ANNUAL REPORT 2014
Annual report 2014 Kleven Maritime AS Org. no. 981 508 734 The Group's activities and organisation The Kleven Maritime AS Group was founded in January 2000. Kleven Maritime AS is the parent company of the Group and as of 31 December 2014 owned, either directly or indirectly, 100% of the companies Myklebust Verft AS, Kleven Verft AS, Kleven Maritime Finans AS, Kleiva Shipinvest II AS and Kleven Maritime Contracting AS, as well as the project companies Kleven Prosjekt II AS and Myklebust Prosjekt AS and Myklebust Nybygg AS. Kleven Maritime AS also owns 51% of the shares in Kleven Maritime Technology AS. In addition, Kleven Maritime Technology AS owns 50% of the shares in the company Kleven ORN in Brazil as of 31 December 2014. In 2014, the Kleven Maritime AS Group has built new vessels and carried out repairs and modifications of vessels in Ulsteinvik and Gursken, and has been involved in after-market electrical services through Kleven ORN in Brazil. Kleven Maritime AS's corporate management has been located in Ulsteinvik. The shipyards delivered the following newbuilds in 2014: Yard Myklebust Verft Myklebust Verft Myklebust Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft
Build number MVE-358 MVE-367 MVE-368 KVE-352 KVE-356 KVE-361 KVE-363 KVE-364
Type Seismic vessel Platform supply vessel Platform supply vessel Construction vessel LNG Platform supply vessel Platform supply vessel Construction vessel Construction vessel
Buyer Sanco Holding AS Atlantic Offshore Epsilon AS Atlantic Offshore Epsilon AS Rem Ship AS Rem Stadt AS Ugland Supplier AS Olympic Nor AS Rem Ship AS
The total contract value of the delivered vessels is about NOK 3.8 billion. Myklebust Verft also completed several extensive after-sales assignments. The market situation The market for shipbuilding is characterised by strong competition between the yards for contracts. Kleven has proven competitive and has increased its market share. In 2014, the group has been awarded 13 new contracts and 1 major modification, and with this has a very good order book in today’s challenging market. After a period of contracting and delivery of many vessels to the offshore industry, sales to this market are expected to decline in the near future. Even though there will be some sales of special ships to the offshore industry, it must be expected that it will take time for the market in general to improve and it is doubtful whether the volume will reach the same level as in the last few years. The shipyards in Kleven will therefore also focus on other types of vessels. The Group also sees a need for after-sales services targeting the offshore shipping companies and has a new floating deck that is big enough to handle most offshore vessels. Kleven will increase its focus on this market in the years ahead.
1
Contract value As at 31 December 2014, the shipyards in Kleven have the following 19 contracts: Company Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Kleven Verft Myklebust Verft Myklebust Verft Myklebust Verft Myklebust Verft
Build number KVE-365 KVE-366 KVE-370 KVE-371 KVE-373 KVE-374 KVE-378 KVE-379 KVE-381 KVE-382 KVE-383 KVE-384 KVE-385 KVE-386 KVE-387 MVE-369 MVE-376 MVE-377 MVE-873
Type Construction vessel Expedition vessel Expedition vessel Construction vessel Construction vessel Platform supply vessel Construction vessel Construction vessel Construction vessel Anchor-handling vessel Anchor-handling vessel Anchor-handling vessel Anchor-handling vessel Anchor-handling vessel Anchor-handling vessel Seismic vessel Construction vessel Construction vessel Modification
Delivery February - 15 June – 15 June – 16 March - 15 February - 16 April - 15 June – 15 December - 15 June – 16 October - 16 December - 16 February - 17 April - 17 June – 17 August -17 May - 15 March – 15 February - 16 March - 16
As at 31 December 2014 the total value of the contracts is about NOK 12.3 billion, compared with about NOK 7.7 billion as at 31 December 2013. Total net contract value at the same time is around NOK 8.4 billion, compared with about NOK 5.0 billion as at 31 December 2013. Organisation and human resources, the working environment, HSE, equality and compliance with the Anti-Discrimination Act: The Group employed an average of 728 full-time equivalents in 2014. This represents an increase of 108 full-time equivalents compared with 2013. At 31 December 2014, the Group employed 33 people under apprenticeship agreements. 10 of these apprentices are part of the TAF scheme, whereby apprentices train for four years, combining on-the-job training with the upper-secondary school programme for specialisation in general studies. Apprentices are a priority in Kleven. Human resources are vital to the activities at Kleven. Through a clear HSE policy and targeted efforts the companies will secure a good and proper working environment. As inclusive workplaces (IA bedrifter), the yards in Kleven have committed to working systematically to reduce sickness absence, through prevention, facilitation and follow up of individual employees. In 2014, the average total sickness absence was 4.2 per cent, which is the same level as in 2013. No serious accidents involving people or property damage were reported in the company in 2014. A total of 27 injuries resulting in 366 days of sickness absence were reported in 2014. This resulted in an H-value of 20.2 for 2014. Compared with the previous year, this is a reduction in the H-value of 9.6. The companies' working environment committees, safety delegates and employee representatives have cooperated to attend to working environment matters in a good manner. The working environment was good in 2014. Today, shipbuilding is project work that involves extensive use of subcontractors, several of whom are from countries other than Norway. The companies in Kleven wish to promote the
2
purpose of the Anti-Discrimination Act. Information materials are translated into relevant languages for the benefit of our own employees and the contractors' employees, Information films are produced without speech and in such a way that they can be understood by employees who speak other languages and have other cultural backgrounds than Norwegian. Norwegian language courses are also held for employees with foreign backgrounds. In 2014, a life phase policy was adopted as part of Kleven’s personnel policy. The life phase policy is a result of a joint project carried out by Myklebust Verft and Kleven Verft in the spring of 2014. The work started immediately, among other things, based on sub-goal 3 in the agreement on an Inclusive Workplace (IA). The life phase policy outlines flexible measures to objective of which is to improve Kleven’s competitiveness. Key topics are recruitment, reduction of sickness absence and turnover, systematic skills development / transfer, motivation and mastering, increasing productivity and getting employees to work longer. The Group aims to be a workplace with full equality between women and men. The Group also aims to avoid all forms of discrimination based on skin colour, language, religion and beliefs. Of the Group's 768 employees at 31 December 2014, 80 were women. The Group operates in a male-dominated industry, but its companies emphasise recruiting both women and men. The companies pay equal pay for equal work. Working hour arrangements in the companies vary according to positions, but are independent of gender. The companies try to adapt working hour arrangements to the needs of the individual employee. Most departments now operate flexitime schemes. The Board of Directors of Kleven Maritime AS consists of 3 men and 2 women. The Chair of the Board is a woman. External environment: The Group's shipyards are engaged in newbuilding, repair and maintenance of vessels. These activities have historically involved a risk of pollution. There is currently great emphasis on reducing pollution, noise and dust from the activities in order to minimise the negative impact on the surroundings. The external environment is adequately protected. Waste is sorted and, if possible, sent to recycling. Kleven Verft AS achieved environmental certification in accordance with the ISO 14001:2004 standard in May 2013. In addition, the company was certified in accordance with the ISO 9001:2008 quality standard from the same date. The objective is that Myklebust Verft is similarly certified during 1st half-year 2016. Financial risk: Shipbuilding is a project-based industry that is exposed to risk. The activities at the Group's shipyards are exposed to various types of risks relating to contracting, purchasing and project implementation. Hedging is used, particularly in areas such as subcontractor delivery risk, credit risk, liquidity risk and interest rate and currency risk. Instructions and procedures have been established for managing these risk areas. The project organisation focuses on thorough planning and risk identification at an early stage of the project implementation phase. The shipyards in Kleven buy hulls and hull modules from foreign shipyards, and their activities are also largely based on the purchase of goods and services from other subcontractors. This involves a risk that deliveries will not be made at the agreed times or meet the agreed quality requirements. The Group reduces the risk through, among other things, close follow-up of key suppliers and by spreading the purchase of hull modules between several hull yards. Kleven Verft has made large investments in production halls and automated production lines to be able to bring parts of the production back to Norway, thereby ensuring control and reducing risk.
3
Shareholder information At 31 December 2014, there were twelve shareholders in Kleven Maritime AS. There were no changes in the composition of the shareholder group in 2014. The annual financial statements, prospects and the going concern assumption The accounts of the parent company Kleven Maritime AS for 2014 showed a profit before taxes of NOK 35.2 million. The company receives dividend from subsidiaries of NOK 30.0 million and a group contribution of NOK 7.1 million. The profit after taxes for the year is NOK 35.2 million. The Kleven Maritime AS Group’s operating profit amounted to NOK 76.0 million compared with NOK 172.2 million in 2013. The reason for the reduction in operating profit is due to generally lower operating margins in projects. The profit includes a recorded income of around NOK 10 million related to a repair carried out at Myklebust Verft AS, where the shipping company disagrees with the claim and argues it is a warranty claim. The profit before taxes was NOK 74.2 million, while the profit after taxes amounted to NOK 56.4 million. At 31 December 2014, the Group had working capital of NOK 320.4 million. The parent company has negative working capital related to the purchase and funding of Myklebust Nybygg AS, which will be resolved through supply of long-term capital from the subsidiary. On the same date the Group's equity was NOK 663.8 million. The cash flow from operating activities in the Kleven Maritime AS Group amounted to minus NOK 482.3 million. This is largely due to a substantial increase in completed, non-invoiced production, i.e. vessels under construction. The net cash flow from investing activities was minus NOK 103.3 million. That figure includes about NOK 111.7 million in investments in non-current assets. At 31 December 2014 cash and cash equivalents amounted to NOK 401.9 million. The Kleven Maritime AS Group's revenues totalled NOK 5,039.4 million in 2014. This is up from NOK 4,196.6 million in 2013. This is due to increased activity in the Group with more projects under construction than the year before, and the projects having a higher sales value. No vessels were exported in 2014. At 31 December 2014, total assets showed a net increase of NOK 1,182.1 million compared with 2013 as a result of investments and higher values of vessels under construction at the turn of the year in both shipyards. Costs relating to research and development are expensed in the year in which they are incurred. Product development otherwise takes place in close collaboration with the customers. Most of the projects include an element of product development, which makes it difficult to measure the proportion of product development in each project or per year. The Group signed 13 new shipbuilding contracts in 2014 and 1 modification contract. Nineteen ships worth a total of NOK 12.3 billion are to be completed and delivered in the period from 2015 to August 2017. The Board of Directors expects the Group’s financial performance to continue to be positive in 2015. In the opinion of the Board of Directors, the annual accounts give an accurate picture of the assets and liabilities, financial position and performance of Kleven Maritime AS and the Group. The Board confirms that the requirements for the going concern assumption are met. The accounts have been prepared on the basis of the going concern assumption. Allocation of profit The annual profit of the individual Group companies is allocated by the respective companies. The Board proposes that NOK 8.0 million of the parent company Kleven Maritime AS’ profit of NOK 35.2 million for 2014 is allocated to dividend, and that NOK 0.042 million is allocated to
4
group contributions to the shareholders, and that the remaining NOK 27.2 million is allocated to other equity.
Ulsteinvik, 31/12/2014 19/06/2015
---------------------------Kjersti Kleven Chair of the Board
-----------------------------Thorolf Hestness
-----------------------------Nils-Fredrik Drabløs
---------------------------Odd Tore Finnøy
-----------------------------Rigmor Kleven
-----------------------------Ståle Rasmussen Managing director
5
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Annual report 2014 Annual report
Annual accounts - Income statement - Statement of financial position - Statement of cash flows - Notes Auditor's report
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Income statement (NOK in thousands)
Note
2014
Revenues Sales revenues Other revenues Total revenues
1, 3, 4 24
5,013,726 25,669 5,039,395
4,177,134 19,465 4,196,599
Operating expenses Cost of sales Payroll expenses Depreciation Other operating expenses Total operating expenses
6 7, 8 10 7, 10
4,386,324 450,567 26,346 100,158 4,963,395
3,551,797 380,332 16,643 75,604 4,024,376
76,000
172,223
7,214 4,672 3,870 7,000 30 8,771 1,800 -1,845
339 4,373 1,643 0 45 8,689 1,808 -4,187
74,155
168,036
17,761
43,850
56,394
124,186
-289 56,683 56,394
-2,604 126,790 124,186
Operating profit (loss) Financial income and financial expenses Income from investments in associated companies Other interest income Other financial income Write-down of financial fixed assets Interest expense Group companies Other interest expenses Other financial expenses Net financial income (expenses)
11 12 12
13
Net profit before taxes Income taxes on net profit
17
Net profit for the year - Group
Transfers Minority share of profit/loss Majority share of profit/loss Total
18 18
2013
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Statement of financial position as of 31 December (NOK in thousands)
Note
2014
2013
Non-current assets Property, plant and equipment Land, buildings and other real property Machinery and plant Operating equipment, fixtures, fittings, office machinery etc. Total property, plant and equipment Financial assets Investments in associated companies Loans to associated companies Investments in other shares and interests Other receivables Total financial assets
10 10
296,291 122,998
217,672 115,772
10
11,472 430,761
11,943 345,387
11 9 12 7, 9
69,758 6,835 28,984 52,299 157,876
67,707 6,835 53,476 32,820 160,838
588,637
506,225
9,016
8,107
74,016 2,823,796 396,107 3,293,919
35,558 1,900,855 466,761 2,403,174
Total non-current assets Current assets Inventory
6
Receivables Trade receivables Completed, non-invoiced production Other receivables Total receivables
1, 25 1, 5 20
Investments Market-based shares Total investments
13
25,529 25,529
26,550 26,550
Bank deposits and cash
16
401,920
192,886
Total current assets
3,730,384
2,630,717
Total assets
4,319,021
3,136,942
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Statement of financial position as of 31 December (NOK in thousands)
Note
2014
2013
18, 19 18
64,632 8,618 73,250
64,632 8,618 73,250
Equity Paid-in capital Share capital Share premium Total paid-in capital Retained earnings Other reserves
18
588,990
540,277
Non-controlling interests Non-controlling interests
18
1,522
1,744
663,762
615,271
144 60,810 60,954
981 61,333 62,314
Total equity including non-controlling interests Liabilities Provisions Pension obligations Deferred tax Total provisions
8 17
Other non-current liabilities Subordinated loans Debt to credit institutions Total other non-current liabilities
14, 22 14, 15
2,976 181,377 184,353
4,470 156,147 160,617
14, 15
2,442,549 445,402 17,523 27,026 8,000 291,086 178,366 3,409,952
1,646,488 375,336 24,192 27,839 24,523 99,815 100,547 2,298,740
Total liabilities
3,655,259
2,521,671
Total equity and liabilities
4,319,021
3,136,942
Current liabilities Debt to credit institutions Trade payables Taxes payable Government taxes payable Dividend allocation Production invoiced in advance Other current liabilities Total current liabilities
17
1, 5 21, 22
31 December 2014 ____________________ Kjersti Kleven Chair
Nils Fredrik Drabløs Board member
Rigmor Anett Kleven Board member
Thorolf Hestness Board member
Odd Tore Finnøy Board member
StĂĽle Rasmussen Managing director
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Statement of cash flows (NOK in thousands)
2014
2013
74,155 -24,192 6,958 26,346 -909 -38,458 70,066 70,563
168,036 -72,085 3,660 16,643 -179 -33,228 32,752 6,548
-837 -922,941 191,271 75,981 -7,214
-1,952 -972,791 -73,558 -13,217 -339
-3,103 -482,314
-1,642 -941,352
47
0
-111,720 22,589 0 5,300 -19,479 -103,263
-114,993 30,555 -53,217 5,000 -633 -133,288
Cash flow from financing activities Net change in overdraft facilities/building loans Payments received from increase in long-term debt Dividends paid Group contributions paid Payments received relating to equity from minority Net cash flow from financing activities
796,061 23,736 -24,523 -663 0 794,611
996,810 5,217 -53,564 -2,689 1,470 947,244
Net change in cash and bank deposits Cash and bank deposits as of 1 January Cash and bank deposits as of 31 December
209,034 192,886 401,920
-127,396 320,282 192,886
Cash flow from operating activities Net profit before taxes Income taxes paid Gain (-)/loss from disposals/impairments of non-current assets Ordinary depreciation Changes in inventories Changes in trade receivables Changes in trade payables Changes in prepayments to suppliers Difference between recognised pension expenses and incoming/outgoing payments in pension schemes Changes in completed, non-invoiced production Changes in production invoiced in advance Changes in other accruals Income from investments in associated companies Recognised share of gain/loss, businesses assessed as partnerships Net cash flow from operating activities Cash flow from investing activities Payments received from sale of property, plant and equipment Payments made on purchases of property, plant and equipment Payments received from sales of shares and interests Payments made on purchases of shares and interests Payments received from investments in associated companies Payments made on long-term loans furnished Net cash flow from investing activities
Some of the bank deposits are tied up and have restrictions. Refer to note 16.
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Note 1 - Accounting policies The consolidated financial statements have been drawn up in accordance with the provisions of the Norwegian Accounting Act and generally accepted accounting principles in Norway. Consolidated financial statements The consolidated financial statements show the activities of the parent company Kleven Maritime AS and all its subsidiaries viewed as a single economic entity based on the accounting policies described below. Inter-company sales, purchases and balances are eliminated in the consolidated financial statements. Any gains arising from transactions between Group companies are eliminated. Companies in which Kleven Maritime AS holds a controlling interest are fully consolidated in the consolidated financial statements. Shares in subsidiaries are eliminated using the acquisition method. This entails assigning the acquisition price of the shares to the subsidiaries' assets and liabilities, which are recognised in the consolidated financial statements at their fair value at the time of acquisition. Acquisition costs that are higher or lower than the amounts assignable to identifiable assets and liabilities are recognised in the statement of financial position as goodwill and negative goodwill, respectively. Shares in associated companies and other long-term shareholdings Shares in associated companies (normally ownership interests of between 20% and 50%) are recognised in accordance with the equity method. This means that the share of the profit/loss linked to these investments is included under financial items in the income statement, and that the investment in the statement of financial position corresponds to the share of the book value of the associated companies' equity with the addition of any excess values not written off. When the Group's share of losses exceeds the investment in an associated company, the Group's carrying amount is reduced to zero, and further losses are not recognised unless the Group has an obligation to cover this loss. The other long-term shareholdings are valued in accordance with the cost method. The cost method entails recognition of investments at acquisition cost unless write-down has been necessary. Write-down to fair value has been carried out when the estimated recoverable amount is lower than the value on the statement of financial position. Write-downs are reversed when the basis for the write-down no longer exists. Dividends and other distributions from associated companies and other ownership interests are taken to income when they are received. Sales revenues Revenues relating to long-term contracts are recognised using the percentage of completion method. Otherwise, revenues are recognised on the date of delivery. Research and development Expenses relating to research and development are recognised in their entirety as they are incurred. Product development takes place in close collaboration with the customers. Most projects contain an element of product development. It is therefore difficult to measure the proportion of product development in each individual project or per year. Classification and valuation of items in the statement of financial position Current assets and current liabilities consist of items that fall due for payment within one year of the date of acquisition, as well as items relating to the production cycle. Other items are classified as non-current assets/non-current liabilities. Current assets are valued at the lower of acquisition cost and fair value. Current liabilities are recognised in the statement of financial position at their nominal value on the date they were incurred. Non-current assets are valued at acquisition cost, but are written down to fair value where falls in value are not expected to be of a temporary nature. Non-current liabilities are recognised in the statement of financial position at their nominal value on the date they were incurred.
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Receivables Trade receivables and other receivables are recognised in the statement of financial position at nominal value after the deduction of a provision for bad debt. The provision for bad debt is made on the basis of individual assessments of each of the receivables. In addition, an unspecified provision is made for any bad debt relating to other trade receivables. Completed, non-invoiced production/production invoiced in advance Long-term contracts (vessels under construction) are recognised in the accounts in accordance with the percentage of completion method, whereby revenues are recognised in step with the degree of completion of the project. The degree of completion is calculated by reckoning the accrued costs as a percentage of the expected total cost, or the time spent as a percentage of the total expected time spent. If the appraisal of a project shows that it will result in a loss, a provision is made for the whole of the expected loss, regardless of the degree of completion. The projects are valued individually. Projects with net completed, non-invoiced production are recognised as receivables, and projects for which advance payments from customers exceed completed production are recognised as liabilities. Completed production is classified under revenues in the income statement. Inventories Inventories of purchased goods are valued at the lower of their acquisition cost according to the FIFO principle and fair value. Foreign currency Monetary items in foreign currency are valued at the exchange rate at the end of the financial year or at the hedged rate in the case of forward contracts. Short-term investments Short-term investments (shares and interests assessed as current assets) are valued at the lower of their acquisition cost and fair value on the reporting date. Dividends received and other disbursements from the companies are recognised as other financial income. Property, plant and equipment/intangible assets Property, plant and equipment are recognised in the statement of financial position and depreciated over the useful life of the assets if the assets have a life of more than three years and a cost price of more than NOK 15,000. Direct maintenance costs for operating assets are expensed as they are incurred under Operating expenses, while upgrading and improvements are added to the cost price of the asset and depreciated in step with the asset. Negative goodwill relates to the acquisition of business enterprises. Negative goodwill is recognised in the income statement in accordance with the weighted average of the remaining useful life of the depreciable assets at the time of their acquisition. Pension costs and pension obligations As of 31 December the Group's pension obligations relate to the unsecured AFP contractual pension scheme. Pension costs and pension obligations are calculated on the basis of straight-line earnings and are based on assumptions about the discount rate, future salary growth, pensions and benefits under the National Insurance Scheme, future returns on pension scheme assets, and actuarial assumptions about mortality, voluntary retirement etc. Net pension costs are recognised under payroll expenses in the income statement. In the statement of financial position the net pension obligations are recognised under the line item provisions. The figure for net pension obligations includes employer's National Insurance contributions. All Group companies that have employees also have a defined contribution pension scheme. Contributions to this scheme are expensed as they accrue. Tax
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) The tax expense in the income statement includes both the tax payable for the period and the change in the deferred tax/deferred tax asset. The deferred tax/deferred tax asset is calculated based on the temporary differences between accounting and tax values and the tax loss carryforward at the end of the financial year. Tax-increasing and tax-reducing temporary differences that are reversed or can be reversed in the same period are offset and recognised net. Guarantees and claims Guarantee work and claims relating to completed sales are valued at the estimated cost of such work. The estimate is largely based on historical figures for guarantee repairs. The provision is included under Other current liabilities.
Classification of project interest Financing expenses (minus any interest income from prepayments from customers) relating to long-term contracts (vessels under construction) are classified in the income statement as operating expenses. Statement of cash flows The statement of cash flows has been prepared using the indirect method. Cash and cash equivalents comprise cash and bank deposits. The use of estimates Preparation of the annual financial statements entails the use of estimates. Accounting estimates may deviate from the actual results, but they are based on the best estimate on the date for the submission of the accounts.
Note 2 - Subsidiaries The following subsidiaries and sub-subsidiaries are included in the Group as of 31 December: Kleven Verft AS, NO-6065 Ulsteinvik (added by merger on 1 January 2001) Kleven Maritime Technology AS, NO-6060 Hareid (added by merger on 1 January 2001) Kleven Prosjekt II AS, NO-6065 Ulsteinvik (added by formation on 14 June 2005) Kleiva Shipinvest II AS (formerly Kleven Prosjekt III AS), NO-6065 Ulsteinvik (added by formation on 14 June 2005) Myklebust Verft AS, NO-6082 Gursken (added by merger on 1 January 2001) Myklebust Prosjekt AS, NO-6082 Gursken (added by merger on 1 January 2001) Kleven Maritime Finans AS, NO-6065 Ulsteinvik (added by formation on 28 May 2004) Kleven Maritime Contracting AS, NO-6082 Gursken (added by formation on 3 January 2008) Myklebust Nybygg, 6082 Gursken (added by acquisition on 27 March 2014) Kleven Maritime AS wholly owns all subsidiaries and tier-subsidiaries as at 31 December, with the exception of Kleven Maritime Technology AS (KMT) in which it has an ownership interest of 51%.
Note 3 - Financial market risk, forward contracts, interest rate risk etc. The Group is exposed to exchange rate fluctuations in connection with the contracts it signs with customers and suppliers. When signing purchase or sales contracts in foreign currencies, the Group normally enters into forward contracts for corresponding amounts in order to hedge against costing variances due to exchange rate fluctuations. At 31 December the Group had no other currency forward contracts. At 31 December 2014, the Group has recently entered into contracts for purchases in EUR
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) totalling around 133 million, which has not been covered against exchange risks. This is due to a strong depreciation in the krone at the end of the year and unrest in the currency market. The purchases in EUR are related to vessels to be delivered in the second half of 2016 and in 2017. At the beginning of 2015, the Group has hedged some of the amount and will gradually increase to full hedging of all purchases in foreign currency. Endeavours are made to reduce liquidity risk by ensuring that financing for building projects is normally clarified before the contract takes effect. In order to reduce the interest rate risk, it is considered whether the interest rate period for project financing should run until project completion. For longer periods, the Group considers hedging against interest rate fluctuations by entering into future interest rate agreements (FRAs) for building contracts from the time that they take effect. For long-term financing, the Group continuously endeavours to achieve an expedient distribution between short and longer-term interest rate periods. A floating rate of interest is agreed for building loans. Long-term debts also mostly have floating interest rates. All the yards in Kleven Maritime use a building method whereby they are dependent on the delivery of sections, large modules or hulls from foreign shipyards. This involves a risk that deliveries will not be made at the agreed times or meet the agreed quality requirements. Nonconformities in these areas can have an impact on the profitability of the individual project. Hence there is uncertainty relating to the valuation of ongoing projects, particularly when it comes to the risk of delays on the part of hull contractors and other suppliers, unexpected events, and estimates and projected income and expenses for the various projects. The yards in Kleven Maritime use their own yard facilities in combination with deliveries of sections, large modules and complete hulls in order to balance the risk of subcontractors not delivering on the agreed terms. The Group's derivatives and significant conditions relating to derivatives at 31 December are summarised in the table below. Currency Exchange amounts in rate thousands Instrument/due date 11.6 1,500 GBP forward exchange contract (purchase) - due date 02/15 8.40 350 EUR forward exchange contract (purchase) - due date 01/15 9.11 12,000 EUR forward exchange contract (purchase) - due date 02/15 8.26 8,250 EUR forward exchange contract (purchase) - due date 03/15 8.47 8,000 EUR forward exchange contract (purchase) - due date 04/15 8.44 981 EUR forward exchange contract (purchase) - due date 05/15 8.57 1,800 EUR forward exchange contract (purchase) - due date 06/15 6.22 -3,725 USD forward exchange contract (sale) - due date 02/15 6.23 -3,725 USD forward exchange contract (sale) - due date 04/15 6.25 -59,600 USD forward exchange contract (sale) - due date 10/15
Note 4 - Sales revenues 2014
2013
By business area Shipbuilding
5,013,726
4,177,134
Geographical distribution Norway
4,665,633
4,146,523
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) EU and the rest of the EEA Oseania Other geographical areas
Total
24,446 284,494 39,153 5,013,726
839 0 29,772 4,177,134
2014 3,742,713 -918,917 2,823,796
2013 2,568,779 -667,924 1,900,855
453,082 -161,996 291,086
204,073 -104,258 99,815
2014 9,016
2013 8,107
Note 5 - Long-term contracts Completed production - Prepayments from customers Completed, non-invoiced production Prepayments from customers - Completed production Production invoiced in advance
Note 6 - Inventory Raw materials and purchased semi-manufactures
Note 7 - Payroll expenses, number of employees, loans to employees and auditor's fees Payroll expenses: Salaries Employers' National Insurance contributions Pension expenses Other payroll expenses Total
2014 361,377 51,900 18,849 18,441 450,567
2013 306,106 45,412 13,082 15,732 380,332
During the accounting year the Group employed a total of 728 full-time equivalents. The corresponding figure in 2013 was 620 full-time equivalent. Other Remuneration of executive personnel: Salary remuneration Managing director 1,926 173 Total directors' fees in the Group 1,311 No other remuneration, bonuses, options or special compensation have been agreed in the event of the Managing director leaving the company. Loans and furnishing of security to executive personnel, employee representatives and shareholders etc. As of 31 December, the Group had furnished loans to executive personnel in the amount of NOK 3,514,000, including a loan of NOK 336,000 to the Managing director. The agreed rate of interest is the rate defined by the authorities as not constituting a taxable benefit. The loans are repayable over six years. The auditor's fees can be broken down as follows: Audits of all the company accounts and consolidated accounts Other financial auditing
2014 1,014 24
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Fees for preparation of the company accounts and consolidated accounts Fees for assistance relating to taxes Fees for other services
152 128 132
Value added tax is not included in the audit fee.
Note 8 - Pension expenses and obligations The Group participates in the scheme agreed between the Norwegian Confederation of Trade Unions and the Confederation of Norwegian Enterprise (the so-called LO/NHO scheme), under which all employees can choose early retirement from the age of 62. In February 2010, it was decided to wind up this scheme, and it was only possible to retire under the old early retirement scheme until 31 December 2010. The gain from discontinuing the scheme was taken to income in 2010 and is presented as a reduction in payroll expenses. One provision remains that concerns the Group's own contribution for persons who are on early retirement pensions under the old scheme. A new AFP scheme has been introduced to replace the old one. As opposed to the old scheme, the new AFP scheme is not an early retirement scheme, but a scheme that provides a lifelong supplement to the ordinary pension. The employee may choose to take out the new AFP scheme on turning 62 while
still continuing to work and this earns further pension rights while he or she works up to the age of 67. The new AFP scheme is a defined benefit multi-enterprise pension scheme, and it is financed by premiums defined as a percentage of pay. At the present time, there is no reliable measurement or allocation of obligations and assets in the scheme. For accounting purposes, the scheme is treated as a defined contribution pension scheme where premium payments are expensed as they are made and no provisions are made in the accounts. No funds are accumulated in the scheme, and the premium level is expected to increase in the years ahead. The Group also has a defined contribution pension scheme. The Group is obliged to have an occupational pension scheme pursuant to the Act relating to mandatory occupational pensions. The Group's pension schemes meet the requirements of the Act.
Note 9 - Receivables due more than one year hence 2014 6,835 51,371 58,206
Loans to associated companies Other non-current receivables Total
2013 6,835 32,010 38,845
Note 10 - Property, plant and equipment, and rental commitments
buildings etc. 267,290
plant 152,545
Operating equipment, fixtures and fittings etc. 27,367
90,481
18,241
2,998
Land, Machinery and
Acquisition cost as of 1 January Additions, operating assets purchased
Total
447,202 111,720
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Disposals Acquisition cost as of 31 December Accumulated depreciation as of 31 December Book value at 31 December Depreciation for the year Economic life Depreciation method
0 357,771 -61,480
0 170,786 -47,788
-576 29,789 -18,317
-576 558,346 -127,585
296,291
122,998
11,472
430,761
11,862 10-40 years Straight-line
11,015 5-25 years Straight-line
3,469 3-5 years Straight-line
26,346
Hire of plant etc.: The Group hires offices and portacabins, with the following rental commitments over the next five years: Office: NOK 0.03 million for 2015. Portacabins (the figures in brackets are from leases from associated companies): NOK 14.4 million (3.8) for 2015, NOK 8.3 million (0.0) for each of the years 2016-2017, NOK 7.7 million (0.0) for 2018 and NOK 4.0 million (0.0) for 2019. Hire of operating equipment etc.: The Group hires various machinery, equipment and movable property. The annual rental committments are NOK 12.5 million for 2015, NOK 8.6 million for 2016, NOK 3.9 million for 2017, NOK 2.5 million for 2018 and NOK 0.7 million for 2019. For accounting purposes, the lease and hire agreements are treated as operational leasing.
Note 11 - Associated companies, etc. Company Viking Reisebyr책 AS Kleiva Boliger AS Rem Fortress AS Kleven ORN LTDA Rem Arctic AS (formerly Rem 364 AS)
Acquired 1 January 2001 12 December 2005 24 June 2010 31 December 2011 6 June 2013
Ownership share
Voting share
Ulstein
50.0%
50.0%
Hareid Fosnav책g
50.0% 23.6%
50.0% 23.6%
Brazil Fosnav책g
50.0% 20.0%
50.0% 20.0%
Office
Investments in accordance with the equity method (consolidated accounts)
Book equity on acquisition date Acquisition cost Share of profit/loss for the year
Viking Reisebyr책 AS 3,500 3,500 3,250
Kleiva Boliger AS 55 55 1,089
Kleven ORN LTDA 1,978 1,978 -238
Calculation of book value Opening balance at 01/01/2014
5,457
4,931
1,591
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Profit for the year Dividends received Other changes during the year Closing balance at 31/12/2014
3,250 -3,500 0 5,207
1,089 -1,800 0 4,220
-238 0 137 1,490
Book equity on acquisition date Acquisition cost Share of profit/loss for the year
Rem Fortress AS 33,010 33,010 2,850
Rem Artic AS 22,420 22,420 263
Total 60,963 60,963 7,214
Calculation of book value Opening balance at 01/01/2014 Profit for the year Dividends received Other changes during the year Closing balance at 31/12/2014
33,041 2,850 0 0 35,891
22,687 263 0 0 22,950
67,707 7,214 -5,300 137 69,758
Information about associated companies' share of equity and profit/loss is based on interim accounts before any provision for dividends.
Note 12 - Shares and interests in other companies
Company Olympic Nor II KS (partnership) Eidesvik Supply AS Eidesvik Neptun AS Other companies
Ownershi p share 7.52% 14.5%
Cost price 0 6,693 28,289 1,002 35,984
Book value 0 6,693 21,289 1,002 28,984
Share of profit 3,103
3,103
Share of the profit for Olympic Nor II KS concerns accounting profit on sale of the share and has been included in the profit and loss account under Other financial income. Note 13 - Market-based shares Company Rem Offshore ASA
Acquisition cost 26,550
Book value 25,529
Market value 25,529
Note 14 - Debt due for payment more than five years hence, instalment profile etc. Long-term debt due for payment more than five years hence Long-term debt to credit institutions
2014 82,706
2013 47,318
The instalment profile for a long-term subordinate loan of NOK 2.98 million is NOK 1.49 million per year in 2015, NOK 0.89 million for 2016 and NOK 0.3 million for each of the years 2017 and 2018. The average interest rate on the subordinated loan was 6.0% in 2014. The instalment profile for the Group's debt to credit institutions is as follows: NOK 30.91 million for 2015, NOK 21.06 million for 2016, NOK 12.02 million for 2017, NOK 11.67 million for 2018, NOK 23.01 million for 2019, and thereafter NOK 82.71 million. The average interest rate was 4.9% in 2014.
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Note 15 - Pledged assets and guarantees etc. Debt secured by mortgages etc.
2014 2,620,270
2013 1,798,168
Book value of assets pledged as security for the Group's debt
3,660,464
2,293,593
The above-mentioned assets have also been pledged as security for guarantees furnished by credit institutions vis-a-vis the Group's customers and subcontractors, totalling NOK 351 million as at 31/12/2014. A guarantee is also issued for tax deductions of NOK 21 million. At 31 December 2013, the corresponding figures were NOK 379 million and NOK 19 million, respectively.
Note 16 - Restricted bank accounts Tied up tax withholdings total NOK 210,000. Other tied up bank deposits total NOK 294,855,000.
Note 17 - Tax The tax expense for the year is broken down as follows: Taxes payable Change in deferred tax Effect of change in tax rate on tax for the year Total income tax expense for the year
Summary of temporary differences: Operating assets Completed, non-invoiced production Inventory Accounts receivable Profit and loss account Guarantee provision Net pension obligation Share in partnership Total Accumulated loss carryforward Limit in interest allowance to be carried forward Net temporary differences as of 31 December
2014 17,538 223 0 17,761
2013 24,378 21,744 -2,272 43,850
2014 43,764 242,715 -1,359 -500 6,849 -17,139 -144 0 274,186 -8,949 -40,013 225,224
2013 30,673 198,980 -992 -500 8,561 -8,887 -981 8,742 235,596 -8,438 0 227,158
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Deferred tax asset/deferred tax (27%)
60,810
61,333
Taxes payable in the statement of financial position: Tax payable on profit/loss for the year Tax payable on Group contribution paid to the parent company Total
2014 17,538 -15 17,523
2013 24,378 -186 24,192
Chance in book deferred tax from 1 January to 31 December 2014 of NOK 523,000 concerns change in deferred tax included under tax costs with NOK 223,000 and deferred tax assets take over from the acquired company (Myklebust Nybygg AS) of NOK 746,000.
Note 18 - Equity Equity 1 January Net profit for the year - Group Dividend allocation Group contribution paid Currency adjustment, foreign company Other changes Equity 31 December
Other
Minority
Share capital
Share premium
equity
interests
Total
64,632 0 0 0
8,618 0 0 0
540,277 56,683 -8,000 -42
1,744 -289 0 0
615,271 56,394 -8,000 -42
0 0 64,632
0 0 8,618
69 3 588,990
67 0 1,522
136 3 663,762
Note 19 - Share capital and shareholder information The share capital consists of:
Class A shares
Number
Nominal value
21,121,423
NOK 3.06
Capitalised NOK 64,632,000
Summary of shareholders in Kleven Maritime AS as of 31 December:
Kleven Maritime Holding AS H-Invest AS Johbo AS St책le Rasmussen, Managing director Ole Kristensen Arve Holstad Hans Kristian Opsal Knut Hasund Tore Roppen Olav Tanberg
A shares 19,029,630 1,021,795 520,000 102,062 68,041 68,041 68,041 68,041 68,041 46,778
Ownership share 90.10 % 4.84 % 2.46 % 0.48 % 0.32 % 0.32 % 0.32 % 0.32 % 0.32 % 0.22 %
Voting share 90.10 % 4.84 % 2.46 % 0.48 % 0.32 % 0.32 % 0.32 % 0.32 % 0.32 % 0.22 %
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) Kathrine Holstad Per Ă˜vrelid Total
35,438 25,515 21,121,423
0.17 % 0.12 % 100.00 %
0.17 % 0.12 % 100.00 %
The Managing director owns 102,062 shares in the Group. He also has indirect ownership through Kleven Maritime Holding AS. The Chair of the Board Kjersti Kleven and the Board members Rigmor Anett Kleven and Thorolf Hestness have indirect ownership in the Group through ownership interests in John Kleven AS, Soltun Invest AS and H-Invest AS, respectively. The registered address of the parent company Kleven Maritime Holding AS is NO-6065 Ulsteinvik.
Note 20 - Specification of other receivables VAT credit Prepayments to suppliers Other receivables Total
2014 57,396 333,367 5,344 396,107
2013 47,839 403,930 14,992 466,761
2014 43,611 57 100,000 34,698 178,366
2013 49,919 663 0 49,965 100,547
2014 57 300 357
2013 663 500 1,163
Note 21 - Specification of other current liabilities Accrued salaries, bonuses and holiday pay Allocation for Group contribution to the parent company Other current liabilities Other accrued expenses and provisions Total
Note 22 - Intra-group balances Liabilities Other current liabilities Subordinated loans Total
Note 23 - Transactions with closely related parties The Group's closely related parties consist of the parent company, subsidiaries that are not wholly owned, members of the Board, the management and closely related parties of the same. Significant transactions with closely related parties may be summarised as follows: Kleven Maritime AS owns 51% of the shares in Kleven Maritime Technology AS. Three of the six Board members of Kleven Maritime Technology AS represent Kleven Maritime AS. Kleven Maritime AS has furnished a loan to this company in 2014 (2013). Interest is calculated on the loan on the basis of NIBOR plus a margin, and interest taken to income amounts to NOK 0.07 million (NOK 0.03 million). Kleven Maritime Holding AS owns 90.1% of the shares in Kleven Maritime AS, and has furnished a subordinated loan to Kleven Maritime AS in 2014 (2013). Interest is calculated on the loan on the basis of
Kleven Maritime AS - consolidated financial statements Org. no.: 981508734
Notes to the consolidated financial statements for 2014 (NOK in thousands) NIBOR plus a margin, and expensed interest amounts to NOK 0.03 million (NOK 0.05 million). For intra-group balances, see separate note. Viking Reisebyrå AS is an associated company of Kleven Maritime AS. The Kleven Group has one representative on the Board of Viking Reisebyrå AS. In 2014 (2013) the Group has purchased travel services from Viking Reisebyrå AS for NOK 10.1 million (NOK 8.1 million). The amount is expensed under operating expenses. Kleiva Boliger AS is another of Kleven Maritime AS's associated companies, and is engaged in letting of portacabins for workers. The Kleven Group has one representative on the Board of Kleiva Boliger AS. In 2014 (2013) the Group rented portacabins for a total of NOK 8.9 million (NOK 8.6 million) which is expensed under operating expenses. Rem Arctic AS (formerly Rem 364 AS) is an associated company of Kleven Maritime Group. The Group has one representative on the Board. Kleven Verft AS has signed an agreement with the company for the construction and delivery of a vessel in the first half of 2015. Companies and private individuals who are shareholders and closely related parties of shareholders in Kleven Maritime AS have issued long-term loans to Kleven Maritime AS in 2014 (2013). Interest is calculated on the loans on the basis of NIBOR plus a margin, and expensed interest amounts to NOK 0.15 million (NOK 0.3 million). For information about loans to employees, see separate note. All transactions have been carried out as part of ordinary operations and at arm's length prices.
Note 24 - Other revenues Gain on disposal of operating assets Rental income, portacabins, etc.
2014 47 25,622 25,669
2013 0 19,465 19,465
Note 25 - Disputes/ contingencies The Group has recognised around NOK 10 million related to repair of a tank on board a vessel delivered by one of the Group’s shipyards in the summer of 2014. The shipping company disagrees with the claim and argues that it is a warranty claim and in connection with this has filed a claim for compensation for impact costs of up to around NOK 9 million. With reference to the provisions of the ship building contract, the shipyard has rejected that this is a warranty claim and the claim for compensation for impact costs.
Kleven Maritime AS Org. no.: 981508734
Annual report for 2014 Annual report
Annual accounts - Income statement - Statement of financial position - Statement of cash flows - Notes Auditor's report
Kleven Maritime AS Org. no.: 981508734
Income statement Note
Revenues Sales revenues Operating expenses Cost of sales Payroll expenses Depreciation Other operating expenses Total operating expenses
4,288,291
4,413,069
3, 4 5 3
3,897,877 649,125 106,500 4,595,559 9,249,061
4,354,545 573,106 106,500 3,221,946 8,256,097
-4,960,770
-3,843,028
37,134,750 5,300,000 1,441,503 143,919 701,796 3,148,373 0 4,634 40,165,369
42,037,169 5,000,000 1,755,338 70,581 307,232 4,558,878 150,000 5,695 43,841,283
35,204,599
39,998,255
-1,921
170,898
35,206,520
39,827,357
8,000,000 41,765 27,164,755 35,206,520
24,522,821 477,179 14,827,357 39,827,357
6 6
Net profit before taxes Income taxes on net profit
11
Net profit for the year
Transfers and allocations Dividend allocation Group contribution allocation Transfers other reserves Total allocations
2013
1, 2
Operating profit (loss) Financial income and financial expenses Profit from investments in subsidiaries Income from investments in associated companies Interest income from Group companies Other interest income Interest expense Group companies Other interest expenses Loss on shares and other securities Other financial expenses Net financial income (expenses)
2014
12 12 12
Kleven Maritime AS Org. no.: 981508734
Statement of financial position as of 31 December Note
2014
2013
Non-current assets Intangible assets Deferred tax assets
27,809
10,441
5
4,744,412
4,711,816
5
65,703 4,810,115
172,203 4,884,019
247,223,218 13,320,139 3,554,900 978,200 1,000,000 266,076,457
147,223,218 34,415,815 3,554,900 978,200 1,000,000 187,172,133
270,914,381
192,066,593
0 37,526,189 37,526,189
1,313,750 42,357,200 43,670,950
216,464,369
2,178,854
Total current assets
253,990,558
45,849,804
Total assets
524,904,939
237,916,397
Property, plant and equipment Land, buildings and other real property Operating equipment, fixtures, fittings, office machinery etc. Total property, plant and equipment Financial non-current assets Investments in subsidiaries Loans to Group companies Investments in associated companies Investments in other shares Other receivables Total non-current financial assets
11
6 7, 10 6 7
Total non-current assets Current assets Receivables Trade receivables Other receivables Total receivables
1, 10 10, 14
Bank deposits, cash and cash equivalents
9
Kleven Maritime AS Org. no.: 981508734
Statement of financial position as of 31 December Note
2014
2013
12, 13 12
64,631,554 8,618,469 73,250,023
64,631,554 8,618,469 73,250,023
12
80,926,143
53,761,388
154,176,166
127,011,411
1,800,000 6,851,250 8,651,250
3,000,000 66,181,250 69,181,250
3,302,154 34,213 8,000,000 350,741,156 362,077,523
2,588,365 0 24,522,821 14,612,550 41,723,736
Total liabilities
370,728,773
110,904,986
Total equity and liabilities
524,904,939
237,916,397
Equity Paid-in capital Share capital Share premium Total paid-in capital Retained earnings Other reserves Total equity Liabilities Other non-current liabilities Subordinated loans Debt to credit institutions Total other non-current liabilities Current liabilities Trade payables Government taxes payable Dividends Other current liabilities Total current liabilities
8, 10 8, 9
10 12 10, 15
31 December 2014 ___________________
Kjersti Kleven Chair
Nils Fredrik Drabløs Board member
Rigmor Anett Kleven Board member
Thorolf Hestness Board member
Odd Tore Finnøy Board member
Ståle Rasmussen Managing director
Kleven Maritime AS Org. no.: 981508734
Statement of cash flows Note
2014
2013
35,204,599 -42,434,750 0 106,500 0 1,313,750 713,789 -1,810,258 -6,906,370
39,998,255 -47,037,169 -26,239,130 106,500 150,000 441,492 881,398 1,411,654 -30,287,000
-32,596
0
0 21,095,676 0
-100,000 11,020,000 -12,030,000
47,337,169 0 68,400,249
110,000,000 -1,530,000 107,360,000
Cash flow from financing activities Payments received from new uptake of current liabilities Payments made on repaying non-current liabilities Payments made on repaying current liabilities Dividends paid Group contributions paid Net cash flow from financing activities
238,507,206 -60,530,000 0 -24,522,821 -662,749 152,791,636
0 -19,042,500 -1,960,000 -53,563,883 -2,689,051 -77,255,434
Net change in liquidity during the year Cash and bank deposits as of 1 January Cash and bank deposits as of 31 December
214,285,515 2,178,854 216,464,369
-182,434 2,361,288 2,178,854
Cash flow from operating activities Profit before taxes Share of profit in subsidiaries/associated companies Income taxes paid Ordinary depreciation Impairment of non-current assets Changes in trade receivables Changes in trade payables Changes in other accruals Net cash flow from operating activities Cash flow from investing activities Payments made on purchases of property, plant and equipment Payments made on purchases of shares and interests in other companies Payments received on current and non-current receivables Payments made on long-term loans Payments received from investments in subsidiaries and associated companies Payments made on investments in subsidiaries Net cash flow from investing activities
Some of the bank deposits are tied up and have restrictions. Refer to note 9.
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 Note 1 - Accounting policies The annual financial statements have been drawn up in accordance with the provisions of the Norwegian Accounting Act and generally accepted accounting principles. Subsidiaries/associated companies Subsidiaries and associated companies are valued in accordance with the cost method in the company's accounts. The cost method entails recognition of investments at acquisition cost unless write-down has been necessary. They are written down to fair value when the estimated recoverable amount is lower than the value on the statement of financial position. Write-downs are reversed when the basis for the write-down no longer exists. Dividends and other distributions from subsidiaries are taken to income in the same year as a provision for such income is made in the subsidiary's accounts. Dividends from associated companies are taken to income in the year in which they are received. If dividends and Group contributions exceed the proportion of retained profit after the acquisition, the excess amount represents repayment of invested capital, and the distributions are deducted from the acquisition costs. See the consolidated financial statements. Sales revenues Revenues from the sale of goods and services are taken to income as they are delivered and earned, respectively. Classification and valuation of items in the statement of financial position Current assets and current liabilities consist of items that fall due for payment within one year of the date of acquisition, as well as items relating to the production cycle. Other items are classified as non-current assets/non-current liabilities. Current assets are valued at the lower of acquisition cost and fair value. Current liabilities are recognised in the statement of financial position at their nominal value on the date they were incurred. Non-current assets are valued at acquisition cost, but are written down to fair value where falls in value are not expected to be of a temporary nature. Non-current liabilities are recognised in the statement of financial position at their nominal value on the date they were incurred. Receivables Trade receivables and other receivables are recognised in the statement of financial position at nominal value after the deduction of a provision for bad debt. Property, plant and equipment Property, plant and equipment are recognised in the statement of financial position and depreciated over the expected useful life of the asset if it has a useful life of more than three years and a cost price of more than NOK 15,000. Direct maintenance costs for operating assets are expensed as they are incurred under operating expenses, while upgrading and improvements are added to the cost price of the asset and depreciated in step with the asset. Taxes The tax expense in the income statement includes both the tax payable for the period and the change in the deferred tax The deferred tax is calculated based on the temporary differences between accounting and tax values and the tax loss carryforward at the end of the financial year. Tax-increasing and tax-reducing temporary differences that are reversed or can be reversed in the same period are offset and recognised net. Statement of cash flows The statement of cash flows has been prepared using the indirect method. Cash and cash equivalents
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 comprise cash and bank deposits.
Note 2 - Financial market risk The company has no receivables or liabilities in foreign currency, and is therefore not exposed to exchange rate fluctuations. The company mostly has floating interest rates (NIBOR+margin) on long-term receivables and long-term liabilities. See the consolidated financial statements for information about the Group's financial risk.
Note 3 - Payroll expenses, number of employees, loans to employees and auditor's fees Payroll expenses: Wages and directors’ fees Employers' National Insurance contributions Other benefits Total
Remuneration of executive personnel: Salary
2014 525,000 74,025 50,100 649,125
2013 431,233 63,143 78,730 573,106
Managing director 0
The Board of Directors 350,000
The company has a joint Managing director with other Group companies. No remuneration has been paid to the Managing Director from Kleven Maritime AS. Fees to the auditors can be broken down as follows: Fees for the required statutory audit (including Group settlement) Fees for preparation of the annual and consolidated financial statements, notes etc. Fees for assistance relating to taxes Other services
2014 148,200 87,400 37,000 36,300
Value added tax is not included in the audit fee.
Note 4 - Mandatory company pensions The company is not obligated to have a company pension scheme under the Act on Mandatory company pensions.
Note 5 - Property, plant and equipment
Acquisition cost as of 1 January
Real property 4,711,816
Operating equipment, fixtures, fittings etc. 1,285,777
Total 5,997,593
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 Additions, operating assets purchased Disposals (scrapping) Acquisition cost as of 31 December Accumulated depreciation as of 31 December Book value at 31 December
32,596 0 4,744,412 0
0 -576,074 709,703 -644,000
32,596 -576,074 5,454,115 -644,000
4,744,412
65,703
4,810,115
0
106,500 3-7 years Straight-line
106,500
Depreciation for the year Economic life Depreciation method Note 6 - Subsidiaries, associated companies, etc..
Company Kleven Verft AS Kleven Maritime Technology AS Kleven Prosjekt II AS (sub-subsidiary) Kleiva Shipinvest II AS (sub-subsidiary) Myklebust Verft AS Myklebust Prosjekt AS (sub-subsidiary) Kleven Maritime Finans AS Kleven Maritime Contracting AS Viking Reisebyr책 AS (associated company) Kleiva Boliger AS (associated company) Rem Fortress AS (associate of subsidiary) Kleven ORN LTDA (associate of subsidiary) Rem Arctic AS (associate of subsidiary) Myklebust Nybygg AS
Acquired 1 January 2001 1 January 2001 14 June 2005 14 June 2005 1 January 2001 1 January 2001 28 May 2004 3 January 2008 1 January 2001 12 December 2005 24 June 2010 31 December 2011 6 June 2013 06-03-2014
Ownershi p share
Voting share
Ulstein
100.0%
100.0%
Hareid Ulstein Ulstein
51.0% 100.0% 100.0%
51.0% 100.0% 100.0%
Sande
100.0%
100.0%
Sande Ulstein
100.0% 100.0%
100.0% 100.0%
Sande
100.0%
100.0%
Ulstein
50.0%
50.0%
Hareid Fosnav책g
50.0% 23.6%
50.0% 23.6%
Brazil Fosnav책g Sande
50.0% 20.0% 100.0%
50.0% 20.0% 100.0%
Office
Rem 364 AS has changed name in 2014 to Rem Arctic AS. The income statement item Profit from investments in subsidiaries relates to Group contributions received from subsidiaries. Income from investments in associated companies is dividends received from Viking Reisebyr책 AS and Kleiva Boliger AS of NOK 3.5 million and NOK 1.8 million respectively in 2014. The corresponding figures for 2013 were NOK 3.5 million and NOK 1.5 million, respectively. Information about equity and profit/loss as shown in last year's annual accounts Name of company Equity Kleven Verft AS 487,824,167 Kleven Maritime Technology AS 1,616,141 Kleven Prosjekt II AS 100,000
Result 30,139,334 -351,083 -5,936
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 Kleiva Shipinvest II AS Myklebust Verft AS Myklebust Prosjekt AS Kleven Maritime Finans AS Kleven Maritime Contracting AS Viking Reisebyr책 AS Kleiva Boliger AS Rem Fortress AS Kleven ORN LTDA Rem Arctic AS Myklebust Nybygg AS
100,000 136,379,070 2,477,814 20,810,620 135,479 10,414,949 8,440,065 152,238,109 2,979,642 114,749,015 100,111,658
-6,386 32,940,589 51,726 -3,438,600 -2,316,338 6,500,415 2,177,436 12,087,755 -475,652 1,313,550 -590,716
Information about associated companies' equity and profit/loss is based on interim accounts before any provision for dividends.
Note 7 - Receivables due more than one year hence 2014 13,014,139 1,000,000 14,014,139
2013 1,530,000 1,000,000 2,530,000
Note 8 - Debt due for payment more than five years hence, instalment profile etc. 2014 Long-term debt to credit institutions 2,295,000
2013 2,881,250
Loans to Group companies Other non-current receivables Total
It has been agreed that annual instalments of NOK 1.2 million shall be paid on a long-term subordinated loan (loan from shareholders) of NOK 1.8 million until 30 June 2016. The average interest rate was 6.8% in 2014. Debt to financial institutions has the following instalment profile: NOK 0.99 million per year for the years 2015-2018 and NOK 0.59 million for 2019. Thereafter NOK 2.3 million. The average interest rate was 5.2% in 2014.
Note 9 - Pledged assets and guarantees Own debt secured by mortgages Debt to Group companies secured by mortgage Book value of assets pledged as security for own debt and Group liabilities Unconditional guarantees/parent company guarantees of up to
2014 3,195,000 213,254,251
2013 61,712,500 1,549,666,746
217,998,663 2,605,011,460
29,083,584 2,640,530,812
Bank deposits of NOK 213 million are included in the said book value of secured assets, which is also tied-up as at 31 December 2014. The above guarantee commitments concern unconditional guarantees/parent company guarantees in
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 connection with borrowing limits and guarantees/guarantee limits furnished by credit institutions to subsidiaries, as well as parent company guarantees to customers and suppliers of subsidiaries. At 31 December 2014, total commitments pursuant to these limits amount to NOK 2,061 million. At 31 December 2013, the corresponding figure was NOK 2,124 million. The company has also furnished guarantees on behalf of others in the amount of NOK 0.1 million. The company is jointly registered with the other Group companies in the VAT register and is therefore jointly liable for any unpaid VAT.
Note 10 - Intra-group balances Receivables Loans to Group companies Trade receivables Other receivables Total
Liabilities Trade payables Other current liabilities Subordinated loans Total
2014 13,320,139 0 37,134,750 50,454,889
Group companies 2013 34,415,815 1,250 42,037,169 76,454,234
2014 2,309,850 250,604,418 300,000 253,214,268
2013 2,370,000 12,702,749 500,000 15,572,749
2014 15,447 0 -17,368 -1,921
2013 185,570 386 -15,058 170,898
2014 35,204,599 0 -35,300,000 88,287 64,326 57,212
2013 39,998,255 -34,800,000 -5,000,000 410,712 53,782 662,749
2014 -102,995 -102,995
2013 -38,669 -38,669
-27,809
-10,441
Note 11 - Tax The tax expense for the year is broken down as follows: Taxes payable Effect of change in tax rate on tax for the year Change in deferred tax Total income tax expense for the year Calculation of the tax basis for the year: Net profit before taxes Permanent differences - tax-free Group contribution Permanent differences - dividends received Other permanent differences Change in temporary differences Tax basis for the year Summary of temporary differences: Operating assets Net temporary differences as of 31 December Deferred tax asset/deferred tax (27%)
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 Taxes payable in the statement of financial position: Tax payable on profit/loss for the year Tax payable on Group contribution paid
2014 15,447 -15,447 0
Total
2013 185,570 -185,570
0
Note 12 - Equity Other
Equity 1 January Net profit for the year Dividend allocation Taxable Group contribution paid Equity 31 December
Share capital 64,631,554 0 0 0 64,631,554
Share premium 8,618,469 0 0 0 8,618,469
equity 53,761,388 35,206,520 -8,000,000 -41,765 80,926,143
Total 127,011,411 35,206,520 -8,000,000 -41,765 154,176,166
Allocated dividend is NOK 796,429 to the minority shareholders and NOK 7,203,571 to the majority shareholder, and allocated group contribution is net NOK 41,765.
Note 13 - Share capital and shareholder information The share capital consists of: Number 21,121,423
Nominal value 3.06
Summary of the shareholders in the company as of 31 December: Ordinary shares StĂĽle Rasmussen, Managing director 102,062 Olav Tanberg 46,778 Ole Kristensen 68,041 Johbo AS 520,000 Kathrine Holstad 35,438 Arve Holstad 68,041 Hans Kristian Opsal 68,041 Knut Hasund 68,041 Tore Roppen 68,041 Per Ă˜vrelid 25,515 H-Invest AS 1,021,795 Kleven Maritime Holding AS 19,029,630 Total 21,121,423
Ownership share 0.48 % 0.22 % 0.32 % 2.46 % 0.17 % 0.32 % 0.32 % 0.32 % 0.32 % 0.12 % 4.84 % 90.10 % 100.00 %
Ordinary shares
Capitalised 64,631,554
Voting share 0.48 % 0.22 % 0.32 % 2.46 % 0.17 % 0.32 % 0.32 % 0.32 % 0.32 % 0.12 % 4.84 % 90.10 % 100.00 %
The Managing director owns 102,062 shares in the company. He also has indirect ownership through Kleven Maritime Holding AS. The Chair of the Board, Kjersti Kleven, and the Board members Rigmor Anett Kleven and Thorolf Hestness have indirect ownership in the Group through ownership interests in John Kleven AS, Soltun Invest AS and H-Invest AS, respectively.
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 The registered address of the parent company Kleven Maritime Holding AS is NO-6065 Ulsteinvik.
Note 14 - Specification of other current receivables VAT credit Receivables from Group companies Other receivables Total
2014 83,265 37,215,528 227,396 37,526,189
2013 47,975 42,037,169 272,056 42,357,200
2014 136,738 250,604,418 100,000,000 350,741,156
2013 1,909,801 12,702,749 0 14,612,550
Note 15 - Specification of other current liabilities Accrued expenses and provisions Debt to Group companies Other current liabilities Total
Note 16 - Transactions with closely related parties Kleven Maritime AS's closely related parties consist of Group companies, members of the Board, the management and closely related parties of the same. Significant transactions with closely related parties may be summarised as follows: Kleven Maritime AS is the parent company of the Kleven Maritime Group. As the parent company, Kleven Maritime AS can carry out joint procurements of goods and services, and then charge them to each of the Group companies. This may concern procurements relating to IT, participation at trade fairs, insurance, legal assistance etc. For 2014 (2013) Kleven Maritime AS has recognised a total of NOK 3.9 million (NOK 2.9 million) to income for these procurements. The Joint Managing Director and executive management are employed in other group companies. Kleven Maritime AS has therefore been charged NOK 2.3 million (NOK 2.4 million) for executive management for 2014 (2013) Kleven Maritime AS owns 51% of the shares in Kleven Maritime Technology AS and 100% of the shares in Myklebust Verft AS, Kleven Verft AS and Maritime Finans AS. Three of the six Board members of Kleven Maritime Technology AS represent Kleven Maritime AS. Kleven Maritime AS has furnished loans to these three companies in 2014 (2013). Interest is calculated on the loans on the basis of NIBOR plus a margin, and interest taken to income amounts to NOK 1.4 million (NOK 1.8 million). Kleven Verft AS has also granted a loan to Kleven Maritime AS. Interest is calculated on the loan on the basis of NIBOR plus a margin, and in 2014 (2013) expensed interest amounts to NOK 0.7 million (NOK 0.3 million). For intra-group balances, see separate note. Companies and private individuals who are shareholders and closely related parties of shareholders in Kleven Maritime AS have issued long-term loans to Kleven Maritime AS in 2014 (2013). Interest is calculated
Kleven Maritime AS Org. no.: 981508734
Notes to the consolidated financial statements for 2014 on the loans on the basis of NIBOR plus a margin, and expensed interest amounts to NOK 0.15 million (NOK 0.3 million). All transactions have been carried out as part of ordinary operations and at arm's length prices.