ANNUAL REPORT
2014
TURNING KNOWLEDGE INTO VALUE
02
MERIT GLOBE ANNUAL REPORT 2014
Leading business solution provider
s rld-Clas Ser vices Wo reed Applicat ion of B t s s Be y S r uite ust s Ind Industry/Vertical
We aim to improve our customer's competitiveness by streamlining business processes and implementing modern integrated standard software. We are turning our knowledge and experience into value!
Merit Customer
M
e ri
Infor M 3
t Po
P ro j
Business Merit Globe AS (MGAS) is the parent company in Merit group. MGAS is a provider of business solutions, Enterprise Management Solutions, within defined branches and with more than 243 employees in nine countries in Northern and Central Europe. The company’s products are based on software from Infor M3 and Merit Portal, an in-house developed software within Business Intelligence (BI), Enterprise Mobility and Business Partner collaboration. In addition to being a parent company, MGAS is a holding, an organization that covers common functions such as corporate management, management within the business areas, economy and finance, IT, marketing and business development. Merit has been through an expansion phase to further development of the company’s position in the existing market. We still believe there are many very interesting possibilities in this market. In 2014, focus has been on consolidating the business to improve own profitability. This will continue in 2015. Today Merit appears as a leading supplier in selected branches with our product portfolio and industry knowledge.
Market The market in 2014 improved during the year. The new release of Infor M3 trigged great demand of existing customers and strengthen the competition towards winning new name customers. Our own applications (Merit Portal/Best of Breed) and service-based concepts (Merit Operations & Merit Partnership) have also helped a regular and recently increased demand. We experience increased demand of different types of hosting services, and this influences own product development and unique solutions. At the same time, sales of mobile solutions increases, especially sales solutions on tablets and smartphones. This leads to an adjustment of the ERP-system’s interfaces; also new user groups are involved, both internally and externally. We have partnership agreements with Infor in Central, Western and Northern Europe. These agreements give us a great framework for future growth. Infor is a leading, global software company, and has a development plan for M3 and other applications which is very exciting. With Infor as a partner, we will continue to provide the best solutions for our defined markets, also in the future.
r t al | I n te r fa c
es
e c t s | O p e r a ti o
ns
MERIT GLOBE ANNUAL REPORT 2014
Everything you need,
we have.
Merit Globe offers a wide range of services and products. We can provide you with business solutions from early requirements to go-live with continuous improvements. From Merit you can buy hardware, software and expertise from our talented consultants.
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04
MERIT GLOBE ANNUAL REPORT 2014
Merit Portal Merit offers a range of products designed to increase efficiency in our customers operations. Thanks to its focus on solving the challenges of target industries, and its extensive experience in software development, Merit has delivered customized software solutions to more than 100 clients. With Merit you can count on the positive power of the most advanced technologies allied to our profound knowledge of industry.
SUPPLY CHAIN Merit Portal Supply Chain will improve productivity and reporting quality both inside and outside your warehouse.
SALES An effective sales process has direct correlation with a strong revenue growth. Merit Sales gives your customer the opportunity to place an order directly into your ERP system and accsess the information “Anytime”, “anywhere”, on “any device”.
MERIT GLOBE ANNUAL REPORT 2014
edge into Turning Knowl Value!
DEVIATION MANAGEMENT
SUPPLIER
Customers who have to wait for a replacement delivery or credit tend to be an unsatisfied customer. Deviation Management gives you the possibility to design a deviation management portal optimized for your needs.
Merit Portal Supplier allows you to create and exchange electronic business documents with your trading partners, regardless of their dimension or technical expertise.
BUSINESS INTELLIGENCE Merit Intelligence is a pre-built BI Application, where all the data you need has already been put together, analyzed and are represented in our reports and dashboard packages.
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MERIT GLOBE ANNUAL REPORT 2014
2013
308.650.188,-
2014
311.744.335,-
EXPENSES 2014
308.708.482,In 2014, Merit could achieve a decline of expenses and total expenses were NOK 308.708.482,-. Decline in expenses was mainly due to reduced payroll expenses, as well as other expenses, due to decrease of work force in 2013/2014. In 2014 deductions were 3,4% of expenses.
EARNINGS Merit had a revenue NOK 311.744.335,in 2014, a small increase from NOK 308.650.188,- in 2013. Hourly consultant fees increased in 2014.
EBITDA 2014
RESULT AFTER TAX
2013
2014
20.581.490,7.579.904,-
BALANCE
223.711,-
The total balance of Merit was NOK 117.554.603,- in the end of the accounting period. Customer receivables were NOK 66.042.499,-. The receivables were evaluated and are to be seen as solid.
2013
2014
-10.760.209
117.554.603,-
Result (EBITDA) in 2014 was NOK 20.581.490,- compared to NOK 7.579.904,- in 2013. This represents a increase of 63,7%. Result after tax was NOK 223.711,- in 2014 which is a increase from NOK -10.760.209 in 2013. The increase is NOK 10.983.920,-.
Economy & finance
RECEIVABLES
66.042.499,-
15% 6,6%
KPI GOAL EBITDA-margin was 6,6 %. Merit has a long-term KPI (Key performance indicator ) of EBITDA margin of 15%. The corporation will continue to focus on increasing operation’s efficiency. We also expect growth in most markets we are serving.
MERIT GLOBE ANNUAL REPORT 2014
DEBT Debt was NOK 81.533.752,- when the balance was taken. NOK 8.082.068,were bank debt. Bank debt was decrease from total NOK 23.954.118,- in 2013.
2014
23.954.118,-
81.533.752,-
EQUITY
RESULT PARENT COMPANY 2014
5.590.799,30,1 30,6 The parent company has – since fission in 2010 – only had internal turnover, earnings and expenses. In 2014 it was decided to transfer dividends from subsidiaries to the parent company. Transferred dividends totaling NOK 5.230.365,-. This resulted in a profit of NOK 5.590.799,-
ALLOCATION OF RESULT 2014 Dividends Transferred to other equity Total
CASH Cash and cash equivalents of NOK 8.168.577,- are placed in the bank. Merit has a cash pool with possibility for credit in the bank. This solution provides the possibility to use surplus liquidity in the companies.
8.082.068,2013
8.168.577,-
2013
2014
The equity were NOK 36.020.851,- on the day the balance was taken. It was very important for Merit to increase solidity of the company. Solidity of equity-ration was 30,6% compared to 30,1% in 2013. Merit aims to have 30% equity-ration in the future.
Parent company The parent company has 52,8 % equity-ration per 31.12.2014.
52,8
2014
FINANCIAL RISK The largest financial risks the company faces are foreign exchange risk, risk of liquidity, and credit risk. Management evaluates these risks continuously and communicates guidelines on how to mitigate these risks. Merit’s financial strategy is to have enough liquidity and/or credit possibilities at any time to finance operations and investment according to company strategy. Surplus liquidity is placed in the bank. The customer base of the company consists largely of large solid organizations with high credit rating. New business connections are credit checked beforehand. The company has during 2014 improved routines and procedures for handling receivables and has increased focus on terms of credit and receiving payment according to these.
5.000.000,590.799,5.590.799,- GOING CONCERN
In accordance with accountings law § 3-3a the board confirms that operations may be continued with given situation, and annual financial statement 2014 is provided under these conditions. The long-term prognosis for the company, as well as equity and liquidity situation are the basis for this decision.
07
08 243 employees 9 countries 22 offices
Organization Merit’s companies are spread in a good way geographically, both in Northern and Central Europe. Merit has 22 offices in 9 countries, and in 2014 we had 243 employees. During 2014, Merit expanded both geographically and with new services and product-areas. One example of the latter is Merit Operations. Background for this establishment is an increasing customer base seeing advantages in us monitoring and supervising the companies’ value adding processes. The establishment is an integrated part of Merit’s existing business which focuses on helping customers grow stronger. Merit will continue to build on this established strategy in Europe. We now have access to customers in several countries and will focus on sales and implementation of products and strategies we have developed.
COMPETENCE BUILDING Solution Consulting is established as a group on parent-company level and all Merit companies participate. This group is responsible for acquiring competency in and knowledge of new product-areas and new functionality and takes part in defining with products Merit should focus on and build competency in. Merit Project and Merit Operations are responsible for implementation projects and operation of the implemented solution. In principle, the entire consultant staff is part of these areas in Merit. MERIT’S SERVICE ORGANIZATION FOCUSES ON THE FOLLOWING AREAS:
SERVICES SOLUTION CONSULTING Responsible for Presales activities Responsible for Presales materials Be the forefront to collect information about new products Heading Pre-study projects Quality assurance in projects
PROJECTS
OPERATIONS
Proven implementation methodology
Application Monitoring
Deep industry knowledge for the focused verticals
Service Desk
Complete resource teams
Emergency support
Scalable from small local projects to large and international projects
Process Control Application Support
PROFESSIONAL GROUPS Merit has worked towards establishing professional groups for different competency areas. These groups may be linked towards branches, solutions or processes. Competency groups are organized by country with contact points and cooperation between countries.
CERTIFICATION Merit has strong focus on increasing competency. This is true for own products and also partner products. As an example, we have also been one of the first to build competency in new versions of Infor products. When the last version of Infor M3 was launched, Merit was the first partner globally to implement it at a customer. Merit aims to be on the forefront when it comes to certification in Infor programs. Additionally, internal requirements and competency certificates have been established to value the skills and experience in different areas.
EFFECTS ON ENVIRONMENT Merit works to reduce negative effects on the environment. We use video- and web-conferencing as must as possible to reduce air travel. We reduce the amount of printouts to a minimum and all printers have 2-sided printout as default setting.
MERIT GLOBE ANNUAL REPORT 2014
RESEARCH & DEVELOPMENT An important part of Merit’s business plan and idea is to sell and implement in-house developed products, Merit Portal. More than 100 of our customers use these products on a daily basis in their businesses. The goal is to provide customers with tools to make their business processes more effective and user-friendly, as well as providing business-critical data in an efficient and intuitive manner. Our products are well established within data warehousing and analysis, as well as transaction reporting within value chains. Our solutions are used both via web-interface on PCs but also on mobile devices where also barcode reporting is used excessively. In 2014 our product development focused especially on further developing the portal concept, as for example sales portal and supplier portal. At the same time, we have developed and implemented our first solutions for mobile platforms such as iOS and Android. These solutions focus on utilizing possibilities of integrating new technologies with the company’s ERP-system solution. Demand of such solutions is growing strongly, which is also reflected in future research and development activities. Our product development organization consists of product specialists with great understanding of business processes; they develop with both broad and deep technical understanding and competency. We wish to provide an interesting and dynamic work place by giving our employees the possibility to work closely with customers and solution consultants. We invest a large amount of the turnover in research and development. We are concerned with providing good opportunities for further developing competencies. Together with the possibility to affect future product development with respect to functionality and technology, this has led to an attractive work place for existing and new employees.
WELL-BEING The parent-company Merit Globe AS had three employees in 2014; the companies together had 243. The board defines the work-environment in Merit as satisfactory. Absences are at a normal rate. There have not been recorded any serious injuries associated with work. We focus heavily on well-being and work-environment. Committed and motivated colleagues provide good services and satisfied customers. Merit wishes to arrange positive and healthy experiences outside working hours. Sports and other leisure activities provide a different environment outside the work-environment. Many have become especially well-known with each other through cycling, skiing, running, hiking, and other leisure activities. Some of these activities are supported by Merit, whilst others are initiated by colleagues.
DISCRIMINATION AND EQUALITY All Merit employees are obligated to support a positive and professional work-environment. This includes that all employees treat each other respectfully and all forms for discrimination are prohibited. This includes amongst others discrimination based on religion, color of the skin, sex, sexual orientation, age, nationality, race and disability. The company works actively to increase equality, ensure equal opportunities and rights, and stop and prevent discrimination. Merit has a long-term goal to increase the percentage of female employees, but right skills and competency will always weight more when hiring.
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MERIT GLOBE ANNUAL REPORT 2014
Income statement PARENT COMPANY 2014
GROUP 2013
REVENUE
0
0
10 900 678
10 143 340
Other operating income
Sales revenue
10 900 678
10 143 340
Total revenue
NOTE 5, 8
2014
2013
310 308 623
307 275 204
1 435 711
1 374 984
311 744 335
308 650 188
18 236 879
32 903 369
204 797 703
209 056 210
OPERATING EXPENSES 704 725
0
7 427 500
7 523 363
295 428
278 378
5 900 752
Cost of goods Payroll expenses
4
Depreciation
6, 7
17 545 638
18 185 283
5 697 781
Other operating expenses
4
68 128 261
59 110 705
14 328 405
13 499 522
Total operating expenses
308 708 482
319 255 567
-3 427 727
-3 356 182
Operating result
3 035 852
-10 605 379
Income from investments in subsidiaries and assosiated companies
0
0
Interest income from group companies
0
0
2 221 584
2 868 858
0
0
2 918 175
3 159 078
-696 591
-290 220
2 339 261
-10 895 599
2 115 550
-135 390
223 711
-10 760 209
Majority interests
-763 028
-11 143 365
Minority interests
986 739
383 157
FINANCIAL INCOME AND EXPENSES 9 349 640
4 264 710
785 434
711 033
1 245 057
1 624 388
0
126 938
2 247 438
2 293 626
Other financial expenses
9 132 693
4 179 567
Net financial items
5 704 966
823 385
Ordinary result before tax
114 167
235 362
Tax on ordinary result
5 590 799
588 023
Net profit or loss for the year
Other financial income Interest paid to group companies
12
ALLOCATED AS FOLLOWS 5 000 000
0
Proposed dividends
13
590 799
588 023
Uncovered losses
13
5 590 799
588 023
Total allocations
MERIT GLOBE ANNUAL REPORT 2014
Balance sheet as of December 31 PARENT COMPANY 2014
GROUP 2013
FIXED ASSETS
NOTE
2014
2013
Intangible assets 0
0
3 476
12 416
0
0
3 476
12 416
Research and development
7, 8
5 170 582
8 504 949
Deferred tax asset
12
1 454 537
1 388 609
Goodwill
7
21 611 066
34 194 649
28 236 185
44 088 207
1 958 838
2 695 532
1 958 838
2 695 532
0
0
988 526
988 526
988 526
988 526
31 183 550
47 772 265
Total intangible assets
Tangible assets 231 507
378 456
Fixtures and fittings, tools, office machinery etc.
231 507
378 456
Total tangible assets
6
Financial assets 79 225 476
79 225 476
Investments in subsidiaries
2
16 494 122
15 228 231
Other receivables
10
95 719 598
94 453 707
Total financial assets
95 954 581
94 844 579
Total fixed assets
CURRENT ASSETS Receivables 760 871
694 623
Trade receivables
11
66 042 499
62 620 133
18 785 355
13 099 309
Other receivables
11, 12
12 159 977
16 119 770
19 546 226
13 793 932
Total accounts receivable
78 202 476
78 739 903
1 157 989
1 935 526
Cash and cash equivalents
8 168 577
9 113 918
20 704 215
15 729 458
86 371 053
87 853 821
116 658 796
110 574 037
117 554 603
135 626 086
Total current assets
Total assets
9
11
12
MERIT GLOBE ANNUAL REPORT 2014
Balance sheet as of December 31 PARENT COMPANY 2014
GROUP 2013
EQUITY
NOTE
2014
2013
1 754 751
1 754 751
Paid-in capital 1 754 751
1 754 751
Share capital
13, 14
0
0
Share premium reserve
13
0
0
0
0
Other paid-in capital
13
0
0
1 754 751
1 754 751
Total paid-in capital
1 754 751
1 754 751
32 477 783
37 985 520
32 477 783
37 985 520
1 788 317
1 046 578
36 020 851
40 786 849
Retained earnings 59 897 741
59 306 942
Other equity
59 897 741
59 306 942
Total retained earnings
0
0
61 652 492
61 061 693
13
Minority interests
Total equity
LIABILITIES Current liabilities 6 370 035
23 954 118
Liabilities to financial institutions
9, 10
8 082 068
23 954 118
791 231
1 668 298
Trade creditors
11
9 516 966
6 650 211
105 227
261 915
Tax payable
12
2 264 540
989 402
296 170
335 522
Public duties payable
9
11 905 580
16 495 406
47 443 641
23 292 491
Other short-term liabilities
2, 11
49 764 597
46 750 099
55 006 304
49 512 344
Total current liabilities
81 533 752
94 839 236
55 006 304
49 512 344
Total liabilities
81 533 752
94 839 236
116 658 796
110 574 037
117 554 603
135 626 085
Total equity and liabilities
Ålesund, June 4th 2015
Erik Outzen CEO
Bjørn Haukebø Chairman of the Board Egil Gussiås Board member
Anders Erik Michael Thern Board member
Markus Herbert Tronich Board member
Pål Marius Rødseth Board member
MERIT GLOBE ANNUAL REPORT 2014
Cash flow statement PARENT COMPANY
GROUP CASH FLOW FROM OPERATING ACTIVITIES
2014
2013
5 704 966
823 386
-9 230 365
-4 264 710
-261 915
0
Taxes paid
-119 275
0
Profit on sale of fixed assets
295 428
278 378
-943 315
10 915 699
22 610 261
-19 234 127
18 055 785
-11 481 374
Profit/(loss) before taxes
2014
2013
2 339 261
-10 895 599
0
0
-989 402
-1 622 252
0
0
17 545 638
18 185 283
-555 611
-3 253 370
Changes in other current balance sheet items
-2 971 583
-6 513 491
Net cash flow from operating activities
15 368 303
-4 099 429
-441 594
-627 121
Proceeds from sale of investments in shares and joint ventures
0
0
Purchase of investments in shares and joint ventures
0
0
0
-747 335
-441 594
-1 374 456
-15 872 050
-481 752
Income from associate
Depreciation and amortisation Changes in inventories, trade receivables and trade payables
CASH FLOW FROM INVESTING ACTIVITIES -102 623
-371 763
Purchase of tangible fixed assets
119 275
0
0
-28 640
-1 265 891
-1 266 870
Purchase of other investments
-1 249 239
-1 667 273
Net cash flow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES -17 584 083
7 165 219
Repayment of short term loans
0
1 372 429
Issue/repurchase of share capital
0
1 372 429
0
5 293 703
Group contribution received/paid
0
0
-17 584 083
13 831 351
-15 872 050
890 677
-777 537
682 704
-945 341
-4 583 208
1 935 526
1 252 823
Cash and cash equivalents at 01.01
9 113 918
13 697 126
1 157 989
1 935 527
Cash and cash equivalents at 31.12
8 168 577
9 113 918
Net cash flow from financing activities
Net change in cash and cash equivalents
13
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MERIT GLOBE ANNUAL REPORT 2014
Notes 01 Accounting Principles The annual report is prepared according to the Norwegian Accounting Act 1998 and generally accepted accounting principles. Basis for consolidation The consolidated financial statements comprise the parent company Merit Globe AS and subsidiaries as described in note 2. Subsidiaries are companies in which the Group has a controlling interest. A controlling interest is normally achieved when the Group owns more than 5O% of the shares in the company and is also in the position to exercise control over the company. The minority share of the equity is included in the consolidated equity. The consolidated accounts are prepared such that the group of companies are presented as a single economic entity. Intercompany transactions have been eliminated from the consolidated accounts. The consolidated accounts are prepared according to the same accounting principles for both parent and subsidiaries. Acquired subsidiaries are reported in the annual accounts on the basis of the parent company’s acquisition cost. The acquisition cost is identified by attributing fair values to the separable net assets acquired. Surplus value or values below the fair value of separable net assets are reported in the balance sheet as goodwill or negative goodwill. Goodwill is amortized linearly through the profit and loss account over its expected useful economic life. Subsidiaries are consolidated in the accounts when a controlling interest is achieved until it no longer applies. Subsidiaries and investment in associate Subsidiaries and investments in associate are valued by the cost method in the company accounts. The investment is valued as cost of acquiring shares in the subsidiary, providing that write down is not required. Write down to fair value will be carried out if the reduction in value is caused by circumstances which may not be regarded as incidental, and deemed necessary by generally accepted accounting principles.
Write downs are reversed when the cause of the initial write down are no longer present. Dividends and other distributions are recognized in the same year as appropriated in the subsidiary accounts. If dividends exceed withheld profits after acquisition, the exceeding amount represents reimbursement of invested capital, and the distribution will be subtracted from the value of the acquisition in the balance sheet. Sales revenue Sales revenues are recognized at the time of delivery. Revenues from services are recognized at execution. The share of sales revenue associated with future services are recorded in the balance sheet as deferred sales revenue, and are recognized at the time of execution. Revenue from projects on fixed price terms that run over a longer period of time are recognized according to the degree of completion. The degree of completion is estimated based on time consumed in relation with estimated total time on the project. Balance sheet classification Net current assets comprise creditors due within one year, and entries related to goods circulation. Other entries are classified as fixed assets and/or long term liabilities. Current assets are valued at the lower of acquisition cost and fair value. Short term creditors are recognized at nominal value. Fixed assets are valued by the cost of acquisition, in the case of non-incidental reduction in value the asset will be written down to the fair value amount. Long term creditors are recognized at nominal value. Trade and other receivables Trade receivables and other current receivables are recorded in the balance sheet at nominal value less provisions for bad debts. Provisions for bad debts are calculated on the basis of individual assessments. In addition, for the remainder of accounts receivables outstanding balances, a general provision is carried out based on expected loss. Foreign currency translation Foreign currency transactions are translated using the year end exchange rates. Property, plant and equipment Property, plant and equipment is capitalized and depreciated over the estimated useful economic life. Direct maintenance costs are expensed as incurred, whereas improvements and upgrading are assigned to the acquisition cost and depreciated along with the asset. If carry-
ing value of a non-current asset exceeds the estimated recoverable amount, the asset is written down to the recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value. Research and development Research and development costs are capitalized providing that a future economic benefit associated with development of the intangible asset can be identified. Otherwise, the costs are expensed as incurred. Capitalized research and development are amortized linearly over the economic lifetime. Government grants Government grants for development projects are recognized when it is probable that the Company will receive the grant. The grant is recognized as a reduction of expensed or capitalized development costs. Income tax Tax expenses in the profit and loss account comprise both tax payable for the accounting period and changes in deferred tax. Deferred tax is calculated at 27 percent on the basis of existing temporary differences between accounting profit and taxable profit together with tax deductible deficits at the year end. Temporary differences, both positive and negative, are balanced out within the same period. Deferred tax assets are recorded in the balance sheet to the extent it is more likely than not that the tax assets will be utilized. Tax payable and deferred tax is recorded directly against the equity to the extent that the tax positions relate to equity transactions. Cash flow statement The cash flow statement is presented using the indirect method. Cash and cash equivalents includes cash, bank deposits and other short term highly liquid placement with original maturities of three months or less. Use of estimates The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts in the profit and loss statement, the measurement of assets and liabilities and the disclosure of contingent assets and liabilities on the balance sheet date. The estimates are related to capitalization of R&D, provision for bad debts and evaluation of projects. Actual results can differ from these estimates.
MERIT GLOBE ANNUAL REPORT 2014
02 Investment in subsidiaries PARENT COMPANY Company
Acquisition year
Location
Share owners
Voting rights
Book value 31.12
Merit Consulting AS
2010
Norway
100 %
100 %
19 219 030
Merit Platform Partner AS
2009
Norway
51 %
51 %
576 500
Merit Consulting OY
2008
Finland
100 %
100 %
25 882 782
Merit Consulting AB**
2009
Sweden
100 %
100 %
5 498 479
Merit Consulting AS
2009
Denmark
100 %
100 %
5 638 311
Merit Consulting GmBH
2010
Germany
100 %
100 %
4 937 847
Merit Central Europe AG
2010
Switzerland
100 %
100 %
15 893 768
Merit Consulting UK
2008
England
100 %
100 %
1 578 759
Axcentro Solutions LLC*
2010
Switzerland
0
Capesso Provider AS*
2011
Norway
0
Merit Czech Consulting s.r.o.*
2013
Czech Republic
0
Total
79 225 476
* Axcentro Solutions LLC, Capesso Provider AS and Merit Czech Consulting, s.r.o are included in the Group, but are owned by subsidiaries. ** Tirem Invest AB was in 2014 sold to, and subsequently merged with, Merit Consulting AB.
03 Financial market risk PARENT COMPANY
The company and the Group are exposed to interest- and exchange rate risk. The Group has no formal hedging strategy.
with a financial institution at floating interest rates. The company has not entered into any fixed rate contracts.
Interest risk The company has overdraft facilities
Exchange rate risk The company and the Group have trans-
actions in different currencies. It is not entered into any hedging transactions to reduce this risk. However, the risk is reduced by the fact that income and expenses in each company of the group is mainly in the same currency.
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MERIT GLOBE ANNUAL REPORT 2014
04 Wage costs, number of employees, remuneration,
loans to employees and auditor’s fee
PARENT COMPANY
GROUP
2014
2013
3 355 318
2 882 636
518 603
587 864
181 743
200 027
3 371 836
3 852 836
0
0
7 427 500
7 523 363
3
3
WAGE COSTS
2013
2014
Salaries
158 244 467
162 484 970
Payroll tax
24 021 573
24 567 093
Pension costs
15 519 459
15 419 269
8 128 524
9 537 909
-1 116 320
-2 953 031
204 797 703
209 056 210
243
239
Other renumerations
Total Average number of employees
PARENT COMPANY
Other remunerations include administrative costs for Group management, amounting to NOK 3 221 359 (2013: NOK 3 554 550). Board of directors remuneration has been paid, at NOK 385 000 in 2014. No bonus is expensed to management in 2014 and 2013. Management remuneration Chief Executive Officer
Salary 1 202 535
Other remuneration 244 816
The parent company is obliged to have a pension plan according to Norwegian pension regulations. The company employs a pension plan that meets the criteria in the regulations. The managing director is included in the company’s general pension agreement. GROUP
Management remuneration Some of subsidiaries are obliged to have a pension plan according to Norwegian pension regulations. The companies have a pension plan that meets the criteria in the regulations. PARENT COMPANY
Loans and guarantees for management, representatives and stockholders etc. The company has not provided loans or security to anyone in the management or shareholders, or any of their affiliates.
PARENT COMP.
GROUP
2014
2014
217 000
Statutory audit fee
607 000
0
Assurance services
28 015
Tax advisory fee
10 862
7 500 29 325
Other services VAT is not included in the figures of auditor’s fee.
338 161
MERIT GLOBE ANNUAL REPORT 2014
05
Revenues PARENT COMPANY 2014
GROUP 2013
2014
2013
149 236 265
158 719 626
Geographical distribution
06
0
0
Norway
0
0
Nordic countries
75 619 690
84 335 488
0
0
Europe
78 536 572
58 165 816
0
0
Other
6 916 096
6 054 274
0
0
310 308 623
307 275 204
Tangible assets
PARENT COMPANY
FIXTURE AND FITTINGS, TOOLS, OFFICE MACHINERY, ETC.
TOTAL
Aquisition cost 01.01.
843 836
843 836
Purchased tangibles
102 623
102 623
Acquisition cost 31.12.
946 459
946 459
Acc.depreciation 31.12.
-714 952
-714 952
Net carrying amount at 31.12.
231 507
231 507
Depreciation for the year
295 428
295 428
FIXTURE AND FITTINGS, TOOLS, OFFICE MACHINERY, ETC.
TOTAL
9 123 236
9 123 236
Purchased tangibles
441 594
441 594
Conversion differences
165 816
165 816
Acquisition cost 31.12.2014
9 730 646
9 730 646
Acc.depreciation 31.12.2014
-7 771 808
-7 771 808
Net carrying amount at 31.12.2014
1 958 838
1 958 838
Depreciation for the year
1 344 104
1 344 104
Useful economic life: 3 years Amortization plan: Linear
GROUP Acquisition cost 01.01.2014
Useful economic life: 3 years Amortization plan: Linear
17
18
MERIT GLOBE ANNUAL REPORT 2014
07
Intangible assets
GROUP
GOODWILL
R&D
TOTAL
Acquisition cost at 01.01.
65 264 115
16 347 760
81 611 875
Conversion differences
804 453
163 714
968 167
Acquisition cost 31.12.
66 068 568
16 511 474
82 580 042
-44 457 502
-11 340 892
-55 798 394
Net carrying amount at 31.12.
21 611 066
5 170 582
26 781 648
Amortization for the year
12 703 453
3 498 081
16 201 534
Acc. amortization at 31.12.
Useful economic life: 5 years Amortization plan: Linear
08
Government grants
GROUP
Merit Platform Partner AS has an ongoing development project that are approved as SkatteFUNN-project in Norway. In total, the company has applied for grants amounting to NOK 1 100 000 in 2014. The amounts are recognized as a reduction in payroll expenses.
09
Bank deposits
PARENT COMP.
GROUP
2014 175 001
2014 Restricted bank deposits
3 919 987
PARENT COMPANY
The Merit Globe group has established a multi-account system where Merit Globe AS is the holder, while the other group companies are sub-account holders or participants. The bank can offset any balance against one another so that the net position represents the balance between Handelsbanken and Merit Globe AS. Each participant’s deposit or liability on the sub-account represents an intercompany balance with Merit Globe AS. These intercompany balances are classified as other current liabilities or other current receivables.
MERIT GLOBE ANNUAL REPORT 2014
Debts and receivables
10
PARENT COMPANY
GROUP
2014
2013
760 871
694 623
Accounts receivables
231 507
378 456
Property, plant and equipment
992 378
1 073 079
PLEDGED ASSETS
Total
2014
2013
27 069 554
24 779 390
935 625
1 072 956
28 005 179
25 852 346
PARENT COMPANY
The parent company and the group have an overdraft facility agreement; cf. Note 9, of NOK 25 million in 2014. As of 31.12.2014 NOK 6 370 035 (2013: NOK 23 954 118) is drawn on this facility. The assets in the table above are pledged as collateral. There are financial covenants related to the agreement. The company meets all of these requirements as of 31.12.2014.
11
Intercompany balance group companies and associates
PARENT COMPANY RECEIVABLES
2014
2013
Accounts receivables
760 871
694 623
9 049 508
8 083 241
16 494 122
15 228 231
Dividends from Group companies
5 230 365
0
Group contribution
4 000 000
4 264 710
35 534 866
28 270 805
265 635
980 000
Other short term payables
42 119 075
22 797 961
Total
42 384 710
23 777 961
Other receivables Long term receivables
Total
PAYABLES Trade creditors
Interest is calculated on intercompany balances in 2014. Management services have been posted as income in 2014, amounting to NOK 10 900 678 in the parent company (2013: NOK 10 143 340).
19
20
MERIT GLOBE ANNUAL REPORT 2014
12
Income taxes PARENT COMPANY 2014
GROUP 2013
INCOME TAX EXPENSE
2014
2013
2 264 540
989 402
Too much/little allocated in previous year(s)
- 83 062
-70 608
-65 928
-1 054 184
2 115 550
-135 390
Fixed assets
-318 631
-438 272
-350 000
-323 001
-5 474 108
-6 018 753
0
0
-6 142 739
-6 780 026
Loss carried forward
-24 498 895
-13 011 863
Net temporary differences
-30 641 634
-19 791 889
0
0
-30 641 634
-19 791 889
105 227
261 915
Tax payable
0
0
8 940
-26 553
Change in deferred tax
114 167
235 362
Total income tax expense
TAX BASE ESTIMATION 5 704 966
823 385
Ordinary result before tax
14 787
15 550
-5 230 365
0
-4 000 000
-4 264 710
-119 275
0
19 617
96 475
-3 610 270
-3 329 300
4 000 000
4 264 710
389 730
935 410
Tax base
105 227
261 915
Tax payable (27%)
Permanent differences Dividends from subsidiaries Group contribution Gain from sale of subsidiary Changes in temporary differences
Group contibution
TEMPORARY DIFFERENCES OUTLINED -65 601
-45 984
0
0
Other differences
0
0
Accounting provisions
5 230 365
0
Recognized dividends from subsidiaries
5 164 764
-45 984
0
0
5 164 764
-45 984
5 177 636
0
-12 872
-45 984
Total
-3 476
-12 416
Deferred tax asset (27%)
-8 273 241
-5 343 810
0
0
Deferred tax asset not in balance sheet
-6 818 704
3 955 201
0
0
Deferred tax asset in balance sheet
-1 454 537
-1 388 609
Total
Differences not included in deferred tax base
MERIT GLOBE ANNUAL REPORT 2014
13
Owners equity
PARENT COMPANY
SHARE CAPITAL
OTHER EQUITY
TOTAL
1 754 751
59 306 942
61 061 693
Profit for the year
0
5 590 799
5 590 799
Dividends to owners
0
-5 000 000
-5 000 000
1 754 751
59 897 741
61 652 492
SHARE CAPITAL
OTHER EQUITY
MINORITY INTR.
TOTAL
1 754 751
37 985 520
1 046 578
40 786 849
Profit for the year
0
-763 028
986 739
223 711
Dividend from subsidiary
0
0
-245 000
-245 000
Dividend to owners
0
-5 000 000
0
-5 000 000
Conversion differences
0
255 291
0
255 291
1 754 751
32 477 783
1 788 317
36 020 851
Owners equity 01.01.
Owners equity 31.12. GROUP Owners equity 01.01.
Owners equity 31.12.
21
22
MERIT GLOBE ANNUAL REPORT 2014
14
Share capital and shareholder information NUMBER OF SHARES
FACE VALUE
BOOK VALUE
1 754 751
1 NOK
1 754 751
Ordinary shares
Ownership share
Voting rights
Kjell Harald Danielsen
128 764
7,34 %
7,34 %
Erik Outzen, Daglig leder
116 782
6,66 %
6,66 %
Jon Kåre Aarskog
98 283
5,60 %
5,60 %
Markus Tronich, styremedlem
92 685
5,28 %
5,28 %
Arnfinn Hjellen
89 715
5,11 %
5,11 %
Frank Skorgen
76 195
4,34 %
4,34 %
Hallgeir Øvrebust
74 485
4,24 %
4,24 %
Kjetil Hjellegjerde
62 341
3,55 %
3,55 %
Håvard Valderhaug
55 424
3,16 %
3,16 %
Lars Sæther
52 297
2,98 %
2,98 %
Audun Krutvik
48 488
2,76 %
2,76 %
Bjørn Vanebo
48 488
2,76 %
2,76 %
Trond Langørgen
47 024
2,68 %
2,68 %
Ragnhild Sunde
44 617
2,54 %
2,54 %
Bjørn Vidar Remme
41 907
2,39 %
2,39 %
John Andre Tran
41 605
2,37 %
2,37 %
Morten Bremseth
41 561
2,37 %
2,37 %
Egil Gussiås, Styremedlem
32 366
1,84 %
1,84 %
Eirik Nesje
31 171
1,78 %
1,78 %
Halvard Aarønes, Varamedlem
25 975
1,48 %
1,48 %
1 250 173
71,23 %
71,23 %
504 578
28,75 %
28,75 %
1 754 751
100,00 %
100,00 %
PARENT COMPANY Ordinary shares
SHAREHOLDERS PER 31.12:
Total Other (less than 5% ownership) Total number of shares
MERIT GLOBE ANNUAL REPORT 2014
23
243 employees 9 countries 22 offices
www.meritglobe.com
NORWAY BERGEN GJØVIK MOLDE OSLO SANDNES TRONDHEIM ÅLESUND Phone: +47 400 03 650 E-mail: norway@meritglobe.com SWEDEN GÖTEBORG KALMAR LINKÖPING MALMÖ STOCKHOLM Tel.: +46 8 410 234 00 Phone: sweden@meritglobe.com FINLAND HELSINKI TURKU TAMPERE Phone: +358 290 091 040 E-mail: finland@meritglobe.com DENMARK ODENSE Phone: +45 42 14 91 20 E-mail: denmark@meritglobe.com
GERMANY LANDSHUT Phone: +49 176 832 799 44 E-Mail: germany@meritglobe.com SWITZERLAND BASEL ZUG Phone: +41 41 561 44 00 E-Mail: centraleurope@meritglobe.com CZECH BRNO Phone: +41 78 688 99 13 E-Mail: centraleurope@meritglobe.com ITALY Phone: +41 78 688 9912 E-Mail: centraleurope@meritglobe.com UK MANCHESTER Phone: +44 78 94 414026 E-mail: enquiries@meritglobe.com Infor Business partner covering Great Britain, Ireland, the Netherlands, Belgium and Luxemburg.