ANNUAL REPORT
2016
SHETLAND
EBIT 176 558 TNOK
GWE 13 541 TONS
ROGALAND
EBIT 466 756 TNOK
GWE 18 367 TONS
CANADA
EBIT 80 526 TNOK
GWE 10 715 TONS
FINNMARK
EBIT 447 131 TNOK
GWE 22 104 TONS
TNOK = 1000 Norwegian Kroner
GWE = Gutted Weight
CONTENT
A REAL EFFORT THAT PAID OFF
KEY FIGURES 2016
GRIEG SEAFOOD ROGALAND AS
GRIEG SEAFOOD SHETLAND LTD
GRIEG SEAFOOD FINNMARK AS
GRIEG SEAFOOD BC LTD
OCEAN QUALITY AS
INVESTOR INFORMATION
BOARD OF DIRECTORS REPORT 2016
PRINCIPLES OF CORPORATE GOVERNANCE
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
CONSOLIDATED BALANCE SHEET
CHANGE IN EQUITY
CASH FLOW STATEMENT
NOTES
PARENT COMPANY INCOME STATEMENT
PARENT COMPANY BALANCE SHEET
PARENT COMPANY CASH FLOW STATEMENT
PARENT COMPANY CHANGE IN EQUITY
NOTES
3
5
6
7
8
9
10
11
12
19
26
27
28
30
32
33
87
89
91
92
93
AUDITOR’S REPORT
ALTERNATIVE PERFORMANCE MEASURES (APM)
119
125
SUSTAINABILITY REPORT - SEE GSF.NO
2
ANNUAL REPORT 2 0 1 6
A REAL EFFORT
THAT PAID OFF
As 2015 went down in history as a challenging year for
the entire aquaculture industry, 2016 arose with great
opportunities for Grieg Seafood to demonstrate what
we stand for and can achieve. For our shareholders, our
employees and the excellent natural resource we are set
to manage.
The organisation has cooperated exemplary at all levels, as
our employees have given everything to realise our vision
of achieving perfection together. Backed by the Board of
Directors, the group has taken important steps during
2016. Under the slogan «time to step up», we have initiated
programs to mobilise talent and motivation into becoming
the best aquaculture company in our regions. As the CEO,
I am proud to look back on 2016 and conclude that we have
succeeded with our targeted efforts. The Board’s decision to
return a NOK 3 dividend to our shareholders for 2016 is the
best proof of our joint achievement.
GOOD SALES FIGURES
An important factor in
our success is the strong
global demand for the
healthy and tasty salmon
that we produce. On several
indicators, 2016 marks
an all-time high in Grieg
Seafood´s history. All
quarterly reports represent
progress, and by the end of
the year, the group reached
an EBIT per kg at 18 NOK.
The Norway region achieved
even higher prices, proving our earlier statement that
there´s more to gain in Norway. Certainly there still is. The
global demand for healthy and nutritious food is not going to
decrease, and Grieg Seafood has set a bold target to become
the best provider of such food in our regions.
About 30% of our 2016 sales passed through fixed price
contracts. This will increase in 2017. Fixed price contracts fit
Grieg Seafood´s long-term sales targets and simultaneously
3
make up a good strategy for Ocean Quality, the sales company
for all our regions. The collaboration between Ocean Quality
and the owner companies Grieg Seafood and Bremnes Fryseri
has been very satisfactory in the past year.
THE SMOLT STRATEGY
The biological threats to fish in the sea prompt a highly
professional response consisting of clever countermeasures
based on local strategies. Our project to reduce the smolt
cycle in sea from 24 to 18 months in our Shetland region is
initiated. We expect that the project will improve sustainability
and strengthen the company. By releasing larger smolts into
the sea and thereby shorten
the fish’s total stay in the sea,
the biological threat will be
reduced, the mortality rate
will fall and production will
increase. Another measure
fulfilled with success is
to make all regions self-
supplied with smolt.
In the upcoming period, we
will further emphasize the
control and cost sides of the
business, having defined a
goal to make the operation even more efficient and profitable.
Better control with biological risks, cost development,
planning and smolt production are among our persistent
success factors.
THE HUMAN CAPITAL
Our employees make up the group´s most precious resource
as they are the foremost representatives of our values; open,
respectful and ambitious. On our route to become the leading
READ MORE >
“Grieg Seafood has set a
bold target to become the
best provider of healthy
and nutritious food”
ANNUAL REPORT 2 0 1 6 group in our industry, each individual’s continuous effort is
essential. Accordingly, the Board has adopted an additional
cash bonus to suit every employee in addition to the existing
2016 bonus scheme. Our renewed effort for the welfare of
the staff began in early 2016 when Grieg Seafood established
the position for HR-director with special responsibility for
developing human capital. This important work continued
throughout the year and contributed to the great results.
Overall, I consider that our employees have good incentives
and heightened motivation to make 2017 an even better
year than 2016. One of our tangible measures is a global HR
strategy for all employees in the group.
VALUES AND LOCAL INVOLVEMENT
With great pleasure, I can confirm that Grieg Seafood in
course of 2016 has strengthened the group´s position and
considerably increased its value in absolute terms. These
results are, of course, partly owing to raw material prices.
On the other hand, we have worked hard to restructure
operations in all our regions, we have secured high harvest
volumes, we have kept focusing on fighting sea lice, we have
emphasized responsible fish health practices, and we have
made a sincere effort to reduce production costs throughout
the operations. These measures are available tools for Grieg
Seafood to strengthen our market position. In 2017, we will
work even harder and more collectively in order to continue
our improvement.
In 2016, we have given priority to strengthening communities
in our locations. We have supported First Nation activities in
British Columbia, wild salmon projects in Finnmark, and wide
variety of sports and activities for children and young people
in all regions. Grieg Seafood is proud to have a community
engagement, which helps communities and the group alike to
create greater value for the future.
IMPROVED OPERATIONS
Throughout 2016, the value of our fish and licenses
demonstrated a positive development. In addition, we have
obtained a higher production volume, our capacity and license
utilisation has improved, and we have achieved good remarks
on fish health and welfare. Grieg Seafood attaches great
importance to environmental sustainability standards. In
2016, we have implemented four green licenses in Finnmark,
and more are underway. The number of employees has been
stable, and we experience a high degree both of thriving and
mastering of tasks at all levels of the organisation.
Although there are many positive features to note from
the market situation and fulfillment of previous targets, I
want to remind everyone that salmon production always
faces substantial risks. The risks relate to biology, price
fluctuations, international trade conditions and changes in
external conitions. Hence, our risk management procedures
are under constant supervision, and in 2017, we will do
everything in our power to preserve a stable and secure
production platform. As CEO of Grieg Seafood, I have set some
goals myself for next year: We will deliver better than budget,
we will continue to grow a profitable and sustainable business,
and we will work together to achieve perfection.
Andreas Kvame
CEO
4
ANNUAL REPORT 2 0 1 6 KEY FIGURES 2016
OUR MARKETS
HARVEST VOLUME
(TONS)
EBIT (NOK 1000)
TURNOVER (NOK 1000)
FINANCIAL
KEY FIGURES
EBITDA margin in % *
EBIT margin in % **
ROCE ***
EK %
NIBD ****
EPS *****
NIBD / EBITDA
2016
20 %
18 %
33 %
47 %
906
10,74
0,7
2015
6 %
1 %
5 %
38 %
1 569
-0,06
6,3
2014
12 %
8 %
10 %
42 %
1 566
1,26
3,3
2013
20 %
14 %
12 %
43 %
1 445
3,9
3,0
2012
-1 %
-9 %
-6 %
37 %
1 530
-1,33
-51,3
2011
17 %
10 %
7 %
41 %
1 444
-1,11
4,2
* EBITDA before fair value adjustment of biological assets, in percent
** EBIT before fair value adjustment of biological assets, in percent
*** Retun on capital employed
**** Net interest bearing debt
***** Earnings per share
5
ANNUAL REPORT 2 0 1 6 GRIEG SEAFOOD
ROGALAND AS
18 367 TONS GWE
20 LICENSES
Grieg Seafood Rogaland AS (GSFR ) farms salmon in Rogaland.
The company has 18 seawater licences and two smolt licences.
The company has its own brood activity in the Erfjord. All the
fish produced at our own plants are processed at our own facili-
ties.
Production capacity is estimated to be approximately 24,000
tons gutted weight. The company is Global GAP certified.
Our operations are located in six municipalities in Rogaland
and they contribute significant local value creation. Read more
about community commitmens in the Sustainability Report.
Opeations in Rogaland are divided into four divisions:
• Broodstock
• Hatcheries
•
Seawater
• Processing
ROGALAND
Harvest in tons GWE*
Sales revenue TNOK
EBIT TNOK **
EBIT / kg GWE
2016
18 367
1 140 398
466 756
25,4
2015
15 236
661 204
83 516
5,5
2014
12 778
572 550
77 835
6,1
2013
15 088
640 600
144 800
9,6
2012
19 247
558 300
50 800
2,6
* GWE = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets
6
ANNUAL REPORT 2 0 1 6
GRIEG SEAFOOD
SHETLAND LTD
13 541 TONS GWE
36 LICENSES
Grieg Seafood Shetland Ltd. (GSFSH) operates in Shetland
and the Ilse of Skye. We are the largest player in salmon
production in Shetland. The company has activities within the
complete value chain.
Our operations are divided into three divisions:
• Hatcheries
•
• Processing
Seawater
The business has an estimated production capacity of around
20,000 tons gutted weight. GSFSH is Global GAP certified.
The business is a significant contributor to local value creation.
Read more about community commitmens in the
Sustainability Report.
SHETLAND
Harvest in tons GWE*
Sales revenue TNOK
EBIT TNOK **
EBIT / kg GWE
2016
13 541
859 815
176 558
13,0
2015
16 370
773 526
-164 833
-10,1
2014
19 231
852 455
81 087
4,2
2013
13 158
567 400
27 300
2,1
2012
17 097
538 100
-83 700
-4,9
* GWE = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets
7
ANNUAL REPORT 2 0 1 6 GRIEG SEAFOOD
FINNMARK AS
22 104 TONS GWE
27 LICENSES
Grieg Seafood Finnmark AS (GSFF) farms salmon in Finnmark
county in Norway. The company has a total of 26 seawater
licences and one smolt licence. Four of the licences are
so-called green concessions that became fully operational in
2016.
Operations are divided into three divisions:
• Hatcheries
Seawater
•
• Processing
The company has its own processing plants that harvest all
salmon produced by the company.
Production capacity is estimated at 33,000 tons gutted weight.
The company was Global GAP certified in 2016.
The business is located in five municipalities and is a significant
contributor to local value creation. Read more about commu-
nity commitment in the Sustainability Report.
FINNMARK
Harvest in tons GWE*
Sales revenue TNOK
EBIT TNOK **
EBIT / kg GWE
2016
22 104
1 244 255
447 131
20,2
2015
19 481
797 872
124 004
6,4
2014
26 470
975 291
205 934
7,8
2013
23 076
870 100
216 800
9,4
2012
20 080
519 800
-17 700
-0,9
* GWE = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets
8
ANNUAL REPORT 2 0 1 6 GRIEG SEAFOOD
BC LTD
10 715 TONS GWE
21 LICENSES
Grieg Seafood BC Ltd (GSFBC) farms salmon on the west and
east sides of Vancouver Island as well on the Sunshine Coast
just north of the city of Vancouver. There are currently a total
of 20 marine farm licences and a land based hatchery located
in Gold River. Production capacity is estimated at 18,000 tons
gutted weight.
GSFBC is committed to operating responsibly and meeting or
exceeding all regulatory requirements. Grieg Seafood was the
first salmon farming company in North America to be sourcing
salmon from farms that were independently audited by the
Best Aquaculture Practices certification program.
GSFBC has also been audited and approved by the Aquarium
of the Pacific’s ‘Seafood for the Future’ responsible sourcing
program.
The comapny has good relations with the First Nations popula-
tion of BC. Read more about community commitment in the
Sustainability Report.
BC
Harvest in tons GWE*
Sales revenue TNOK
EBIT TNOK **
EBIT / kg GWE
2016
10 715
611 223
80 526
7,5
2015
14 311
573 900
13 310
0,9
2014
6 257
277 757
-47 810
-7,6
2013
6 739
330 700
17 500
-1,2
2012
13 576
438 400
-32 200
-2,4
* GWE = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets
9
ANNUAL REPORT 2 0 1 6 OCEAN
QUALITY AS
Ocean Quality AS is the Norwegian sales company for Grieg
Seafood ASA (60%) and Bremnes Fryseri AS (40%).
The quality of the products and our customer service
emphasizes the following:
•
Fresh and healthy products with desirable nutrition content
• Customer requirements, reliability and year-round delivery
Full traceability and focus on food safety for finished
•
products and raw materials
Strict quality control and sustainable utilization of raw
materials
Fish health
Sustainable production
•
•
•
The company was established in the fall of 2010 and has its
main office in Bergen, Norway. The Ocean Quality Group has
established sales companies in Shetland and British Columbia
that sell the fish that Grieg Seafood produce in the respective
regions.
At year-end 2016 the Group had 46 employees, of whom 34 men
and 12 women.
The main strategy of the company is to become the market´s
preferred supplier of seafood. Ocean Quality carries out its
services in accordance with high standards of seafood supply
to our customers across the world.
10
ANNUAL REPORT 2 0 1 6 INVESTOR INFORMATION
Amounts in NOK 1000
Dividend paid out
Dividend per share NOK
Shareholders
2016
165 618
1,5
2015
55 206
0,5
2014-12
0
0
2011
150 744
1,5
2010
27 916
1,35
As at 31.12.2016, the company had 4 390 shareholders
See note 17 in the Financial Statement for more information.
The largest 20 shareholder have 73.51% of total shares.
Numer of shares:
Holdings of own shares:
11 662 000
1 250 000
Largest shareholders per 31.12.2016
Analysts following the GSF stock
Grieg Holdings AS
Folketrygdfondet
OM Holding AS
Ystholmen AS
Morgan Stanley and Co Int. PLC
State street Bank and Trust Co.
Verdipapirfondet Pareto Investment
Artic Funds PLC
Grieg Seafood ASA
The Bank of New York mellon SA/NV
11
Nordea Markets
DnB NOR Markets
Handelsbanken
Enskilda
RS Pareto Securities
Swedbank
Carnegie ASA
ABG Sunndal Collier
Arctic Securities
Sparebank 1 Markets
Danske Bank Markets
ANNUAL REPORT 2 0 1 6
BOARD OF DIRECTORS REPORT
2016
GROUP ACTIVITIES AND
LOCATION
Grieg Seafood ASA (”the Company”) is the parent Company of
the Grieg Seafood Group (”the Group”). The Group’s business
activities relate to production and trading in the sustainable
farming of salmon, and in naturally related activities.
The Group is one of the world’s largest producers of farmed
salmon, delivering an output of nearly 65,000 tons in 2016,
in addition to a significant unutilised capacity. The Group has
100 licenses for salmon production and five licenses for smolt
production. The Group shall be a leader in the area of aquacul-
ture. The Group’s commercial development builds on profitable
growth and the sustainable use of natural resources, as well as
being a preferred supplier to selected customers.
The Group has operations in Finnmark and Rogaland in Norway,
in British Columbia in Canada (BC), and in Shetland/Scotland
(UK). The Group owns 60% of the sales company Ocean Quality
AS, which keeps offices in Norway, Canada and Shetland (UK).
The head office is located to Bergen, Norway.
12
Grieg Seafood ASA has been listed on the Oslo Stock Exchange
since June 2007.
MAIN FEATURES OF 2016
Very good solidity and liquidity by year-end.
2016 represents the best year in the Group´s history.
•
• Historically strong market with good prices.
• Additional dividend was paid with NOK 1.50 per share.
•
• All fish harvested by the Group in 2016 is Atlantic salmon.
Focus on this single product is an intentional strategy.
The production in Norway has been strong throughout
2016. In December, an indication of ISA (Infectious Salmon
Anaemia) was located in Hammerfest. All fish has been
culled in 2017.
•
• Good revenues from Shetland in 2016, in spite of high
mortality caused by algae, sea lice and gill problems.
• Production in BC has been good in the last quarter of 2016,
although algae posed a challenge in the first half of the
year. The smolt production has been satisfactory in 2016.
• An expansion of the smolt facility in Rogaland was put into
action in 2016.
ANNUAL REPORT 2 0 1 6
ACCOUNTS
The Group´s profit after tax for 2016 was MNOK 1,222 compared
with MNOK 4 in 2015.
The consolidated financial statements are prepared in accor-
dance with International Financial Reporting Standards (IFRS).
SEGMENT REPORT
RESULTS
The Group had a turnover of MNOK 6,545 in 2016, an increase
of 42% compared with the previous year. The total harvest was
64,726 tons glutted weight (65,398 tons in 2015), a decrease of
1%. EBIT before fair value adjustment of biological assets was
MNOK 1,168, compared to MNOK 48 in 2015. EBIT per kg before
fair value adjustment of biological assets was NOK 18 against
NOK 0.7 in 2015. The strong profit is a consequence of high
salmon prices and substantially improved production, both in
sea and smolt facilities. The market salmon prices have been
high throughout 2016, in both Europe and the US. The strong
salmon prices must be regarded in context with lack of supply
growth. A general increase in biological challenges facing the
industry, with sea lice as the biggest problem, has complicated
production growth in recent years. Finnmark and Rogaland
have recorded good production throughout 2016, while algae
and low oxygen levels represent problems in Canada in the
first half of the year. This has gradually improved in the second
half of 2016. Shetland has experienced weak production with
high mortality rates due to lice in the second half of 2016. At
the beginning of 2016, the GPB was strong, entailing a weaker
market position for UK. This prospect has normalised later in
2016, with a weakened GPB.
Feed prices have continued to increase during 2016, in both
Europe and UK, while Canada has experienced a decline in
prices. The price increases are attributable to the develop-
ment in raw material prices and a local currency effect in UK.
Increased use of special feed varieties also leads to increased
feed costs. Feed prices are sensitive to both marine and vege-
table commodity prices, which vary with seasonal harvesting
and production conditions.
Treatment costs, not least preventive measures against
diseases and lice, have increased every year. Cleansing fish has
been deployed in Rogaland, Finnmark and Shetland. Invest-
ments have been placed into mechanical treatment to combat
lice and limit consequences of AGD (Amoebic Gill Disease),
which entails persistently high production costs, both in Norway
and UK. The preventive measures have been effective and lice
treatment could be reduced in Rogaland last year.
EBIT after fair value adjustment of biological assets was MNOK
1,683 against MNOK 81 in 2015. Net financial expenses showed
MNOK 135 against MNOK 93 in 2015. Interest expenses were
substantially lower in 2016 compared to 2015, due to strong
liquidity, and by year-end 2016 credit facilities are unutilised.
Increased finance expense is due to losses on current loans in
GBP and CAD. The Group had a negative net unrealised loss
in 2016 of MNOK -70, against net unrealised gain in 2015 of
MNOK 29.
Tax expense for the year was MNOK 339, against net tax income
of MNOK 14 in 2015. The effective tax rate of 21.7% for 2016
is due to change in tax rate in Norway and different tax rates
between the countries. Effective tax rate for 2015 was 147%,
due to high permanent differences. The Group has entered into
tax position and MNOK 172 has been provisioned at year-end
2016 (MNOK 24 for 2015) for tax payable.
13
Rogaland
EBIT before fair value adjustment was MNOK 467, corre-
sponding to NOK 25.4/kg. The equivalent in 2015 was MNOK
84 (NOK 5.5/kg). Total harvested volume in 2016 was 18,367
tons, up 21% from 2015. Increased result is caused by higher
prices and higher harvesting volume. In the first half of 2016,
the production in sea was marked by increasing numbers of
lice treatments, which involved missing feeding days in several
periods. An underlying increase in treatment and emergency
preparation costs to reduce PD (Pancreas disease), AGD and
other biological challenges, has contributed to an increased
production cost. Rogaland uses wrasse agains sea lice, which
has proved effective in 2016, and number of treatments have
been very low. There are significant costs incurred, but this has
yielded positive results in terms of low sea lice levels in the last
half of the year, as well as increased production in sea. Produc-
tion at the hatchery has been satisfactory in 2016.
Finnmark
EBIT before fair value adjustment was MNOK 447.1, corre-
sponding to NOK 20.2/kg. The equivalent for 2015 was MNOK
124 (NOK 6.4/kg). Total harvested volume in 2016 was 22,104
tons, up 13% from 2015. Finnmark showed a high harvested
volume in the last half of the year (63%). Due to lice challenges
in the Øksfjorden in 2015, it was decided to fallow the whole
area. The fish in Øksfjorden was harvested in Q2 2016, with a
low margin due to high treatment costs. The harvesting plant
was closed down for the last part of Q2 and first part of Q3,
during a period of very high salmon prices. As a consequence,
Finnmark achieved lower realised prices in Q2 and Q3 due to
harvesting period in relation to price development.
Increasing resistance of lice against medical treatment is
a challenge in Finnmark. Hence, the company has secured
mechanical treatment capacity, which was implemented
from the third quarter. Both treatment costs and the costs of
prevention increase and will lead to a higher production cost. In
December, ISA was detected at a location in Hammerfest. All
fish were down-harvested in the beginning of 2017. A following
impairment has been expensed through operation. Produc-
tion in the sea has otherwise been good throughout the year,
if one disregards the ISA and a few localities with IPN (Infec-
tious Pancreatic Necrosis). In 2014, Finnmark was awarded
four green licenses, which are in the process of implementa-
tion. In this region, an increasing number of smolts is released.
Production in the hatchery is good.
BC
EBIT before fair value adjustment of biological assets was
MNOK 81, corresponding to NOK 7.5/kg, against MNOK 13 (NOK
0.9/kg) in 2015. The improved positive result is due to higher
prices in 2016, and lower costs on harvested fish. The Amer-
ican segment has been weaker than the Norwegian segment,
although better than in 2015. Total harvested volume in 2016
was 10,716 tons, against 14,311 tons in 2015, corresponding
to a reduction of 25%. BC has experienced challenges by
algae in Q2 and Q3, which lead to reduced feeding and growth
in these periods. High mortality in Q3 due to algae and low
oxygen levels has incurred impairments, which are included in
operating costs. Investments are deployed in order to reduce
risk of future biological divergences, due to low oxygen levels.
ANNUAL REPORT 2 0 1 6
The management is not satisfied with the development in BC
and continuously evaluates how improvements can be imple-
mented. It is an advantage to keep production in the proximity
of the US market. Ring cages are approved at one location in
BC, and further endeavors are carried out to attain permission
for more localities. Algae has damaged the quality of the fish,
thereby reducing realised prices in 2016. 2016 is the first year
in BC region exclusively with Atlantic salmon.
The smolt production startet with Furunculosis in Q1. This
entailed an impairment, recognised as operating cost. Smolt
production since Q1 has been very satisfactory throughout 2016.
In 2014, agreements for external delivery of smolt were put into
practice, in order to ensure sufficient backup of smolt to avoid
negative production impacts from new incidents of disease at
the hatchery in 2015. This generates higher costs than normal
related to smolt. As a result of the smolt delivery backup-
system, Grieg Seafood has released the projected number of
smolts in 2016.
Shetland
In Shetland the EBIT before fair value adjustment was MNOK
176, corresponding to NOK 13/kg. The equivalent for 2015 was
MNOK -165 (NOK -10.1/kg). Included in the 2015 result is an
impairment of the smokehouse and filleting plant at MNOK 46.
Total harvested volume in 2016 was 13,541 tons, against 16,370
tons in 2015. Reduction of the harvesting volume by 2,829 tons
from 2015 is due to high mortality caused by lice and algae.
Shetland has experienced challenges by algae, AGD and lice
during the year, which has entailed reduced production and a
high mortality rate. Impairments have been recognised through
operating costs. High output prices on harvested fish have been
the most significant factor for weak results.
Shetland has achieved somewhat lower prices due to a strong
GBP at the beginning of 2016. This changed along the weak-
ening of the GBP. The main grounds for the improved result in
2016, are good prices.
In 2015, a decision was made to change the production cycle
from 24 to 18 months. The purpose is to improve utilisation of
the good locations. Implementation is progressing as planned.
Efforts are maintained to keep lice at the lowest possible levels,
as lice remains to be a challenge. To keep lice at an accept-
able level has incurred high treatment costs. Cleansing fish and
temperate water (mechanical de-lousing) have been deployed
against resistant lice. Measures are underway to reduce the
biological risk connected with algae. Observation and analyses
of the algae situation is critical in this respect. The hatchery
was completed in 2015 and the production of smolt went
according to plans throughout 2016.
SALES: OCEAN QUALITY
All fish from each segment is sold by Ocean Quality Group (OQ).
All revenue is accounted for at the producers and presented
as part of EBIT per segment. OQ handles marketing and sales
distribution for Grieg Seafood Group. OQ also handles sales
for Bremnes Fryseri AS, including both fresh fish, processed
and frozen salmon, except for the brand Salma. OQ is owned
by Grieg Seafood ASA (60%) and Bremnes Fryseri AS (40%).
The company is established in Shetland, Canada and Norway.
The establishing of the company both in UK and Canada has
yielded synergies in terms of sale of various origins of salmon
in different markets. The salmon market was very strong in
2016. Throughout six years, OQ has established good customer
relations, allowing them to exploit the market and return high
14
margins to the producers in 2016. In a high price market, even
brands like Skuna Bay, Kvitsøy and Bømlo achieved higher
volume and margin compared to previous years. OQ sells to
Asia, Europe, US and Canada. The total sales volume in 2016 is
98 323 tons. See Note 6 for further information.
RESEARCH AND
DEVELOPMENT
Grieg Seafood makes provisions and utilises funds for research
and development every year. This relates to various activities
ranging from active participation in steering committees in
national research projects to local test and trial projects in the
regions. The focus of these activities was sharpened through
a review of the company´s R&D strategy, carried out June
2016. The focus should be operational and supporting projects
in order to detect solutions to biological and technical chal-
lenges in short and/or long term, which in turn contributes to
streamline daily operations in our farms. Group is working on
many different projects, ranging from improving fish health and
welfare, efficient operation of large units, feeding control and
optimisation of young fish production in large recycling plants.
In 2016, the Group initiated its hitherto largest R&D project, by
assembling and submitting an application to the government
for 10 development licenses, intended to make an operating
plan for fish farming in the open sea. The project´s cost esti-
mate is MNOK 270 over 8 years.
BALANCE SHEET
The Group had total recorded assets of MNOK 6,770 as at 31
December 2016, against MNOK 5,940 at year-end 2015. Of this,
goodwill accounted for MNOK 109 and licenses MNOK 1,061.
Investments in tangible fixed assets relate mainly to mainte-
nance investments and implementation of green licenses in
Finnmark. Fair value adjustment of biological assets was posi-
tive due to expected future sales prices that will exceed the
accrued production costs.
Group equity at 31 December 2016 stood at MNOK 3,207,
against MNOK 2,238 at year-end 2015. The equity ratio at year-
end 2016 was 47%, up from 38% in 2015.
FINANCE AND FUNDING
The Group’s net interest-bearing debt including Ocean Quality
Group is MNOK 1,400 at year-end 2016.This includes factoring
liabilities of MNOK 503. The equivalent for 2015 was MNOK
1,907, of which factoring debt was MNOK 338. This equals a
reduction of MNOK 507. Net interest-bearing debt according to
loan covenants is MNOK MNOK 906 (MNOK 1,569). The bank
syndicate consists of Nordea and DNB. The syndicated loan
comprises a total frame of MNOK 1,910. The revolving credit has
not been utilised at year-end. The term loan has been repaid
with MNOK 90 in 2016. The Group mainly uses finance leasing
by investing in new feeding barges and other operational equip-
ment. Through the agreement with the bank syndicate, the
Group has a leasing facility of MNOK 350. As at 31 December
2016, the leasing liabilities amount to MNOK 318. According to
covenants, equity is calculated exclusive of Ocean Quality. The
equity thus stands at 52% (41%). All covenants are met.
ANNUAL REPORT 2 0 1 6 CASH FLOW
The net cash flow from operations was increased with MNOK
583 to MNOK 953 in 2016, up from MNOK 370 in 2015. The
increase in working capital is related to improved operations
compared with the previous year. Net cash flow from invest-
ment activities in 2016 was MNOK -200, against MNOK -317 in
2015. Investment payments related to fixed assets amounted to
MNOK 248. The equivalent for 2015 was MNOK 264. Net cash
flow from financing was MNOK -645 against MNOK 158 in 2015.
There has been a net repayment on credit facilities and term
loan as mentioned under financing. This implies a negative
cash flow from financing in 2016, compared to 2015. Increased
factoring liabilities from 2015 contribute to a small increase in
financing. For 2016 there was a net change in cash and cash
equivalents of MNOK 109. As at 31 December 2016 the dispos-
able cash balance was MNOK 504.
GRIEG SEAFOOD ASA
The parent company’s financial statement
is prepared
according to Norwegian accounting principles (NGGAP). The
parent company recorded an operating income of MNOK -52
(MNOK -19). Weaker operating income is caused by exercise of
options in course of 2016 compared to 2015, as well as higher
operating expenses. The company gives loans to subsidiaries in
foreign currency, which has incurred losses of net MNOK 157
against gains of MNOK 77 in 2015. This is caused by a strength-
ening of NOK against GBP during 2016. In 2016, contribution
from subsidiaries of MNOK 725 (MNOK 39) has been recog-
nised, which contributes to the positive financial result. Interest
expenses have been reduced compared to 2015, due to posi-
tive liquidity and unutilised credit facility, which implied a low
margin. In 2015, the company was granted a waiver of the cove-
nants, and thus increased margin. In 2016, the company has a
15
very good liquidity, and the interest expenses have decreased
substantially due to reduced margin.
In 2016, the company has paid dividends totalling MNOK 165,
pertaining to the 2015 statement. The equity ratio by year-end
is 35%.
The parent company´s net cash flow from operations in 2016
was MNOK -176, against MNOK 105 in 2015. The cash flow
from investing activities was MNOK 467 (MNOK 3). Net cash
flow from financing activities was MNOK -123 (MNOK 10). In
2016, the term loan and credit facilities debt have been partially
repaid. There was a net change in cash and cash equivalents of
MNOK 168.
As at 31 December 2016 the disposable cash balance was
MNOK 383.
Accounting results and allocations –
Grieg Seafood ASA
The aim of the Group is to offer a competitive return on invested
capital to the shareholders through distribution of dividend and
growth of share price.
The Group´s strategy for dividend is that the annual dividend
over several years should correspond to around 25-35% of the
Group’s profit after tax and adjusted for accounting effect of
biomass adjustments. In 2016, an additional dividend of NOK
1.50 per share was paid, based on the 2015 statement. The
Board of directors will recommend the General Meeting to
adopt a dividend of NOK 3.- per share.
The parent company, Grieg Seafood ASA, recorded a profit for
2016 of MNOK 388, which the Board proposes to the General
Assembly to dispense as follows:
ANNUAL REPORT 2 0 1 6 Provision for dividends
Transfer to retained equity
Total dispensed
MNOK 331
MNOK 57
MNOK 388
GOING CONCERN
ASSUMPTION
Forecasting is carried out, showing a positive and good cash
flow based on conservative salmon price assumptions. The
supply growth of salmon is expected to be small in the coming
years. Accordingly, a strong market is likely in the nearest
future. This is a trend in Europe, Asia and the United States
which is expected to contribute to a positive cash flow. It is a
target to increase smolt size. This will bring down the future
biological risk. During 2017, Shetland will complete the transi-
tion from 24 to 18 months production cycle. Efforts are being
made in BC to improve monitoring of algae and low oxygen
levels, and to deploy actions in a timely manner. In Rogaland,
the expansion of the smolt facility will be complete during Q3
2017. This will more than double the production capacity of this
plant. A similar expansion of the smolt facility in Finnmark is
under planning, which will be completed in 2018.
Strong cash flow in 2016 has provided a good starting point
in order to service debt established in accordance with the
Group´s financing agreements. At year-end, the Group has
sufficient funding to carry out its plans.
It is the view of the Board that the financial statements give a
true and fair presentation of the Group’s assets and liabilities,
financial position and financial results. Based on the above
account of the Group’s results and position, and in accordance
with the Norwegian Accounting Act, the Board confirms that
the annual financial statements have been prepared on a going
concern basis, and that the requirements for so doing are met.
RISK AND RISK
MANAGEMENT
The Group is exposed to risks in a number of areas, such as
biological production, changes in salmon prices, the risk of
political trade barriers, as well as financial risks such as
changes in interest and exchange rates and liquidity.
The Group’s internal control and risk exposure are subject
to continuous observation and improvement, and the task to
reduce risk in different areas has a high priority.
The management has set parameters for managing and elimi-
nating most of the risks that could prevent the company from
achieving its goals. For further information, we refer to the
Principles of corporate governance for Grieg Seafood ASA.
Financial risk
The Group operates within an industry characterised by great
volatility which entails greater financial risk. 2016 has provided
a good financial market for the aquaculture industry, still with
more liquidity available in the market. Requirements towards
the borrower are still high, due to stringer requirements
on lending practiced by financial institutions. Financial and
contractual hedging as is a matter of constant consideration,
in combination with operational measures. The management
16
draws up rolling liquidity forecasts extending over five years.
These forecasts incorporate conservative assumptions for
salmon prices, and this applies as basis for calculating the
liquidity need. This forecast forms the basis of the need for
financial parameters. With the financing of the Group at year-
end, the level of this risk is considered to be very satisfactory.
At year-end, the Group had an unutilised credit facility of MNOK
700. The Group´s financial position is very good at year-end
2016.
The long-term financing agreement includes a revolving credit
facility totaling MNOK 700. It is flexible, as it can be drawn down
within 1 month or a longer period, depending on the Group´s
need for liquidity. The following sections provide further infor-
mation about the individual risk areas.
Currency risk
In converting the operating income and balance of foreign
subsidiaries, the Group’s greatest exposure is to CAD and GBP.
The main strategy is to reduce the currency risk by funding
the business in the local currencies. All long-term loans from
the parent company to subsidiaries are in the local currency.
Such loans are regarded as a net investment, as the loans are
not repayable to the parent company. The subsidiaries will
always require long-term funding. The currency effect of the
net investment is incorporated in the consolidated statement of
comprehensive income (OCI) for the Group.
Income for the Norwegian operation is denominated in NOK,
and the translation risk is transferred to the sales company.
The case is similar for Shetland and BC. BC sells in CAD to the
sales company, which in turn hedges against currency volatility
in relation to CAD/USD. The Norwegian sales company likewise
hedges against currency volatility in relation to EUR/NOK, USD/
NOK and other currency in demand. At year-end, contracts are
concluded until Q1 2018. Long-term foreign currency contracts
are hedging instruments, where unrealised agio/disagio is
recognised through comprehensive income (OCI) in the state-
ment. The currency situation is continuously assessed against
the volatility of the currencies. The remaining net exposure is
frequently monitored. For further information, refer to Note 3.
Interest rate risk
The Group is exposed to interest rate risk through its loan
activities. The Group is exposed to varying interest rate levels in
connection with financing of its activities in all regions.
Most of the Group’s existing loans are based on floating rates,
but separate fixed rate contracts have been entered into in
order to reduce the interest rate risk. It is the Group´s policy to
have a certain percentage of its interest-bearing debt hedged
through interest rate swap agreements. A given proportion
shall be at a floating rate, while consideration will be given to
entering and exiting hedge contracts for the remainder. The
interest rate swap agreement changes in relation to 3 months
Nibor.
Liquidity risk
The Group´s equity ratio increased from 42% at year-end 2015
to 47% at year-end 2016. Interest-bearing debt has decreased
due to strong cash flow throughout 2016, and no drawdown of
the credit facility. Ocean Quality has concluded agreements
with factoring companies for Norway and UK, implying transfer
of credit insured receivables to factoring company. This ensures
the companies an early settlement of account receivables. This
is a financial arrangement, as the factoring company does not
acquire the substantial credit risk. The management monitors
ANNUAL REPORT 2 0 1 6 the Group’s liquidity reserve which comprises a loan facility and
bank deposits, as well as cash equivalents based on expected
cash flows. This is carried out at Group level in collaboration
with the operating companies. The management and Board
seek to maintain a high equity ratio in order to be well equipped
to meet financial and operational challenges. Considering the
dynamic nature of the industry, the Group aims to maintain
flexibility of funding.
Operating risk
It is critical to manage the operating risk. Book value of live fish
in the balance sheet at year-end was MNOK 2,500. Operating
risk was adequately managed throughout 2016, but there is still
focus on training of staff and on proper internal guidelines to
reduce operating risk. There have been challenges by algae in
Shetland and BC. Measures are being carried out to improve
the biological situation in these two regions. One important
issue is observation of algae with regard to timing of feeding as
a precondition for algae blooming. In Shetland, the transition
to 18 months production cycle is one of the measures taken. In
BC, there is also a focus on correct oxygen concentration, and
new oxygen equipment is acquired to suit all localities.
There is an ongoing shift from medical to mechanical treat-
ment of lice, because the lice develop resistance. Cleansing
fish is another important remedy against lice, which has proven
effective in Rogaland. The Group has adopted a policy of zero
tolerance for escapes. In 2016, there were three cases of
escapes. In 2015 there were no cases. Action is taken to bring
this number down to zero. The Group has production of Atlantic
salmon as its main product, in order to reduce the risk.
In 2016, new regional directors have been appointed in Shet-
land and BC. In Shetland, former regional production manager
Grant Cumming, has taken over as leader. In BC, former
production manager Rocky Boschman has assumed the posi-
tion of regional director.
For further information about financial risks (currency, interest
rate, credit and liquidity), refer to Note 3 to the consolidated
financial statements.
SUSTAINABILITY REPORT
The Group´s main cost drivers, risks and opportunities are
increasingly connected with managing our impact on the envi-
ronment, our personnel and the local communities where we
operate. Systematic efforts to secure a balanced sustainability
are therefore fundamental in order to facilitate a long-term
profitable growth. These efforts are increasingly material for
the industry´s viability. The Group has in 2013 conducted an
assessment in order to accentuate priority areas for sustain-
ability, an assessment which has been further followed up
in 2016. Our priorities will ensure that our efforts respond to
our main stakeholders´ expectations of us, as well as being
resource efficient in terms of our strategy and long-term value
creation. The priorities also take into account our long-term
obligations through Global Salmon Initiative (GSI). A compre-
hensive statement of the Group´s approach, efforts, results
and ambitions towards sustainability priorities is available in
the Sustainability report. The Group´s sustainability priorities
treated in the report are divided into the following main areas;
External environment, working environment, and social rela-
tions. Within external environment fish health, sea lice, and
escape are focus areas. In the domain of the soft factors, HSE
and working environment are priorities. Social relations are
divided into three main areas: quality and food safety, the ripple
effect in communities, and anti-corruption. Starting from 2016,
17
the sustainability report has been revised on basis of the GSI
handbook in compliance with the standard ISAE 3000. Further
information can be obtained from the report.
EMPLOYEES
Of the Group´s 664 employees at year-end 2016, 385 work in
Norway, 169 in Shetland and 110 in Canada. The Board wishes
to thank the employees for good work in the past year.
The Group has a majority of male managers and employees.
In total, 533 men and 131 women are hired in the Group. The
employee policy is to take the steps necessary to retain and
attract qualified personnel of both genders.
Grieg Seafood’s position as an international company is also
reflected in the fact that in total, 130 employees work in a
country different than their country of origin. The Group accepts
no kind of discrimination related to gender, religion, cultural or
ethnic background, disability, or in any other way. Our aim is
to conduct our activities on the basis of equality and respect.
In terms of human rights and equal treatment, we are not
exposed to significant risk. A focused effort is made to secure
equal treatment and to avoid discrimination.
In 2016, the incidence of short-term sick leave within the Group
was 1.96% while the figure for long-term sick leave was 1.70%.
For further information, refer to the Sustainability report, in the
section about employee health, safety and working environ-
ment.
All management of human resources is managed locally
according to local rules and instructions, and in accordance
with Group guidelines. The working environment in the Group is
considered satisfactory, at the same time as we work actively to
reduce sick leave and injury. As from May 2016, an HR director
has been appointed, with a special responsibility to strengthen
global routines and guidelines for HR and HSE in the Group.
Grieg Seafood ASA
At year end the parent company had 21 employees in its main
office in Bergen, of which five men and two women in senior
positions. Short-term sick leave in the parent company was
0.3%, while long-term sick leave was 0.0%. No injuries/acci-
dents were registered in the Company in 2016. The Company
does not pollute the external environment.
POST-BALANCE SHEET
DEVELOPMENT
At the beginning of 2017 the prices were somewhat sinking,
although from a high level. At the end of Q1 2017, prices have
stabilised around NOK 60 for deliveries to Oslo, which is a good
level. NOK remains weak. In total, this provides the basis for
good earning in the nearest future.
The biological situation has been stable at the start of 2017.
ILA was detected at a location in Finnmark in December, and
all fish was destroyed in the beginning of 2017 by order of the
Norwegian Food Safety Authority. The incident has been relayed
to the market. The harvested volume in Q1 2017 will be low.
This is to position as much biomass as possible before the
important growth season this summer. Low harvest volumes
will lead to high costs measured per kg. Because of continued
harvesting from weak sites with 24 months production cycle,
ANNUAL REPORT 2 0 1 6 UK also represents high costs at the beginning of 2017. When
harvesting commences in the new 18 months production cycle,
expenses will drop. This will be the case as from Q2 2017. BC
also has high prices at the start of 2017, as a consequence of
fish affected by algae in 2016. A reduction of costs is expected
for BC as well, in course of the year.
OUTLOOK
The fish farming industry is very volatile and it will always be
considerable uncertainty when projecting for future condi-
tions. There has been, though, a steady increase of demand for
salmon during recent years. This is expected to continue in the
future. China represents a market demanding more salmon
every year. This country has a growing middle class requesting
high quality food. Therein resides a great potential for salmon.
The Russian market also represents huge opportunities. At
present, it is closed, but it would be positive for demand if this
market were to open again. Additionally, at the backdrop of low
supply growth, the forecast is good prices in the time to come.
Norway has introduced a new system of regulations for future
growth, referred to as the «traffic light system». The Norwegian
coastal territory has been divided into 13 new production areas.
The limit of expansion is 6%, depending on environmental
sustainability in the respective area. The impact of sea lice on
wild salmon is defined as one of the environmental indicators.
Based on the indicators, a production area will be evaluated as
acceptable, moderate or unacceptable.
The Group has applied for 10 development licenses in Roga-
land, intended for fish farming in the open sea, including plans
for technology transfer from the oil industry. The project is a
close cooperation between technology suppliers from both the
aquaculture and oil industries.
The Group expects a total harvested volume of 70,000 tons in
2017, according to defined production plans. The plans repre-
sent a growth of 8% from 2016. The group aims to grow 10%
per year in the period 2017-2020. The group has attained new
locations, and together with larger smolts, it is foreseeable to
utilise better the existing and new licenses. Furthermore, it is a
goal to reduce costs to an average industry level, or less.
STATEMENT FROM THE
BOARD OF DIRECTORS AND
CEO
We hereby confirm that the financial statements for the
period from 1 January to 31 December 2016 to the best of our
knowledge have been prepared in accordance with applicable
accounting standards and give a true and fair view of the Group
and of the Group’s assets, liabilities, financial position and
overall results. We also confirm that the Directors’ Report gives
a true and fair view of the development and performance of the
business and the position of the Company and the Group, as
well as a description of the principal risks and uncertainties
facing the Company and the Group.
Bergen, 3 April 2017
The Board of Directors in Grieg Seafood ASA
Translated version. Not to be signed
18
ANNUAL REPORT 2 0 1 6 PRINCIPLES OF
CORPORATE GOVERNANCE
Adopted by the Company’s Board of Directors on 20 April 2007 and updated on
22 January 2010, 4 April 2011, 22 March 2012, 22 March 2013, 1 April 2014, 23 March
2015, 6 April 2016, and 3 April 2017.
INTRODUCTION
Presentation of Corporate
1.
1.1
Governance
The responsibility for ensuring that the company has good
corporate governance rests with the Board. The board and
management review and annually evaluates the company’s
principles for corporate governance.
The Group’s Corporate Governance is based on the Norwegian
Code of Practice for Corporate Governance (NUES) as
recommended by the Norwegian Corporate Governance
Board on 30 October 2014. The Grieg Seafood Group follows
the current recommendation from NUES, and has updated
existing rules and defined values in accordance with changes
in NUES 2014.
The company complies with these recommendations
according to the follow or explain principle. This means
that the company should explain all points where the
recommendations are not followed.
The Annual Report offers a full report on the company’s
principles for corporate governance, which is available on
www.griegseafood.com.
2. OPERATIONS
2.1 Grieg Seafood ASA
The Company is the parent company of a group where
companies of this Group are engaged in the production and
sale of seafood and naturally related activities.
The object of the Company is to engage in the production
and sale of seafood and naturally related activities, including
investment in companies engaged in the production and sale
of seafood and other activities naturally related to similar
companies.
The Company is established and registered in Norway and is
required to comply with Norwegian law, including laws and
regulations pertaining to companies and securities.
2.2 Grieg Seafood ASA’s vision and
overall objectives
The Group aims to comply with all relevant laws and
regulations and with the Norwegian Code of Practice for
Corporate Governance. This also to applies to all companies
which are controlled by the Group. In as far as it goes, this
document of principle therefore applies to all companies of
the Group.
19
ANNUAL REPORT 2 0 1 6 The Group’s core values are to be open, respectful and
ambitious.
The Group shall be managed applying the following principles:
•
•
•
•
•
We shall be open and honest.
We shall become better day by day.
We do what we say.
We are positive and enthusiastic.
We care.
The Group is committed to the sustainable use of natural
resources and the development of the organisation based on
high ethical standards. Targets and detailed plans have been
adopted for the implementation of initiatives in these areas.
The fish farmer has overall responsibility for the wellbeing of
the fish and for ensuring that at all times the fish can be kept
in their natural surroundings under optimal conditions. The
Group selects locations where the water is as deep as possible
and with good currents.
The Group has drawn up a designated health plan which
stipulates how all production operations are to be performed.
The fish shall be systematically examined by a veterinarian.
The Group attaches great importance to preventive measures
and a rapid reaction in the event of disease or pollution. This is
important not only to protect the environment and fish health,
but also to safeguard the quality and profitability of production.
The work shall be performed in accordance with the Group’s
designated health plan. Measures have been implemented
to prevent the escape of farmed fish. The Group has zero
tolerance for escapes. The objective is to conduct operations
that do not cause any lasting damage to the environment.
As a user of natural resources such as clean water and feed
from wild fish, the Group has a responsibility which extends
beyond its own operations. The Group requires its feed
suppliers to ensure that the feed is based on sustainable
supplies of raw materials.
Starting with 2013, an own sustainability report has been
prepared, pointing out ten areas defining Grieg Seafood´s
highest priorities for sustainability and social responsibility.
The priorities were conducted according to guidelines
developed by GSI (Global Salmon Initiative). GSI has developed
sector specific measurement indicators which Grieg Seafood
utilises. As from 2015, Grieg Seafood has taken on the
responsibility as Co-Chair in GSI.
2.3 Management of the Group
Control and management of the Group is divided between the
shareholders, represented through the General Meeting, the
Board of Directors and the Group CEO, and is exercised in
accordance with prevailing company legislation.
Divergences from this Code of Practice: None.
20
3. GROUP EQUITY AND
DIVIDEND POLICY
3.1
At any given time the Group shall have a level of equity which
is appropriate in relation to the Group’s cyclical activities. The
Board requires that equity consistently stay in accordance with
current loan terms, as a minimum.
Equity
3.2 Dividend
The Group’s objective is to give the shareholders a competitive
return on invested capital through dividend payments and
value appreciation of the share, which is at least at the
same level as other companies with comparable risk. The
future dividend will depend on the Group’s future earnings,
financial situation and cash flow. The Board believes that the
dividend paid should develop in pace with the growth of the
Group’s profits, while at the same time ensuring that equity
is at a healthy and optimal level and that there are adequate
financial resources to prepare the way for future growth and
investment, and taking into account the wish to minimise
capital costs. The Board believes it is natural that the average
dividend, over a period of several years, should correspond to
25-35% pre-tax profit, adjusted for the accounting effect of fair
value adjustment of biological assets.
Furthermore, it is reasonable that the company’s net interest-
bearing debt per harvested kg is between NOK 15 and 20.
Based on this, the size of the dividend could be corrected both
up and down according to the 25 - 35 % share of profit after
tax.
3.3 Board authorisation
The Board will request the AGM to grant a general mandate
to pay out dividends in the period until the next AGM. The
Board´s proposal must be justified. The dividend will be
based on the Group’s current policy in accordance with
clause 3.2. Dividends should be awarded on the basis of
the latest financial statements approved within the scope of
the Public Companies Act. Upon granted authorisation, the
Board determines from which date the shares are traded
ex-dividend.
The Board has general authorisation to increase the
Company’s share capital through share subscription for a total
amount not exceeding NOK 44 664 800 divided into not more
than 11 166 200 shares of nominal value NOK 4 each.
This authorisation remains in effect until 30 June 2017 as
approved by the Annual General Meeting (AGM) on 14 June
2016.
The Board has general authorisation to acquire the Company’s
own shares in accordance with the provisions of chapter 9 of
the Norwegian Public Limited Companies Act for an aggregate
nominal amount not exceeding NOK 44 664 800. The Company
shall pay not less than NOK 4 per share and not more than
NOK 100 per share when acquiring its own shares.
ANNUAL REPORT 2 0 1 6
Divergences from the Code of Practice: None.
6. GENERAL MEETING
The shareholders represent the Company’s highest decision-
making body through the General Meeting.
The Company’s AGM shall be held each year before the end
of June. The AGM shall consider and, if thought fit, adopt
the annual financial statements, the annual report and the
dividend, as well as deciding on other matters which under
current laws and regulations pertain to the AGM.
The Board may convene an Extraordinary General Meeting
(EGM) at whatever time it deems necessary or when such
a meeting is required under current laws or regulations.
The Company’s auditor and any shareholder or group of
shareholders representing more than 5% of the Company’s
share capital may require the Board to convene an EGM.
The Board calls General Meetings at least 21 days before
the date of the meeting. During the same period, the notice
of meeting and the documents pertaining to matters to be
considered at the General Meeting shall be accessible on the
Company’s homepage. The same applies to the nomination
committee’s recommendation. When documents are made
available in this manner the statutory requirements for
distribution to shareholders do not apply. Still, a shareholder
may claim to receive documents concerning matters to be
considered at the General Meeting.
The deadline to register for the general meeting is set by the
Board in the notice. Shareholders who are unable to attend
may vote by proxy. An authorisation form containing a vote
option for each issue will be enclosed with the notice of
meeting, and it will also be possible to give authorisation to
the chairman of the Board or the Group CEO.
The Company will publish the Minutes of the General Meetings
in accordance with the stock exchange regulations in addition
to making them available for inspection at the Company’s
registered offices.
The Board, the Nomination Committee and the auditor will be
represented at the meeting, and the Chairman will normally
preside at the meeting.
The Board shall not make contact with the Company’s
shareholders outside the General Meeting in a manner
which could be deemed to constitute differential treatment of
shareholders or which could be in conflict with current laws or
regulations.
The nomination committee proposes Board candidates to the
Annual General Meeting.
Divergences from the Code of Practice: None.
This authorisation remains in effect until the next AGM, but not
later than 30. June 2017. The Company will observe the Code
of Practice in respect of new proposals to authorise the Board
to implement capital increases and acquire the Company’s
own shares. The Board aims at a request for prolongation of
these authorisations on the AGM on 7 june 2017.
Divergences from the Code of Practice: None.
4. EQUAL TREATMENT
OF SHAREHOLDERS.
TRANSACTIONS WITH
RELATED PARTIES
Share class
4.1
The Company has only one class of shares, and all shares
carry the same rights. At 31 December 2016 the Company had
111 662 000 outstanding shares.
4.2 Own shares
If the Company trades in its own shares, the Code of Practice
shall be observed.
As at 31 December 2016, the Company owned 1 250 000 of its
own shares.
4.3 Approval of agreements with
shareholders and other related parties
All transactions of no lesser significance between the
Company and a shareholder, Board member or a senior
employee (or their related parties) shall be subject to a value
assessment by an independent third party. If the consideration
exceeds one twentieth of the Company’s share capital,
transactions of this kind shall be approved by the General
Meeting, in so far as this is required under Section 3-8 of the
Norwegian Public Limited Companies Act.
Board members and senior employees shall inform the Board
if they have any significant interest in a transaction to which
the Company is a party. For further information, please refer
to Note 22 «Related parties» in the GSF Group annual report.
Divergences from the Code of Practice: None.
4.4 Capital increases
In the event of a waiver of the shareholders’ preferential
subscription right, the Code of Practice shall be observed.
5. NEGOTIABILITY OF THE
SHARES
The Company’s shares shall be freely negotiable.
21
ANNUAL REPORT 2 0 1 6 7. NOMINATION
COMMITTEE
On 13 February 2009 the AGM approved a resolution to
establish a nomination committee. This is described in article
8 of the Article of Association. At the same time, the AGM
adopted instructions for the nomination committee. According
to the instructions, the election committee through its work
should take care of the interests currently embodied in the
Norwegian Code of Practice for Corporate Governance.
The present nomination committee was elected at the AGM on
14 June 2016 and comprises Marianne Johnsen (chair), Helge
Nielsen and Tone Østensen, of whose Marianne Johnsen is
candidate for election in 2017. At least 2/3 of the members of
the nominating committee shall be independent of the Board
and may not be members of the Board. The Group CEO cannot
be a member of the nomination committee. The nomination
committee shall have meetings with the directors, Group CEO
and relevant shareholders.
Details about the nomination committee members are
available on the Company´s website.
The nomination committee´s recommendation to the
General Assembly should be submitted in good time and
follow the summons to the General Assembly, no later than
21 days before the meeting. The recommendation of the
nomination committee must include information about the
candidate´s impartiality, competence, age, education and
professional experience. Upon proposal for re-election, the
recommendation should include additional information about
how long the candidate has been a board member, as well as
details about participation in the board meetings.
When the recommendation comprises candidates to the
nomination committee, it should include relevant information
about these candidates.
and on the Company’s homepage, showing the Board
members’ competence, relationship to main shareholders,
and a description of Board members who are deemed to be
independent. No overview of participation at Board meetings
is included in the Annual Report. An overview of the Board
members’ ownership of shares in the Company appears in
the relevant note to the accounts in the Annual Report. The
Company has no corporate assembly. The Company does not
otherwise diverge from the Code of Practice.
There is compliance with the required number of independent
Board members contained in the Code of Practice.
9. BOARD OF DIRECTORS
9.1 Duties and work plan
The Board has overall responsibility for the management
of the Group and for overseeing the daily management and
business activities. The Company shall be managed by an
effective Board of Directors (the Board) who has shared
responsibility for the success of the Company. The Board
represents and is accountable to the Company’s shareholders.
Each year the Board shall draw up a work plan for its
activities.
The Board’s duties include drawing up the Group’s strategy
and ensuring that the adopted strategy is implemented,
effective supervision of the Group CEO, control and
supervision of the Group’s financial situation, internal control
and the Company’s responsibility to and communication with
the shareholders.
The Board shall initiate any investigations it considers
necessary at any given time to perform its duties. The Board
shall also initiate such investigation that is requested by one
or more Board members.
Divergences from the Code of Practice: None.
The Company does not diverge from the Code of Practice.
9.2
Instructions
8. CORPORATE ASSEMBLY
AND BOARD OF DIRECTORS,
COMPOSITION
8.1 Number of Board members
The Company has no corporate assembly. Under the Articles
of Association the Board shall have up to seven members.
8.2 Election period
Board members are elected by the AGM for a period of two
years.
8.3
Independent Board members
The Board has drawn up instructions for its members and the
Management, which contain a more detailed description of the
Board’s duties, meetings, the Group CEO’s duties in relation to
the Board, the meeting schedule for the Board, participation,
separate entries in the Minutes and duty of confidentiality.
The respective roles of the Board and the Group CEO are
separate, and there is a clear division of responsibility
between the two. Separate instructions have been drawn up
for the Group CEO. He is responsible for the Company’s senior
employees. The Board underlines that special care must
be exercised in matters relating to financial reporting and
remuneration to senior employees.
In matters of importance where the chairman of the Board
is or has been actively involved, Board discussions shall be
chaired by the vice chairman.
The Board members are presented in the Annual Report
The instructions for the Board and Management were last
22
ANNUAL REPORT 2 0 1 6 revised by the Board on 4 April 2011.
9.3 Annual assessment
Each year, in connection with the first Board meeting in the
calendar year, the Board shall carry out an assessment of its
work in the previous year.
9.4 Audit Committee
The Board has set up a sub-committee (audit committee)
comprising a minimum of two and a maximum of three
members elected from among the Board’s members, and has
drawn up a mandate for its work.
The committee assists the Board in the work of exercising its
supervisory responsibility by monitoring and controlling the
financial reporting process, systems for internal control and
financial risk management, external audits and procedures for
ensuring that the Company complies with laws and statutory
provisions, and with the Company’s own guidelines.
9.5 Remuneration Committee
The Board has set up a sub-committee (remuneration
committee) comprising no less than three members. The
committee shall hold discussions with the Group CEO
concerning his/her financial terms of employment. The
committee shall submit a recommendation to the Board
concerning all matters relating to the Group CEO’s financial
terms of employment.
The committee shall also keep itself updated on and
propose guidelines for the determination of remuneration
to senior employees in the Group. The committee is also the
advisory body for the group managing director in relation
to remuneration schemes which cover all employees to a
significant extent, including the Group’s bonus system and
pension scheme. Matters of an unusual nature relating to
personnel policy or matters considered to entail an especially
great or additional risk, should be put before the committee.
The composition of the committee is subject to assessment
each year.
Divergences from the Code of Practice: None.
10. INTERNAL CONTROL
AND RISK MANAGEMENT
The Board has a responsibility to ensure that the company
has proper risk management and internal control adaptable
to statutory provisions for the company. The Board conducts
an annual evaluation of the most important risk areas and
internal control.
Internal control means activities carried out by the Group to
organise its business activities and procedures in order to
safeguard its own values and those of its customers, and to
realise adopted goals through appropriate operations. The
23
achievement of these goals also requires systematic strategy
work and planning, identification of risk, choice of risk profile,
as well as establishing and implementing control measures to
ensure that the goals are achieved.
The Group’s core values, external guidelines and social
corporate responsibility constitute the external outer
framework of internal control. The Group is decentralised
and considerable responsibility and authority are therefore
delegated to the regional operating units. Risk management
and internal control are designed to take account of this.
Internal control is an on-going process that is initiated,
implemented and monitored by the Company’s Board of
Directors, management and other employees. Internal
control is designed to provide reasonable assurance that the
Company’s goals will be achieved in the following areas:
Targeted, efficient and appropriate operations.
•
• Reliable internal and external reporting.
• Compliance with laws and regulations, including internal
guidelines.
The audit committee updates the Board after each meeting.
Each year the auditor carries out a review of internal control
which is an element of financial reporting. The auditor’s review
is submitted to the audit committee.
The Company has established framework procedures to
manage and eliminate most of the risk that could prevent a
goal from being achieved. This includes a description of the
Company’s risk management policy as well as all financial
control processes. There is on-going risk assessment of the
main transaction processes. Descriptions of the transaction
processes are currently in preparation for each region, with
the aim of clarifying key controls and ensuring that these
controls are in place. This means assessing all processes
to determine the probability of divergences arising, and how
serious the economic consequences would be of any such
divergence. The establishment of controls in each region is
aimed at reducing the likelihood of divergences arising with
major economic consequences.
The biological development in course of producing smolt
and farming in the sea poses the greatest risk in the group.
The Group therefore continuously and systematically works
to develop processes that ensure animal welfare and reduce
diseases and mortality, and so that “best practices” are
being implemented at all levels. Control routines have been
prepared, including conditions for the employees as well
as safeguarding against escapes, animal welfare, pollution,
water resources and food safety. Referring to the sustainability
report prepared annually, objectives, internal controls and
measures are described within the company’s main focus
areas.
The Group’s activities entail various kinds of financial risk:
Market risk (including foreign exchange risk, interest rate
risk and price risk), credit risk and liquidity risk. The Group’s
overall risk management plan focuses on the unpredictability
of the capital markets and seeks to minimise the potential
ANNUAL REPORT 2 0 1 6 negative effects on the Group’s financial results. To some
extent, the Group uses financial derivatives to hedge against
some risks. Risk management is drawn up at Group level
and involves identifying, evaluating and hedging financial risk
in close cooperation with the Group’s operational units. The
Board has established written principles for risk management
related to foreign exchange and interest rate risk, price risk,
and the use of financial instruments.
The Board has established procedures for reporting within the
Group:
• At the start of each year the Board adopts a budget for
•
•
•
the year. Divergences from the budget are reported on a
monthly basis.
Forecasts are drawn up for the next five years and they
are updated every month.
Every month, each region submits a report containing
given Key Performance Indicators (KPI). The main
KPIs are: EBIT/kg, feed factor, production, production
cost, harvest volume, harvest cost and level of sea
lice. Analyses are made and measured against budget
figures and KPIs. Generational accounts for terminated
generations will be updated on a monthly basis. The
information form of the regions is summarised in a report
submitted to the Board.
Each quarter, the Group management holds meetings
with the management of each region respectively. The
aim of the meeting is to follow up the strategies and goals
that have been set.
Each quarter, a risk assessment covering biology, feed,
market, finance and Compliance is prepared. These areas
are considered to pose the greatest risks for the Company.
This can be changed from the changed situation. The risk
assessment is reviewed by the Audit Committee in connection
with quarterly reporting.
Divergences from the Code of Practice: None.
11. BOARD REMUNERATION
Proposals concerning Board remuneration are submitted by
the nomination committee. Remuneration to Board members
is not linked to the Company’s results. None of the Board
members have special duties in relation to the Company which
are additional to those they have as Board members. Board
remuneration shall be shown in the financial statements of
both the Company and the Group.
Divergences from the Code of Practice: None.
12. REMUNERATION TO
SENIOR EMPLOYEES
12.1 Senior employees
The group management consists of Group CEO, the director of
operations and the financial director, and HR director.
The objective of the guidelines for determination of salary and
24
other remuneration to senior employees within the Group is to
attract people with the required competence and at the same
time retain key personnel. The guidelines should also motivate
the employees to work with a long-term perspective to enable
the Group to achieve its goals.
The determination of salary and other remuneration to the
Group’s senior employees is therefore based on the following
guidelines:
•
•
•
•
Salary and other remuneration shall be competitive and
motivating for each manager and for everyone in the
senior management group.
Salary and other remuneration shall be linked to value
creation generated by the Company for the shareholders.
The principles used to determine salary and other
remuneration shall be simple and understandable to
employees, the shareholders and the public at large.
The principles used to determine salary and other
remuneration shall also be sufficiently flexible to allow
adjustments to be made on an individual basis in the light
of the results achieved and the contribution made by the
individual to the development of the Group.
The salary paid to the members of the senior management
group consists of a fixed and a variable element. Under
the bonus scheme in force the variable salary under the
scheme cannot exceed six times the monthly salary. Each
year, information about the provisions of the bonus scheme
is included in the Group declaration on the determination of
salary to the senior management group, and appears in the
financial statements for the Group, note 14.
The Company´s Board approved the allocation of cash
options based on the General Assembly´s resolution for
the framework of the share and cash options programme.
The last approval from the General Assembly was May 28
2015. The allocation from the Board has been approved on
20 April 2007, 6 May 2009, 27 March 2012, 22 March 2013, 17
December 2013, 28 May 2015, and December 2016. The Group
CEO, the CFO, the COO, the HR director, and the four regional
managers are included in the share options programme. The
options agreements have been entered into within the scope
of the resolution adopted by the General Assembly. Minutes
of this General Assembly can be accessed on the Company’s
homepage.
This has been followed by the establishment of a synthetic
options programme. Options agreements with members of the
senior management group have been entered into within the
framework of the adopted resolution.
Remuneration to the Group CEO is determined at a meeting
of the Board of Directors. The salary payable to the other
members of the senior management group is determined
by the Group CEO. The Group CEO shall discuss the
remuneration which he/she proposes with the chairman of the
Board before the amount of remuneration is determined.
General schemes for the allocation of variable benefits,
including bonus schemes and options programmes, are
determined by the Board. Schemes which entail an allotment
ANNUAL REPORT 2 0 1 6 of shares, subscription rights, options and other forms of
remuneration related to shares or the development of the
Company’s share price, are determined by the General
Assembly. The Board´s declaration of management
remuneration is a separate agenda paper of the General
Assembly. The General Assembly votes separately on
guidelines to guide the Board and remuneration comprising
the synthetic options programme.
The Company has no divergences from the Code of Practice.
12.2 Severance pay
The Group CEO is entitled to 12 months’ severance pay after
dismissal, and 12 months salary during illness.
A severance pay agreement has also been established for the
CFO and COO providing for 12 months’ severance pay after
dismissal.
Divergences from the Code of Practice: None.
13. INFORMATION AND
COMMUNICATION
13.1 Financial information
The Company shall at all times provide its shareholders,
the Oslo Stock Exchange and the finance market in general
(through the Oslo Stock Exchange information system) with
timely and accurate information. The Board shall ensure that
the quarterly reports from the Company give a correct and
complete picture of the Group’s financial and commercial
position, and whether the Group’s operational and strategic
objectives are being reached. Financial reporting shall also
contain the Group’s realistic expectations of its commercial
and performance-related development.
The Company publishes all information on its own homepage
and in stock exchange/press announcements. Quarterly
reports, annual reports and stock exchange/press releases are
presented on an ongoing basis on the Company’s homepage in
accordance with the Company’s financial calendar.
The Company shall have an open and active policy in relation
to investor relations and shall hold regular presentations in
connection with the annual and interim results.
13.2 Shareholder information
The Board shall ensure that information is provided on
matters of importance for the shareholders and for the
stock market’s assessment of the Company, its activities
and results, and that such information is made publicly
available without undue delay. Publication shall take place in a
reliable and comprehensive manner and by using information
channels which ensure that everyone has equal access to the
information.
All information shall be provided in both Norwegian and
English. The Company has procedures to ensure that this
is done. The chairman of the Board shall ensure that the
shareholders’ views are communicated to the entire Board.
Divergences from the Code of Practice: None.
14. COMPANY TAKEOVER
14.1 Change of control and takeovers
The Company has no established mechanisms which can
prevent or avert takeover bids, unless this has been resolved
by the General Meeting by a majority of two thirds (of the votes
cast and of the share capital represented). The Board will not
use its authorisation to prevent a takeover bid without the
approval of the General Meeting after the takeover bid has
become known. If a takeover bid is received, the management
and the Board will ensure that all shareholders are treated
equally. The Board will obtain a value assessment from a
competent independent party and advise the shareholders
whether to accept or reject the bid. The shareholders will be
advised of any difference of views among the Board members
in the Board’s statements on the takeover bid.
The Board has in its Board meeting 13 October 2015 adopted
some core principles for how the Board will act in the event of
any persuasion offers. These core principles are in accordance
with the recommendation of NUES.
Divergences from the Code of Practice: None.
15. AUDITOR
The Board through its audit committee seeks to have a close
and open cooperation with the Company’s auditor. Each year
the audit committee obtains confirmation that the auditor
meets the requirements of the Act on auditing and auditors
concerning the independence and objectivity of the auditor.
The auditor’s schedule of audit work is submitted to the audit
committee once a year. In particular, the audit committee
considers whether, to a satisfactory extent, the auditor is
performing a satisfactory control function.
Both the Company management and the auditor comply with
guidelines issued by the Financial Supervisory Authority of
Norway concerning the extent to which the auditor can provide
advisory services.
The auditor attends Board meetings which deal with the
annual financial statements. The audit committee has an
additional meeting with the auditor at least once a year
to review the auditor’s report on the auditor’s view of the
Group’s accounting principles, risk areas and internal control
procedures. Moreover, each year the Board has a meeting with
auditor when neither the Group CEO nor anyone else from the
management is present.
The auditor also attends meetings of the audit committee
to consider quarterly reports and other relevant matters.
The auditor’s fee appears in the relevant note in the annual
report showing the division of the fee between audit and other
services.
Divergences from the Code of Practice: None.
25
Translated version. Not to be signed
ANNUAL REPORT 2 0 1 6 CONSOLIDATED
INCOME STATEMENT
AMOUNTS IN NOK 1 000
Sales revenue
Other income
Other gains and losses
Share of profit from associated companies
Cost of sales
Salaries and personnel expenses
Other operating expenses
Note
2016
2015
6
6
6
5
7
6 545 187
4 608 667
41 019
17 386
569
44 921
-15 218
6 994
-3 287 159
-2 738 926
15/16
-483 473
-409 432
11/15/20/24
-1 491 867
-1 235 695
EBITDA before fair value adjustments of biological assets
1 341 662
261 311
Depreciation property, plant and equipment
Depreciation licenses and other intangible assets
Impairment and reversals of property, plant and equipment, and intangible assets
EBIT before fair value adjustments of biological assets
Fair value adjustment of biological assets
EBIT
Share of profit/loss from associated companies
Financial income
Financial expenses
Net financial items
Profit before income tax
Income tax expense
Profit for the year
ALLOCATED TO:
Controlling interests
Non-controlling interests
9
8
8/9
3/7
5
23
23
13
-175 352
-162 211
-5 036
6 472
1 167 745
515 741
1 683 486
-5 163
-46 195
47 742
33 209
80 951
12 083
3 142
20 479
-155 213
-134 733
38 056
-131 357
-93 301
1 560 836
-9 208
-338 505
1 222 331
1 186 032
36 299
13 574
4 366
-6 626
10 992
-0,06
-0,06
Profit available to shareholders in parent company
Earnings per share (NOK)
Diluted earnings per share (NOK)
26
18
18
10,74
10,74
A N N U A L R E P O R T 2 0 1 6 GROUP
CONSOLIDATED
COMPREHENSIVE INCOME
STATEMENT
AMOUNTS IN NOK 1000
Profit for the year
ITEMS WITH NO TAX EFFECT ON REALISATION SUBSEQUENTLY REVERSED IN PROFIT:
Currency translation differences, subsidiaries
Change in value of available-for-sale assets
Total
ITEMS WITH TAX EFFECT ON REALISATION SUBSEQUENTLY REVERSED IN PROFIT:
Currency effect of net investments
Fair value adjustment of cash flow hedging
Tax effect
Net effect
Note
2016
2015
1 222 331
4 366
-10 389
19
-10 370
-90 228
6 052
20 203
-63 973
6 266
31
6 297
54 134
-
-13 533
40 601
3
3
Comprehensive income after taxes
-74 343
46 898
Total comprehensive income for the year
1 147 988
51 264
ALLOCATED TO:
Controlling interests
Non-controlling interests
1 109 138
38 850
40 272
10 992
27
A N N U A L R E P O R T 2 0 1 6 GROUP
CONSOLIDATED
BALANCE SHEET
AMOUNTS IN NOK 1000
ASSETS
Goodwill
Deferred tax assets
Licenses
Other intangible assets
Property, plant and equipment
Investments in associated companies
Available-for-sale financial assets
Other non-current receivables
Total non-current assets
Inventories
Biological assets
Accounts receivable
Other current receivables
Derivatives and other financial instruments
Cash and cash equivalents
Total current assets
Note
31.12.16
31.12.15
8
13
8
8
9
5
7
7
3/20
21
3/12
3/19
108 595
0
1 060 622
17 598
1 510 379
0
1 445
4 167
110 647
10 317
1 093 338
16 993
1 534 770
25 947
1 426
2 667
2 702 804
2 796 104
89 164
2 459 625
800 591
163 246
48 994
503 613
4 065 234
90 867
1 929 115
581 904
145 767
0
392 020
3 139 673
Total assets
6 768 038
5 935 777
28
A N N U A L R E P O R T 2 0 1 6 GROUP
Amounts in NOK 1000
EQUITY AND LIABILITIES
Share capital
Treasury shares
Other equity - not recognised
Retained earnings
Total controlling interests
Non-controlling interests
Total equity
Deferred tax liabilities
Pension obligations
Cash-settled share options
Loan
Other long-term borrowings
Finance leasing liabilities
Total non-current liabilities
Current portion of long-term borrowings
Current portion of finance leasing liabilities
Factoring liabilities
Cash-settled share options
Accounts payable
Tax payable
Accrued salary expense and public tax payable
Derivatives and other financial instruments
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Note
31.12.16
31.12.15
17
17
13
16
10
10
10/11
10
10/11
3/10
16
3
13
3/12
25
446 648
-5 000
63 098
2 645 935
3 150 681
56 270
446 648
-5 000
139 993
1 625 521
2 207 162
30 349
3 206 951
2 237 511
674 684
0
11 360
979 874
15 963
250 452
539 040
109
4 389
1 518 261
21 425
272 968
1 932 333
2 356 192
98 490
67 116
502 535
0
493 534
172 057
48 819
23 990
222 213
1 628 754
101 922
61 008
338 231
1 250
653 083
24 545
12 134
27 104
122 795
1 342 072
3 561 087
3 698 264
6 768 038
5 935 777
Bergen, 3 April 2017
Grieg Seafood ASA
TRANSLATED VERSION. NOT TO BE SIGNED
29
A N N U A L R E P O R T 2 0 1 6 GROUP
CHANGE IN EQUITY
Amounts in NOK 1000
Share capital
Own
shares
Other
equity - not
recognised
Retained
equity
Non-
controlling
interests
Total equity
Equity at 01.01.2015
446 648
-5 000
93 095
1 687 353
19 357
2 241 451
PROFIT FOR 2015
-6 626
10 992
4 366
Translation effects foreign currency
Net investment
Change in value in shares held for sale
Total comprehensive income
Total comprehensive income for 2015
Dividend paid
Total equity from shareholders 2015
Total change in equity in 2015
6 266
40 601
31
46 898
0
0
0
6 266
40 601
31
46 898
46 898
-6 626
10 992
51 264
-55 206
-55 206
0
-55 206
-55 206
0
46 898
-61 832
10 992
-3 942
0
0
0
0
0
0
0
0
Equity at 31.12.2015
446 648
-5 000
139 993
1 625 521
30 349
2 237 511
PROFIT FOR 2016
1 186 032
36 299
1 222 331
Translation effects foreign currency
Net investment
Change in value in shares held for sale
Fair value change of cash flow hedging
Total comprehensive income
Total comprehensive income for 2016
Dividend paid
Dividend allocated minority from Ocean Quality
Total equity from shareholders 2016
Total change in equity in 2016
-10 389
-68 573
19
2 048
-76 895
-10 389
-68 573
19
4 600
-74 343
0
2 552
2 552
-76 895
1 186 032
38 850
1 147 988
-165 618
0
-165 618
-12 929
-12 929
-165 618
-12 929
-178 547
-76 895
1 020 414
25 921
969 441
0
0
0
0
0
0
0
0
Equity at 31.12.2016
446 648
-5 000
63 098
2 645 935
56 270
3 206 951
Booked value of the line "Own shares" equals nominal value of parent company´s holding of own shares
30
A N N U A L R E P O R T 2 0 1 6 GROUP
SPECIFICATION OF RETAINED EQUITY
Book value at 01.01.2015
Changes in 2015
Changes in 2016
Effect of
share-based
remuneration
Purchase of own
shares *)
Profit for the year -
dividend paid
Total
1 094
-13 036
1 699 295
1 687 353
0
0
0
0
-61 832
-61 832
1 020 414
1 020 414
Book value at 31.12.2016
1 094
-13 036
2 657 877
2 645 935
SPECIFICATION OF OTHER EQUITY,
NOT RECOGNISED
Shares held for
sale
Net investment
Currency
conversion
Change cash flow
hedging
Book value at 01.01.2015
Changes in 2015
Changes in 2016
Book value at 31.12.2016
737
31
19
787
75 372
40 601
-68 573
16 986
6 266
-10 389
47 400
12 863
2 048
63 098
Total
93 095
46 898
0
0
2 048
-76 895
*) Amount of "Purchase of own shares" is cost price in excess of nominal value. See also note 17
31
A N N U A L R E P O R T 2 0 1 6 GROUP
CASH FLOW STATEMENT
AMOUNTS IN NOK 1000
EBIT
Taxes paid in the period
Fair value adjustment of biological assets
Ordinary depreciation
Impairment and reversal of property, plant and equipment, and intangible assets
(Gain/)Loss on sale of property, plant and equipment
(Gain/)Loss on sale of own shares
Share of results from companies applying equity method of accounting
Change in inventories and biological assets ex. fair value
Change in customer accounts receivable and other receivables
Change in accounts payable
Change in other accruals items
Change in net pension and option obligations
Net cash flow from operations
Receipts from sale of property, plant and equipment
Receipts from sale of shares and other equity instruments
Dividends received
Payments on purchase of property, plant and equipment
Payments on purchase of intangible assets
Change in other non-current receivables
Net cash flow from investment activities
Change in long-term interest-bearing debt
Leasing receipts
Repayment of long-term interest-bearing debt and leasing
Other financial items
Dividend incl. allocation to non-controlling owner interests
Change in factoring
Interest expense
Net cash flow from financing activities
Note
13
7
8/9
9
5
5
8/9
5
23
9
8
2016
1 683 486
-41 653
-515 741
180 388
-6 472
1 202
-
-569
-16 799
-236 166
-159 549
59 374
5 612
953 113
17 199
39 592
-
-247 783
-7 069
-1 519
2015
80 951
-57 005
-33 209
167 374
46 195
-403
-1 405
-6 994
-51 661
-168 672
292 689
99 839
1 966
369 665
2 092
7 973
446
-264 050
-58 651
-4 358
-199 580
-316 548
-
43 131
-587 455
-3 988
-178 547
169 221
-87 196
-644 834
650 000
71 795
-528 987
-823
-55 206
139 131
-117 641
158 269
Net change in cash and cash equivalents
108 699
211 386
Cash and cash equivalents at 01.01
392 020
181 498
Currency conversion of cash and cash equivalents
2 894
-865
Cash and cash equivalents at 31.12
503 613
392 020
32
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 1
GENERAL INFORMATION
Grieg Seafood ASA is an integrated Norwegian seafood company
operating in the area of salmon farming and processing. Grieg
Seafood ASA is a public limited company registered in Norway. Its
head office is located at C. Sundtsgt. 17/19, Bergen, Norway. Grieg
Seafood ASA was listed on the Oslo Stock Exchange on
21 June 2007. The Company has operations in Norway, the UK and
Canada.
The consolidated accounts are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
EU, and approved by the Board of Directors 3 April 2017.
In the following, «Group» describes information related to the
Grieg Seafood Group, whilst «Company» refer to the parent
company.
The Group holds 60% of Ocean Quality AS together with Bremnes
Fryseri AS (40%). Grieg Seafood does not receive any of the profit
from sale of fish from Bremnes Fryseri AS, as the result is based
on a skewed distribution of profit from the delivered volume from
each shareholder, respectively. Share of profit and share of equity
in Bremnes Fryseri AS are presented as non-controlling interests.
All amounts are in NOK thousand unless stated otherwise.
Grieg Seafood Group consists of the following entities as at
31 December 2016:
Grieg Seafood Hjaltland UK Ltd including all subsidiary companies
and Ocean Quality UK Ltd are resident in UK. Grieg Seafood BC Ltd
and Ocean Quality North America Ltd are resident in Canada. The
rest of the companies are resident in Norway.
Grieg Seafood Hjaltland UK Ltd. and Grieg Seafood Canada AS are
holding companies, holding 100 % of the production companies
Grieg Seafood Shetland Ltd. and Grieg Seafood BC Ltd.,
respectively. Grieg Seafood ASA has a 60% stake in Ocean Quality
AS, the other subsidiaries are owned 100%.
GROUP STRUCTURE
SEGMENT STRUCTURE
33
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 2
ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless
stated otherwise.
BASIS OF PREPARATION
The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU.
The consolidated financial statements have been prepared under
the historical cost convention, as modified by biological assets,
available-for-sale financial assets, and financial assets/liabilities
(including derivative instruments) at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS
requires the use of estimates. It also requires management to
exercise its judgement in the process of applying the Company’s
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements,
are described in note 4.
CONSOLIDATION PRINCIPLES
(I) SUBSIDIARIES
Subsidiaries are all entities (including special purpose entities) over
which the Group has control. A situation where the Group controls
another entity arises when the Group is exposed to variability in
returns from the entity, and has power to influence this return
through its control of the entity.
Subsidiaries are consolidated from the date when the Group
can exercise control and consolidation ends when control of the
subsidiary terminates.
If the Company´s ownership exceeds 50 % but is below 100 % of the
subsidiaries, the non-controlling interest’s share of profit after tax
and share of equity is recognised in separate lines.
The purchase method of accounting is used for acquisitions. The
cost of an acquisition is measured as the fair value of the assets
and liabilities taken over, and equity instruments issued. The
cost also includes the fair value of all assets and liabilities and
contingent liabilities taken over by agreement. Identifiable assets,
debt and contingent liabilities are recognised at fair value on the
date of acquisition. Non-controlling interests in the acquired
entity are measured from time to time either at fair value, or at
their proportionate share of net assets of the entity that has been
acquired.
Costs related to acquisitions are charged as they arise.
In the case of a multi-stage acquisition, the proportion of ownership
from an earlier purchase is re-stated at fair value at the date of
control and the value change is recognised through profit or loss.
A contingent acquisition price is measured at fair value at the date
of acquisition. Under IAS 39, subsequent changes in the contingent
acquisition price are recognised through profit or loss or are posted
as a change in the comprehensive income statement where the
contingent price is classified as an asset or a liability. There is no
new value measurement of a contingent acquisition price classified
as equity, and the subsequent settlement is charged against equity.
Intra-group transactions, balances, and unrealised gains and losses
between Group companies are eliminated. The financial statements
of subsidiaries are re-stated where necessary to ensure consistency
with the accounting policies adopted by the Group.
(II) CHANGE IN OWNER INTERESTS IN SUBSIDIARIES WITHOUT LOSS OF
CONTROL
Transactions with non-controlling interests of subsidiaries, which
do not entail a loss of control, are regarded as equity transactions.
On the purchase of further shares from non-controlling interests,
the difference between the consideration paid and the shares’
proportionate share of the net assets in the financial statements of
the subsidiary is recognised in the equity of the parent company’s
owners. Similarly, any gain or loss on a sale to non-controlling
interests is charged against equity.
(III) DIVESTMENT OF SUBSIDIARIES
In the event of loss of control, any remaining ownership interest is
stated as fair value change through profit or loss. Thereafter, for
accounting purposes, fair value is the acquisition cost either as
an investment in an associated company or as a financial asset.
Amounts previously recognised in comprehensive income statement
related to this company, are dealt with as if the Group had disposed
of underlying assets and liabilities. This allows for amounts
previously recognised in comprehensive income statement, to be
reclassified as part of the income statement.
(IV) ASSOCIATED COMPANIES
Associated companies are entities over which the Group has
significant influence, but not control. Significant influence normally
occurs when the Group has between 20 % and 50 % of the voting
rights. Investments in associates are recognised using the equity
method. Investments in associates are initially recognised at
acquisition cost, and the Group´s share of the results in subsequent
periods is recognised through profit or loss. The amount recognised
in the balance sheet includes any implicit goodwill identified at the
date of purchase.
Shares of profit or losses of associates that are closely linked to
the Group´s operations and thus are included in the value chain of
the Group, are classified on a separate line included in the Group’s
operating result.
In the event of a reduction in the owner interest in an associated
company where the Group retains significant influence, only a
proportionate share of amounts previously recognised in the
comprehensive income statement is reclassified through profit or
loss.
The Group’s share of profits or losses of associated companies
is recognised in the income statement and is added to the value
of the investment in the balance sheet. The Group’s share of the
comprehensive results of the associated company is recognised
34
A N N U A L R E P O R T 2 0 1 6 GROUP
in the consolidated statement of comprehensive income plus the
amount of the investment in the balance sheet. The Group’s share
of a loss is not recognised in the income statement if this means
that the value of the investment in the balance sheet is negative
(including the entity’s unsecured receivables), unless the Group
has undertaken obligations or made payments on behalf of the
associated company. The accounts of associated companies are
re-stated when necessary to ensure consistency with the accounting
policies adopted by the Group.
At the end of each accounting period, the Group determines if there
is a need to write down the investment in the associated company.
In such case, the amount of the write-down is calculated as the
difference between the recoverable amount of the investment and
its book value, and the difference is posted on a separate line along
with «Share of results of associated companies».
If a gain or a loss arises on transactions between the Group and
its associated companies, only the proportionate amount related to
shareholders outside the Group is recognised. Unrealised losses
are eliminated unless there is a need to write down the asset
that was the subject of the transaction. Accounting policies of
associates are changed when necessary to ensure consistency with
the accounting policies adopted by the Group. Gains and losses on
dilution of assets of associated companies are recognised in the
income statement.
SEGMENT REPORTING
Operating segments are reported in a manner consistent with
the internal reporting to the chief operating decision-maker. The
chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments,
has been identified as the Group management.
FOREIGN CURRENCY TRANSLATION
The financial statements of each of the Group’s entities are generally
measured using the currency of the economic area in which the
entity operates («the functional currency»). The consolidated
financial statement is presented in Norwegian Kroner (NOK), which
is the parent company’s functional and presentation currency.
TRANSACTIONS AND BALANCE SHEET ITEMS
Foreign currency transactions are translated into the functional
currency using the exchange rates. Foreign exchange gains
resulting from the settlement of such transactions that are not
denominated in the entity´s functional currency are recognised
in income. Translations of monetary items (assets and liabilities)
that are not denominated in the entity´s functional currency are
recognised.
GROUP COMPANIES
The income statements and balance sheets of the Group entities
(none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
1.
2.
3.
the balance sheet is translated into closing rate on the date of
the balance sheet,
income and expense items in the income statement are
translated at average exchange rates for the period (if the
average is not a reasonable estimate of the cumulative effects
of using the transaction rate, the transaction rate is used)
translation differences are recognised in comprehensive
income and specified separately.
When a foreign operation is sold, the exchange difference, which
in previous periods was recognised in consolidated income, is not
accrued. The accumulated exchange difference on the sale of the
foreign operation is hence reversed in the consolidated income.
Gain/loss from the sale is recognised on a basis of zero exchange
difference. Gain/loss is recorded in the ordinary net profit.
Goodwill and fair value adjustments of assets and liabilities on the
acquisition of a foreign entity are treated as assets and liabilities of
the foreign entity and are translated into closing rate on the date of
the balance sheet.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at historical cost less
depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the asset. Acquisition
may also include gains or losses transferred from equity as a result
of hedging the cash flow in foreign currency on the purchase of
property, plant and equipment.
Improvements are included in the asset’s carrying amount or
recognised as a separate asset when it is probable that future
economic benefits associated with the improvement will flow to the
Group and the cost of the item can be reliably measured. All other
repairs and maintenance are charged to the income statement
during the financial period in which they are incurred.
Land and buildings comprise mainly factories and offices. Land is
not depreciated. Depreciation on other assets is calculated using
the straight-line method to allocate cost less residual value over
estimated useful lives, as follows:
• Buildings/real estate 10 – 50 years
• Plants, barges, onshore power supply 5 – 30 years
• Nets/cages/moorings 5 – 25 years
• Other equipment 3 – 35 years
The assets’ useful lives and residual values are estimated at each
balance sheet date and if necessary adjusted.
An asset’s carrying amount is written down to its recoverable
amount if the carrying amount is greater than its estimated
recoverable amount. Gains and losses on disposals are posted net
in the income statement and correspond to the difference between
the sale price and the carrying amount.
INTANGIBLE ASSETS
Intangible assets, which arise internally within the Group, are not
recognised. Goodwill and licenses with an indefinite economic
life are subject to annual impairment tests. Impairment tests are
performed more frequently if indications of impairment occur.
Amortised licenses are tested for impairment only if there are
indications that future earnings do not justify the asset’s balance
sheet value.
GOODWILL
Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group’s share of the net identifiable assets
of the acquired entity at the date of acquisition. Goodwill on
acquisitions of subsidiaries is classified as an intangible asset.
Goodwill on the purchase of a share in an associated company is
included in «investments in associates». Goodwill is tested annually
for impairment and carried at cost less accumulated impairment
losses. Impairment losses on goodwill are not reversed. Gains and
losses on the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of
impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose.
LICENSES
Fish quotas and fish farming licenses that have an indefinite useful
life are not amortised but reviewed for impairment annually, or
more frequently if there are indications that the balance sheet value
may have decreased.
The Group considers the following licenses to have indefinite useful
35
A N N U A L R E P O R T 2 0 1 6 GROUP life:
1. Licenses granted with indefinite useful life, where the company
has no other contractual restrictions related to the use of the
license.
2. Licenses granted with limited useful life, but where renewal
license holders´ side can be arranged without
from
considerable expenses.
Licenses with a limited useful life are amortised over the useful
lifetime. These regard water concessions for hatcheries and
some specific seawater licenses. The following sections provide
a description of concessions related to the segments Norway, UK
(Shetland) and Canada (BC). Please refer to note 10 Intangible
assets for an overview of the number and types of licenses, as well
as impairment testing.
NORWAY
The licensing regime for the production of salmon and trout in
Norway has been introduced by the Parliament and adopted
through the Aquaculture Act. The Ministry of Trade, Industry and
Fisheries grants permits for aquaculture (licenses). All aquaculture
operations are subject to licensing and nobody can produce salmon/
trout without permission from the authorities, cf. Aquaculture Act
§ 4.
The aquaculture permit entitles the production of salmon
and trout in limited geographic areas (sites), with the current
determined limitations of the permit scope. The Aquaculture Act
is administered centrally by the Ministry of Trade, Industry and
Fisheries, with the Directorate of Fisheries as the supervisory
authority. Regionally, several
industry authorities collectively
manage a complete administrative and supervisory responsibility
within the regulating range of the Aquaculture Act. The county is
the regional administrative body, while the Directorate of Fisheries
serves as appellate body in locality and licensing matters.
Seawater licenses
Each license for salmon and trout in the sea is subject to a
production limit in the form of «maximum allowed biomass» (MTB).
MTB does not directly limit the number of tons of fish production
within a year, but limits the amount of fish to keep in the sea at
any time. Normally, a license has a limit of 780 tons MTB, while
in Troms and Finnmark counties, a standard license has a limit
of 900 tons MTB (provided all associated locations are situated
in Troms and Finnmark) ref. the Salmon Allocation Regulation
§ 15 («laksetildelingsforskriften»). Such licenses are limited in
number and only subject to application, following politically decided
licensing rounds.
Hatchery licenses
Young salmon/trout are defined as eggs, juveniles, parr or smolts
to be released in another locality ref. Salmon Allocation Regulation
§ 4 f. Such licenses are not limited in number and thus subject
to continuous application for new licenses or changes to existing
licenses. Basically, it is not allowed to produce smolts over 250
grams, but the regulations allow for applications to produce a
certain percentage of fish up to 1 kg. GSF has authorisation up to
1 kg.
R&D and broodstock licenses
These licenses are not limited in number. Permissions are means-
tested, meaning the applicant must demonstrate a need for the
production of eggs, specific research projects or educational
purposes. Broodstock licenses include both land and sea phase,
i.e. the broodfish and egg production belong to the same licensing
consideration.
Harvesting cage licenses
Licenses utilized to cage setting of live fish for harvesting. These
relate to specific locations.
Duration and renewal
The Ministry may in individual decisions or regulations specify
further provisions on the contents of aquaculture licenses,
including scope, time limitations, etc., cf. the Aquaculture Act § 5,
second paragraph. Still, the preparatory work for the Aquaculture
Act specify that licenses normally are granted without a time limit.
GSF’s general food fish licenses and hatchery licenses are not
time limited under current regulations. After the reform in 2009,
a number of licenses were time limited, mainly to 15 years. As no
government practices have been established related to renewal of
broodstock licenses, the current understanding is that expiration
of licenses allows for application for renewal based on demand. A
license for harvesting cages is valid for 10 years and needs renewal
upon expiration, given that the license is still connected to an
approved harvesting plant.
Disposal and withdrawal
All licenses can be transferred and mortgaged according to the
Aquaculture Act § 19. Transfers and mortgages must be registered
in a separate register (the Aquaculture Register). It is not allowed to
rent out licenses or license capacity.
The Aquaculture Act reviews the basis for withdrawal of an
aquaculture license. This states inter alia that there must be
significant breaches of the terms of an aquaculture license before
it can be revoked.
UK
Grieg Seafood Shetland Ltd (GSF UK) has farms on both the west
and east coast of Shetland, as well as the west coast of Scotland. In
order to operate farms in Scotland, the following five licenses must
be in place:
1. Water Environment (Controlled activities) “CAR” license –
issued by Scottish Environment Protection Agency (SEPA)
2. Planning permission – issued by local authorities (Town and
3.
Country Planning Act)
(iii) Crown Estate Lease/Permission (The Crown Estate act
1961)
4. Aquaculture Production Business License (APB) – issued by
Aqua Animal Health
5. Marine License
government
(Navigation) –
issued by the Scottish
For limitations related to production quantity, see table in note 8.
Duration and renewal
1. CAR license – requires periodic inspection and monitoring. If a
substantial negative effect on the environment can be proven,
as a consequence of the operation, the production volume can
be reduced or, as a worst-case scenario, revoked.
2. Planning Permission – indefinite duration, but if the plant is left
unused for 3 consecutive years, the license may be withdrawn
3. Crown Estate Lease/Permission – 25 years of duration. Normal
procedure is renewal of the licenses upon expiration.
4. APB – indefinite duration depending on compliance with the
license´s conditions.
5. Marine License – required application for renewal every 6
years. This is normally a formality.
BC
Grieg Seafood BC Ltd (GSF BC) has farms on both the west and
east coast of Vancouver Island. In order to operate farms in British
Columbia, Canada, the following three licenses must be in place:
1. Aquaculture license – issued by Department of Fisheries and
Oceans
2. License of Occupation (Tenures) – issued by Ministry of Forest,
Lands and Natural Resource Operations
3. Navigation Water Permit – issued by Transport Canada
(Canadian public authorities)
For limitations related to production quantity, see table in note 8.
36
A N N U A L R E P O R T 2 0 1 6 GROUP Duration and renewal
1. Aquaculture license – duration of 1 year, renewal each year is
a formality.
2. License of Occupation – duration of between 2 and 20 years.
Renewal is applied for upon expiration.
3. Navigation Water Permit – duration of 5 years, but possible to
apply for renewal.
OTHER INTANGIBLE ASSETS
Acquired customer portfolios and computer software licenses are
capitalised at cost and amortised over their estimated useful lives.
Customer portfolios are capitalised at historical cost at the date of
purchase. Amortisation is calculated using the straight-line method
over the estimated useful life, as follows:
• Customer portfolios 6 years
• Computer software 3-10 years
Impairment of non-financial assets
Assets that have an indefinite useful life are not amortised and
are tested annually for impairment. Assets that are subject to
amortisation are reviewed for impairment whenever there are
indications that future earnings do not justify the carrying amount.
An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating
units). Non-financial assets, other than goodwill, that suffered an
impairment are reviewed for indicators of possible reversal of the
impairment at each reporting date.
FINANCIAL ASSETS/LIABILITIES
The Group classifies its financial assets in the following three
categories:
1.
loans and receivables,
2. assets available for sale, and
3. at fair value through profit or loss
The classification depends on the purpose of the assets. The
management determines the classification of its financial assets
upon acquisition and re-evaluates this designation only in case of
material changes at every reporting date.
I) LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market.
They are classified as current assets, except for maturities greater
than 12 months after the balance sheet date. These are classified
as non-current assets. Loans and receivables are classified as
‘other receivables’ in the balance sheet.
At each balance sheet date the Group considers whether there is
any objective evidence that the loans and receivables are impaired.
Such objective evidence is, for instance:
- breach of contract, such as a default or delinquency in payments,
- the probability that the borrower will become insolvent or be
subject to financial reorganisation.
Loans and receivables are carried at amortised cost using the
effective interest method.
II) AVAILABLE-FOR-SALE FINANCIAL ASSETS
Available-for-sale financial assets are non-derivatives
that
are either designated in this category or not classified in any
other category. They are included in non-current assets unless
management intends to dispose of the investment within 12 months
of the balance sheet date.
value is recorded in consolidated total financial statement.
When securities classified as available-for-sale are sold or
impaired, the accumulated fair value adjustments recognised in
equity are included in the income statement as ‘other financial
income/losses from investment in securities ’. Interest on available-
for-sale securities calculated using the effective interest method is
recognised in the income statement. Dividends on shares classified
as available-for-sale are recognised in the income statement when
the Group’s right to receive dividends is established. The fair values
of quoted investments are based on current bid prices. If the market
for a financial asset is not active (and for unlisted securities), the
Group establishes fair value by using valuation techniques. These
include recent transactions on market terms, reference to other
instruments which are essentially the same, the use of discounted
cash flows and options models.
The techniques used make maximum use of market and avoid
company-specific information as much as possible.
Investments are derecognised when the rights to receive cash flows
from the investments have expired or have been transferred and
the group has transferred substantially all risks and rewards of
ownership.
Regular purchases and sales of investments are recognised on
trade-date – the date on which the Group commits to purchase
or sell the asset. All financial assets which are not stated at fair
value through profit or loss are initially recognised at fair value plus
transaction costs.
At each balance sheet date the Group assesses whether there is
objective evidence that a financial asset or a group of financial assets
is impaired. In the case of shares classified as available for sale,
a significant or prolonged decline in the fair value of the security
below its cost is considered as an indicator that the securities are
impaired. If any such evidence exists for available-for-sale financial
assets, the cumulative loss – measured as the difference between
the acquisition cost and fair value, less any impairment loss on
that financial asset previously recognised through profit or loss –
is removed from equity and recognised in the income statement.
Impairment losses recognised in the income statement on shares
and corresponding equity instruments are not reversed through the
income statement. Impairment testing of accounts receivable is
described below.
III) FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE INCLUDED IN IN-
COME STATEMENT, INCLUDING DERIVATIVES AND HEDGING
Financial equity classified as available-for-sale is recorded at fair
value, whereas change of value is included in income statement.
The Group applies hedge accounting under IAS 39 on long-term
foreign currency forward contracts entered into in connection with
physical future delivery contracts of fish to customers. Changes in
value of foreign currency forward contracts which meet the hedging
criteria, are recorded in comprehensive income.
Short-term foreign currency forward contracts related to spot
market for fish are recognised at fair value through profit or loss.
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently stated at
fair value on an ongoing basis. Changes in fair value of derivatives
entered into for hedging purposes against operational revenue,
are posted in revenue. Other currency and interest derivatives are
posted net in the income statement under «other financial income/
financial costs».
Pertaining to financial price contracts related to sale and purchase
agreements on Fish Pool, the change of unrealised gains and
losses is posted as a value adjustment of biological assets, while
book value is reported as a derivative in the balance sheet, carrying
gross value for purchase and sales contracts, respectively.
Available for-sale financial assets are stated at fair value. Change of
37
A N N U A L R E P O R T 2 0 1 6 GROUP Assets/liabilities in this category are classified as current assets/
short term debt when intended to be disposed of within 12 months,
otherwise as non-current assets/liabilities.
INVENTORIES
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the first-in, first-out (FIFO) method. The
net realisable value is the estimated selling price, less processing
and selling expenses.
BIOLOGICAL ASSETS
The accounting treatment of living fish by companies applying IFRS
is regulated by IAS 41 Agriculture. IAS 41 comprises a hierarchy
of methods for accounting measurement of biological assets. The
basic principle is that such assets shall be measured at fair value.
The model applied by the Group divides the fish into three weight
categories and assumes the following:
1. Fish below 1 kg is recorded at accumulated cost. The best
estimate for fair value is considered to be accumulated cost.
2. For fish between 1 and 4 kgs the estimated fair value includes
a proportionate part of the estimated profit.
3. Fish in sea with an average weight over 4 kgs (fish ready for
harvesting) are estimated to net sale price, on the basis of
harvesting and sale at the balance sheet date. I.e. no remaining
production cost or biomass growth is added to this weight
category. The basis price used to calculate the fair value of this
fish is expected price per kg at the estimated date of sale.
If the expected sale price is below the estimated cost, this will entail
a negative value adjustment of biological assets, which is 100 %
accrued. Upon estimating actual accumulated cost at the respective
seawater facility, direct costs (fish feeds a.o.) are allocated to the
locality. Indirect costs are distributed across localities through a
norm of distribution. Given unusual mortality rate, the production
cost is subject to write-down. This applies only when mortality rate
exceeds normal expectations. Financial costs are not allocated to
production cost.
The sale price for fish in sea with an average weight exceeding 4
kgs (fish ready for harvest) is forward price in Norway based on
harvesting and selling the fish on the balance sheet date. The price
of fish between 1 and 4 kgs is based on forward prices, adjusted for
remaining growth period to expected harvest.
Regarding foreign countries, the most relevant price information
available for the expected period of harvest, is being applied. As
for fish between 1 and 4 kgs, forward price in Norway is corrected
for historical differences in achieved prices between Norway and
Canada/UK.
The price/net sales value is adjusted for quality differences
(superior, ordinary and prod.), weight size, and for logistics
expenses and sales commissions. Estimated harvesting expenses
are deducted. The volume is adjusted for gutting waste, as the price
is measured for gutted weight. Own, budgeted harvesting- and
freight cost has been applied. Foreign currency forward contracts
associated with the date of harvesting, are applied when translating
price into CAD and GBP.
Change in fair value of biological assets is recognised. The value
adjustment is presented on the separate line «Fair value adjustment
of biological assets».
for
loss/
Physical delivery contracts undergo assessment
value decrease against fair value adjusted for biological assets.
Calculation of value is based on the forward price from Fish Pool,
analogous to the calculation of biological assets. For sales under the
contracts covering fish 4 kgs, forward prices on the balance sheet
date for the consecutive quarter has been applied. Regarding losses
connected to physical contracts covering fish 4 kgs, a proportionate
share is recognised, equal to the principle of fair value calculations
of biological assets. Forward prices from Fish Pool according to the
scheduled time of harvest is applied. Change of loss arising from
physical delivery contracts, is recognised as a correction to change
of value adjustment of biological assets. The liability in the balance
sheet is posted under other current liabilities (see note 7).
The Group applies an internal principle of impairment in the event
of extraordinary mortality. Such impairments are recorded as they
arise as part of the goods expenses in the income statement.
Information on recorded fair value for extraordinary mortality is
based on the same principle as estimating value-adjusted biological
assets. For specification of annual extraordinary mortality, see note
7.
INDUSTRY GROUP FOR AQUACULTURE
In autumn 2014 the Fincancial Supervisory Authority of Norway
(FSA) initiated an evaluation project related to parts of the financial
reporting for aquaculture companies listed on the Oslo Stock
Exchange. The purpose of the project was to assess whether the
aquaculture industry practices a uniform and consistent reporting
in accordance with IFRS. FSA published its final report on
17 November 2015 on its website (www.finanstilsynet.no). As a
result of this review, the fish farming companies subject to the
project, established an industry group for financial reporting, as a
venue for discussions and common improvements of reporting.
The Group has held several meetings in 2015 and 2016, and the two
main agendas of the meetings have been to:
i) identify possible note improvements and policy applications, and
ii) develop a common model for fair value measurement of biomass
in line with IAS 41.
Affiliated with the first agenda, the group has identified some areas
for improvement, and some adjustments of the note disclosures
and presentation with effect starting from the fiscal year 2015.
As for the other agenda, the industry group has initiated work on
a common valuation model, and this work will continue in 2017.
The group aims to have completed this work in time to effect the
financial statements as of 31 December 2017.
The following companies participate in the industry group: Lerøy
Seafood Group ASA, Grieg Seafood ASA, P/F Bakkafrost, and Marine
Harvest ASA.
ACCOUNTS RECEIVABLE
Accounts receivable are generated from trading of goods or
services within the ordinary operating cycle. Accounts receivable
under normal terms of payment are recognised initially at
nominal value. Longer terms of payment implies a subsequent
measurement of net present value/discounting of the accounts
receivable. A provision for impairment of accounts receivable is
established when there is objective indication that the Group will not
be able to collect all amounts due according to the original terms
of trade. Significant financial difficulties affecting the debtor, the
probability that the debtor will become insolvent or be subject to
financial reorganisation, and default or delinquency in payments
are considered indicators that the account receivable is impaired.
The provision is the difference between nominal and recoverable
amount, which is the present value of estimated future cash flows,
discounted at the original effective interest rate. The amount of
the provision is recognised in the income statement under ‘other
operating expenses’.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, bank deposits,
other short-term highly liquid investments with original maturities
of three months or less. In the balance sheet, long-term credit
facility is included in short-term borrowings.
38
A N N U A L R E P O R T 2 0 1 6 GROUP SHARE CAPITAL
Ordinary shares are classified as equity. Costs directly attributable
to the issue of new shares or options, net of tax, are shown in equity
as a deduction, net of tax, from the proceeds.
is used for valuation.
The company´s obligations are posted under
long-term
commitments if the latest possible redemption date exceeds one
year into the future.
BORROWINGS
Borrowings are recognised initially at fair value when the funds
are received, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost applying the effective interest
method. Any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the income
statement over the period of the borrowings.
Borrowings are classified as current liabilities unless the Group has
an unconditional right to defer settlement of the liability for at least
12 months after the balance sheet date.
DEFERRED TAX
Deferred tax is provided for in full at nominal values, using the
liability method, on temporary differences arising between the value
of assets and liabilities for tax and accounting purposes. Deferred
tax is determined using tax rates and laws that have been enacted
or substantially enacted by the balance sheet date and are expected
to apply when the related deferred tax asset is realised or the
deferred income liability is settled.
Deferred tax assets are recognised to the extent that it is probable
that future taxable income will be available, from which the
temporary differences can be deducted.
Deferred tax is calculated on temporary differences arising on
investments in subsidiaries and associates, except where the timing
of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not be reversed
in the foreseeable future.
EMPLOYEE BENEFITS
PENSION OBLIGATIONS
The Company has paid premium to local, defined contribution based
schemes for all employees. The Company’s pension scheme is in
accordance with rules and regulations for mandatory occupational
pensions. The pension premium is charged through operations as
it arises in the profit and loss account. Employer’s social security
contributions are charged on the basis of the pension premium
paid.
The Group companies Grieg Seafood Rogaland AS and Grieg
Seafood Finnmark AS have a contractual early retirement pension
scheme (AFP). The financial commitments associated with this
scheme are included in the Group’s pension expenses. The AFP
early retirement scheme follows the rules for public sector AFP,
and both companies are members of the LO/NHO scheme. The
pension payment calculations are based on standard assumtions
relating to the development of mortality and disability as well as
other factors such as age, years of service and remuneration. The
premium is charged through operations as it arises in the profit and
loss account.
SHARE-BASED REMUNERATION
The Group operates a share-based management remuneration plan
with settlement in cash. The fair value of the employee services
received in exchange for the grant of the options is recognised as
an expense. The total amount to be charged over the vesting period
is calculated on the basis of the fair value of the options granted,
excluding the impact of any non-market vesting conditions (for
example, profitability and sales growth targets). Non-market vesting
conditions are included in assumptions about the number of options
that are expected to vest. At each balance sheet date, the company
revises its estimates of the number of options that are expected
to vest. It recognises the impact of the revision relative to original
estimates, if any, in the income statement, with a corresponding
adjustment to equity. The Black and Schole’s option pricing model
TRANSACTIONS UNDER JOINT CONTROL
On the purchase of entities under joint control the Group has chosen
to apply IFRS 3 as its accounting standard.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium when the options are exercised.
TERMINATION BENEFITS
Termination benefits are payable when employment is terminated
by the Group before the normal retirement date, or whenever an
employee accepts voluntary redundancy in exchange for these
benefits. The Group recognises termination benefits when it is
demonstrably committed to either terminating the employment
of current employees according to a detailed formal plan without
the possibility of withdrawal, or providing termination benefits as a
result of an offer made to encourage voluntary redundancy.
PROFIT SHARING AND BONUS PLANS
The Group recognises a provision where it has a contractual
obligation or where there is a past practice that has created a
constructive obligation.
PROVISIONS
Provisions (e.g. environmental improvements, restructuring costs
and legal claims) are recognised when:
- the Group has a present legal or constructive obligation as a result
of past events;
- it is more likely than not that an outflow of resources will be
required to settle the obligation;
- the amount of the obligation can be reliably estimated.
Restructuring provisions comprise lease termination penalties and
employee termination payments. Provisions are not recognised for
future operating losses.
Where there is a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering
the class of obligations as a whole. A provision is recognised even if
the likelihood of an outflow with respect to any one item included in
the same class of obligations may be small.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a pre-tax
discount rate that reflects the current market situation and the
risks specific to the obligation. The increase in the provision due
to the change in value because of passage of time is posted as a
financial expense.
REVENUE RECOGNITION
Revenue comprises the fair value of the consideration received or
receivable for the sale of goods and services. Revenue is shown
net of value-added tax, returns, rebates and discounts and after
eliminating intra-group sales. Revenue is recognised when it is
reliably measured and it is reasonably assured that the economical
assets will be transferred, that is when a group entity has delivered
products to the customer, the customer has accepted the products
and collectability of the related receivables and when the risks and
rewards have been transferred to the customer.
INTEREST INCOME
Interest income is recorded proportionately over time using the
effective interest method. When a receivable is impaired, the Group
reduces the carrying amount to its recoverable amount, being the
estimated future cash flow discounted at the original effective
interest rate. Interest income on impaired loans is recognised on
the basis of the amortised cost and the original effective interest
rate.
39
A N N U A L R E P O R T 2 0 1 6 GROUP DIVIDEND INCOME
Dividend income from investments under the cost method or
available-for-sale is recognised when the right to receive payment
is established. Dividend income from entities under the equity
method are not being recognised but recorded as a reduction in the
carrying value of the investment.
LEASES
FINANCE LEASINGS
Leases, or other arrangements as described in IFRIC 4, relating to
property, plant and equipment where the Group has substantially all
the risks and control, are classified as finance leasings.
Finance leasings are capitalised at the lease’s commencement at
the lower of the fair value of the leased property and the present
value of the aggregate minimum lease payments.
Each lease payment is allocated between an instalment element
and an interest element so as to achieve a constant interest rate
in the different periods on the outstanding lease obligation in the
balance sheet. The lease obligation, less interest costs, is classified
as other long-term debt. The interest expense is posted in the
income statement as a financial expense over the lease period so as
to achieve a constant interest expense on the outstanding obligation
in each period. The property, plant and equipment acquired under
finance leasings is depreciated over the shorter of the useful life of
the asset or the lease period.
OPERATING LEASES
Leases, or other arrangements as described in IFRIC 4, in which
a significant portion of the risks and rewards of ownership are
retained by the lessor, are classified as operating leases. Payments
made under operating leases (net of any financial incentives from
the lessor) are charged to the income statement on a straight-line
basis over the period of the lease.
DIVIDENDS
Dividends payable to the Company’s shareholders are recognised as
a liability in the Group’s financial statements when the dividends are
approved by the AGM.
BORROWING COSTS
Borrowing costs incurred during the construction of operating
assets are capitalised during the period of time that is required
to complete and prepare the asset for its intended use. Other
borrowing costs are charged in the income statement.
CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities are defined as:
(i) possible obligations resulting from past events whose existence
depends on future events;
(ii) obligations that are not recognised because it is not probable
that they will lead to an outflow of resources entailing financial
benefits out of the company
(iii) obligations that cannot be measured with sufficient reliability.
Contingent liabilities are not recognised in the annual financial
statements apart from contingent liabilities which are acquired
through the acquisition of an entity. Significant contingent liabilities
are disclosed, with the exception of contingent liabilities where the
probability of the liability occurring is remote.
Contingent liabilities acquired through the purchase of operations
are recognised at fair value even if the liability is not probable.
The assessment of probability and fair value is subject to constant
review. Changes in the fair value are recognised in the income
statement.
A contingent asset is not recognised in the financial statements,
but is disclosed if it is likely that a benefit will accrue to the Group.
CASH FLOW STATEMENT
The Group’s cash flow statement shows the overall cash flow
broken down into operating, investing and financing activities by
using the indirect method. The cash flow statement illustrates the
effect of the various activities on cash and cash equivalents. Cash
flows resulting from the disposal of operations are presented under
investing activities.
EARNINGS PER SHARE
Earnings per share are calculated by dividing the profit for the year
allocated to the company’s shareholders by a weighted average of
the number of issued ordinary shares during the year.
Diluted earnings per share are calculated by adjusting the weighted
average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares.
40
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 3
FINANCIAL RISK MANAGEMENT
CAPITAL MANAGEMENT
The Group aims to ensure that it has access to capital to enable the business to develop in accordance with adopted strategies. By so doing,
the Group should continue to be one of the leading players in the business. Historically, the industry has always been vulnerable to price
fluctuations in the market. Because of this, the accounting performance may fluctuate considerably from year to year. It is therefore also
a goal to ensure that the business maintains an appropriate level of free liquidity.
The aim of the Group is to provide a competitive return on invested capital to shareholders, through distribution of dividend and increased
nominal share value. The Board deems it normal to achieve over several years an average dividend corresponding to 25-30% of the
company´s profit after tax, after allowing for the effects of fair value adjustments of biomass on profits. However, the dividend must always
be considered in the light of what is deemed to be a healthy and optimal level of equity.
At 31.12.2016 the Group had net interest-bearing debt including finance leasings of MNOK 1 400, ref. note 10. Funding is mainly in the form
of bank loans. The level of debt and alternative forms of funding are subject to constant evaluation.
FINANCIAL RISK FACTORS
The Group is exposed to a range of financial risks; market risk (including currency risk, interest rate risk and price risk), credit risk and
liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of the financial markets and seeks to
minimise potential adverse effects on the Group’s financial performance. To some extent, the Group uses financial derivatives to reduce
certain risks.
The Group identifies, evaluates and hedges financial risks in close cooperation with the Group’s operational units. The board has estab-
lished written principles for the management of foreign exchange risk, interest rate risk and the use of financial instruments.
MARKET RISK
(I) FOREIGN EXCHANGE RISK
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect
to the CAD, USD, GBP and EUR. Foreign exchange risk arises from future commercial transactions, recognised assets, and liabilities and
net investments in foreign operations. The Group enters into foreign currency forward contracts to manage this risk.
Currency in NOK 1000
2016
NOK
USD
EUR
GBP
CAD
JPY
Other
currency
Total
Accounts receivable
Accounts payable
86 289
171 796
353 776
136 028
6 259
37 330
9 113
800 591
378 525
2 648
9 444
51 300
48 847
-
2 770
493 534
Currency in NOK 1000
2015
NOK
USD
EUR
GBP
CAD
JPY
Other
currency
Total
Accounts receivable
Accounts payable
102 482
87 647
271 653
92 021
4 679
23 422
0
581 904
424 127
769
7 419
124 405
91 513
-
4 850
653 083
Currency statement net
interest-bearing debt
2016
NOK
USD
EUR
GBP
CAD
Cash and cash equivalents
3 459
-53 390
-2 140
352 771
203 226
JPY
-409
Other
currency
Total
95
503 613
Longt-term interest-bearing
debt*
1 408 282
58 222
273 907
133 493
-
22 188
7 501
1 903 593
Net interest-bearing debt
1 404 823
111 613
276 047
-219 277
-203 226
22 597
7 406
1 399 981
Currency statement net
interest-bearing debt
2015
NOK
USD
EUR
GBP
CAD
Cash and cash equivalents
261 739
24 165
1 601
48 231
55 930
Other
currency
Total
1
392 020
JPY
353
Interest-bearing
1 965 818
71 053
199 476
50 587
-
12 195
-
2 299 129
Net interest-bearing debt
1 704 079
46 888
197 875
2 356
-55 930
11 842
-1
1 907 109
*Overview of interest-bearing debt, see note 10
41
A N N U A L R E P O R T 2 0 1 6 GROUP
The Group has investments in foreign subsidiaries whose net assets are exposed to foreign currency translation risk. Currency exposure
arising from the net assets of the Group’s foreign operations has previously been managed primarily through borrowings denominated in
the relevant foreign currencies.
The Group´s bank loans are in NOK. The background is a wish to prevent the parameters of the financial framework from being affected
by currency fluctuations, since all of the syndicated bank loans are measured in NOK.
The parent company has short and long-term loans to the subsidiaries denominated in these companies’ functional currency. All long-term
loans are considered to be equity in these companies, as they will not be repaid. The currency effect of loans are posted under «currency
effect of net investments» in consolidated comprensive income. Numerical effects for 2016 and 2015 are presented below.
The currency effect of the net investments of subsidiaries is as follows:
Currency effect
Tax effect
Net effect charged to equity
2016
-90 228
21 655
-68 573
2015
54 134
-13 534
40 601
Sensitivity analysis:
Given a currency appreciation of NOK with 10% against USD, CAD, GBP and EUR on the balance sheet date 31.12.2016, the following
effects on net interest-bearing debt in TNOK can be expected.
10% appreciation against
Net effect on net interest-bearing debt
USD
-26 145
EUR
-22 052
GBP
-13 135
The reversed effect will take place if NOK depreciates with 10%
10% appreciation against
Monetary items - net effect on profit after tax (25 %)
USD
-15 242
EUR
4 004
GBP
161
CAD
41
CAD
31
The reversed effect will take place if NOK depreciates with 10%
Forward currency contracts:
Hedge accounting has been applied to foreign currency forward contracts relating to long-term physical supply contracts. Effect on profit
is recorded through comprehensive income. Short-term forward currency contracts are not subject to hedge accounting.
Short-term forward currency contracts are classified at fair value through profit or loss as current assets or current liabilities, respectively.
Please refer to further details disclosed in note 2.
Forward currency contracts at fair value through profit or loss as at 31.12.2016:
Amount
Bought
Amount
3 920
7 582
12 348
993
262 435
564
11
CAD
NOK
NOK
NOK
NOK
NOK
NOK
5 224
65 132
113 333
11 026
19 658
523
96
Weighted
hedging rate
1,3300
8,5908
9,1782
Market rate
Maturity interval *)
1,3400
04.01.17 - 27.01.17
8,6200
03.01.17 - 27.01.17
9,0863
02.01.17 - 30.01.17
11,1078
10,6126
04.01.17 - 20.01.17
0,0749
0,9272
8,4857
0,0736
04.01.17 - 27.01.17
0,9512
05.01.17 - 09.01.17
8,4610
06.01.17
Market value
in TNOK at
31.12.2016
-288
-236
1 059
501
309
-14
0
1 332
Sold
USD
USD
EUR
GBP
JPY
SEK
CHF
Total
42
A N N U A L R E P O R T 2 0 1 6 GROUP Hedging contracts through comprehensive income at fair value as at 31.12.2016
Sold
USD
EUR
GBP
JPY
CHF
Total
Amount
Bought
Amount
3 164
74 147
55 415
459 896
4
NOK
NOK
NOK
NOK
NOK
27 192
687 093
588 232
36 094
36
Weighted
hedging rate
8,5937
9,2666
Market rate
Maturity interval *)
8,6200
03.01.17-10.01.18
9,0863
17.01.17-06.02.17
10,6150
10,6126
11.01.17-12.01.18
0,0785
8,4644
0,0736
18.01.17-03.02.17
8,4610
11.01.17
Forward currency contracts as at 31.12.2015:
Sold
USD
EUR
USD
GBP
JPY
Other currency
Total
Amount
Bought
Amount
5 550
51 070
2 826
9 032
299 059
193
CAD
NOK
NOK
NOK
NOK
NOK
7 562
483 247
24 311
117 080
21 448
244
Weighted
heding rate
1,3625
9,4625
8,6036
12,9631
0,0717
Market rate
Maturity interval *)
1,3884
05.01.16 - 12.02.16
9,6030
04.01.16 - 24.01.17
8,8206
05.01.16 - 08.02.16
13,0840
04.01.16 - 20.01.17
0,0733
05.01.16 - 08.02.16
05.01.16 - 07.01.16
*) The maturity is stated in intervals where there are several contracts.
Market value
in TNOK at
31.12.2016
-64
5 873
-1 736
1 980
-0
6 052
Market value
in TNOK at
31.12.2015
-847
-9 420
-615
-1 196
-467
-4
-12 549
(II) INTEREST RATE RISK
As the Group has no significant interest-bearing assets except from bank deposits, its income and operating cash flow are largely
independent of changes in market interest rates. The Group’s interest rate risk arises from borrowings. Borrowings at variable rates
expose the Group to cash flow interest rate risk. Fixed interest contracts are used to reduce this risk. The level of fixed interest loans is
insignificant. The Group monitors its interest rate exposure continuously. The Group calculates the impact on profit and loss of a defined
interest rate change. For each simulation, the same change in the interest rate is used for all currencies. The scenarios are run only for
liabilities which represent major interest-bearing positions.
Sensitivity calculations show the following expected values: If the interest rate had been 1% higher (lower) throughout the year, other
things being equal, the pre-tax profit would have been reduced (increased) by MNOK 17,1 in 2016 and MNOK 17,7 in 2015 due to the floating
rate of interest on loans and deposits. The sensitivity analysis is based on average net interest-bearing debt throughout 2016 and 2015,
notwithstanding concluded interest rate swap agreements.
Amounts in NOK 1000
Increase/reduction in interest rate points
2016
2015
Effect on profit before income tax
-/+ 1%
-/+ 17 126
-/+ 17 704
43
A N N U A L R E P O R T 2 0 1 6 GROUP Interest rate swap agreements
The purpose of the Group’s risk management activities is to establish an overview of the financial risk that exists at any given time and to
take protective steps which give more time to adapt to the changes that take place. With this purpose in mind, the Group has chosen to
employ interest rate swap agreements to establish greater stability for the Group’s loan interest expenses on variable rate. The Group has
decided that at any given time a certain percentage of its interest-bearing debt on variable rate in banks shall be hedged under interest
rate swap agreements. A given proportion will always be at a floating rate, while the remainder will be subject to possible hedging. This is
under constant consideration, based on the market situation.
The interest rate swap agreements have a horizon of 4 years and whether these periods are to be rolled over is a matter of constant
evaluation.
2016
Agreement
Fixed rate paid - floating rate received
Total
Principal
400 000
Fixed rate
Basis of
floating rate
1,69 Nibor 3 months
Duration
27.03.19
Market value
NOK 1000
-5 268
-5 268
Interest rate swap contracts assessed at market value excl. accrued interest
2015
Agreement
Fixed rate paid - floating rate received
Fixed rate paid - floating rate received
Fixed rate paid - floating rate received
Total
Principal
Fixed rate
Basis of
floating rate
400 000
200 000
200 000
1,69 Nibor 3 months
2,34 Nibor 3 months
2,40 Nibor 3 months
Duration
27.03.19
17.10.16
16.08.16
Market value
NOK 1000
-10 380
-1 766
-2 409
-14 555
Hedge accounting under IAS 39 is not applied to interest rate swap agreements. Change in value of interest rate swap agreements are
recognised as fair value change through profit or loss, see description in accounting principles (note 2).
(III) PRICE RISK
Financial salmon price contracts allows buyer and seller to agree on price and volume for future delivery. At year-end 2016, 22.4 % of
estimated harvesting weight in Rogaland and Finnmark for 2017 and 2018, as well as 7.9 % of estimated harvest in UK were hedged
under fixed price contracts. The financial contracts are presented gross in the balance sheet and value change is recognised through
profit/loss as part of fair value adjustment for biological assets. As biological assets are accounted for at fair value, the expected costs
to meet contract terms will be included in fair value adjustment. The Group has for 2016 entered into financial price contracts totaling to
TNOK 22,887, of which sales contracts amount to TNOK – 18,723 and purchase contracts TNOK 41,610.
In 2015, the Group had no financial price contracts or physical delivery contracts that would give a loss at year end.
Fair value, financial assets :
Carrying value of derivatives and other financial instruments as at 31.12 is displayed below (TNOK). Carrying value equals fair value.
Positive value is classified as an asset, while negative value is classified as a liability in the balance sheet.
Forward currency contracts at fair value through profit or loss
Forward currency hedging contracts at fair value through
comprehensive income
Interest rate swap agreement (1 contract totalling MNOK 400
due in 2019, 2015: 3 contracts)
Financial salmon contracts - purchase contracts
Financial salmon contracts - sales contracts
Sum financial instruments at fair value
44
2016
Assets
1 332
6 052
0
41 610
0
48 994
Short-term
liabilities
2015
Assets
0
0
-5 268
0
-18 723
-23 990
0
0
0
0
0
0
Short-term
liabilities
-12 549
0
-14 555
0
0
-27 104
A N N U A L R E P O R T 2 0 1 6 GROUP
CREDIT RISK
Credit risk is managed at Group level. Credit risk arises from transactions with derivatives and deposits in banks and financial institutions,
as well as from transactions with customers, including accounts receivable and fixed contracts. The Group has procedures to ensure that
products are only sold to customers with satisfactory creditworthiness. The company normally sells to new customers only on presentation
of a letter of credit or upon advance payment. Credit insurance is used when deemed necessary. For customers who have a reliable track
record with the Group, sales up to certain levels agreed upon in advance, are permitted without any security. Factoring agreements have
been concluded with Ocean Quality AS and Ocean Quality UK Ltd. regarding accounts receivable. See further information in note 10. All fish
produced in the Group is sold to Ocean Quality Group which in turn sells to external customers. It is the policy of Ocean Quality Group to
secure the bulk of its sales through credit insurance and bank guarantees.
The book value of financial assets represents the maximum credit exposure. The maximum credit risk exposure as at year end was as
follows:
20
21
19
2016
800 591
163 246
503 612
2015
581 904
145 767
392 020
1 467 448
1 119 691
2016
508 688
291 902
288 529
1 645
1 729
800 591
2016
4 979
3 399
8 378
2015
460 807
120 973
109 423
10 132
1 404
581 780
2015
1 704
3 275
4 979
Amounts in NOK 1000
Accounts receivable
Other receivables
Cash and cash equivalents
Total
AGE DISTRIBUTION OF ACCOUNTS RECEIVABLE
Not due
Due
- 0-3 months
- more than 3 months
- more than 1 year
Total nominal value of accounts receivable
CHANGE IN PROVISION FOR BAD DEBTS
01.01.
Change in provision
At 31.12.
45
A N N U A L R E P O R T 2 0 1 6 GROUP
LIQIDITY RISK
The Group performs prudent liquidity risk management, which implies maintaining sufficient cash and marketable securities. The
availability of funding through sufficient credit facilities and the ability to close market positions when considered appropriate.
Due to the dynamic underlying nature of the business, the Group aims to maintain flexibility in funding by keeping committed credit lines
available. The Group maintains a financing agreement through a syndicate owned by DNB and Nordea with 50% each. The financing
agreement consists of a total credit frame of MNOK 1910, of which a long-term credit facility of MNOK 700. For further information about
non-current liabilities, see note 10.
The management monitors the Group’s liquidity reserve comprising credit facilities (see note 10) and cash and cash equivalents (note 19)
based on expected cash flows. This is generally carried out at Group level in cooperation with the operating companies.
The following table shows a specification of the Group’s financial liabilites that are not derivatives, classified by structure of maturity. The
amounts in the table are undiscounted contractual cash flows. Note 10 shows the payment profile for the Group’s non-current liabilities.
31 December 2016
Long-term loan instalments
Loan interest - floating
Long-term credit facility
Short-term loan interest - floating
Finance leasing
Finance leasing interest
Accounts payable
Export credits
Factoring commitments
Total commitments
31 December 2015
Long-term loan instalments
Loan interest - floating
Long-term credit facility
Short-term loan interest - floating
Finance leasing
Finance leasing interest
Accounts payable
Export credits
Factoring commitments
Total commitments
< 3 mth
22 500
6 593
0
0
17 471
2 489
493 440
0
502 536
3-12 mth
1-2 years
2-5 years
Over 5 years
Total
67 500
19 357
0
0
49 712
6 606
55
8 490
0
90 000
23 869
0
0
57 216
7 060
6
0
0
895 000
8 447
0
0
108 993
12 508
33
0
0
0
0
0
0
84 176
7 248
0
0
0
1 075 000
58 267
0
0
317 568
35 911
493 534
8 490
502 536
1 045 029
151 721
178 151
1 024 981
91 424
2 491 305
< 3 mth
22 866
11 909
0
1 580
16 739
1 695
652 106
0
338 213
3-12 mth
1-2 years
2-5 years
Over 5 years
Total
68 598
34 627
0
4 740
44 269
7 792
235
10 458
0
90 000
42 778
0
6 320
63 732
8 471
742
0
0
985 018
60 967
450 000
15 800
151 345
18 442
0
0
0
0
0
0
0
57 891
5 426
0
0
0
1 166 482
150 281
450 000
28 440
333 976
41 826
653 083
10 458
338 213
1 045 108
170 719
212 043
1 681 572
63 317
3 172 759
Available liquidity, available drawdown on the credit facility, as well as positive cash flows from operations, are deemed to be sufficient
to cover current and long-term liabilities.
46
A N N U A L R E P O R T 2 0 1 6 GROUP
FAIR VALUE ESTIMATION
(I) FINANCIAL INSTRUMENTS
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques (see note 12).
The Group uses different methods and makes assumptions that are based on market conditions existing at each balance sheet date. The
fair value of forward foreign exchange contracts is determined using quoted forward exchange rates on the balance sheet date. The fair
value of financial salmon contracts is determined using forward prices from Fish Pool.
(II) ACCOUNTS RECEIVABLE AND PAYABLES
The nominal value less write-downs for realised losses on trade receivables and payables is assumed to correspond to the fair value of
these items. The fair value of financial liabilities is assumed to be close to the book value, as they nearly all carry a floating interest rate.
(III) BIOLOGICAL INVENTORIES
Fish in the sea is measured at estimated fair value. As a consequence, the value of biological inventories will likely vary more than the
value of inventories based on cost. Fair value varies due to a number of reasons, including volatility in pricing of Atlantic salmon and factors
related to production, unpredictability of biological production and changes in the composition of inventories.
A sensitivity analysis of the prices of salmon as at 31.12.2016 and 31.12.2015 shows the following impact on the Group’s profit after tax
(TNOK).
31 DECEMBER 2016
Price reduction per kg
Reduced profit after tax
Price increase per kg
Increased profit after tax
31 DECEMBER 2015
Price reduction per kg
Reduced profit after tax
Price increase per kg
Increased profit after tax
NOK 1
-21 838
NOK 1
21 838
NOK 1
-22 527
NOK 1
22 527
NOK 2
-43 694
NOK 2
43 694
NOK 2
-45 050
NOK 2
45 050
A sensitivity analysis of the full volume of Atlantic salmon as at 31.12.2016 shows the following impact on profit after tax (TNOK):
31 DECEMBER 2016
Increased volume in tons
Increased profit after tax
Reduced volume in tons
Reduced profit after tax
31 DECEMBER 2015
Increased volume in tons
Increased profit after tax
Reduced volume in tons
Reduced profit after tax
47
+ 10 %
151 681
- 10 %
-158 679
+ 10 %
92 443
- 10 %
-83 860
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 4
CRITICAL ACCOUNTING
ESTIMATES AND JUDGEMENTS
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The management is required to make estimates and assumptions concerning the future, which affect which accounting policies are to
be used and reported amounts for assets, liabilities and contingent liabilities in the balance sheet, as well as income and expenses for
the accounting year. Estimates and underlying assumptions are continuously evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be expectable under the present circumstances. The final results may
diverge from these estimates. Changes in accounting estimates are included in the period when the estimates are changed.
ESTIMATED IMPAIRMENT OF GOODWILL, LICENCES AND PROPERTY, PLANT AND EQUIPMENT
The Group tests annually whether goodwill and licences have suffered any impairment, in accordance with the accounting policy stated in
note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations
require the use of estimates of future cash flows from the cash-generating unit, and the application of a discount rate in order to calculate
the present value of future cash flows. Expectations of future cash flows will vary over time. Changes in market conditions and expected
cash flows can result in loss due to future value decrease. The value of long-term growth in demand, the competitive situation, the strength
of the production link in the value chain and thereby also the expectations of the long-term profit margin are also of significance. The
different parameters could variously affect the value of the licences over time. Any change in these critical assumptions will entail related
write-downs, or the reversal of write-downs of the value of licences in accordance with the accounting policies described in note 2. Please
also refer to note 8 for further remarks on tests related to value impairment.
BIOLOGICAL ASSETS
The estimation of fair value is exposed to several uncertainties. Future price, period of harvesting, gutted weight, as well as remaining
production cost. Salmon sale prices are extremely volatile. All these factors have impact on the calculation of fair value. The sales price is
based on forward prices and/or the most relevant pricing information available for the period the fish is expected to be harvested. Changes
in price assumptions have the highest impact on the estimate of fair value. Refer to note 3 disclosing a sensitivity analysis related to the
price assumptions applied. The planned point of harvesting is assumed to be four kg, but this is also subject to significant estimation
uncertainty connected to the estimated growth pace. An expected production cost is budgeted, which makes provisions for estimated
feed prices, cost of treatment of lice and other emergency costs to avoid biological accidents. Similarly, the estimation is uncertain due to
varying numbers of lice treatments to be carried out, the temperature at sea and other conditions affecting growth and cost. Please refer
to note 2 Accounting principles and note 7 for further information on estimation and calculation of fish value/biological asset value.
48
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 5
INVESTMENTS IN ASSOCIATED
COMPANIES
Associated companies closely related to the Group operation and included in the Group´s value chain, are classified on a separate line in
the EBIT. This applies where associated companies operate in the same position in the value chain as the Group. In Q1 2016, all shares
in Salten Stamfisk AS were sold. The profit is posted on a separate line after EBIT. In December 2016, the share capital of Finnmark
Brønnbåtrederi AS was written down with the Group´s share and fully repaid. The share of profit/loss in 2016 is for the period January
throughout May, when the agreement to leave Finnmark Brønnbåtrederi AS was executed.
2016
ASSOCIATED COMPANIES CLASSIFIED AS OPERATIONS
Equity
interest
01.01.2016
Book value at
01.01.2016
Share of the
result for the
year
Changes in
period, repaid
capital and
sale
Book value at
31.12.2016
Finnmark Brønnbåtrederi AS
Total associated companies classified as operations
49,9 %
15 024
15 024
569
569
-15 593
– 15 593
ASSOCIATED COMPANIES CLASSIFIED ON SEPARATE LINE AFTER EBIT
Salten Stamfisk AS
34,0 %
10 922
1 161
-12 083
Total associated companies classified on separate line
after EBIT
10 922
1 161
-12 083
Total investments in associated companies
25 947
1 730
-27 676
-
-
-
-
-
-
2015
ASSOCIATED COMPANIES CLASSIFIED AS OPERATIONS
Bokn Sjøservice AS
Finnmark Brønnbåtrederi AS
Total associated companies classified as operations
ASSOCIATED COMPANIES CLASSIFIED ON SEPARATE LINE AFTER EBIT
Equity
interest
Book value at
01.01.2015
Share of the
result for the
year
Changes
during the
period
Book value at
31.12.2015
50,0 %
49,9 %
5 272
9 325
14 598
1 296
5 698
6 994
-6 568
0
-6 568
-
15 024
15 024
Salten Stamfisk AS
34,0 %
7 780
3 142
Total associated companies classified on separate line
after EBIT
7 780
3 142
0
-
10 922
10 922
Total investments in associated companies
22 379
10 136
-6 568
25 947
49
A N N U A L R E P O R T 2 0 1 6 GROUP
The following summarised preliminary financial information on individual associated companies for 2015 are on 100% basis. All compa-
nies have the same financial year as the Group. 2016 is not displayed, as the Group does not hold any share interests in any associated
companies by year-end.
2015
Finnmark Brønnbåtrederi AS
Salten Stamfisk AS
Total assets at
31.12.2015
Total liabilities at
31.12.2015
Total equity at
31.12.2015
Operating
income
Pre-tax profit/
loss
30 316
93 670
210
58 674
30 106
34 996
14 603
36 132
11 418
4 259
SALE OF SHARES/REPAID SHARE
CAPITAL IN ASSOCIATED COMPANIES
Finnmark
Brønnbåtrederi AS
Salten Stamfisk
AS
Sum for 2016
Bokn Sjøservice
AS
Sum for 2015
Repaid share capital
Proceeds net of expenses
Book value on sales date
Book profit
15 593
-15 593
0
24 000
-11 917
12 083
15 593
24 000
-27 510
12 083
7 973
-6 568
1 405
7 973
-6 568
1 405
Book profit for Salten Stamfisk is included in the account line share of profit from associated company.
In 2015, all shares in Bokn Sjøservice AS were sold. Book profit is included in other gains/losses.
50
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 6
SEGMENT INFORMATION
The operational segments are identified on the basis of the reports which the Group management (chief decision-maker) uses to assess
performance and profitability at a strategic level.
The Group management assesses our business activities from a geographical standpoint, based on the location of assets. The Group
has only one production segment: Production of farmed salmon. Geographically, the management assesses the results of production in
Rogaland - Norway, Finnmark - Norway, BC - Canada and Shetland - UK.
The Group management assesses the results from the segments based on the EBIT before value adjustment of biological assets. The
method of measurement excludes the effect of one-time costs, such as restructuring costs, legal costs on acquisition and amortisation of
goodwill and intangible assets when amortisation is a result of an isolated event which is not expected to recur. The measurement method
furthermore excludes the effect of cash-settled share options, as well as unrealised gains and losses on financial instruments.
The Group’s customers are divided into different geographical markets. All sales from Norway, UK and Canada go through the sales
company Ocean Quality AS, which is a sales company in collaboration with Bremnes Fryseri AS. Grieg Seafood ASA owns 60 % of Ocean
Quality AS (see note 1 for further information). Norway therefore shows the aggregate figures for the Norwegian market. Ocean Quality is
fully consolidated and exists as a part of the associated segment.
Geographical market -
sales revenue
EU
UK
USA
Canada
Russia
Asia
Other markets
Total
UK
Norway
Canada
Elim.
TOTAL 2016
TOTAL 2015
188 820
3 357 698
503 507
111 208
1 085
0
257 567
90 301
1 097
0
79 693
1 049 867
15 173
198 216
3 596
0
567 392
86 763
0
34 288
1 490
0
0
0
-2 582
0
0
0
3 550 115
54 % 2 554 891
761 076
768 902
86 364
1
1 163 850
214 881
12 %
12 %
1 %
0 %
18 %
3 %
335 785
636 679
125 226
196 927
708 613
50 546
55 %
7 %
14 %
3 %
4 %
15 %
1 %
899 487
4 954 746
693 529
-2 582
6 545 187
100 % 4 608 667
100 %
Geographical segments
Sales revenues
Other income **)
Other gain/loss **)
Share of results from associated
companies
Norway
Rogaland
Norway
Finnmark
Canada
BC
UK
Shetland
2016
2015
2016
2015
2016
2015
2016
2015
1 140 398
661 204
1 244 255
797 872
611 223
573 900
859 815
773 526
5 923
1 316
3 191
22 797
1 477
0
2 158
4 215
-356
22 064
-2 427
8 571
2 685
21 791
5 488
14 636
8 712
0
6 820
0
21 540
436
148
Operating costs before depreciation
-668 302
-556 387
-771 718
-627 345
-511 319
-564 388
-646 899
-863 896
EBITDA before fair value adjust-
ment of biological assets
Depreciation, amortisation, and
reversal
EBIT before fair value adjustment
of biological assets
499 810
114 812
511 447
181 397
103 763
35 969
224 172
-68 246
-33 054
-31 296
-64 316
-57 393
-23 237
-22 659
-47 614
-96 587
466 756
83 516
447 131
124 004
80 526
13 310
176 558
-164 833
Assets (excl. associated companies)
1 792 509
1 114 545
2 073 036
1 519 499
889 655
867 014
1 307 903
1 454 857
Associated companies
Total assets - Group
0
0
0
15 024
0
0
0
0
1 792 509
1 114 545
2 073 036
1 534 523
889 655
867 014
1 307 903
1 454 857
Liabilities
586 661
503 508
779 462
658 857
569 423
623 445
931 334
1 286 739
Total liabilities - Group
586 661
503 508
779 462
658 857
569 423
623 445
931 334
1 286 739
51
A N N U A L R E P O R T 2 0 1 6 GROUP Segments
Sales revenues
Other income **)
Other gain/loss **)
Share of results from associated companies
Operating costs before depreciation
EBITDA before fair value adjustment biological assets
Depreciation, amortisation, and reversal
EBIT before fair value adjustment of biological assets
Assets (excl. associated companies)
Associated companies
Total assets - Group
Liabilities
Total liabilities - Group
EBIT FOR THE GROUP
EBIT before fair value adjustment of biological assets
Fair value adjustment of biological assets (note 7)
EBIT
Share of result from associated companies (note 5)
Net financial items (note 23)
Profit before tax
Estimated taxes
Profit of the year
Others/eliminations *)
Grieg Seafood Group
2016
2015
2016
2015
2 689 496
1 802 165
6 545 187
4 608 667
-487
13 580
-35 858
0
-18 576
-14 174
41 019
17 386
569
44 920
-15 218
6 994
-2 664 261
-1 772 037
-5 262 499
-4 384 053
2 470
-5 695
-3 225
-2 622
-5 634
-8 256
1 341 662
261 311
-173 916
-213 569
1 167 745
47 742
704 935
953 915
6 768 038
5 909 830
0
10 923
0
704 935
964 838
6 768 038
25 947
964 838
694 207
694 207
625 715
3 561 087
3 698 264
625 715
3 561 087
3 698 264
2016
2015
1 167 745
515 741
1 683 486
12 083
47 742
33 209
80 951
3 142
-134 733
-93 301
1 560 836
-338 505
1 222 332
-9 208
13 574
4 366
*) Others/eliminations
Proportion of non-controlling owner interest (Bremnes Fryseri AS) is reported with ownership expense and other posts as an elimination.
Proportion of sales revenues and other operational expenses from non-controlling ownership interests, get eliminated on subordinated
account lines in column «Other/eliminations». Sales revenues from sales for Bremnes Fryseri AS amount to appr. MNOK 2.0, and other
operational expenses including goods expense amount to appr. MNOK 1.9.
Other items comprise profit/loss from activities conducted by the parent company or other Group companies not geared for production.
There are eliminations of internal transactions between the subsidiary and the parent company, as well as other posts relied to the parent
company.
**) Other income/gain/loss
Other gain/loss include sale of shares and operating equipment, as well as foreign currency forward contracts recognised at fair value
through profit/loss. Please refer to note 5 for return on sale of shares.
Other income is mainly the settlement of insurance and other services not directly related to production.
52
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 7
BIOLOGICAL ASSETS AND
OTHER INVENTORIES
Biological assets at 01.01.
Currency translation differences
Increase due to production
Decrease due to extraordinary mortality/loss
Decrease due to sales
Fair value adjustment at 01.01
Fair value adjustment in connection with business
acquisition
Fair value adjustment at 31.12
TONS
NOK 1000
2016
48 089
N/A
75 839
-5 787
2015
51 258
N/A
80 846
-3 265
2016
1 929 117
-76 011
2 437 747
-217 252
2015
1 844 097
44 712
2 382 410
-104 526
-72 515
-80 750
-2 125 984
-2 268 770
N/A
N/A
N/A
N/A
N/A
N/A
-312 479
-281 285
N/A
824 487
N/A
312 479
Book value of biological assets at 31.12.
45 626
48 089
2 459 625
1 929 117
Recognised fair value adjustment:
Change in fair value adjustment of biologial assets (1)
Change in physical supply contracts related to fair value adjustment of biological assets (2)
Change in fair value of financial derivatives from salmon (Fish Pool contracts) (3)
Total recognised fair value adjustment of biological assets
529 931
-37 078
22 888
515 741
33 209
-
-
33 209
Recognised value adjustment of biological assets include:
1.
2.
3.
Fair value adjustment of biological assets
Fair value (liability) change in loss contracts, and
Change in unrealised gain/loss from financial purchases/sales contracts (derivatives) from fish at Fish Pool
Provisions allocated to future physical supply contracts that require fair value adjustment, is recorded as other current liabilities in the
balance sheet.The contracts are calculated on basis of the same forward prices that apply to fair value calculation of biological assets.
Provisions allocated to physical contracts covering fish under 4 kgs (immature), are recognised as a proportionate share corresponding to
the principle of fair value calculation of biological assets. Value change in financial derivatives from salmon is recorded in the balance sheet
as derivatives and other financial instruments. Financial derivatives are calculated at market value, refer to note 3 for further information.
For further information on accounting principles for biological assets, refer to note 2.
53
A N N U A L R E P O R T 2 0 1 6 GROUP
STATUS OF BIOLOGICAL ASSETS AT 31.12.16
Smolt/broodstock/biological assets with round
weight < 1 kg *)
Biological assets with round weight 1 - 4 kg
Biological assets with round weight > 4 kg
Total
Number of
fish (1 000)
Biological
assets (tons)
Accrued
cost of
production
Fair value
adjustment
Book value
30 630
12 536
1 921
45 087
4 833
31 973
8 820
382 150
1 006 602
246 386
0
382 150
566 269
258 217
1 572 871
504 603
45 626
1 635 138
824 487
2 459 625
*) Fish < 1 kg is included in the group with smolts and broodstock
STATUS OF BIOLOGICAL ASSETS AT 31.12.15
Smolt/broodstock/biological assets with round
weight < 1 kg
Biological assets with round weight 1 - 4 kg
Biological assets with round weight > 4 kg
Total
Number of
fish (1 000)
Biological
assets (tons)
Accrued
cost of
production
Fair value
adjustment
Book value
35 055
12 131
2 333
49 520
5 753
30 713
11 622
48 089
434 136
873 217
309 283
0
434 136
167 292
145 188
1 040 509
454 470
1 616 635
312 479
1 929 115
BASIS FOR VALUES 31.12.16:
Weighted price in relation to volume
Weighted price in relation to volume
Source
BC
Shetland
Norway
> 4 kg
CAD 11,95
GBP 7,25
NOK 72,49
1 - 4 kg
CAD 10,50
GBP 6,55
NOK 65,68
Fish Pool
Fish Pool
Fish Pool
Forward prices from Fish Pool as stated above are deducted of expected quality reduction and before logistics expenses. The
standard deduction for quality reduction is considered. Forward prices are weighted in relation to intended harvesting period.
The price for BC is based on forward price in Norway adjusted for own historical difference in price levels between Norway and
Canada. The same principle applies to Shetland. Self-budgeted harvesting and logistics expenses are assumed. Forward exchange
rates are used to translate price into CAD and GBP relative to the period of harvesting.
OTHER INVENTORIES
Raw materials (feed) at cost price
Roe
Other (frozen fisk, supplementary products)
Total inventories
Impairment of inventories accounted for at year-end
PURCHASE COST OF THE YEAR
Inventories at 01.01 (inverted number)
Purchases for the year (incl. Change in accrued cost of production)
Inventories at 31.12.
Purchase cost of the year
2016
73 989
10 336
4 839
89 164
1 571
2016
-90 867
-3 285 456
89 164
-3 287 159
2015
72 363
11 810
6 694
90 867
1 027
2015
-91 016
-2 738 777
90 867
-2 738 926
The purchase cost of the year mainly comprises feed, roe, recognition of extraordinary mortality, and external purchase of fish in
the sales company Ocean Quality.
54
A N N U A L R E P O R T 2 0 1 6 GROUP The Group applies an internal rule of impairment in cases of extraordinary loss/mortality. Such impairment is recognised on a straight-
line basis as parts of goods expenses through profit/loss. Information about recognised fair value of extraordinary loss/mortality is
based on the same rule as calculation of fair value-adjusted biological assets.
Below follows an overview of impairment related to extraordinary loss/mortality (production cost), as well as associated fair value of the
fish reduced to NOK 0.
EXTRAORDINARY LOSS/MORTALITY
Rogaland
Finnmark
Shetland
British Columbia
Total
2016
2015
Cost of
production
Fair value
Cost of
production
Fair value
18 039
71 770
52 233
46 372
22 622
93 919
97 414
56 930
16 660
10 448
39 061
38 357
26 191
12 044
49 030
40 399
188 414
270 885
104 526
127 664
2016
Smolt/broodstock/biological assets with round
weight < 1 kg
Biological assets with round weight 1 - 4 kg
Biological assets with round weight > 4 kg
Total
2015
Number of
fish (1 000)
Biological
assets (tons)
Accrued cost
of production
Fair value
adjustment
Fair value
1 121
2 048
208
3 377
629
4 183
975
5 787
28 228
132 188
27 997
188 414
0
66 827
15 644
82 471
28 228
199 015
43 642
270 885
Number of
fish (1 000)
Biological
assets (tons)
Accrued cost
of production
Fair value
adjustment
Fair value
Smolt/broodstock/biological assets with round
weight < 1 kg
Biological assets with round weight 1 - 4 kg
Biological assets with round weight > 4 kg
Total
1 129
518
296
1 944
603
1 438
1 224
3 265
25 311
43 803
35 411
104 525
0
15 572
7 566
23 138
25 311
59 375
42 978
127 664
In Rogaland the main cause of extraordinary loss/mortality is PD (Pancreas Disease). In the first half of 2016 mortality due to heart failure
(CMS) was also registered.
In Finnmark mainly IPN (Infectious Pancreatic Necrosis), Yersiniiose, Pavicapsula and Tenacibaculum cause extraordinary mortality, as
well as detection of ISA (Infectious Salmon Anaemia) in one location at year-end, which implied fallowing the locality.
In Shetland, sea lice, gill problems, planktonic algae, AGD (Amoebic Gill Disease) and seal have caused mortality both years.
In BC, mortality occurs due to low levels of oxygen in the sea, as well as planktonic algae. Furunculosis has also been a challenge in the
fish hatchery, both in 2015 and first half of 2016, causing impairments.
2016 saw three ocurrences of escape, one in Finnmark and two in Shetland. All three occurences were caused by routine failure at
commissioned wellboats. In Shetland, connected expenses were covered by the wellboat company. In Finnmark, the number of fish was
low and connected costs were insignificant. For more information, refer to the sustainability report.
55
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 8
INTANGIBLE ASSETS
Fish farming
licences indefinite
lives
Fish farming
licences definite
lives
Other intangible
assets
2016
Book value at 01.01.
Currency translation differences
Intangible assets purchased
Intangible assets sold
Amortisation
Book value at 31.12.
As at 31.12.
Acquisition cost
Accumulated amortisation
Accumulated impairment
Book value at 31.12.
Goodwill
110 647
-2 052
0
0
0
1 067 433
-34 338
2 786
0
0
108 595
1 035 881
198 198
1 035 894
0
-89 603
108 595
-13
0
1 035 881
Other intangible assets consist mainly of software.
25 905
190
0
0
-1 353
24 742
52 027
-27 285
0
24 742
Fish farming
licences indefinite
lives
Fish farming
licences definite
lives
Goodwill
Other intangible
assets
1 154
784
0
0
20 140
4 048
0
-13
110 647
1 067 433
200 250
1 067 446
0
-89 603
110 647
-13
0
1 067 433
-243
4 566
0
-1 344
25 905
51 837
-25 932
0
25 905
16 993
4
4 283
0
-3 683
17 598
Total
1 220 977
-36 194
7 069
0
-5 036
1 186 815
35 723
-18 126
0
1 321 842
-45 424
-89 603
17 598
1 186 815
Total
21 080
18 651
0
-5 163
1 220 977
1 350 968
-40 388
-89 603
29
9 253
0
-3 806
16 993
31 436
-14 443
0
16 993
1 220 977
2015
Book value at 01.01.
Currency translation differences
Intangible assets purchased
Intangible assets sold
Amortisation
Book value at 31.12.
As at 31.12.
Acquisition cost
Accumulated amortisation
Accumulated impairment
Book value at 31.12.
56
A N N U A L R E P O R T 2 0 1 6 GROUP LICENSES
The tables below display an overview of the different licenses in the Group. See note 2 for further information about licenses.
UK
FARM/AREA
Bight of Foraness
Boatsroom Voe
Cole Deep
Coleness
Collafirth Delting Site 3
Corlarach
East of Langa
East of Papa Little
Easter Score Holm
Fish Holm
Geo of Valladale (Urafirth)
Gob na Hoe
Hamar Sound
Hamnavoe, Lunnaness
Laxfirth Voe East (Site 2)
Leinish Bay
Linga (South of Linga)
Muckle Roe East (Heights)
North Havra
North of Papa
North Voe
Olnafirth North (Site 2)
Olnafirth South (Site 1)
Papa, East Head of Scalloway
Punds Voe
Roe Sound
Setter Voe
Setterness North
Setterness South
Snizort
South Voe of Gletness
Spoose Holm (Oxna)
Swining Voe Site 3 (Collafirth Ness)
Taing of Railsborough
Wadbister Inshore
West of Burwick
Total
Cash generating unit
BC - Canada
Finnmark
Shetland - UK
Rogaland
Total value
57
CANADA
Capacity (tons)
FARM/AREA
Capacity (tons)
1 546
Ahlstrom
216
Atrevida
2 178
Barnes bay
752
Bennet Point
1 500
1 602
1 643
1 750
2 500
1 910
Conception
Culloden
Esperanza
Gore
Hecate
Kunechin
809
Muchalat N.
2 021
Muchalat S.
738
Newcomb
1 910
Salten
942
Site 13
1 700
2 299
Site 9
Streamer Point
350
TSA-YA
1 496
1 776
1 920
Vantage
Williamson
WA-KWA
300
Total
1 100
3 300
3 000
4 400
4 100
1 500
3 600
4 100
4 000
1 500
4 100
3 900
1 000
1 500
900
1 500
3 600
3 000
1 500
3 900
2 500
58 000
1 000
1 500
960
350
987
2 500
2 358
2 125
750
1 500
1 920
1 043
800
1 923
51 572
NORWAY
LICENSE CATEGORY
Total number
Total volume
Seawater licenses
R&D permit
Broodstock
Smolt
Harvesting cage
37
1
3
4
2
33 435 tn
780 tn
2 340 tn
12 700 000 pcs
1 106 tn
IMPAIRMENT TEST FOR GOODWILL AND LICENCES
Goodwill and licences were not impaired in 2016 or 2015. Good-
will and licences with an indefinite economic life are subject to an
annual impairment test. Tests are performed more frequently if
there are indications of impairment. Licences with definite useful
lives are tested for impairment only if there are indications of
a decline in value. Estimated value in use is used as a basis for
calculating the recoverable amount. Impairment occurs when the
carrying value is higher than the recoverable amount.
Location
Book value of
related goodwill
Book value of
licences
Canada
Norge
UK
Norge
10 177
0
77 955
20 463
108 595
162 021
299 814
463 814
134 973
1 060 622
1 169 217
Total
172 198
299 814
541 769
155 436
A N N U A L R E P O R T 2 0 1 6 GROUP
Goodwill relates to the acquisition of the subsidiary companies. Goodwill is allocated to the Group’s cash-generating units (CGU) identi-
fied according to the operating segment. An annual impairment test for goodwill and licenses is carried out. The recoverable amount of a
CGU is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets
from the respective cash generating units covering a three-year period. Cash flows beyond the three-year period are extrapolated using
the estimated growth rates stated below. The estimated growth rate corresponds with expected inflation.
THE ASSUMPTIONS USED FOR VALUE-IN-USE CALCULATIONS ARE AS FOLLOWS:
Unit
Budget period
Increase in revenues in budget period
BC - Canada
Finnmark
Shetland - UK
Rogaland
3 years
43 %
3 years
20 %
3 years
4 %
3 years
-18 %
EBITDA margin 1)
28% - 31%
27% - 42%
33% -43%
26% -44%
EBITDA margin in terminal period
Harvest growth - tons 2)
Required rate of return 3)
Growth rate 4)
21 %
61 %
7,5 %
1,0 %
27 %
59 %
7,5 %
1,0 %
19 %
50 %
7,5 %
1,0 %
26 %
18 %
7,5 %
1,0 %
As stated above, the budget period/explicit period is 3 years. Estimated increase in revenue in the budget period thus indicates revenue
increase in 2019 compared to income in 2016.
Estimated future price levels are calculated from Fish Pool´s projections and takes into account quality reduction and freight. The projected
prices for 2018 and 2019 are lower than projections for 2017.
Other comments/explanations to assumptions in the impairment test is presented below; historical price levels and forward markets.
1. Budgeted EBITDA margin. The margin increases through the budget period, due to higher output in all regions.
2. The growth rate of the harvested volume in the budget period (nominal growth rate) measured against 2016 volume. Over time a
corresponding increase in output is assumed.
3. Weighted required return on capital employed before tax. Cash flow forecasts are thus estimated before taxes.
4. Weighted average growth rate used to extrapolate cash flows beyond the budget period. In the years after 2019, the annual reinvest-
ment is assumed to be equal to the annual depreciation.
EBITDA MARGIN IN BUDGET AND TERMINAL PERIOD
The budgeted EBITDA margin is based on past performance, expected cost of production and expectations of market development. All
regions are subject to an assumed increase in gutted weight output throughout the budget period. The increased harvest volume is based
on an increase in utilisation of existing production capacity and licenses, reflecting the new smolt strategy.
The Group has an internal investment programme the following years in order to significantly increase the internal smolt production. This
will ensure access to a higher number of and larger size of smolts, which is conclusive to achieve a higher overall production volume.
Larger smolt will also decrease the production time in sea, which in turn will reduce the biological risk level. The strategy furthermore
allows for an improved utilisation of the best localities. Overall, this will contribute to reducing the cost measured per kg.
Finnmark has been granted 4 green licenses, and the expectation is to achieve a harvesting volume slightly exceeding 1,300 tons per year
per license in this region. It is therefore assumed a significant increase in harvest volumes. An effort is carried out to arrange with new
localities in the region. In sum, this allows for an increased number of smolt in the sea.
In Rogaland, an increase in harvest volumes is assumed through increased smolt capacity (both number and size) as well as new localities.
In the UK, the hatchery has been completed, and the production follows schedule. A new biological scheme is being implemented, reducing
time in sea from 24 months to 18 months and thus bringing down the biological risk. The implementation will be complete in the course
of 2017.
In BC, a significant incrase in harvesting volumes is assumed through the budget period. The growth target will be ensured through
improved production in the region´s hatchery, as well as measures to reduce the negative effects on production-in-sea from algae and
depressed oxygen levels.
The assumptions in the terminal are based on the budget for 2019, but with some adjustments to reflect EBIT/kg in the benchmark and the
Group’s own historical results. The applied discount rates are pre-tax and reflect specific risks relating to the relevant operating segments.
SENSITIVITY ANALYSIS
Value-in-use is sensitive to changes in the assumptions made. The most important are requirement for return and EBIT/kg. A sensitivity
analysis has been carried out based on these assumptions, with an isolated requirement to increase return rate by 2 %-points, and reduce
EBIT/kg by NOK 2. The conclusion of the analysis is still no need for impairment in any of the segments.
58
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 9
TANGIBLE FIXED ASSETS
2016
Book value at 01.01.
Currency translation differences
Reclassification of fixed assets
Tangible fixed assets acquired *)
Tangibe fixed assets sold
Reversal of impairments **)
Depreciation
Book value 31.12.
AS AT 31.12.
Acquisition cost
Accumulated depreciation
Accumulated impairments
Book value at 31.12.
Book value of finance leasings included above
Depreciation of finance leasings included above
Of which book value of property not depreciable
2015
Book value at 01.01.
Currency translation differences
Reclassification of fixed assets
Tangible fixed assets acquired*
Tangibe fixed assets sold
Impairments ***)
Depreciation
Book value at 31.12.
AS AT 31.12.
Acquisition cost
Accumulated depreciation
Accumulated impairments
Book value at 31.12.
Book value of finance leasings included above
Depreciation of finance leasings included above
Of which book value of property not depreciable
Buildings/
property
Prod.plants
and barges
Nets, cages
and moorings
Other
equipment
Total
418 318
-30 860
-15 574
38 332
-1 353
0
-22 524
386 340
634 414
-53 537
-18 805
76 275
-1 738
6 304
-60 969
581 945
350 242
-18 680
5 119
96 244
-14
0
-65 716
367 195
131 795
1 534 770
3 983
29 260
36 932
-1 096
168
-26 143
174 899
-99 094
0
247 783
-4 200
6 472
-175 352
1 510 379
588 355
1 331 920
907 856
319 457
3 147 587
-202 015
-710 084
-540 661
-144 726
-1 597 486
0
386 340
1 436
-50
24 873
-39 891
581 945
156 601
-12 219
0
168
-39 723
367 195
135 760
-22 085
174 899
102 540
-12 001
1 510 379
396 337
-46 356
Buildings/
property
Prod.plants
and barges
Nets, cages
and moorings
Other
equipment
Total
362 070
14 989
28 030
29 651
0
0
-16 421
418 318
687 432
33 205
-28 314
58 193
-850
-46 195
-69 056
634 414
296 702
78 748
1 424 952
8 646
2 302
103 120
-1 556
0
-58 972
350 242
-76
-2 017
73 086
-184
0
-17 763
131 795
56 764
0
264 050
-2 590
-46 195
-162 211
1 534 770
597 809
1 329 725
825 186
250 378
3 003 098
-179 491
-649 116
-474 945
-118 583
-1 422 134
0
418 318
1 284
-33
23 405
-46 195
634 414
178 955
-17 821
0
350 242
115 676
-16 367
0
-46 195
131 795
1 534 770
95 843
-8 109
391 757
-42 330
*) Investments mainly comprise maintenance, plus investments in order to initiate production of the green licenses in Finnmark.
**) Previously impaired equipment in Shetland has been sold in 2016. Depreciation has been reversed through profit/loss.
***) In Q3 2015, it was decided to sell the smokehouse and filleting production in Shetland. In this connection, impairment of equipment
belonging to this production has been made.
59
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 10 BORROWINGS
AND FINANCE LEASING
The Group has a financing agreement through a bank syndicate, where DNB and Nordea own 50 % each. The financing agreement consists
of a total frame of MNOK 1 910, of which a long-term credit facility of MNOK 700. As at 31 December 2016, the credit facility had not been
utilised.
The financing agreement includes covenants related to consolidated equity of 35% (not including Ocean Quality), a revolving NIBD / EBITDA
ratio of 5.0 if the book equity ratio is higher than 40% and 4.5 if the book equity ratio is between 35% and 40%. As at year-end 2016 the
equity ratio was 52 % and NIBD/EBITDA ratio 0.7 not including the consolidated Ocean Quality company. Hence, the Company is in compli-
ance with all covenants at year-end.
A factoring agreement has been concluded with Ocean Quality AS in Norway and UK. Credit insured receivables are transferred to the
factoring companies. This ensures early settlement of receivables. The Group still retains the risk related to accounts receivable. Funding
received from the factoring company before the counterparty has paid is recognised as factoring debt, which is interest bearing. The
factoring agreement includes covenants comprising a.o. required minimum book equity in Ocean Quality AS. As at 31 December 2016,
Ocean Quality Group was in compliance with all covenants.
NON-CURRENT LIABILITIES AND FINANCE LEASING OBLIGATIONS (INTEREST-BEARING DEBT)
Liabilites to credit institutions before amortisation effect
Long-term credit facility
Finance leasing liabilities
Total
NON-CURRENT LIABILITIES, NON-INTEREST BEARING
Subordinated loans
Other long-term non-interest bearing borrowings
Total
Amortisation effect of loans
Total non-current loans and finance leasing liabilities
CURRENT INTEREST-BEARING LIABILITIES
Current portion of long-term borrowings
Current portion of finance leasing liabilities
Factoring debt
Export loans
Total current interest-bearing liabilities
NET INTEREST-BEARING DEBT
Total non-current interest-bearing liabilities (see above)
Total current interest-bearing liabilities (see above)
Gross interest-bearing debt
Cash and cash equivalents
Loans to associated companies
Other interest-bearing assets
Net interest-bearing debt
Quote of factoring debt
Quote of Bremnes´ share of bank OQ AS (40 %)
Net interest-bearing debt, according to covenants
60
2016
985 000
0
250 452
2015
1 075 000
450 000
272 968
1 235 452
1 797 968
15 963
0
15 963
21 425
954
22 379
-5 126
-6 739
1 246 289
1 813 608
2016
90 000
67 116
502 535
8 490
668 141
2015
91 464
61 008
338 231
10 458
501 161
2016
2015
1 235 452
1 797 968
668 141
501 161
1 903 593
2 299 129
503 612
392 020
0
0
0
0
1 399 981
1 907 109
502 535
8 873
906 319
338 231
0
1 568 878
A N N U A L R E P O R T 2 0 1 6 GROUP PAYMENT PROFILE NON-CURRENT LIABILITIES
Non-current non interest-bearing liabilities
Borrowings
Non-current credit facility
Finance leasing liabilties
Total
2017
0
2018
0
2019
0
90 000
90 000
889 874
0
0
0
2020
Subseq.
0
0
0
15 963
0
0
Total
15 963
1 069 874
0
67 116
57 216
47 577
157 116
147 216
937 451
34 079
34 079
111 581
317 568
127 544
1 403 405
LIABILITIES SECURED BY MORTGAGE/CHARGE ON ASSETS:
Liabilities to credit institutions incl. finance leasings
ASSETS PLEDGED AS SECURITY
Licenses
Fixed assets
Accounts receivable
Inventories and biological assets
Total assets pledged as security
2016
2015
1 903 593
2 299 129
2016
2015
1 060 622
1 093 338
1 510 379
1 534 770
800 591
581 904
2 548 789
2 019 982
5 920 381
5 229 994
Pledges include shares in subsidiaries. The book value of these shares is NOK 0 in the consolidated accounts.
DESCRIPTION OF DEBT
Currency
Fixed or
floating
interest
rate
Effective
interest
rate
Final
maturity
(mth/year)
Current
portion
Non-
current
portion
Current
portion
Non-
current
portion
NOK
Floating
Price grid
06/2019
90 000
979 874
90 000
1 068 261
2016
2015
NOK
NOK
Floating
Price grid
06/2019
Floating
Price grid
10/2016
GRIEG SEAFOOD SHETLAND
SLAP
GBP
Floating
0,0 %
12/2018
GBP
5,50 %
Multiple
Floating
8 490
502 535
0
0
0
0
0
0
0
0
0
450 000
1 464
0
0
954
10 458
338 231
0
0
67 116
250 452
61 008
272 968
0
15 963
0
21 425
668 141
1 246 289
501 161
1 813 608
GRIEG SEAFOOD ASA
Syndicate loan non-
current
Syndicate loan - credit
facility*)
Other loans
OCEAN QUALITY
Export loan
Factoring debt
Finance leasings liabilities
Subordinated loan
Total
61
A N N U A L R E P O R T 2 0 1 6 GROUP BOOK VALUE OF GROUP LOANS BY CURRENCY (NOK 1000)
31.12.16
NOK
GBP
Syndicate loan non-current
Syndicate loan - credit facility
Other loans
Export loan
Factoring *)
Finance leasings
Subordinated loan
1 069 874
1 069 874
-
-
8 490
502 535
317 568
15 963
-
-
-
44 465
288 816
15 963
-
-
-
8 490
96 252
28 752
-
Other
currencies
-
-
-
-
361 818
-
-
Total borrowings and finance leasings
1 914 430
1 419 118
133 493
361 818
*) Other currency effects comprise mainly EUR, JYP and USD
Average interest rate on loans and credit facility
2016
3,53 %
2015
4,70 %
By calculation of average interest-rate on loans and credit facilities the effect of interest-rate swap is taken into account.
BOOK VALUE AND FAIR VALUE OF BORROWINGS
Book value
Fair value
Loan (non-current and credit facility)
Total
The book value of other loans is virtually the same as the fair value.
2016
979 874
979 874
2015
1 608 261
1 608 261
2016
979 874
979 874
2015
1 608 261
1 608 261
62
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 11
LEASE CONTRACTS
OPERATING LEASE COMMITMENTS - GROUP COMPANY AS LESSEE
The Group leases offices, docks, berths, etc. with duration tenancies between 5 and 10 years. The group also leases plant and machinery
under cancellable finance leasing agreements. The Group must give written notification in case of termination of these agreements, in
order to make the termination valid. The Group has a property lease agreement with its biggest shareholder, with a lease contract period
out 2018. Annual lease amount is MNOK 1.5. Refer to note 22 Related parties.
The future aggregate minimum lease payments under operating leases are as follows:
OVERVIEW OF FUTURE MINIMUM OPERATING LEASES
Within 1 year
1-5 years
Minimum lease amount
Present value of future minimum lease amount (5% discount rate)
95 029
90 504
253 970
224 806
Lease amount charged in the year
Total lease amount charged
Sub-
sequently
134 700
105 541
2016
52 660
52 660
Total
483 698
420 851
2015
32 261
32 261
FINANCE LEASING COMMITMENTS - GROUP COMPANY AS LESSEE
The Group has signed finance leasings for equipment such as barges, well boats, cage installations and other equipment.
The lease period for equipment of this kind is mainly 7 - 8 years.
The future agregate minimum lease payments related to finance leasings are as follows:
OVERVIEW OF FUTURE MINIMUM LEASE AMOUNT (FINANCE LEASINGS)
Within 1 year
1-5 years
Future minimum lease amount
Future financial expenses related to finance leasings
Present value of finance leasings
76 279
9 095
67 184
185 777
19 568
166 209
LEASED ASSETS BOOKED AS FINANCE LEASING
Book value of leased assets (equipment, vessels)
Book value of lease commitment
Sub-
sequently
91 424
7 248
84 176
2016
396 337
317 568
Total
353 479
35 911
317 568
2015
391 757
333 976
63
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 12 FINANCIAL
INSTRUMENTS BY CATEGORY
Lendings and
receivables
Assets at fair
value through
profit or loss
Deriva-
tives used
for hedging
purposes
Available-for-sale
financial assets
1 445
48 994
0
48 994
1 445
1 522 057
Liabilities
at fair value
through profit
or loss
Deriva-
tives used
for hedging
purposes
Other financial
liabilities
Total
1 085 837
1 085 837
317 568
502 535
8 490
11 360
317 568
502 535
8 490
11 360
23 990
493 534
0
1 925 790
2 443 314
23 990
493 534
517 524
Lendings and
receivables
Assets at fair
value through
profit or loss
Deriva-
tives used
for hedging
purposes
Available-for-sale
financial assets
1 426
Total
1 445
800 591
167 413
48 994
503 613
Total
1 426
581 904
148 434
0
392 020
AS AT 31 DECEMBER 2016
Available-for-sale financial assets
Accounts receivable
Other receivables
Derivatives
Cash and cash equivalents
Total
Borrowings
Finance leasing liabilities
Factoring debt
Export loan
Cash-settled options
Derivatives
Accounts payable
Total
AS AT 31 DECEMBER 2015
Available-for-sale financial assets
Accounts receivable
Other receivables
Derivatives
Cash and cash equivalents
Total
Level
2/ 3
2
Level
2
Level
2/ 3
2
Level
800 591
167 413
503 613
1 471 618
581 904
148 434
0
392 020
1 122 358
Borrowings
Finance leasing liabilities
Factoring debt
Export loan
Pension obligations and cash-settled options
Derivatives
Accounts payable
Total
2
10 137
653 083
663 220
0
0
1 426
1 123 784
Liabilities
at fair value
through profit
or loss
Deriva-
tives used
for hedging
purposes
Other financial
liabilities
Total
1 632 104
1 632 104
333 976
338 231
10 458
333 976
338 231
10 458
10 137
27 104
653 083
27 104
27 104
2 314 769
3 005 093
The purpose of the derivatives is to reduce the Group´s exposure to changes in floating interest rates and exchange rates. See notes 2-3
for further details.
64
A N N U A L R E P O R T 2 0 1 6 GROUP
FAIR VALUE ASSESSMENT
The table above shows the fair value of financial instruments according to the valuation method used. The different levels are defined as
follows:
Level 1 - Fair value based on the quoted price in an active market for an identical asset or liability.
Level 2 - Fair value based on other observable factors than the quoted price (used in level 1) and entered directly (price) or indirectly
(derived from prices) for the asset or the liability.
Level 3 - Fair value based on factors not taken from observable markets (non-observable assumptions).
CREDITWORTHINESS OF FINANCIAL ASSETS
The credit risk attached to financial instruments that have not matured or which have not been written down is shown by the internal
classification of historical information on breaches of credit covenants. Further information about credit risk is provided in note 3.
ACCOUNTS RECEIVABLE
Counterparties with no external credit assessment
Group 1
Group 2
Group 3
Total accounts receivable that have not been written down
BANK DEPOSITS
AAA
AA
A
Total bank deposits
2016
2015
225 579
538 002
37 010
800 591
0
503 613
0
503 613
22 770
445 074
114 060
581 904
0
392 020
0
392 020
Group 1 - new customers/related parties (less than 6 months).
Group 2 - existing customers/related parties (more than 6 months) with no history of having breached credit covenants.
Group 3 - existing customers/related parties (more than 6 months) with a history of one or more breaches of credit covenants. All amounts
due have been paid in full after the breaches.
65
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 13
TAX
AMOUNTS IN NOK 1000
SPECIFICATION OF TAX EXPENSE
Tax payable Norway
Tax payable abroad
Tax payable not provided for last year
Change in deferred tax Norway
Change in deferred tax abroad
Taxes
TAX RECONCILIATION
Profit before tax
Taxes calculated at nominal tax rates
Withholding tax
Changes in deferred tax liabilities due to change in tax rate
Use of carryforwards, not recognised earlier
Tax loss carried forward, not recognised
Other permanent differences
Taxes
CHANGE IN BOOK VALUE OF DEFERRED TAX
Book value at 01.01.
Currency conversion
Tax effect of deferred tax liabilities
Tax effect of currency effect of net investments recognised in comprehensive income
(see note 3)
Other effects
Change in deferred tax taken to income in period
Deferred tax liability at balance sheet date
2016
171 085
972
3 816
91 398
71 235
338 506
1 560 835
366 200
2 954
-18 401
-502
-9 976
-1 769
338 506
2015
22 371
2 175
-266
-1 344
-36 510
-13 574
-9 208
12 194
366
-31 613
-
-1 057
6 536
-13 574
528 723
558 140
-165
7 741
-20 142
-4 107
162 633
674 684
-81
707
13 533
-5 722
-37 854
528 723
Weighted average tax rate
21,69 %
147,42 %
The nominal tax rate in Norway is 25 %. The nominal tax rate for 2016 in Canada was 26 % and on Shetland 20 %.
The considerable tax effect is attributed to a change in tax rate and other permanent differences.
The following tables show the composition of deferred tax. The tax effects of taxable and deductible temporary differences are shown
separately. Both the Norwegian, Canadian and UK part of the Group, have a net deferred tax position. Deferred tax and deferred tax
assets within Norway, Canada and UK can be set off.
66
A N N U A L R E P O R T 2 0 1 6 GROUP
DEFERRED TAX
Licenses
Fixed
assets
Biological
assets
Receiv-
ables
Inventory
Deferred
capital gain
Current
liabilities
Total
2015
Opening balance at
01.01.
Taken to income in the
period
Currency translation
differences
Other effects
Effect of business
combinations
180 102
42 363
310 506
40 220
3 064
1 209
0
577 464
-3 772
-1 557
-3 406
10 273
-1 257
-534
2 589
-
739
438
-
-
597
480
-
-65
-
-
-36
777
-
-
-
-
-
-
-
-
-253
3 588
1 192
739
As at 31.12.
179 658
41 244
308 177
50 428
2 548
675
0
582 730
2016
Taken to income in the
period
Currency translation
differences
Other effects
Effect of business
combinations
-5 779
5
138 911
-30 408
1 382
-150
-
103 962
-4 034
-1 353
-1 531
-
-
1 623
2 635
-
-
0
-
-
14
96
-
-
-
-
-
-
-
-6 904
4 354
-
As at 31.12.
169 845
41 519
448 192
20 020
4 041
525
0
684 143
Loss carried
forward
Fixed
assets
Pensions
Receiv-
ables
Lease
obligations
Tax credits
Other
liabilities
Total
DEFFERED TAX ASSETS
2015
Opening balance at
01.01.
Taken to income in the
period
Currency translation
differences
Other effects
Effect of business
combinations
As at 31.12.
2016
Taken to income in the
period
Currency translation
differences
Other effects
Effect of business
combinations
As at 31.12.
Net deferred tax
-13 017
-37 742
-3 727
6 824
-32
-47 694
53 947
6 755
-29 286
8 516
-7 761
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
-
-
-
-185
-261
-
-
-
-446
-1 116
-
-
-
-1 562
-
-
-
-
-
-
-
-0
-
-
-0
All deferred tax is classified as non-current assets
Deferred tax is classified as non-current debt
Tax payable is classified as current debt
67
-6 364
243
-19 324
6 324
-5 925
-37 604
40
-
-
-
-
0
-
-
0
19
-3 668
-203
6 621
-
-32
-5 866
-54 006
5 842
58 672
-16
6 739
-94
-29 380
-
8 516
-135
-9 458
2016
2015
674 684 528 723
-
10 317
674 684
539 040
172 057
24 545
A N N U A L R E P O R T 2 0 1 6 GROUP NET DEFERRED TAX TAKEN INTO INCOME:
Changes in deferred tax, Norway
Changes in deferred tax, other countries
Net deferred tax taken into income
Recognition in the period for positions that incur deferred taxes
Recognition in the period for positions that incur deferred tax assets
Net deferred tax taken into income
2016
91 398
71 235
162 633
103 962
58 672
162 633
2015
-1 344
-36 510
-37 854
-252
-37 602
-37 854
LOSS CARRIED FORWARD
Deferred tax assets related to an allowable deficit are recognised in the balance sheet in so far as it is likely that this can be set against
future taxable profits.
Deferred tax assets related to a tax loss carried forward are divided among the following
jurisdictions
Norway
UK
Canada
2016
-
-7 761
0
-7 761
2015
-
-47 687
-7
-47 694
There is no time limit on the application of tax losses carried forward in Norway and the UK.
Application of tax losses carried forward in Canada is eliminated for the period 2025 to 2031.
68
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 14 DECLARATION ON
DETERMINATION OF SALARY
AND OTHER REMUNERATION TO
SENIOR EMPLOYEES
In line with regulations issued pursuant to the Norwegian Public Limited Companies Act, the Board has drawn up the following declaration
on guidelines and principles used to determine salary and other remuneration for key personnel.
The Group’s remuneration policy will continue to be based on the principle that the Group shall offer its employees competitive compensa-
tion terms in accordance with local industry standards. Where appropriate, this may include incentive elements, and the basic salary shall
reflect individual performance.
The components of remuneration shall consist of a fixed basic salary and other fixed remuneration elements. The latter may be a company
car or car allowance, telephone and electronic communications, newspapers and similar benefits. As well as participating in the Compa-
ny’s ordinary group life insurance and defined contribution-based pension scheme up to 12G, the CEO has a separate salary compensation
agreement for pension benefits exceeding 12G. CEO has a special start-up cash bonus for 2015 and 2016 which assumes that the CEO is
in position at the time of payment. The bonus for 2016 is being disbursed in 2017. The CEO is entitled to a rolling 12 months’ severance
pay calculated from the termination date. Termination date is considered the expiration date of the notice. COO and CFO are entitled to 12
months’ pay after termination or changes in employment/position.
The Group has an annual bonus scheme based on a combination of earnings and personal performance. For the management team the
annual bonus has a limit of maximum 5 months’ fixed salary. The CEO bonus limit is 6 months.
A synthetic option scheme (hereafter called «cash option») for the company’s management group was established in 2009. The cash
options scheme requires the participants’ direct share ownership throughout the entire period of the programme. Those who are entitled
to the options are required to use 50 % of the net gain under the scheme to purchase shares until the ownership corresponds to 100 % of
the fixed annual salary. The gain under the cash option scheme cannot exceed 12 times the monthly salary per participant per year. The
exercise price is increased by 0.5 % each month. An option must be exercised not later than 24 months after the first exercise date.
The cash option scheme corresponds to a total of 1,341,082 shares at year-end after awarding of 300,000 options in 2016. Options allocated
in 2016 must be exercised not later than 1 June 2019. Throughout 2016, 753,789 options have been exercised.
CEO has a total of 314,009 cash-settled options at year-end. The last exercise date for CEO is 1 June 2019.
For information about remuneration of the Group management, see note 15.
For further information about options, see note 16.
69
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 15
PAYROLL, FEES, NUMBER OF
EMPLOYEES ETC.
Salaries
Social security costs
Share options granted to directors and key employees (incl. social security costs)
16
Note
Pension costs
Other personnel costs
Total
Average number of employees
2016
374 760
27 735
21 712
10 781
48 484
483 473
654
2015
337 591
26 654
3 819
8 983
32 384
409 432
663
Based on the results in 2016, there is a decision to pay a fixed bonus to all employees in addition to regular bonus schemes. The
bonus is allocated in the 2016 financial statements and will be disbursed in 2017.
The Board’s guidelines and principles for determination of salary and other remuneration to key employees are detained in note 14.
As at 31.12.2016 no loans were provided to Group employees.
Accumulated costs related to salaries, pension costs and other remuneration to the CEO, other senior employees and board members
in 2016 were as follows:
REMUNERATION TO SENIOR OFFICERS IN 2016
IN TNOK
Salary
Bonus
Andreas Kvame (CEO)
Atle Harald Sandtorv (CFO)
Knut Utheim (COO)
Kathleen O. Mathisen (CHRO from May 1,
2016)
Total remuneration incl. soc. security
costs
2 348
1 683
1 659
810
6 501
0
0
0
0
0
Retained,
not yet paid
Options
exercised
during year
Other
remunera-
tion
732
505
276
286
2 400
2 387
2 288
0
24
45
39
15
Total
5 504
4 621
4 261
1 111
1 799
7 075
123
15 498
Recognision of synthetic options not declared throughout the year, are not included in the above list.
REMUNERATION TO BOARD MEMBERS IN 2016
Per Grieg jr. 1)
Wenche Kjølås 2)
Karin Bing Orgland 2)
Asbjørn Reinkind 1)
Ola Braanaas 1)
Total remuneration including social security costs
SUM
419
262
262
288
234
1 466
Recognision of synthetic options not declared throughout the year, are not included in the above list.
1) Remuneration for work done in the remuneration committee is included in the payment to Per Grieg jr., Asbjørn Reinkind, and
Ola Braanaas with NOK 14,267 each.
2) Remuneration for work done in the audit committee is included in the payment to Wenche Kjølås and Karin Bing Orgland with NOK
42,788 each.
These amounts include social security costs.
70
A N N U A L R E P O R T 2 0 1 6 GROUP
Accumulated costs related to salaries, pension costs and other remuneration to the CEO, other senior employees and board members
in 2015 were as follows:
REMUNERATION TO SENIOR OFFICERS IN 2015 IN TNOK
Salary
Bonus
Retained, not
yet paid *)
Options
exercised
during year
Other
remunera-
tion
Andreas Kvame (CEO fra 01.06.2015)
Morten Vike (CEO til 17.10.2014) *)
Atle Harald Sandtorv (CFO)
Knut Utheim (COO)
Total remuneration including social security costs
1 369
4 414
1 988
1 701
9 472
456
0
119
89
664
0
1 488
0
0
1488
0
928
0
0
928
9
104
146
139
398
*) M.Vike has received severance pay according to agreement. The expense was provided for in 2014 but paid in 2015.
REMUNERATION TO BOARD MEMBERS IN 2015
Per Grieg jr. 1)
Wenche Kjølås 2)
Karin Bing Orgland
Asbjørn Reinkind 1)
Ola Braanaas 1)
Total remuneration including social security costs
Total
1 834
6 934
2 253
1 929
12 950
SUM
405
245
245
274
222
1 392
Recognision of synthetic options not declared throughout the year, are not included in the above list.
1) Remuneration for work done in the remuneration committee is included in the payment to Per Grieg jr. with NOK 11,410, in the
payment to Asbjørn Reinkind with NOK 11,410, and in the payment to Ola Braanaas with NOK 11,410.
2) Remuneration for work done in the audit committee is included in the payment to Wenche Kjølås with NOK 34,230, and in the
payment to Karin Bing Orgland with NOK 34,230.
These amounts include social security costs.
SPECIFICATION OF AUDITORS' FEES
AUDIT FEES
Group auditor
Other auditors
OTHER ASSURANCE SERVICES
Group auditor
Other auditors
TAX ADVICE
Group auditor
Other auditors
OTHER SERVICES
Group auditor
Other auditors
Total - Group auditor
Total - other auditors
Total
71
2016
2015
2 399
513
2 176
777
157
0
373
148
264
1 048
3 193
1 709
4 902
139
0
415
160
431
144
3 162
1 082
4 243
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 16
CASH-BASED REMUNERATION
(OPTIONS)
The Company has issued options to the management group and regional directors. The options’ strike price is the stock market price on
the date of issue increased by 0.5% per month until exercise date. As per 31 December 2016 no equity options are available for vestment. As
from 2009 an option scheme with settlement in cash has been established for the management and regional directors. The last allocation
was in 2016, totalling 300,000 options. The last due is 1 June 2019. The options have 2 years of duration, where 50 % is vested each year.
Employees taken on after the first allocation of options have been allocated options on taking up employment.
The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to carry out the calculations.
The table below illustrates the movement in outstanding options throughout 2015 and 2016.
Granted
options
Exercised
options
Cancelled
options
Expired
options
Outstanding
options at
31.12.2016
Of which
cash-
settled
Outstanding
options at
31.12.2015
400 000
300 000
300 000
-
-
-
85 991
153 199
112 107
-
100 000
-
1 150 000
200 000
402 492
355 129
2 150 000
300 000
753 789
355 129
-
-
-
-
-
-
-
-
-
-
314 009
314 009
146 801
146 801
187 893
187 893
100 000
100 000
592 379
592 379
1 341 082
1 341 082
Outstanding
options at
31.12.2014
Granted
options
Exercised
options
Cancelled
options
Expired
options
Outstanding
options at
31.12.2015
Of which
cash-
settled
400 000
400 000
400 000
200 000
200 000
100 000
200 000
100 000
200 000
300 000
300 000
300 000
300 000
400 000
800 000
50 000
1 150 000
1 150 000
800 000
1 600 000
250 000
-
-
2 150 000
2 150 000
OVERVIEW 2016
Andreas Kvame (CEO)
Option
category
Cash
settlement
Atle Harald Sandtorv
(CFO)
Cash
settlement
Knut Utheim (COO)
Cash
settlement
Kathleen O. Mathisen
(CHRO)
Cash
settlement
Others
Total
Cash
settlement
OVERVIEW 2015
Andreas Kvame (CEO)
Option
category
Cash
settlement
Morten Vike (former
CEO)*
Cash
settlement
Atle Harald Sandtorv
(CFO)
Cash
settlement
Knut Utheim (COO)
Others
Total
Cash
settlement
Cash
settlement
*Morten Vike resigned 17 October 2014
72
A N N U A L R E P O R T 2 0 1 6 GROUP
Allocation: Year -
month
Expiry date: Year -
month
Strike price NOK per
share as at 31.12.2016
Strike price NOK per
share as at 31.12.2015
2013 - 12
2013 - 12
2014 - 04
2014 - 04
2014 - 07
2015 - 06
2015 - 06
2016 - 12
Total
2016 - 06
2017- 06
2016 - 06
2017 - 06
2017 - 06
2018 - 06
2019 - 06
2019 - 06
-
-
-
-
-
27,90
27,90
79,22
24,97
24,97
24,99
24,99
31,55
26,27
26,27
-
Cash-based options available for settlement
Weighted average outstanding contract period
2016
-
-
-
-
-
441 082
600 000
300 000
2015
150 000
150 000
50 000
100 000
100 000
800 000
800 000
1 341 082
2 150 000
2016
441 082
28,05
2015
450 000
24,93
Listed
price on
alloca-
tion
Calculated
value per
option on
allocation
Calcu-
lated total
value on
alloca-
tion*)
Total
value of all
options at
01.01.2016
Change
in provi-
sion
OB - IB *)
Exer-
cised
options
2016
Acc. cost
charged
against
equity at
31.12.2016
Book liability
cash settle-
ment at
31.12.2016
6 887
2016
Former
employees with
expired options
Option
category
Equity
option
Andreas Kvame
(CEO)
Cash
settlement
Atle Harald
Sandtorv (CFO)
Atle Harald
Sandtorv (CFO)
Knut Utheim
(COO)
Knut Utheim
(COO)
Kathleen O.
Mathisen
(CHRO)
Other options
allocated in
2013
Other options
allocated in
2014
Other options
allocated in
2014
Other options
allocated in
2015
Other options
allocated in
2016
Total
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
26,00
3,36
1 342
579
2 356
2 400
22,22
3,94
394
639
-639
903
25,50
3,97
793
353
1 346
1 485
22,56
4,78
478
662
-662
1 950
25,50
3,97
793
353
1 945
338
79,00
3,63
363
0
41
-
22,22
3,94
1 181
1 250
-1 250
3 823
22,56
4,24
424
315
-315
546
28,90
4,20
420
206
-206
2 143
25,50
3,60
2 876
1 282
3 030
1 465
2 935
-
1 699
0
2 298
41
0
0
0
4 312
75
79,00
3,34
669
9 734
0
75
-
5 639
5 721
15 052
6 887
11 360
*) The amounts are exclusive of social security cost.
73
A N N U A L R E P O R T 2 0 1 6 GROUP 2015
Former
employees with
expired options
Option
category
Equity
option
Andreas Kvame
(CEO)
Cash settle-
ment
Morten Vike
(former CEO)**
Cash settle-
ment
Atle Harald
Sandtorv (CFO)
Cash settle-
ment
Atle Harald
Sandtorv (CFO)
Cash settle-
ment
Knut Utheim
(COO)
Knut Utheim
(COO)
Other options
allocated in
2013
Other options
allocated in
2014
Other options
allocated in
2014
Other options
allocated in
2015
Total
Cash settle-
ment
Cash settle-
ment
Cash settle-
ment
Cash settle-
ment
Cash settle-
ment
Cash settle-
ment
Listed
price on
alloca-
tion
Calculated
value per
option on
allocation
Calcu-
lated total
value on
alloca-
tion*)
Total
value of all
options at
01.01.2015
Change
in provi-
sion
OB - IB *)
Exer-
cised
options
2015
Acc. cost
charged
against
equity at
31.12.2015
Book liability
cash settle-
ment at
31.12.2015
6 887
6 887
25,50
3,36
1 342
-
579
22,22
3,94
788
929
-929
813
22,22
3,94
394
491
148
25,50
3,97
793
-
353
22,56
4,78
478
429
233
25,50
3,97
793
-
353
22,22
3,94
1 181
957
293
22,56
4,24
424
397
-82
199
28,90
4,20
420
60
146
25,50
3,60
2 876
9 490
-
1 282
10 150
2 376
1 013
6 887
579
-
639
353
662
353
1 250
315
206
1 282
5 639
*) The amounts are exclusive of social security cost
**) Morten Vike resigned 17 October 2014
ACCRUED COST IS DIVIDED AS FOLLOWS:
Change in provisions
Exercised options during year
Total cost excl. social security costs
Social security costs
Total cost incl. social security costs
2016
5 721
15 052
20 772
939
21 712
2015
2 376
1 013
3 389
430
3 819
CLASSIFICATION IN ACCOUNTS
Other provisions for liabilities
Payroll & social security costs/ bank
Public taxes payable
Payroll and social security costs
The costs related to cash-based remuneration in 2016 is TNOK 21,712. This is charged in the income statement as a personnel cost. Social
security contributions are provided for on an ongoing basis based on the fair value of the options.
At 31 December 2016 outstanding options with the right to cash settlement were stated at TNOK 11,360 of which the total amount is clas-
sified as non-current liabilities. Options issued are cancelled when employment terminates.
ESTIMATES USED IN CALCULATIONS ON ALLOCATION OF OPTIONS
Anticipated volatility (%)
Risk-free rate of interest (%)
Estimated qualification period (years)
36,59 %
0,68 %
2,02
The estimated qualification period for the options is based on historical data, and does not necessarily represent an indication of the
future.
In order to estimate volatility, the management has applied historical volatility for comparable listed companies.
74
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 17
SHARE CAPITAL AND
SHAREHOLDER INFORMATION
SHARE CAPITAL
As at 31 December 2016 the Company had 111,662,000 shares with a nominal value of NOK 4 per share.
All shares issued by the company are fully paid up. There is one class of shares and all shares have the same rights.
In June 2011 the company purchased 1,250,000 of its own shares for NOK 14.40 per share.
Date of registration
Change in share capital (TNOK)
Holdings of treasury shares
As at 31.12.2016
THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA
GRIEG HOLDINGS AS
FOLKETRYGDFONDET
OM HOLDING AS
YSTHOLMEN AS
MORGAN STANLEY AND CO INTL PLC
STATE STREET BANK AND TRUST CO.
VERDIPAPIRFONDET PARETO INVESTMENT
ARTIC FUNDS PLC
GRIEG SEAFOOD ASA
THE BANK OF NEW YORK MELLON SA/NV
DNB NOR MARKETS
NORDEA BANK NORGE ASA
KONTRARI AS
Total - largest shareholders
Nominal value
(NOK)
Total share capital
(TNOK)
No. of ordinary
shares
4,00
4,00
446 648
-5 000
441 648
111 662 000
-1 250 000
110 412 000
No of shares
31.12.2016
Shareholding
31.12.2016
No of shares
31.12.2015
Shareholding
31.12.2015
55 801 409
49,97 %
55 801 409
49,97 %
3 390 000
3 105 000
2 928 197
2 067 749
1 814 836
1 711 000
1 397 000
1 250 000
1 241 277
105 841
-
-
3,04 %
2,78 %
2,62 %
1,85 %
1,63 %
1,53 %
1,25 %
1,12 %
1,11 %
0,09 %
-
2 610 000
2 928 197
206
1 305 901
598 695
-
1 250 000
281 741
0,00 %
2,34 %
2,62 %
0,00 %
1,17 %
0,54 %
0,00 %
1,12 %
0,25 %
22 188 875
19,87 %
-
-
6 605 998
5 862 763
5,92 %
5,25 %
89,05 %
10,95 %
74 812 309
67,00 %
99 433 785
Other shareholders with shareholding less than 1%
36 849 691
33,00 %
12 228 215
Total shares
111 662 000
100,00 % 111 662 000
100,00 %
75
A N N U A L R E P O R T 2 0 1 6 GROUP
SHARES CONTROLLED BY BOARD MEMBERS AND
GROUP MANAGEMENT:
No of shares
31.12.2016
Shareholding
31.12.2016
No of shares
31.12.2015
Shareholding
31.12.2015
BOARD OF DIRECTORS:
Per Grieg jr. *)
Wenche Kjølås (Jawendel AS)
Asbjørn Reinkind (Reinkind AS)
Karin Bing Orgland
Ola Braanaas
GROUP MANAGEMENT:
Andreas Kvame (CEO)
Atle Harald Sandtorv (CFO)
Knut Utheim (COO)
Kathleen O. Mathisen (CHRO)
59 138 799
52,96 %
60 795 561
54,44 %
7 000
120 000
-
-
29 000
30 661
12 400
0
0,01 %
0,11 %
0,00 %
0,00 %
0,03 %
0,03 %
0,01 %
0,00 %
7 000
120 000
-
-
0
45 500
0
0
0,00 %
0,11 %
0,00 %
0,00 %
0,00 %
0,04 %
0,00 %
0,00 %
* The shares owned by the following companies are controlled by Per Grieg jr. and family.
Grieg Holdings AS
Grieg Shipping II AS
Ystholmen AS
Grieg Ltd AS
Kvasshøgdi AS
Per Grieg jr. privat
Total shares
55 801 409
49,97 %
55 801 409
49,97 %
-
3 105 000
217 390
-
15 000
0,00 %
2,78 %
0,19 %
0,00 %
0,01 %
824 565
2 928 197
217 390
1 000 000
15 000
0,74 %
2,62 %
0,19 %
0,90 %
0,01 %
59 138 799
52,96 %
60 786 561
54,44 %
76
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 18
EARNINGS PER SHARE AND
DIVIDEND PER SHARE
BASIS FOR CALCULATION OF EARNINGS PER SHARE
Profit for the year (majority share)
Number of shares at January 1
Effect of treasury shares (see note 17)
Average number of outstanding shares during the year
Adjustment for effect of share options
Diluted average number of outstanding shares during the year
Earnings per share
Diluted earnings per share
Proposed dividend per share
2016
1 186 032
111 662 000
-1 250 000
110 412 000
2015
-6 626
111 662 000
-1 250 000
110 412 000
0
0
110 412 000
110 412 000
10,74
10,74
3,00
-0,06
-0,06
0,00
77
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 19
CASH AND CASH EQUIVALENTS
Restricted deposits related to employees' tax deduction
Restricted bank deposits related to clearing account for financial price contracts*)
Restricted bank deposits related to fixed interest rate on a current basis
Other cash and bank deposits
Total
The Group's currency and interest rate exposure is described in note 3.
2016
10 017
0
160 000
333 597
503 613
2015
8 318
1 513
0
382 189
392 020
78
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 20
ACCOUNTS RECEIVABLE
Accounts receivable at nominal value
Provision for bad debts
Accounts receivable at 31.12.
2016
808 969
-8 378
800 591
2015
586 883
-4 979
581 904
For information about the age distribution of accounts receivable and the Group's exposure to credit risk related to outstanding
receivables, please refer to note 3.
RECORDED BAD DEBTS
Change in provision for bad debts
Year´s actual losses
Filed on previous loss provisions
Recognised losses on receivables
Losses on receivables are classified as other operating expenses
2016
3 399
2 880
0
6 279
2015
3 275
1 741
0
5 016
79
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 21
OTHER CURRENT RECEIVABLES
VAT receivable etc.
Pre-paid expenses
Insurance claims
Other current receivables
Other current receivables at 31.12.
2016
97 789
24 031
35 909
5 517
163 246
2015
83 870
30 484
22 237
9 176
145 767
80
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 22
RELATED PARTIES
2016
Total - related parties as shareholders
Total - related parties as associated companies
Total
2015
Operating
income
Operating
expenses
Financial
income
Financial
expenses
Long-term
balances
Short-term
balances
0
0
0
24 731
20 844
45 575
0
0
0
0
0
0
0
0
0
-272
0
-272
Operating
income
Operating
expenses
Financial
income
Financial
expenses
Long-term
balances
Short-term
balances
Total - related parties as shareholders
Total - related parties as associated companies
Total
0
0
0
15 966
1 875
17 841
0
0
0
0
0
0
0
0
0
-496
0
-496
The group purchases service from companies in the same group as its majority shareholder, Grieg Holdings AS.
These services include:
•
Services related to ICT and other functions such as canteen, reception etc. are provided by Grieg Group Resources AS. The services
are provided on an arm’s length basis.
• Grieg Seafood ASA rents its offices from Grieg Gaarden AS. The rent is on an arm’s length basis.
•
The regions purchased cleansing fish from Ryfylke Rensefisk AS, a company owned by Grieg Holdings AS.
• Purchase of roe and other operating services from SalmoBreed AS, which is related to member of the Board.
•
Transactions with other related parties in associated companies are the purchase of services related to operations.
The board and management are related parties. See note 16 on share-based options and note 17 on shares controlled by board members
and management.
81
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 23
FINANCIAL INCOME AND
FINANCIAL EXPENSES
Other interest income
Dividends
Net change in fair value of derivatives
Net currency gains
Other financial income
Total financial income
Interest expense on bank borrowings and leasing *)
Other interest expenses **)
Net change in fair value of derivatives
Net currency gains
Other financial expenses
Total financial expenses
2016
11 129
0
9 287
0
63
20 479
74 873
8 976
0
69 926
1 438
155 213
2015
5 002
446
4 024
28 584
0
38 056
117 959
7 969
0
0
5 430
131 357
*) Interest expenses bank borrowings and leasing includes recognised gains/losses from realised interest rate swaps.
**) Interest expenses related to factoring agreement in Ocean Quality is included in other interest expenses.
82
A N N U A L R E P O R T 2 0 1 6 GROUP NOTE 24
OTHER OPERATING EXPENSES
Transportation costs
Maintenance costs
Electricity and fuel
Lease expenses
Outsourced services
Insurance
IT expenses
Marketing costs
Other operating expenses *)
Other production related costs **)
Total other operating expenses
*) Includes equipment, telephony/postage, office supplies, fees, travelling costs etc.
**) Includes vaccines, de-lousing, oxygen, analyses etc.
2016
445 372
215 931
60 637
59 395
47 825
34 786
18 673
7 669
97 103
2015
368 896
178 853
50 225
49 196
39 613
28 813
15 466
6 352
80 429
504 475
1 491 867
417 851
1 235 695
83
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 25
OTHER CURRENT LIABILITIES
Specification of other current liabilities
Accrued expenses *)
Other current liabilities **)
Other current liabilities
2016
175 042
47 170
222 213
2015
107 661
15 135
122 795
*) Accrued expenses relate to accrual of interest, other operating expenses, including insurance and salary.
**) Other current liabilities include a.o. provision for bad debt attributable to physical delivery contracts, MNOK 37, see notes 7 and 3.
84
A N N U A L R E P O R T 2 0 1 6 GROUP
NOTE 26
NEW ACCOUNTING STANDARDS
a) New and amended standards adopted in 2016
In 2016, no new standards have been adopted, neither amend-
ments of standards or interpretations, that substantially affect the
consolidated financial statements.
b) New standards and interpretations not yet adopted
A number of new standards, amendments of standards and
interpretations of existing standards are mandatory for future
financial statements. Additionally, the application of some amend-
ments is permitted prior to mandatory application. Among those
amendments the Group has decided to implement in the future,
and which are not mandatory for 2016, the essential are disclosed
below.
IFRS 9 FINANCIAL INSTRUMENTS INCLUDING RELATED AMEND-
MENTS TO VARIOUS OTHER STANDARDS
IFRS 9 replaces the classification and measurement models of
IAS 39 with a single model, with essentially only two categories:
amortised cost and fair value.
The classification of lending depends on the entity’s business
model for managing its financial instruments and the characteris-
tics of the cash flows of each instrument.
A debt instrument is measured at amortised cost if;
•
the business model is to hold the financial asset in order to
receive the contractual cash flows, and
the contractual cash flows solely represent payments of
principal and interest.
•
is based on the principle that revenue is recognised when control
over a good or service is transferred to a customer, so that the
principle of control substitutes the existing principle of transfer of
risk and returns.
A new five-step model framework must be applied before revenue
can be recognised:
•
•
• Determine the transaction price
• Allocate the transaction price to the separate performance
Identify the contract(s) with a customer
Identify all separate performance obligations in the contract
obligations in the contract, and
• Recognise revenue when each performance obligation is
satisfied.
Major changes from current practices include:
• Goods and/or services that are sold together, but which
can be sold separately, must be recognised separately. Any
discounts should normally be allocated to each individual
element.
• Revenue can be recognised earlier than permitted under
current standards if the compensation varies (i.e. due to
incentives, rebates, performance fees, royalties, the success
of an outcome, etc.). The minimum amount should be
recognised if there is a significant risk of cancellation of the
agreement.
The point of revenue recognition may shift: Some revenues
that currently are recognised retrospectively, may need to be
recognised over the contract term, and vice versa.
There are new specific rules on licences, warranties, non-
refundable advance payments, and commission sales, to
mention a few.
•
•
All other debt and equity instruments, including investments in
complex instruments, should be measured at fair value through
profit/loss. There is an exception made for equity instruments
not intended for sale. Value changes in such positions should be
recognised in comprehensive income, without subsequent reclas-
sification to profit/loss. For financial liabilities that the entity has
chosen to measure at fair value, the proportion of the change in
value attributable to changes in inherent credit risk is recognised
through other comprehensive income and not through profit/loss.
The new rules for hedge accounting means that hedge accounting
better reflects normal practice for the risk management of
enterprises. As a general rule, it will be easier to apply hedge
accounting to come. The new standard also introduces expanded
disclosure requirements and changes in the rules for the presen-
tation of hedge accounting.
IFRS15 REVENUE FROM CONTRACTS WITH CUSTOMERS
IASB has issued a new standard for revenue recognition. The stan-
dard replaces IAS 18, regarding a.o. sale of goods and services,
and IAS 11, regarding Construction Contracts. The new standard
• As with any new standard, it implies increased disclosure
requirements.
These changes in accounting policies may affect the Group´s
business practices regarding systems, processes and controls,
compensation and bonus schemes, contracts, tax planning and
communication with the investors.
The Group will be able to choose between full retrospective appli-
cation, or prospective application with additional disclosures.
The standard is effective as from the annual reporting period
beginning in 2018, but early adoption is permitted.
The new income standard will have no material impact on the
Group based on current revenue flows. The cash flow of the Group
is the sale of gutted salmon packed and sent to customers. The
major part is fresh fish, while a proportion is filleted or frozen.
The Group also sells roe, smolt and ensilage, together making up
about 1 % of the total sales. The Group may furthermore perform
harvesting for other aquaculture companies in the case of surplus
85
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY capacity. All categories of the Group´s revenue streams are recog-
nised at the time of delivery. That also applies to the fulfillment of
physical delivery contracts.
IFRS 16 – LEASES
IFRS 16 (issued in January 2016) specifies accounting principles
for leases. IFRS 16 will replace IAS 17 Leases (and related
interpretations). IAS 17 has essentially designated two models for
the recognition of leasing agreements – one for operating lease
and one for finance leasing. The lessee has only been required
to recognise leased assets classified as finance leasings in the
balance sheet. IFRS 16 no longer specifies this as a main rule.
There is primarily one model for recognition, which implies that
the lessee shall recognise most leased assets, with certain excep-
tions. This will impact the Group, which at 31 December 2016 has
several active operating lease contracts, see note 11 for more
information. The Group will carry out a modified retrospective
application upon the implementation of IFRS 16 for the financial
year 2019.
DISCLOSURE INITIATIVE – AMENDMENTS TO IAS 7
In the future, the Group will have to explain changes in its obliga-
tions arising from financing activities. This includes changes
resulting from cash flows (e.g. draw-downs and repayment of
loans), as well as changes with cash flow effect, such as acquisi-
tions, sales, imputed interest and unrealised foreign exchange
translation differences. Changes in financial assets should be
included in the note disclosures if the cash flows were, or will
be, included in cash flow from financing activities. This may for
instance be the case for assets pledged as security for financing
commitments.
Business entities can disclose other changes in this informa-
tion, e.g. by displaying a reconciliation of net debt. In such a
case, changes in other items must be presented separately from
changes in debt as a result of financing activities.
The disclosures may be presented as a table that reconciles the
opening and closing balance, but a specific format is not manda-
tory.
There are no other standards or interpretations that still have not
taken effect that are expected to materially impact the consoli-
dated financial statements.
86
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 27
POST-BALANCE SHEET EVENTS
No events have occured after balance sheet date which materially impact the 2016 statement.
87
A N N U A L R E P O R T 2 0 1 6 GROUP PARENT COMPANY
INCOME STATEMENT
AMOUNTS IN NOK 1 000
Other operating income
Total operating income
Salaries and personnel expenses
Depreciation
Other operating expenses
Total operating expenses
Operating profit
Financial income
Financial expenses
Net financial profit
Profit before tax
Income tax expense
Profit for the year
ALLOCATION OF PROFIT FOR THE YEAR
Allocated to dividend
Transferred to other equity
Sum allocation
Note
2,17
3,4
12,13
6,17
5,17
5,17
15
2016
55 995
55 995
-55 791
-5 370
-46 990
-108 151
-52 156
789 106
-219 272
569 834
517 678
-129 509
388 169
331 236
56 933
388 169
2015
52 351
52 351
-29 968
-5 275
-36 161
-71 404
-19 053
173 914
-103 846
70 068
51 015
-11 375
39 641
0
39 641
39 641
88
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
PARENT COMPANY
BALANCE SHEET
AMOUNTS IN NOK 1 000
ASSETS
Software
Property, plant and equipment
Investments in subsidiaries
Loan to Group companies
Loan to associated companies
Investments in shares or units
Total non-current assets
Accounts receivable
Account receivables from Group companies
Other receivables from Group companies
Other current receivables
Cash and cash equivalents
Total current assets
Total assets
Note
12
13, 18
10,18
17,18
11
6,17
17
17,18
7
8
31.12.2016
31.12.2015
17 419
5 972
1 226 980
601 032
167
656
16 651
4 814
1 226 980
691 259
167
637
1 852 225
1 940 507
19
37 520
1 240 578
4 025
383 281
1 665 424
0
4 827
903 345
4 046
215 057
1 127 275
3 517 650
3 067 782
89
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
EQUITY AND LIABILITIES
31.12.2016
31.12.2015
14
14
15
4
18
18
4
17
17
17
15
7,9
446 648
-5 000
13 652
790 759
446 648
-5 000
13 652
899 425
1 246 059
1 354 725
14 201
11 360
25 561
979 874
979 874
90 000
0
331 236
6 668
34 201
633 576
146 024
2 031
22 420
1 266 155
36 446
4 389
40 835
1 518 261
1 518 261
90 000
1 250
0
6 280
26 511
0
0
2 049
27 872
153 961
2 271 591
1 713 057
3 517 650
3 067 782
Bergen, 3 April 2017
Grieg Seafood ASA
Translated version. Not to be signed
Share capital
Treasury shares
Other reserves
Retained earnings
Total equity
Deferred tax
Cash-settled share options
Total provisions
Long-term loan
Total non-current liabilities
Short-term borrowings
Cash-settled share options
Provision for dividends
Accounts payable
Accounts payable subsidiaries
Current liabilities to group companies
Public tax payable
Accrued public expense
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
90
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
PARENT COMPANY
CASH FLOW STATEMENT
AMOUNTS IN NOK 1000
Note
2016
2015
Profit before income taxes
Tax payable
Depreciation and amortisation
Profit/loss on sale of assets
Impairment/reversal of fixed assets
Interest paid
Change in accounts receivable
Change in accounts payable
Change in other accruals
Recognised contribution from subsidiaries
Dividend income
Net cash flow from operations
Proceeds from sale of tangible assets
Dividend income
Purchase of tangible assets
Purchase of intangible assets
Proceeds/payments on loans to/from subsidiaries
Payment on loans to subsidiaries
Proceeds on other receivables
Payment on loan to associated company
Net cash flow from investment activities
Change in short-term credit facilities
Payments on long-term debt
Proceeds/payment on loans to/from Group companies
Proceeds on long-term debt
Interest paid
Dividend paid
Net cash flow from financing activities
15
12,13
13
13
13
5
13
12
18
517 678
-3 278
5 370
-2
-66
52 355
-19
388
-27 181
-713 301
-8 071
-176 129
74
8 071
-3 018
-4 284
466 295
0
0
0
467 138
51 015
0
5 275
0
0
82 715
-2 483
1 349
6 601
-39 091
0
105 381
0
30
-2 351
-9 161
69 116
-54 133
0
-100
3 401
0
-396 050
-538 387
633 576
0
-52 355
-165 618
-122 784
-90 000
-16 621
650 898
-82 715
-55 206
10 306
Net change in cash and cash equivalents
168 224
119 088
Cash and cash equivalents at 01.01.
215 057
95 969
Cash and cash equivalents at 31.12
383 281
215 057
91
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
PARENT COMPANY
CHANGE IN EQUITY
AMOUNTS IN NOK 1000
Equity at 01.01.2015
PROFIT FOR THE YEAR 2015
Other gains recorded in equity
Allocations to dividend
Equity at 31.12.2015
PROFIT FOR THE YEAR 2016
Other gains/losses recorded in equity
Provision for dividends
Allocations to additional dividend 2016
Equity at 31.12.2016
Share capital
Other paid in
equity
Other equity
Total equity
441 648
13 652
859 752
39 641
31
0
1 315 053
39 641
31
0
441 648
13 652
899 424
1 354 725
388 169
19
-331 236
-165 618
790 758
388 169
19
-331 236
-165 618
1 246 059
441 648
13 652
92
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
NOTE 1
ACCOUNTING POLICIES
The annual financial statements have been prepared in accordance
with the Norwegian Accounting Act and generally accepted
accounting principles in Norway.
All amounts are in TNOK, unless stated otherwise.
REVENUE RECOGNITION
Revenue from sales of goods is recognised at the time of delivery.
Revenue from the sales of services is recognised when the services
are executed. The share of sales revenue associated with future
service is recorded in the balance sheet as accrued sales revenue
and is recognised as revenue at the time of execution.
CLASSIFICATION AND VALUATION OF BALANCE
SHEET ITEMS
Assets intended for long-term ownership or use are classified
as fixed assets. Assets related to the normal operating cycle, are
classified as current assets. Receivables are classified as current
assets if they are expected to be repaid within 12 months after the
transaction date. Similar criteria apply to liabilities.
Current assets are valued at the lower of cost and fair value. Short-
term liabilities are recognised in the balance sheet at nominal
value.
Fixed assets are carried at historical cost. Fixed assets whose value
will deteriorate are depreciated on a straight line basis over the
asset’s estimated useful life. Fixed assets are written down to fair
value where this is required by accounting rules. Nominal amounts
are discounted if the interest rate element is significant.
INTANGIBLE ASSETS
Expenditure on intangible assets is recognised to the extent that
future economic benefits from the development of identifiable
intangible assets and costs can be measured reliably. Otherwise,
the costs are expensed as they arise. Capitalised development is
amortised over the useful life.
FIXED ASSETS
Fixed assets are recognised in the balance sheet and depreciated
on a straight line basis over the estimated useful life, providing the
asset has an expected useful life of more than 3 years and a cost
price which exceeds TNOK 15. Maintenance costs are charged as
they arise as operating expenses, while improvements and additions
are added to the acquisition cost and depreciated along with the
asset. The distinction between maintenance and improvements is
made with regard to the asset’s relative condition at the original
purchase date.
SUBSIDIARIES
Investments in subsidiaries are valued at cost in the company
accounts. The investment is valued at the cost of acquiring the
shares, providing a write-down has not been necessary.
Group contributions to subsidiaries, with tax deducted, are
recognised as increases purchase cost of the shares.
Dividends and group contributions are recognised in the same year
as they are recognised in the subsidiary accounts. If dividends/
group contributions materially exceed retained earnings after
acquisition, the exceeding amount is regarded as reimbursement of
invested capital and is deducted from the recorded acquisition value
in the balance sheet. Group contributions received are recognised
as other financial income.
IMPAIRMENT OF FIXED ASSETS
Impairment tests are performed upon indication that the carrying
amount of a non-current asset exceeds the estimated fair value.
The test is performed on the lowest level of fixed assets at which
independent cash flows can be indentified. If the carrying amount is
higher than both the fair value less selling costs and the recoverable
amount (net present value of future use/ownership), the asset is
written down to the higher of fair value less selling costs and the
recoverable amount.
Previous impairment charges are reversed at a later period if
the prerequisites for impairment are no longer present (with the
exception of impairment of goodwill).
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised in the balance sheet
at nominal value after deduction of provision for bad debts. The
provision for bad debts is estimated on the basis of an individual
assessment of each major receivable. An additional general
provision is made for minor receivables based on estimated
expected losses.
SHORT-TERM INVESTMENTS
Short-term investments (shares and investments which are
considered current assets) are carried at the lower of average
purchase cost and net realisable value on the balance sheet date.
Dividends and other distributions received are recognised as other
financial income.
PENSIONS
The company’s pension schemes meet the requirements of the
mandatory Occupatonal Pension Act. The company has a defined
contribution pensions scheme for the employees. The premium is
paid through operations and is charged as it arises. Social security
costs are charged on the basis of the pension premium paid.
93
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
GROUP BANK ACCOUNTS SYSTEM – DEPOSIT AND
LOAN
Grieg Seafod ASA operates as an internal bank for the subsidiaries.
Grieg Seafood ASA borrows funds under the agreement from
the financial institutions and lends these funds onwards to the
subsidiaries. The Company has set up a group account system
(multi-accounts) in which Grieg Seafood ASA is the legal account
holder towards the financial institution. Deposits and loans are
recognised as intercompany transactions. All subsidiaries are
jointly and severally responsible to the financial institutions for the
whole amount of the commitment under the scheme.
TAXES
The tax expense in the income statement consists of both taxes
payable for the accounting period and changes in deferred tax
during the period. Deferred tax is calculated as relevant rate of the
temporary differences between the value of assets and liabilities
for tax purposes and any allowable loss to be carried forward at
year-end in the financial statements. Temporary differences, both
positive and negative, are offset within the same period. Deferred
tax assets are recorded in the balance sheet when it is more likely
than not that the tax assets will be utilised. Deferred tax assets and
deferred tax liabilities are presented net in the balance sheet.
Tax on given group contributions booked as an increase in the
purchase price of shares in other companies, and tax on received
group contribution booked directly against equity, have been booked
directly against tax items in the balance sheet (offset against tax
payable if the group contribution affects tax payable, and offset
against deferred taxes if the group contribution affects deferred
taxes).
CASH FLOW STATEMENT
The cash flow statement has been prepared according to the
indirect method. Cash and cash equivalents include cash, bank
deposits and other short-term highly liquid investments which
entail no appreciable exchange rate risk and with maturities of 3
months or less from the purchase date.
FOREIGN CURRENCY
Functional and presentational currency is NOK. All foreign currency
transaction are translated into NOK at the date of the transaction.
Exchange rate and translational differences are posted under other
financial income or expenses.
All monetary items in foreign currency are translated at the balance
sheet date.
CASH-BASED REMUNERATION
The Company has a share-based remuneration scheme with
settlement in cash. The Company’s estimated liability is posted
under current or non-current liabilities based on estimated
settlement date. The cost for the year is charged in the income
statement.
DERIVATIVES
Forward currency contracts
Realised gains are recorded in the income statement as financial
income. The fair value of the contracts is stated on the basis of the
exchange rate at balance sheet date for 2016.
Derivatives are stated at fair value and value changes are recognised
in the income statement.
Interest rate swaps
Interest rate swap contracts are stated at the lowest value principle.
94
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
NOTE 2
OPERATING INCOME
AMOUNTS IN NOK 1000
OPERATING INCOME CONSISTS OF
Administrative services - Group companies
Other operating income
Total other operating income, see note 17
2016
55 997
-2
55 995
2015
52 351
0
52 351
95
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 3
PAYROLL, FEES, NO. OF
EMPLOYEES ETC.
AMOUNTS IN NOK 1000
Wages and salaries
Social security costs
Shares options for directors
Pension costs - defined contribution scheme
Other personnel costs
Total
Average number of employees
Note
4
2016
24 639
4 503
21 712
1 308
3 629
55 791
2015
20 170
3 388
3 819
1 702
889
29 968
19
19
The Company has a pension scheme covering all employees at 31.12.2016. The pension scheme is funded and managed through an
insurance company.
A fixed bonus will be payed to all employees with reference the the 2016 result, in addition to the ordinary bonuses. The bonus has
been provided for in the 2016 income statement and will be payed in 2017.
The board's guidelines and principles for the determination of salary and other remuneration to the management group are included
in the financial statements for the group.
The accumulated cost of salaries, pensions and other benefits to senior employees and board members in 2016 were as follows:
REMUNERATION TO SENIOR EMPLOYEES IN 2016
(TNOK)
Salary
Bonus
Andreas Kvame (CEO)
Atle Harald Sandtorv (CFO)
Knut Utheim (COO)
Kathleen O. Mathisen (CHRO as from May 1,
2016)
Total remuneration incl. social security costs
2 348
1 683
1 659
810
6 501
0
0
0
0
0
Accumulated,
not yet paid
Options exer-
cised during
year
Other
benefits
732
505
276
286
1 799
2 400
2 387
2 288
0
7 075
24
45
39
15
123
REMUNERATION TO BOARD MEMBERS IN 2016 (TNOK)
Per Grieg jr. 1)
Wenche Kjølås 2)
Karin Bing Orgland 2)
Asbjørn Reinkind 1)
Ola Braanaas 1)
Total remuneration incl. social security costs
Total
5 504
4 621
4 261
1 111
15 498
419
262
262
288
234
1 466
1) The payment for work done in the remuneration committee is included in the remuneration to Per Grieg jr., to Asbjørn Reinkind, and
to Ola Braanaas with NOK 14 267 each.
2) The payment for work done in the audit committee is included in the remuneration to Wenche Kjølås, and to Karin Bing Orgland with
NOK 42 788 each. The amounts include social security costs.
96
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY The accumulated cost of salaries, pensions and other benefits to the CEO, CFO, COO and board members in 2015 were as follows:
REMUNERATION TO SENIOR EMPLOYEES IN 2015
(TNOK)
Andreas Kvame (CEO as from 01.06.2015)
Morten Vike (resigned as CEO 17.10.2014)
Atle Harald Sandtorv (CFO)
Knut Utheim (COO as from 01.04.2014)
Total remuneration incl. social security costs
Salary
Bonus
Accumu-
lated, not
yet paid*)
Options
exercised
during year
Other
benefits
1 369
4 414
1 988
1 701
9 472
456
0
119
89
664
0
1 488
0
0
1 488
0
928
0
0
928
9
104
146
139
398
*) The amount consists of accumulated, not paid benefits to former CEO
REMUNERATION TO BOARD MEMBERS IN 2015 (TNOK)
Per Grieg jr. 1)
Wenche Kjølås 2)
Karin Bing Orgland 2)
Asbjørn Reinkind 1)
Ola Braanaas 1)
Total remuneration incl. social security costs
Total
1 834
6 934
2 253
1 929
12 950
405
245
245
274
222
1 392
1) The payment for work done in the remuneration committee is included in the remuneration to Per Grieg jr. with NOK 11 410, to
Asbjørn Reinkind with NOK 11 410 and to Ola Braanaas with NOK 11 410.
2) The payment for work done in the audit committee is included in the remuneration to Wenche Kjølås with NOK 34 230 and to
Karin Bing Orgland with NOK 34 230.
The amounts include social security costs.
SPECIFICATION OF AUDITOR´S FEE
Statutory audit
Tax advisory fee
Other services
Total
2016
958
99
6
2015
910
90
129
1 062
1 129
97
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 4
SHARE-BASED REMUNERATION
(OPTIONS)
The company has a share-based options programme for the management group and regional directors. The options’ strike price is the
stock market price on the date of issue increased by 0.5% per month until exercise date. As at 31.12.2016 there are no equity options
outstanding for exercise. Since 2009 the Company has issued cash-based options to the management group and regional directors. The
last allocation was in 2016, totalling 300 000 options. The last exercise date is 1 June 2019. The options have 2 years’ duration, where 50%
is vested each year. Employees taken on after the first allocation of options have been allocated options on taking up employment.
The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to carry out the calculations. The
table below illustrates the movement in outstanding options throughout 2015 and 2016.
Outstanding
options
31.12.2015
400 000
300 000
300 000
Granted
options
Exercised
options
Cancelled
options
Outstanding
options at
31.12.2016
Of which
cash-settled
-
-
-
85 991
153 199
112 107
-
100 000
-
-
-
-
-
314 009
314 009
146 801
146 801
187 893
187 893
100 000
100 000
1 150 000
2 150 000
200 000
300 000
402 492
753 789
355 129
592 379
592 379
355 129
1 341 082
1 341 082
Outstanding
options
31.12.2014
Granted
options
Exercised
options
Cancelled
options
Outstanding
options at
31.12.2015
Of which
cash-settled
-
400 000
-
200 000
-
200 000
100 000
200 000
100 000
200 000
-
-
-
-
-
-
400 000
400 000
-
-
300 000
300 000
300 000
300 000
400 000
800 000
50 000
1 150 000
1 150 000
800 000
1 600 000
250 000
-
2 150 000
2 150 000
OVERVIEW 2016
Andreas Kvame (CEO)
Atle Harald Sandtorv
(CFO)
Knut Utheim (COO)
Kathleen O. Mathisen
(CHRO)
Others
Total
OVERVIEW 2015
Andreas Kvame (CEO)
Morten Vike (former
CEO)*
Atle Harald Sandtorv
(CFO)
Knut Utheim (COO)
Others
Total
Option
category
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Option
category
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
Cash
settlement
*Morten Vike resigned 17 October 2014.
98
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
Expiry date:
Year - month
Strike price NOK
per share as at
31.12.2016
Strike price NOK
per share as at
31.12.2015
2016 - 06
2017- 06
2016 - 06
2017 - 06
2017 - 06
2018 - 06
2019 - 06
2019 - 06
-
-
-
-
-
27,90
27,90
79,22
24,97
24,97
24,99
24,99
31,55
26,27
26,27
-
ALLOCATION:
YEAR - MONTH
2013 - 12
2013 - 12
2014 - 04
2014 - 04
2014 - 07
2015 - 06
2015 - 06
2016 - 12
Total
Cash based options available for exercise
Weighted average outstanding contract period
Options
2016
-
-
-
-
-
441 082
600 000
300 000
2015
150 000
150 000
50 000
100 000
100 000
800 000
800 000
1 341 082
2 150 000
2016
441 082
28,05
2015
450 000
24,93
2016
Option
category
Previous employees
with exired option
Equity
Listed
price on
alloca-
tion
Calcu-
lated
value per
option on
allocation
Calcu-
lated total
value on
alloca-
tion*)
Total
value of all
options at
01.01.2016
Change in
provision
OB-IB *)
Exer-
cised
options
2016
Acc. cost
charged
against
equity at
31.12.2016
6 887
Book liability
cash settle-
ment at
31.12.2016
Andreas Kvame
(CEO)
Atle Harald Sand-
torv (CFO)
Atle Harald Sand-
torv (CFO)
Knut Utheim (COO)
Knut Utheim (COO)
Kathleen O.
Mathisen (CHRO)
Other options
allocated in 2013
Other options
allocated in 2014
Other options
allocated in 2014
Other options
allocated in 2015
Other options
allocated in 2016
Total
Cash
25,50
3,36
1 342
579
2 356
2 400
Cash
22,22
3,94
394
639
-639
903
Cash
Cash
Cash
25,50
22,56
25,50
3,97
4,78
3,97
793
478
793
Cash
79,00
3,63
363
353
662
353
0
1 346
1 485
-662
1 950
1 945
338
41
-
Cash
22,22
3,94
1 181
1 250
-1 250
3 823
Cash
22,56
4,24
424
Cash
28,90
4,20
420
315
206
-315
546
-206
2 143
Cash
25,50
3,60
2 876
1 282
3 030
1 465
*) The amounts are excluded of social security costs
99
Cash
79,00
3,34
669
9 734
0
75
-
5 639
5 721
15 052
6 887
11 360
2 935
-
1 699
0
2 298
41
0
0
0
4 312
75
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY 2015
Option
category
Previous employees
with exired option
Equity
Listed
price on
alloca-
tion
Calcu-
lated
value per
option on
allocation
Calcu-
lated total
value on
alloca-
tion*)
Total
value of all
options at
01.01.2015
Change in
provision
OB-IB *)
Exer-
cised
options
2015
6 887
Acc. cost
charged
against
equity at
31.12.2015
6 887
Book liability
cash settle-
ment at
31.12.2015
Andreas Kvame
(CEO)
Morten Vike
(former CEO)**
Atle Harald Sand-
torv (CFO)
Atle Harald Sand-
torv (CFO)
Knut Utheim (COO)
Knut Utheim (COO)
Other options
allocated in 2013
Other options
allocated in 2014
Other options
allocated in 2014
Other options
allocated in 2015
Total
Cash
25,50
3,36
1 342
-
579
Cash
22,22
3,94
788
929
-929
813
Cash
22,22
3,94
394
491
148
Cash
Cash
Cash
25,50
22,56
25,50
3,97
4,78
3,97
793
478
793
-
429
-
353
233
353
Cash
22,22
3,94
1 181
957
293
Cash
22,56
4,24
424
397
-82
199
Cash
28,90
4,20
420
60
146
Cash
25,50
3,60
2 876
9 490
-
1 282
10 150
2 376
1 013
6 887
579
-
639
353
662
353
1 250
315
206
1 282
5 639
*) The amounts are excluded of social security costs
**) Morten Vike resigned at 17 October 2014
ACCRUED COST IS DIVIDED AS FOLLOWS:
Accrued cost cash settlement
Exercised options during the year
Total cost excl. employer's national insurance
contributions
National insurance contributions
Total cost incl. employer's national insurance
contributions
2016
5 721
15 052
20 977
939
2015
2 376
1 013
3 389
430
CLASSIFICATION IN STATEMENT
Other provisions for liabilities
Salary and social security costs / bank
Accrued public expense
21 712
3 819
Salary and social security costs
The costs related to cash-based remuneration in 2016 is TNOK 21 712. This is charged in the income statement as a personnel cost.
National security contributions are provided for on an ongoing basis based on the fair value of the options.
At 31 December 2016 outstanding options with the right to cash settlement were stated at TNOK 11 360, of which the total amount is stated
as non-current liabilities. Options issued are cancelled when employment terminates.
ESTIMATES USED IN CALCULATIONS ON ALLOCATION OF OPTIONS
Anticipated volatility (%)
Risk-free rate of interest (%)
Estimated qualification period (years)
36,59 %
0,68 %
2,02
The estimated qualification period for the options is based on historical data, and does not necessarily represent an indication of the
future.
In order to estimate volatility, the management have applied historical volatility for comparable listed companies.
100
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 5
FINANCIAL INCOME AND
FINANCIAL EXPENSES
AMOUNTS IN NOK 1000
Interest income from group companies
Other interest income
Group contribution from subsidiaries
Group contribution 2015, recognised 2016
Dividend
Unrealised value changes derivatives, see note 9
Unrealised currency change, long-term loans from Group
Net unrealised currency gains
Total financial income
Interest expenses from group companies
Loan interest expenses
Other interest expenses
Unrealised currency change, long-term loans from Group
Other financial expenses
Net unrealised currency losses
Total financial expenses
2016
46 916
63
713 301
11 467
8 071
9 287
0
0
789 106
0
60 157
1 666
90 228
530
66 692
219 272
2015
55 823
0
39 091
0
30
2 316
54 134
22 520
173 914
529
101 444
1 263
0
610
0
103 846
Net financial items
569 834
70 068
101
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 6
ACCOUNTS RECEIVABLE
AMOUNTS IN NOK 1000
Accounts receivable at nominal value
Provisions for bad debt
Book value of accounts receivable at 31.12
Change in bad debts provision
Bad debt realised
Sum loss on accounts receivable charged in the accounts
2016
2015
19
0
19
0
0
0
0
0
0
0
0
0
102
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 7
OTHER RECEIVABLES/
OTHER CURRENT LIABILITIES
Amounts in NOK 1000
OTHER CURRENT RECEIVABLES
Prepaid expenses
VAT
Tax receivable from 2015
Deposit Nasdaq*)
Other current receivables
Other current receivables 31.12
2 016
1 215
2 138
502
0
171
4 025
2 015
599
1 672
0
1 513
262
4 046
*) Deposit Nasdaq is linked to the ongoing financial salmon price contracts. Grieg Seafood ASA enters into hedging contracts on behalf
of Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS.
OTHER CURRENT LIABILITIES
Accrued interest
Other accrued expenses
Unrealised loss on interest rate swap contracts, see note 9
Unrealised loss on foreign currency contracts
Other current liabilities
Other current liabilities at 31.12
2 016
628
12 690
5 268
0
3 834
22 420
2 015
5 532
5 939
14 555
0
1 846
27 872
103
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 8
CASH AND CASH EQUIVALENTS
AMOUNTS IN NOK 1000
Restricted deposits related to employees' tax deductions
Restricted account Nasdaq *)
Fixed interest rate deposit **)
Other bank deposits
Total
2016
1 242
0
160 000
222 039
383 281
2015
1 295
1 513
0
212 249
215 057
*) Restricted amounts relate to financial salmon price contracts. Grieg Seafood ASA enters into hedging contracts on behalf of Grieg
Seafood Rogaland AS and Grieg Seafood Finnmark AS.
**) Fixed interest rate deposit valid until January 2017, the contract was not renewed
104
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 9
FINANCIAL INSTRUMENTS TO
FAIR VALUE
AMOUNTS IN NOK 1000
Interest rate swap contracts (1 contract for a total of MNOK 400
maturing in 2019)
Total financial instruments at fair value
2016
2015
ASSETS
CURRENT
LIABILITIES
ASSETS
CURRENT
LIABILITIES
0
0
-5 268
-5 268
0
0
-14 555
-14 555
*) The amounts are exclusive of accrued interest totalling TNOK 17.1 (2015: TNOK 1,027)
CHANGE IN FAIR VALUE POSTED AS FINANCIAL ITEMS
Unrealised gain/loss on interest rate swaps
Net unrealised gain/loss on financial instruments
2016
9 287
9 287
2015
2 316
2 316
105
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 10
INVESTMENTS IN SUBSIDIARIES
AMOUNTS IN NOK 1000
SUBSIDIARIES
Grieg Seafood Rogaland AS
Grieg Seafood Canada AS
Grieg Seafood Finnmark AS
Registered
office -
country
Registered
office -
location
Norway
Norway
Norway
Bergen
Bergen
Alta
Grieg Seafood Shetland Ltd
UK
Shetland
Ocean Quality AS
Norway
Bergen
Ownership/
voting share
Equity at
31.12.2016
100 %
100 %
100 %
100 %
60 %
574 132
68 461
638 666
199 039
48 038
Profit/loss
2016
330 813
-32
313 137
116 753
62 759
Book value
223 497
138 252
400 481
458 750
6 000
Book value of subsidiaries at 31.12
1 528 336
823 430
1 226 980
106
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 11
INVESTMENTS IN SHARES
AMOUNTS IN NOK 1000
INVESTMENTS IN SHARES
Finnøy Næringspark AS
DNB Global Allokering
Codfarmers ASA
CO2 AS
Norsk Villaksforvaltning
Fiskeriforum Vest
Book value of shares at 31.12
Registered
office -
country
Registered
office -
location
Ownership/
voting share
Norway
Norway
Norway
Norway
Norway
Norway
Finnøy
Oslo
Oslo
Lindås
Førde
Bergen
7,14 %
0,00 %
0,00 %
10,00 %
15,15 %
20,00 %
No. of shares
Acquisition cost
Book value
100
3 038
500
2
5
20
103
630
156
20
50
16
103
464
4
20
50
16
656
107
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 12
INTANGIBLE ASSETS
AMOUNTS IN NOK 1000
2016
Book value at 01.01
Intangible assets acquired
Amortisation
Book value at 31.12
As at 31.12.
Acquisition cost
Accumulated amortisation
Book value at 31.12
Economic lifetime/amortisation plan
2015
Book value at 01.01.
Intangible assets acquired
Amortisation
Book value at 31.12
As at 31.12.
Acquisition cost
Accumulated amortisation
Book value at 31.12
SOFTWARE
16 651
4 284
-3 516
17 419
37 148
-19 729
17 419
3 - 10 years
SOFTWARE
11 320
9 161
-3 830
16 651
32 864
-16 213
16 651
Economic lifetime/amortisation plan
3 - 10 years
108
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 13
TANGIBLE FIXED ASSETS
AMOUNTS IN NOK 1000
2016
Book value at 01.01
Tangible fixed assets acquired
Sale tangible fixed assets (book value)
Depreciation
Depreciation of fixed assets sold
Book value at 31.12.
As at 31.12.
Acquisition cost
Accumulated depreciation
Book value at 31.12
Economic lifetime/amortisation plan
2015
Book value at 01.01
Tangible fixed assets acquired
Depreciation
Book value at 31.12
As at 31.12.
Acquisition cost
Accumulated depreciation
Book value at 31.12
Economic lifetime/amortisation plan
109
PLANT, EQUIPMENT AND
OTHER FIXTURES ETC.
4 814
3 018
-72
-1 854
66
5 972
15 976
-10 004
5 972
3-5 years
PLANT, EQUIPMENT AND
OTHER FIXTURES ETC.
3 908
2 351
-1 446
4 814
13 030
-8 216
4 814
3-5 years
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 14
SHARE CAPITAL AND
SHAREHOLDER INFORMATION
SHARE CAPITAL:
As at 31 December 2016 the company had 111 662 000 shares with a nominal value of NOK 4 per share.
All shares issued by the company are fully paid up. There is one class of shares and all shares have the same rights.
In June 2011 the company purchased 1 250 000 of its own shares for NOK 14.40 per share.
Holdings of treasury shares
31.12.2015
Change in
share capital
(TNOK)
Nominal value
(NOK)
Total share
capital (TNOK)
No. of ordinary
shares
4,00
4,00
446 648
111 662 000
-5 000
-1 250 000
441 648
110 412 000
THE LARGEST SHAREHOLDERS OF GRIEG SEAFOOD ASA
No. of shares
Shareholding
No. of shares
Shareholding
GRIEG HOLDINGS AS
FOLKETRYGDFONDET
OM HOLDING AS
YSTHOLMEN AS
MORGAN STANLEY AND CO INTL PLC
STATE STREET BANK AND TRUST CO.
VERDIPAPIRFONDET PARETO INVESTMENT
ARTIC FUNDS PLC
GRIEG SEAFOOD ASA
THE BANK OF NEW YORK MELLON SA/NV
DNB NOR MARKETS
NORDEA BANK NORGE ASA
KONTRARI AS
Total - largest shareholders
Other shareholders with shareholding less than 1%
31.12.16
55 801 409
31.12.16
49,97 %
31.12.15
55 801 409
3 390 000
3 105 000
2 928 197
2 067 749
1 814 836
1 711 000
1 397 000
1 250 000
1 241 277
105 841
-
-
3,04 %
2,78 %
2,62 %
1,85 %
1,63 %
1,53 %
1,25 %
1,12 %
1,11 %
0,09 %
0,00 %
0,00 %
74 812 309
36 849 691
67,00 %
33,00 %
-
2 610 000
2 928 197
206
1 305 901
598 695
-
1 250 000
281 741
22 188 875
6 605 998
5 862 763
99 433 785
12 228 215
31.12.15
49,97 %
0,00 %
2,34 %
2,62 %
0,00 %
1,17 %
0,54 %
0,00 %
1,12 %
0,25 %
19,87 %
5,92 %
5,25 %
89,05 %
10,95 %
Total shares
111 662 000
100,00 %
111 662 000
100,00 %
110
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY SHARES CONTROLLED BY BOARD MEMBERS AND GROUP
MANAGEMENT:
No. of shares
Shareholding
No. of shares
Shareholding
31.12.2016
31.12.2016
31.12.2015
31.12.2015
BOARD OF DIRECTORS:
Per Grieg jr. *)
Wenche Kjølås (Jawendel AS)
Asbjørn Reinkind (Reinkind AS)
Karin Bing Orgland
Ola Braanaas
GROUP MANAGEMENT:
Andreas Kvame (CEO)
Atle Harald Sandtorv (CFO)
Knut Utheim (COO)
Kathleen O. Mathisen (CHRO)
59 138 799
52,96 %
60 786 561
54,44 %
7 000
120 000
-
-
29 000
30 661
12 400
0
0,01 %
0,11 %
0,00 %
0,00 %
0,03 %
0,03 %
0,01 %
0,00 %
7 000
120 000
-
-
0
45 500
0
0
0,00 %
0,11 %
0,00 %
0,00 %
0,00 %
0,04 %
0,00 %
0,00 %
*) THE SHARES OWNED BY THE FOLLOWING COMPANIES ARE CONTROLLED BY PER GRIEG JR. AND FAMILY
Grieg Holdings AS
Grieg Shipping II AS
Ystholmen AS
Grieg Ltd AS
Kvasshøgdi AS
Per Grieg jr. privat
Total shares
55 801 409
49,97 %
55 801 409
49,97 %
-
3 105 000
217 390
-
15 000
0,00 %
2,78 %
0,19 %
0,00 %
0,01 %
824 565
2 928 197
217 390
1 000 000
15 000
0,74 %
2,62 %
0,19 %
0,90 %
0,01 %
59 138 799
52,96 %
60 786 561
54,44 %
111
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
NOTE 15
TAXES
AMOUNTS IN NOK 1000
BASIS FOR TAX PAYABLE ARISES AS FOLLOWS:
Profit before taxes
Recognised share dividends
Net other permanent differences
Change in temporary differences
Adjustment of Group contribution 2015
Group contribution received/provided
Taxable profit
Group contribution received
Basis for tax expense for the year
25 % (27 %) tax payable
SPESIFICATION OF DEFERRED TAX BASIS
TEMPORARY DIFFERENCES
Fixed assets
Profit and loss account
Cash-based options
Long-term debt/amortised cost
Revaluation account non-current liabilities
Financial instruments
Net temporary differences/ basis for deferred tax in balance sheet
Carryforwards
Unutilised credit allowance/dividend payments
Basis for deferred tax in balance sheet
Deferred tax assets 25% (27%)
Change in deffered tax assets due to change in tax rate 24 % (25 %)
Deferred tax/deferred tax assets in balance sheet
SPECIFICATION OF TAX CHARGE
Tax payable
Change in deferred tax, previous rate
Change in deferred tax due to change of rate
Tax effect of foreign tax not credited Norwegian tax
Correction of contributions for 2015, tax effect
Tax expense in income statement
112
2016
517 678
-8 071
-655
86 612
-11 467
-713 301
-129 203
713 301
584 098
146 024
2016
3 832
1 551
-12 962
5 126
66 891
-5 268
59 170
0
0
2015
51 015
-30
-563
-50 423
0
-39 091
-39 091
39 091
0
0
2015
1 871
1 939
-6 302
6 739
157 118
-15 582
145 783
0
0
CHANGE
1 961
-388
-6 660
-1 613
-90 227
10 315
-86 612
-
-
-86 612
59 170
145 783
14 792
-592
14 201
2016
146 024
-21 653
-592
2 451
3 278
39 361
-2 916
36 446
2015
0
13 614
-2 916
676
0
129 509
11 374
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY RECONCILIATION OF TAX EXPENSE
Profit before taxes
Estimated tax 25 % (27 %)
Tax expense in income statement
Difference
THE DIFFERENCE CONSISTS OF THE FOLLOWING:
25 % (27 %) of permanent differences
Tax effect of foreign tax not credited Norwegian tax
Change in contribution previous years, tax effect
Change in tax/deferred tax due to change of rate
Total explained difference
2016
517 678
-129 419
129 509
90
-5 048
2 451
3 099
-592
-90
2015
51 015
13 774
-11 374
2 400
152
364
0
-2 916
-2 400
113
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 16
GUARANTIES
Grieg Seafood ASA served as guarantor on behalf of Ocean Quality UK Ltd and Ocean Quality North America Inc in connection with sales
contracts towards customers. The total amounts are EUR 250,000 and USD 3,000,000, respectively.
114
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 17
RELATED PARTIES
AMOUNTS IN NOK 1000
2016
Total related parties -
group companies
Total related parties -
shareholders
Operating
income
Operating
expenses
Financial
income
Financial
expenses
Long-
term
receiv-
ables
Accounts
receivable
Current
receiv-
ables
Accounts
payable
Other
current
liabilities
55 997
0
46 916
-6
601 032
37 520 1 240 578
-34 201
-633 576
0
7 356
0
0
0
19
11
0
-283
Total
55 997
7 356
46 916
-6
601 032
37 539
1 240 589
-34 201
-633 859
2015
Total related parties -
group companies
Total related parties -
shareholders
Operating
income
Operating
expenses
Financial
income
Financial
expenses
Long-
term
receiv-
ables
Accounts
receivable
Current
receiv-
ables
Accounts
payable
Other
current
liabilities
52 351
782
55 823
-529
691 259
4 827
903 345
-26 511
0
0
5 373
0
0
0
0
0
0
-492
Total
52 351
6 155
55 823
-529
691 259
4 827
903 345
-26 511
-492
The company purchases services from companies controlled by Grieg Seafood ASA´s majority shareholder, Grieg Holdings AS. These
services include:
•
Services related to ICT and other functions such as book-keeping, canteen, reception etc., provided by Grieg Group Resources AS on
an arm’s length basis.
• Grieg Seafood ASA rents its offices from Grieg Gaarden AS. The rent is based on the arm’s length principle.
The parent company provides a range of services to the subsidiaries. The services include administrative services and services related to
the parent provision of non-current loans and short-term credit facilities to the subsidiaries. The interest is on an arm´s length basis.
As from 2015, Ocean Quality AS is classified as a subsidiary of Grieg Seafood ASA.
Grieg Seafood ASA enters into hedging contracts on behalf of Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS. The arrange-
ment is intended to reduce these companies´ exposure to salmon prices. The agreements with the subsidiaries are priced on the basis of
a “back to back” arrangement.
115
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
NOTE 18
NET INTEREST-BEARING DEBT
The Company has a syndicated loan provided 50/50 by DNB and Nordea. The financing agreement consists of a total frame of MNOK 1.910
including a long-term credit facility of MNOK 700. At year-end the credit line was not utilised.
The financing agreement includes covenants related to consolidated equity of 35% (in the Group, not including Ocean Quality), a revolving
NIBD/EBITDA ratio of 5.0 if the book equity ratio is higher than 40% and 4.5 if the book equity ratio is between 35% and 40%. As at
31.12.2016 the NIBD/EBITDA ratio for the group is 0.7, not including Ocean Quality. Hence, at year-end the group was in fully in compliance
with all covenants.
AMOUNTS IN NOK 1000
NON-CURRENT LIABILITIES
Liabilites to credit institutions before amortisation effect
Long-term credit facility *)
Amortised cost
Total interest-bearing non-current liabilities
SHORT-TERM DEBT
Short-term credit facility *)
Share of current portion of long term borrowing
Total interest-bearing current liabilities
Gross interest-bearing liabilities
Bank deposits
Loans to subsidiaries
Net interest-bearing liabilities
2016
985 000
0
-5 126
979 874
2016
0
90 000
90 000
1 069 874
383 281
494 733
191 859
2015
1 075 000
450 000
-6 739
1 518 261
2015
0
90 000
90 000
1 608 261
215 057
864 945
528 259
*)The company has in 2016 a total long-term credit facility of MNOK 700. As at 31.12.2016 there was no draw-down.
116
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY MATURITY PROFILE - NON-
CURRENT LIABILITIES
Long-term loan
Long-term credit facility
Total
LIABILITIES SECURED BY
MORTGAGE
Liabilities to credit institutions
Total liabilities
BOOK VALUE OF ASSETS PLEDGED AS SECURITY
Shares in subsidiaries
Fixed assets
Accounts receivable
Loans to subsidiaries
Total assets pledged as security
2016
90 000
90 000
889 874
2017
2018
2019 SUBSEQU.
SUM
90 000
90 000
889 874
0
0
0
0
0
1 069 874
0
1 069 874
2016
2015
1 069 874
1 608 261
1 069 874
1 608 261
1 226 980
1 226 980
5 972
4 814
19
0
494 733
864 945
1 727 705
2 096 739
TYPE OF DEBT
Currency
Syndicated long-term loan
NOK
Syndicated loan revolving credit
NOK
Interest
rate
Floating
Floating
Total
2016
2015
Current
portion
Non-
current
portion
Current
portion
Non-
current
portion
90 000
979 874
90 000
1 518 261
0
0
0
0
90 000
979 874
90 000
1 518 261
Maturity
06/2019
06/2019
Syndicated long-term loan
Syndicated loan revolving credit (non-current)
1 069 874
1 069 874
0
0
Total loans
1 069 874
1 069 874
0
0
0
31.12.16
NOK
CAD
GBP
USD
Average interest rate
2016
3,53 %
2015
4,70 %
117
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY NOTE 19
POST-BALANCE SHEET EVENTS
Since the closing of accounts at year-end 2016 there have been no events which could materially affect the accounts for 2016.
118
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY To the General Meeting of Grieg Seafood ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Grieg Seafood ASA. The financial statements comprise:
• The financial statements of the parent company, which comprise the balance sheet as at 31
December 2016, and the income statement, statement of changes in equity and cash flow
statement for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies, and
• The financial statements of the group, which comprise the balance sheet as at 31 December
2016, and income statement, statement of comprehensive income, statement of changes in
equity, cash flow for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies.
In our opinion:
• The financial statements are prepared in accordance with the law and regulations.
• The accompanying financial statements give a true and fair view of the financial position of the
parent company as at 31 December 2016, and its financial performance and its cash flows for
the year then ended in accordance with the Norwegian Accounting Act and accounting
standards and practices generally accepted in Norway.
• The accompanying financial statements give a true and fair view of the financial position of the
group as at 31 December 2016, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Basis for Opinion
We conducted our audit in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, included International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company as
required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
PricewaterhouseCoopers AS, Sandviksbodene 2A, Postboks 3984 - Sandviken, NO-5835 Bergen
T: 02316, org.no.: 987 009 713 VAT, www.pwc.no
State authorised public accountants, members of The Norwegian Institute of Public Accountants, and authorised
accounting firm
119
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
Auditor's Report - 3 April 2017 - Grieg Seafood ASA
Key Audit Matter
How our audit addressed the Key Audit Matter
Measuring of biological assets
(See also note 2 and 7 for further
information about biological assets.)
As described in the accounting policies
notes, Grieg Seafood ASA measures the
Group’s biological assets at fair value in
accordance with IAS 41. Biological assets
include inventories of broodstock, smolt
and live fish held for harvesting purposes.
The biological assets are by nature
difficult to count, observe and measure
due to lack of sufficiently accurate
measuring techniques that at the same
time does not affect fish health.
Therefore, we have focused on measuring
the inventory of biological assets
(biomass), emphasizing live fish held for
harvesting purposes, which constitute the
major part of the Group’s biological
assets. Biomass in the sea has direct
influence on the valuation; see more
about this in the paragraph «Valuation of
biological assets at fair value» below.
The Group’s biomass system shows the number of fish,
average weight and biomass per site. We have directed
our effort at the movement in biological inventory (in
numbers) in the period. The movement is the sum of
smolt stocked, loss of fish and harvested fish for the
period.
We have reviewed the Group’s processes for controlling
the number of fish stocked. For a selection of stocking
we have tested the control by tracing the number of fish
at stocking back to underlying documentation;
vaccination documentation for internally produced
smolt and invoices for purchase of external smolt. Our
procedures did not identify any material deviations.
The growth in the period is connected to the total feed
consumption and is closely associated with purchase of
feed. We have reviewed the Group’s control for
reconciliation of feed inventory and have obtained
external confirmation from feed suppliers in order to
verify purchased volume. We have also assessed
recorded accumulated feed factor for live fish held for
harvesting purposes and obtained explanations from
management and further documentation for sites with
significantly either higher or lower feed factor than
expected. Our procedures substantiated that the growth
for the year was reasonable.
In order to challenge the historical accuracy of
management’s biomass estimates we have reviewed the
harvest deviation for the period. We found the
accumulated deviations to be as expected.
120
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GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
Auditor's Report - 3 April 2017 - Grieg Seafood ASA
Valuation of biological assets at fair value
(See also note 2 and 7 for further
information about biological assets.)
The Group measures biological assets at
fair value in accordance with IAS 41.
Valuation of biological assets is important
for the understanding of the financial
statements. The fluctuations in the fair
value estimate that occur due to, for
instance, changes in the market price,
may have significant impact on the
period’s operating result. The Group
therefore shows the effect of fair value
adjustments for biological assets as a
separate line item before operating result
(EBIT).
We focused on the valuation of this item
due to the size of the amount
(MNOK 2 460 per 31.12.2016), the
complexity of the calculation and because
the estimate involves judgement.
We challenged management’s model for calculation of
fair value of biological assets by assessing the model
against the criteria in IAS 41 and IFRS 13. We found
that the model includes the elements that the
accounting standards require.
We checked whether the biomass that formed the basis
for the Group’s model corresponded with the Group’s
biomass system and controlled that the model made
the mathematical calculations as intended.
After having assured that these fundamental were in
place, we assessed whether the price assumptions that
management used in the model were reasonable. We
assessed the price assumptions against observable
spot- and/or forward prices from FishPool and other
observable markets. We found management’s price
assumptions to be reasonable.
We challenged management’s assumptions for future
mortality and expected production cost by assessing
these factors against industry data and the Group’s
historical results. We found the assumptions to be in
line with industry data and historical results.
Other information
Management is responsible for the other information. The other information comprises the Board of
Directors’ report, principles of Corporate Governance and information in the Group’s Sustainability
Report, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
121
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GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
Auditor's Report - 3 April 2017 - Grieg Seafood ASA
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
The Board of Directors and the Managing Director (management) are responsible for the preparation
and fair presentation of the financial statements of the parent company in accordance with Norwegian
Accounting Act and accounting standards and practices generally accepted in Norway, and for the
preparation and fair presentation of the financial statements of the group in accordance with
International Financial Reporting Standards as adopted by the EU, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the parent company use the going concern basis of accounting
insofar as it is not likely that the enterprise will cease operations. The financial statements of the group
use the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, included International Standards on Auditing (ISAs), we exercise
professional judgment and maintain professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
•
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
122
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GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
Auditor's Report - 3 April 2017 - Grieg Seafood ASA
•
•
•
conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit
We also provide the Audit Committee with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
123
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GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
Auditor's Report - 3 April 2017 - Grieg Seafood ASA
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report
Based on our audit of the financial statements as described above, it is our opinion that the
information presented in the Board of Directors’ report and in the statements on Corporate
Governance and Corporate Social Responsibility concerning the financial statements, the going
concern assumption, and the proposal for the allocation of the profit is consistent with the financial
statements and complies with the law and regulations.
Opinion on Registration and Documentation
Based on our audit of the financial statements as described above, and control procedures we have
considered necessary in accordance with the International Standard on Assurance Engagements
(ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial
Information, it is our opinion that management has fulfilled its duty to produce a proper and clearly
set out registration and documentation of the company’s accounting information in accordance with
the law and bookkeeping standards and practices generally accepted in Norway.
Bergen, 3 April 2017
PricewaterhouseCoopers AS
Jon Haugervåg
State Authorised Public Accountant
Note: This translation from Norwegian has been prepared for information purposes only.
124
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GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY
GRIEG SEAFOOD APM
ALTERNATIVE PERFORMANCE
MEASURES
Grieg Seafood Group applies APMs (alternative performance measures) to demonstrate corporate achievements in the most relevant
and informative way possible to our users. APMs listed below have been applied consistently over time, with one exception: Calculation
of net interest bearing debt excl. factoring. Starting with Q1 reporting in 2016, figures showing Bremnes Fryseri AS´ share of bank in
Ocean Quality AS, as well as factoring, are omitted.
The perfomance measure is used to calculate NIBD/EBITDA share, which represents one of the covenants required by the bank
syndicate, where Ocean Quality AS is not consolidated into the calculation. The revised method of Q1 2016 will apply to future
calculations of NIBD/EBITDA shares under the loan terms.
125
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY ALTERNATIVE
PERFORMANCE
MEASURE (APM)
EBIT
NO.
1
DEFINITION AND CALCULATION
Unless otherwise specified, EBIT (earnings
incl. amortisation and depreciation) is prior to
fair value adjustment. This applies to all key
figures where EBIT is a component, including:
EBIT/ kg (NOK)
EBIT/ kg GWE
REASON FOR APPLYING APM
EBIT before fair value adjustment provides a more
informative result as it does not take into account
future gains or losses on fish not yet sold at the point
of fair value adjustment. In addition, it provides an
industry measure.
EBIT before fair value
adjustment of biological
assets
Operating profit incl. amortisation and
depreciation, excl. fair value adjustment of
biological assets
This is the mandatory financial measure according to
standard
2
3
4
EBITDA before fair
value adjustment of
biological assets
Equity ratio excluding
Ocean Quality
5
NIBD/EBITDA
6
ROCE
EPS
API In-bath treatment
7
8
126
Unless otherwise specified, EBITDA (oper-
ating profit) is calculated before fair value
adjustment of biological assets. This applies
to all key figures where EBITDA is a compo-
nent, including:
EBITDA (%)
EBITDA margin
EBITDA margin – terminal value
NIBD/EBITDA
Equity ratio is calculated both with and
without Ocean Quality, due to bank syndicate
equity demands exclusive of the consoli-
dated Ocean Quality. Equity ratio excl. Ocean
Quality is solely considering Grieg Seafood
companies, pertaining to both equity and total
liability.
Net interest bearing debt (NIBD) comprises
long-term and current debt to financial
institutions, after deducting cash and cash
equivalents. NIBD is calculated in two ways:
1) Including all long-term and current debt to
credit institutions
2) According to covenants required by the
bank syndicate. When calculating NIBD
according to covenants the factoring debt is
not included. Furthermore, cash and cash
equivalents are reduced with an amount
corresponding to Bremnes Fryseri AS’ share
of OQ AS’ bank deposits. For both versions,
EBITDA is before fair value adjustments of
biological assets.
Corresponds to return on capital employed
before fair value adjustment of biological
assets. Denominator is NIBD excluding Ocean
Quality.
Calculation:
ROCE= (EBIT)/(annual average NIBD+annual
average equity excluding fair value adjustment
of biological assets)
EPS (Earnings per share) = (net profit after
taxes minus shares of non-controlling inter-
ests)/ number of shares
API (=Amount of pharmaceutical ingredient)
Antibiotics = amount of antibiotics defined
as an agent measured in grams per ton
produced live weight fish. API = grams per ton
LWE
EBITDA before fair value adjustment provides a more
informative result as it does not take into account
future gains or losses on fish not yet sold at the
balance sheet date, contrary to fair value adjustment.
In addition, it provides an industry measure.
Applied to measure the company´s solidity,
according to the Group´s covenant requirements.
We extract a share of OQ from interest bearing debt,
as it is not interest bearing debt according to cove-
nant definitions. Fair value adjustment of biological
assets is extracted as this is a highly volatile variable.
The company has limited influence on price, which is
an important factor in the calculation.
Measurement figure in relation to financial standard
The perfomance measure provides a better indicator
of the proportion of antibiotics used in production.
GRIEGSEAFOOD 2 0 1 6 PARENT COMPANY