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GRIEG
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C o n t e n t s
The Grieg Group
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Timeline
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Company Structure
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From the Owners
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Selected Highlights
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Grieg Group Companies - Grieg Shipping Group - Grieg Logistics - Joachim Grieg & Co - MARIS - Grieg International - Grieg Investor Related Companies - Grieg Seafood - NorWind - OceanWind - Grieg Development - AON Grieg
Photos by Hung Ngo except where noted.
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Corporate Responsibility
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Grieg Foundation
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Financial Statements
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the grieg group
The Grieg Group is a privately owned line of companies which operates globally within a variety of business areas: shipping, logistics, shipbroking, fish farming, insurance, investments and renewable energy.
Grieg Maturitas is the Grieg family’s owning company for their 75% share of the Grieg Group. The remaining 25% is owned by Grieg Foundation. Grieg Maturitas is responsible for a continued healthy and profitable corporate structure going forward. Since October 2009 the company employs a Managing Director. The Grieg Group emphasises on creating economic and social values in a long-term perspective. The group engages in international competitive business which is controlled from Norway. In order to strengthen the foundation for business and maintain and secure jobs 4
in a long term perspective, all Grieg Group activities must have a sound financial basis for their existence. The companies in the Grieg Group are knowledge intensive, and the employees’ qualifications constitute a substantial part of the business capital. All members of the group are independent, but close cooperation across the company borders is encouraged. This contributes to a higher knowledge level, increased solidity and new business opportunities.
Our companies have offices in several cities and locations in Norway. They also have offices in Europe, North- and South-America and the Far East. The strategic management is executed from Norway with headquarters in Bergen. By the end of 2009 the Grieg Group had 1640 employees, of whom 593 are sailing personnel onboard vessels owned by the Group. In order to maintain an ethical foundation for business and a strong and solid company culture, we have worked thoroughly for several years to implement our four core values; Solid, Proud, Open and Committed. All T HE
employees in the Grieg Group shall be aware of the significance of a common value base in their daily work. The Grieg Group emphasizes social responsibility and contributes actively to programs for humanitarian, cultural and public benefit. Grieg Foundation which owns 25% of the Grieg Group is a major sponsor for SOS Children’s Villages. Additionally Grieg Foundation supports projects within the fields of medical research and culture.
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2009
The Grieg Group celebrated its 125th anniversary
2008
Star Shipping becomes Grieg Star Shipping and joined the Grieg Group 31/12 2008.
2007
Grieg Seafood ASA was listed at Oslo Børs 21/6 2007.
2002
Grieg Foundation established in Os outside Bergen.
2001
Grieg Logistics expands to cover global logistics services.
1999
4th. generation Grieg takes over. Per Grieg jr., Elisabeth Grieg, Camilla Grieg and Elna-Kathrine Grieg take leading roles in the Grieg Group.
1992
Grieg Seafood established
1991
The Grieg Group headquarters in Bergen gathered under one roof in Grieg-Gaarden.
1984
100 years! Restructured as the Grieg Group.
1969
Grieg Logistics established as a separate business unit.
1961
Per Grieg Sr. reorganizes the company and starts widening the scope of activities. Star Shipping established.
1930s
Joacim Grieg & Co builds up a significant tanker department.
1900s
Joachim Grieg & Co is one of Europe’s leading ship broking companies
1884
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Joachim Grieg establishes ship broker business in Bergen.
Grieg Maturitas Holding company 75%
Fish Farming Grieg Seafood (44%)
Shipping Grieg Shipping Group - Grieg Shipping - Grieg Star Shipping
Shipbroking Joachim Grieg & Co
Navigation systems MARIS Management ServiCes
Grieg Group Resources
Offshore Windmills NorWind (40%) Insurance Broker AON Grieg (20%)
Global logistics Grieg Logistics
Investments Grieg International Grieg Limited Grieg Holdings
Investment consulting Grieg Investor
25%
Grieg Foundation Benevolent foundation
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From the left: Camilla Grieg, Elna-Kathrine Grieg, Per Grieg jr. and Elisabeth Grieg. Photo: Svein Bringsdal
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Fro m the owner s
Year 2009 was one of hard work, where no stone was left unturned in the hunt for possible cost-cuts and savings. Given the global economic framework our results are, on the whole, satisfactory. Thus we can congratulate ourselves with successful efforts, while at the same time reminding ourselves to keep up the good work. Our focus must continuously remain on building the future of our businesses on a safe and solid foundation of good attitudes and conscious spending.
In 2009 the Grieg Group was proud to celebrate its 125th anniversary. The group is solid and strong financially; we have an open and outward attitude, and committed employees. In addition to our company values that are highlighted above, it is perhaps timely for a company with proud traditions to add the word; modern!
In the Grieg Group we are constantly on the outlook for new roads to explore, and for new business opportunities. We are not settling down to rest on our laurels. As part of this approach we have in 2009 established a project called “Grieg Future�. This is an initiative that aims at encouraging an innovative mind-set also across the different companies in the group and at promoting a group culture of openness, willingness to dialogue, and consciousness to new prospects. Our hope is that this can be a positive add-on to the constant business development that is going on in each company.
In April 2009 the undersigned took over the role as Chair of the Board of Grieg Maturitas, the Grieg family’s owning company. I am honored to take the Chair position after my father. In our different roles as owners, my siblings and I will continue to work hard to carry forward the long term commitment we have to the Group and to all of our employees. The first shockwaves from the global financial crisis that hit the world economy with full force in 2008 have settled. Despite a difficult shipping market, the results from Grieg Shipping Group are a lot better than feared, much due to financial investments and a successful cost-cutting program. Grieg Seafood experienced one of their best years ever in 2009. Also Grieg Logistics continue to deliver steady results. However, we should still be prepared for troubled waters and possible new set-backs in the years to come. In any event we will have to adjust to the fact that the financial centre of gravity seems to be moving from the West to the East.
Going forward we will undoubtedly meet a lot of challenges. Likely challenges will be related to environment issues, global macro economical trends, and cultural differences. As a group we will find ways of dealing with all of this. We possess a particular strength in that we have been around for a long time. A lot of experience, knowledge and tradition have been accumulated. In the past years we have proved that based on our solid platform we are able to turn around fast and to find new solutions when necessary. For 125 years the Grieg Group has proved its stamina. Going forward, let us also demonstrate continued strength! Thank you all for your efforts in 2009. I can assure you that they are noticed and much appreciated. Your contributions constitute the fundament for a steady course also into the new decade!
Elna-Kathrine Grieg
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Selecte d H ighlight s 2 0 0 9
Celebrations
MARIS Contract
The 125th anniversary of the Grieg Group was marked world wide, in every office and on every ship, on Friday 23. October 2009. Traditional birthday lunches were held, and a birthday song had been specially made for the party.
In March 2009 MARIS was awarded a seven year contract by United Kingdom Hydrographic Office (UKHO) as the supplier of an ordering, management and maintenance system for marine navigational products and services.
ISO 14001
A l p h a Ve n t u s
An important milestone was reached when Grieg Shipping Group received the ISO 14001 Certificate in March 2009. The certification is a result of diligent work and preparations from staff both ashore and onboard.
Norwind successfully fabricated and installed six steel foundations for the first German offshore wind farm project, Alpha Ventus.
SOS Village in Bergen In September 2009 Norway’s first SOS village opened in Bergen. The village has eight houses for SOS families, and the funding for one of these homes was donated by Grieg Foundation in 2006.
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The new SOS Children’s Village in Bergen.
Installing Alpha Ventus wind farm
MARIS electronic chart system
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grieg s hipping group
Grieg Shipping Group is a fully integrated shipping group and the owner of one of the world’s largest open-hatch fleets. Presently we own, manage, market and operate 26 open-hatch general cargo vessels of which the four youngest and most sophisticated were delivered in 2009 and early 2010.
The Group’s long-term commitment, financial strength and highly competent and dedicated people are of vital importance for the ability to deliver high-quality services and maintaining our position as a world class shipping group. The organization emphasizes knowledge, skills and innovation. The continuous search to improve the vessels and cargo handling equipment has given us a leading role in setting new standards within our segment.
The commercial operation is organized as a pool, also including some chartered-in tonnage, and is characterized by long-term contracts of affreightments. The pool operates a considerable network of trades with regular sailings and frequencies adapted to customers’ requirements. Multi-year contracts with shippers enable us to operate regular liner services in key trade lanes.
We recognize the environmental and social impacts of our business activities and focus on corporate responsibility and sustainable business development. At all times, our main concern is the safety and security of the crew, the cargo and the vessels.
Open-hatch The open-hatch ships are specially designed, with box-shaped holds, for optimal, safe and fast handling of pulp and other forestry products. Innovative design features, such as removable tween decks, gantry cranes up to 70 mt., rain protection over unobstructed holds and cell guides, allows for fast and safe handling. Through its chartering and operating arm Grieg Star Shipping, the Group provides high quality transportation and logistic services for a number of industries. Particularly we have a special position in the transportation of forest products, such as wood pulp and rolled paper. 12
Fertilizer, steel and various metals are other important cargoes. The open-hatch ships are also suitable for project cargoes. Consequently windmills and machinery constitute a fast growing cargo segment. The Group has built up a broad customer base with a variety of different cargoes, primarily steel products like pipes, wire rods and coils as well as different project cargoes. Punctuality, efficiency, quality and flexibility are the primary competitive advantages to ensure customer satisfaction. While the open-hatch services operate worldwide, the Group’s operation is today very much focused on routes to and from North America. The challenge ahead is thus to increase our share of cargo contracts in the southern hemisphere in order to achieve a larger cargo base and a more flexible sailing pattern.
Photo: Eilif Stene
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The open-hatch vessels are designed, developed and maintained by the project and technical management arm Grieg Shipping, to secure optimal operation through out their effective life. By continuous focus on quality routines and procedures, together with onboard training and drills verified by audits, the vessels are at all times in compliance with our high quality standard as well as all relevant national and international regulations. Our focus on quality is confirmed amongst other by the vessels being holders of the US Coast Guards’ “Qualship 21” certificates. This implies that the vessels are considered to be operated to very high standards and is consequently subject to less inspections on average, compared to noncertified vessels. Only about 10% of all vessels calling American ports have “Qualship 21” certificates. The vessels are manned by highly qualified Philippine seafarers, specially educated for our operations. We are proud of our high return rate of crew. This indicates that our crew are satisfied with their general working conditions. Also it secures a crew that is familiar with our vessels and operational standards. To further develop and improve the competence, knowledge and skills of the seamen, the Group has co-established a manning agency in the Philippines named Grieg Philippines Inc.
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Te r m i n a l s As an important part of the logistic chain in the open hatch activities, we have long-term agreements with terminals in all major ports serving as consolidation and distribution hubs. In Squamish, British Columbia, Canada, the Group owns a purpose-built break-bulk terminal, Squamish Terminals. The terminal is for public use. With two berths, three warehouses, specialized handling equipment, and intermodal transportation infrastructure, Squamish Terminals efficiently handles imports and exports cargo from and to major markets worldwide.
Conventional Bulk Carriers The Group also operate a modern fleet of about 15 geared handysize and handymax bulk carriers, equipped with grabs. These vessels are chartered from the market on short and long term time charter agreements. They are operated in contract trades and the spot market worldwide, carrying a large variety of cargoes such as coal, coke, alumina, fertilizers, cement, concentrates, steel products, grain, sugar, salt, scrap and logs.
Financial Asset Management The Group owns and manages an investment portfolio that serves as a long term buffer for the core activity and provides overall solidity.
The investment policy is founded on the Group’s business principles and long term strategy, and is actively managed within the limits set forth by the Norwegian Tonnage Tax regime. The management of the investment portfolio follows a traditional asset allocation approach, and funds are added to or withdrawn from the portfolio based capital requirements and new business development projects.
M o d e r n C o m p a n y - P r o u d Tr a d i t i o n s Grieg Shipping Group is located in Bergen and Oslo, Norway with offices and representation in Atlanta, Mobile, Savannah, Charleston, Long Beach, Rotterdam, Brussels, Livorno, Gothenburg, Rio de Janeiro, Sydney, Seoul, Shanghai, Tokyo, Vancouver, Squamish and Manila. In 2009, the Group employed 799 persons, of whom 593 are sailing personnel and 206 are office personnel. The Group is based on years of tradition, high technological standards and professional seamanship. We make use of this expertise and knowledge to pave the way in a continuous development towards a modern, competitive and sustainable business.
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grieg logi s tic s
Grieg Logistics is a leading logistics provider to Norwegian oil & gas, shipping, maritime and general industries on a local and global basis. Our products range from Freight Management, Contract Logistics, Project Logistics, Ship Services and Terminal Operations to Project Development and Advisory Services.
In Norway, Grieg Logistics serves the whole country with a large number of offices, based on our policy of “going where the customer is�. Internationally we are established with own offices in Rotterdam, Singapore and Shanghai and provide our clients with total logistics services based on a worldwide partnership network with CEVA Global Logistics having more than 1000 offices on all continents.
Grieg Logistics in 2009 2009 has been a very challenging year. The global transport market (air, sea and road) has shown reduced volumes ranging from 15% to 30%. In this context of world recession, Grieg Logistics has experienced less then 5% reduction in turnover.
Our high activity in sales together with continuous focus on costs, quality and customer satisfaction, has made 2009 a good year for Grieg Logistics. Continuous high activity in the North Sea Basin keeps the activity level high in our oil base branches along the coast. Statoil is still the driving force in this segment, but more and more other clients get into our logistics divisions portfolio. Saipem, AGR, Kaefer Energy and Proserv came in as our largest new clients in 2009 and we have agreed a contract extension with Statoil. Good relations with ship yards, ship equipment suppliers and shipping companies resulted in a sound activity within Freight Forwarding and Maritime Services. We have also experienced high activity in our the Project Division where the largest project has been supporting Norwind AS with all logistics related to installation of 6 wind turbine jackets in the Alfa Ventus field offshore Germany.
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In our project development department we have together with Det Norske Veritas and other partners, finalized the research project “Synchroport” - in which we have successfully developed models and tools to optimize the interaction between ship, cargo owner and port. The main objective for the project has been to find ways of reducing emissions to sea and to make harbor operations more cost effective. We see this as an important contribution to supplying our customers with the best solutions in the future. Mosjøen Industriterminal AS (MIT) has maintained a sound activity managing all harbour and plant related logistics on contract to the Alcoa Aluminium and Anode plants in Mosjøen.
Inside the gigant transport plane Antonov AN 124. The plane can carry 150 tons of cargo. This plane was chartered by Grieg Logistics to carry a 31 ton generator from Norway to Spain.
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joachi m grieg & co
Dry Cargo Department
The dry cargo department consists of 12 brokers and two operators. The dry cargo department is divided in a Competitive desk and a Grieg Star Shipping desk. The Grieg Star Shipping desk is divided into two sections, the specialised “open hatch” division and the conventional bulk carriers division. Each division has its own dedicated brokers with top market knowledge. The competitive desk offers broker services and expertise to their customers in competition with brokers all over the world. The desk has built a substantial portfolio of external customers during the recent years. Among the customers on the competitive market are charterers like Alcan, Hydro Aluminium, Elkem and owners like United Bulk Carriers, Ugland Bulk Carriers, TBS, Clipper. The company’s main focus is on the handysize/handymax/supramax market (vessels from 10-60.000 dwt). Recently Joahim Grieg & Co also took over all chartering activities for our sister company Grieg Logistics. Joachim Grieg & Co holds exclusive authority to act on behalf of Grieg Star Shipping. It is vital that the department is at all times updated with regards to the cargoes, vessels and contracts that circulate in the market. This information is the basis for the commercial decisions Joachim Grieg & Co makes in consultation with Star Shipping.
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Joachim Grieg & Co is an international shipbroking company working out of the Grieg Group’s main office in Bergen, Norway. The company was established in 1884 and is today serving ship owners and charterer’s from around the world. In 2009 the company worked in two units - a dry cargo department and a sale and purchase department. Since January 2010 a gas department has been added.
Sale and Purchase Department
The Sale and purchase department consists of four brokers who are engaged in buying and selling both new and second hand vessels for Norwegian and international clients. Both dry- and wet trading vessels are represented. With Bergen being the ‘chemical-tankers capital of the world’, the department is regularly involved in buying and selling this type of tonnage. In recent years the department has succeeded in concluding a fair number of so called “combination business”, where a sale of a vessel is combined with long term employment. Joachim Grieg & Co has also gained detailed knowledge of the ship-recycling market, and the department is also ready to handle transactions within this market segment.
Gas Department
In January 2010 Joachim Grieg & Co opened a gas shipping department with three brokers, all with extensive experience in in the highly specialised LPG/NH3 and petrochemical gas shipping market. It is the intention of Joachim Grieg & Co to expand further into the gas market on the broker, operational and research side.
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m ari s
MARIS is a private limited company with head office in Tønsberg, Norway, with subsidiaries in St. Petersburg and Singapore and with distributors in more than 20 countries. The company was founded in 1997 by a group of engineers with world-class experience in maritime onboard systems focusing on radar tracking systems and electronic charts. Grieg Shipping Group became a shareholder in 1999 and have since 2001 been a major owner and active in developing the company to what it is today.
In 2009 MARIS was awarded a 7 year contract by UKHO as the supplier of an ordering, management and maintenance system for marine navigational products and services. The UKHO is a Government Trading Fund and part of the Ministry of Defence and has been charting the world’s oceans for over 200 years providing navigational products and services to the Royal Navy and merchant marine in compliance with Safety Of Life At Sea (SOLAS) regulations.
Innovative engineering from people in MARIS has added several ‘world’s firsts’ to the global list of milestones. More than 40% of the company employees are working in research and development.
MARIS turnover amounted to NOK 82 mill (+29%).
MARIS has delivered the largest sea surveillance system in the world. Other world’s firsts are: • Type approved automatic radar system based on a PC • Certified Flat Panel Computer (FPC) to be used onboard vessels • Certified ECDIS based on a FPC • Approval from United Kingdom Hydrographic Office (UKHO) on email update of certified electronic charts • Wheelmark certified electronic chart system/data recorder 20
Maritime Information Systems (MARIS) is focusing on safety and fuel optimalization systems and is a world leader in supply of electronic chart systems, data recorders, radar processing systems and digital services. More than 4,000 systems have been delivered to end-users in 40 countries.
The turbulent times are challenging, but with mandatory implementation of electronic chart systems from 2012, the longterm contract with UKHO, new products and services like fuel optimalization and digital services, MARIS is in an excellent position for future growth.
Photo: Getty Images
grieg inter national Grieg International´s portfolio consists of both direct investments in companies and investments in PE funds, with a targeted split of 60% and 40% respectively. Investments in funds are made to balance the risk of the overall portfolio. Direct investments are primarily directed towards the following industries: • Oil services • Clean-tech and Renewable energy • Financial services Oil services and financial services currently account for almost 60% of the direct investment portfolio. However, going forward there will be more emphasis on investing in clean-tech and renewables.
Grieg International is a private equity (PE) investment company. The overall objective for the investment portfolio is to provide competitive returns for the company. Private equity investments (unlisted papers) are characterized by active ownership and long investment horizons and are often considered less liquid than listed papers. PE investments have historically yielded above-average returns. cash-flow and a certain degree of maturity are prioritized. A majority stake is not required, but Grieg International prefers to have a strong influence in projects undertaken, which is often attained through board representation. Grieg International will enter into ventures with co-investors given common objectives. In order to meet objectives and realize synergies, it will be important to utilize the competence, knowledge and network of the Grieg Group. Grieg International is located at Skøyen, Oslo and has three employees.
When evaluating investment opportunities, as a single-handed effort or together with co-investors, Grieg International considers factors like sustainability, growth potential, uniqueness, management and synergies. Projects with a clear and predictable path towards a positive
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grieg in v e s tor Grieg Investor works with a broad range of institutional clients like family offices, foundations, municipalities, pension funds, life insurance- and non-life insurance companies as well as shipping companies. The total asset under management is appr. USD 5 billion. In our segment we have the number one position in the Norwegian market. Grieg Investor’s investment services can be divided into four different categories: Investment strategy: We assist our clients to uncover their long term objectives and risk tolerance in order for them to set up an overall investment strategy for their assets. Investment manager selection: We help our clients to implement their investment strategy by identifying which fund managers to invest with. We also assist in all matters regarding the actual transactions with fund managers. Performance measurement and attribution analysis: We review the investments on a monthly basis on behalf of our clients. Through monthly performance reports and attribution analysis we evaluate the total result as well as the performance of the fund managers. ALM-modelling: We also do asset-liability-modelling for pension funds, and we have built our own model for this purpose.
Grieg Investor is an investment consultancy regulated by Kredittilsynet (The Financial Supervisory Authority of Norway). The company provides independent investment services to institutional investors, focusing on customised solutions for a demanding client group. About 2009 2009 was a very positive year for our clients, in the aftermath of the historical financial crisis in 2008. All of our clients had a strong and positive return, both in absolute and relative terms. We are very pleased that we also in 2009 managed to keep and further develop all our existing client relationships. In addition we won new mandates. We trust that this is a sign of confidence in what we do. Our business model is solidly based on real independence, and on the clients best interest. We aim to further develop our strong client relationships and to provide even better services in the future. Many of our employees have been with the firm for 10 years or more, and the culture is strong.
In brief, we provide a full scale professional investment service within the asset management area, including outsourcing of consulting services from our offices in Oslo, Stavanger, Bergen and Trondheim. In total there are 15 investment professionals working in the company.
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Photos: Terje Borud
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relate d co m panie s
Grieg Seafood NorWind OceanWind Grieg Development AON Grieg
NorWind T HE
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grieg s ea f oo d
Grieg Seafood ASA is one of the world’s leading fish farming companies, specializing in salmon and trout. The company has an annual production capacity of more than 80.000 tons gutted weight. The Group is today present in Norway, British Columbia (Canada) and in Shetland (UK), employing approximately 450 people. Grieg Seafood ASA was listed at the Oslo Stock Exchange (OSEBX) in June 2007. Our headquarters are located in Bergen, Norway. The business development of Grieg Seafood ASA focuses on profitable growth, sustainable use of resources and being the preferred supplier to selected customers.
Grieg Seafood Rogaland Our ventures in Rogaland, Norway, are a result of mergers with and acquisitions of smaller fish farming companies in the region. During the last five years, the company has made substantial investments in both smolt production and farming facilities. Among other things, this has enabled deep water fish farming at depths of up to 40 metres. This means the ideal temperature can be upheld for optimal farming conditions all year round.
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Grieg Seafood Finnmark Operations in Finnmark were established in 1978 by Norwegian fish farming pioneer Harald Volden. His company, Volden Group, soon became one of the most profitable fish farming companies in Norway. In November 2006, Volden Group was merged with Grieg Seafood, and today the Volden family has a significant ownership stake in Grieg Seafood ASA.
Grieg Seafood BC owns and operates its own smolt production, harvesting and hatchery facilities and processing plant, with 21 growout licences enabling broodstock production. We employ about 130 people during peak time, including part time help.
GSF Hjaltland currently operates 31 growout licences, of which 23 are active. The company also manages its own sales department, a highly modernized harvesting and processing plant, in addition to a smokehouse. We employ about 160 people.
Grieg Seafood Finnmark owns and operates the northernmost fish farm in the world, close to the North Cape. Our facilities in Finnmark enjoy the shortest export route to Russia in Norwegian fish farming, including the major cities of Moscow and St. Petersburg. Almost all our Norwegian production is exported, and our most important markets today are the EU, Russia, Japan, China, as well as Ukraine, Taiwan and Korea. Grieg Seafood’s well known trademark Blue Silver™ originates from Finnmark. Grieg Seafood BC, Canada Operations in Canada are located on Vancouver Island in British Columbia, near the city of Vancouver, and became part of Grieg Seafood in 2001. Grieg Seafood’s activities in Canada have expanded considerably during recent years. The last acquisition was made in February 2007, when the Group bought Target Aquaculture including eight production licences and one processing plant. There is growout production both at the west and east side of Vancouver Island, and at Sechelt, northwest of Vancouver. The Group has also made considerable investments in order to modernize the equipment in Canada the last years, along with other efforts to meet environmental challenges.
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GSF Rogaland runs its salmon hatchery based on three smolt licences. There is also salmon farming activity in Rogaland with 16 growout licences, where GSF is also responsible for harvesting and freezing. GSF Rogaland owns 48.7 % of Erfjord Stamfisk AS, a broodstock (roe) company. We employ about 70 people.
GSF Finnmark produces salmon and trout based on 24 growout licences, complete with harvesting and freezing facility, in addition to 1 smolt production facility. We employ about 150 people.
Grieg Seafood Canada has a crucial proximity to the American market, with transport costs at one to two dollars lower per kg than for our Chilean competitors. Furthermore, the sea temperature near Vancouver Island (7 to 15 °C) is ideal for salmon farming. Grieg Seafood Hjaltland The company has its business on Shetland, with activities on 23 sites divided between five clusters. The company is the largest salmon producer on Shetland. Harvesting is performed by Lerwick Fish Traders Ltd, which is a fully owned subsidiary of Hjaltland. Lerwick Fish Traders Ltd is one of the largest salmon packing and processing companies on Shetland. About 70% of the salmon production is to be delivered as whole fish, and 30% as various fillet qualities. The company’s new £4.2 million processing plant houses six trolley kiln smokehouses for smoking both hot and cold salmon. It also boasts an automatic salting line for curing, four slicing lines and a packing line. This means our new facility allows Grieg Seafood Hjaltland a daily production capacity of twelve tonnes of smoked and marinated salmon. Grieg Seafood Hjaltland UK Ltd. has developed a large customer network in the UK and in Europe. The sales department sell their own products in addition to fish from external producers. They effectively deliver salmon through distributors to some of the larger UK supermarket chains, such as Tesco, Sainsbury and Morrison. GRIEG
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Photo: Alpha Ventus project
N orwin d
NorWind installs deep water wind farm foundations and erects wind turbine generators.
NorWind is 100 percent focused on offshore wind energy. Our strategy is to become a leading contractor for the installation of offshore wind turbine foundations. Together with our partners we can offer total solutions for foundations including design, fabrication and installation, depending on the clients needs.
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NorWind currently employs 12 staff members bringing expertice and competence from the oil and gas sector and the marine industry. This marine competence together with the hands on experience from the first German offshore wind farm project, Alpha Ventus, have made it possible for NorWind to develop a state of the art installation vessel for jacket foundations. This innovative vessel will improve the efficiency of installation compared to what is currently available in the market and reduce the overall cost of offshore wind farm construction. New vessels based on new innovative technical solutions are necessary in order to make offshore wind a robust solution for our future energy needs.
To assure access to the leading, most cost-effective solutions, NorWind maintains alliances with key specialist contractors within oil& gas and offshore wind energy development. Initiated, supported and owned by the Grieg Group and renewable energy incubator Scatec. NorWind brings the necessary financial capacity and technological know-how to become a leading player in Europe’s offshore wind industry.
NorWind
oceanwin d In late 2009 OceanWind AS was repositioned as an independent and technology-neutral service provider to the offshore wind industry with a vision to contribute to making offshore wind a mainstream source of energy. The company offers support to clients from project inception to construction through various offerings, including standalone studies, integrated packages and individuals seconded to our client’s project team.
OceanWind plans and develops offshore wind energy projects Alliance with world leaders Acciona (Spain), Power@Sea (Belgium) and GoodEnergies (Switzerland) to submit a joint bid for a zone in Round 3. The Alliance’s bid, one of 41 bids for nine zones, reached the second round but was ultimately unsuccessful.
OceanWind was initially established as an offshore wind project development company in June 2008. As a developer, OceanWind performed assessments of regulatory regimes in several markets, as well as site investigations in the North Sea area and in France, Spain and the US to support consultancy assignments and project developments. In the United Kingdom, OceanWind formed the MarineWind
OceanWind Development AS
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grieg d e v elop m ent Our sole investment – Grieghallen Parkering AS is the ownership company to a combined three story underground parking facility (named GriegPark) where one of the parking levels easily can be converted to a attractive and well equiped exhibition area/event venue. GriegPark is situated next to the famous Grieghallen in Bergen and was opened to the general public in august 2006. The demand for proper parking facilities in the centre of Bergen has proven right as well as all our economical estimates has been above initial expectations. Visitors to both parking facilities and the exhibition area is showing steadily growing numbers We consider our long term ownership as financial sound and the return on our investment to be solid. Since May 2008 “Edvard Griegs Plass” has been open to the public. This public space has given added value to both our parking facilities as well Grieghallen and is also highly valued as a new “meeting point” in the centre of Bergen with its new Coffe shop/Ticket office combined. In may/june 2010 Edvard Griegsplass will be completed all the way around Grieghallen with its new decoration as well as new
A O N grieg
surface in all walking areas surrounding the concert hall. The main entrance of GriegPark will also be upgraded in terms of lightening, signs and colours. Our partner and only tenant Q-Park - is keeping the daily management and marketing of GriegPark. Q-Park is a Dutch public company and one of the largest and fastest growing parking companies in Europe. Grieg Development is comfortable with our partnership as well as the speed and direction we are moving to reach common goals. Grieghallen AS is also a vital partner for GriegPark – taking care of the daily ownership responsibilities on behalf of Grieghallen Parkering AS. Grieghallen have the exclusive management rights in all matters concerning the exhibition area. The “three-party partnership” is perceived as a successful collaboration between commercial and public interests – giving revenues to all parties involved.
Aon Grieg is Norway’s largest insurance broker, with a market share of 30 per cent. The company was established as Duo Insurance Brokers in 1874 – primarily offering services to the marine industry. The Grieg Group owns 20 per cent of Aon Grieg.
The company was bought by Rollins Hudig Hall in 1993, and the name changed to Aon Norway in 1996. Grieg Insurance (established 1975) was acquired in 1998, when the name was changed again. Today Aon Grieg provides solutions for a wide variety of clients: Shipping, the oil industry, all business and industry segments, towns, municipalities, museums, galleries and many different organizations. Services include risk management consulting, insurance and reinsurance brokerage as well as pension and other HR-related consulting services. Aon Grieg’s total operating revenue (2009) was NOK 284 million. Aon Grieg has approximately 150 employees. 30
Grieg Development is a project based company with main focus on development and ownership of parking facilities.
Photo: Grieg Development
T HE
GRIEG
GROUP
ANN UAL
REPORT
2009
31
corporate re s pon s ibilit y The general public often perceives the Grieg Group as one company, while it in fact is comprised of several autonomous businesses owned by Grieg Maturitas and Grieg Foundation. Therefore, each company needs to be responsible for building and maintaining the Group’s brand and reputation to the public. We acknowledge the need for a common strategic approach to Corporate Responsibility with improved internal follow-up mechanisms and routines within all our business entities. We are proud of what we have achieved over the past years, and we are committed to doing our part to ensure we leave the earth in good condition for future generations.
Ethical Guidelines
Va l u e s
The Grieg Group has implemented common ethical guidelines. As part of an active, international business environment, the Grieg Group accepts a particular responsibility for ethical awareness. Our activities are closely connected to the community which we are a part of and we wish to broadcast what the Grieg Group is doing to raise ethical awareness among our employees.
The Grieg Group companies operate within diversified business segments. This creates great opportunities for synergies and knowledge sharing, but also creates challenges related to information flow and how the public perceives the Grieg brand. The Grieg Group’s values have developed during our long history, and in 2002 the group initiated a shared project with focus on our common values in order to develop and strengthen a sound business culture and the sense of community within the group. In addition to being a common basis for ideas and decisions, the values generate important discussions and serve as a foundation for business ethics and other related issues.
The Group emphasises a high ethical standard. We acknowledge that the practice of an unambiguous and national “Code of Conduct” is challenging in a diverse business with international operation. Thus, our ethical guidelines are developed with the intention to be a tool to maintain a high ethical standard relative to Norwegian circumstances, and at the same time give clear guidance when our employees’ dilemmas are in conflict with other management- and business cultures. The guidelines are based on simple principles of transparency and reporting. As an alternative to writing a complex set of detailed rules, we instruct our employees to document and report to superiors when facing corruption, facility payments and other situations that challenge ethical principles. This contributes to an internal discussion of difficult subjects and thus maintaining an ethical awareness. The Grieg Shipping Group has in addition developed detailed rules for employees who face particularly challenging dilemmas concerning corruption.
32
The integrity of our employees and our shared values define the compass by which we navigate when doing business across the world: Open, Solid, Proud and Committed. The Grieg Group keeps the values on the agenda; they are debated, and interpreted so that every employee gets a chance to reflect on what the Grieg Group values means - for the company and for the individual.
Grieg Foundation The Grieg Group is proud to be owned 25 per cent by the Grieg Foundation. Through Grieg Foundation one quarter of the values created by the Grieg Group will be endowed to society. Please refer to the Grieg Foundation’s section on page 34.
The Grieg Group takes part in the GoActive programme initiated by marathon legend Grethe Waitz. GoActive is a way of sponsoring the Active Against Cancer foundation, which builds rehabilitation facilities for cancer patients in hospitals. The main purpose is to generate a financial contribution to the organization by logging physical activity on a website. Additionally, the employees in the Grieg companies gets a motivation for exercising.
T HE
GRIEG
GROUP
ANN UAL
REPORT
2009
33
grieg f oun d ation Grieg Foundation contributes substantial amounts to a wide range of activities. Internationally and in Norway, there is an increasing need to support children and youth. Many of the projects Grieg Foundation support are in the intersection between youth work and culture work. Other contributions are given mainly towards health, research and other benevolent projects in Western Norway.
The Grieg Foundation was established in its present form in the autumn of 2002 and owns 25 per cent of the Grieg Group’s operative companies. It has no voting power, but is guaranteed a dividend. This secures that a proportion of the values created by the Grieg Group will benefit the society.
Grieg Foundation contributed to national and international projects with about NOK 88 million during 2009 (where of 55 million to Oseana art and culture centre), and is committed to considerable additional funds for accepted projects over the next years. The Grieg Group is proud to have a shareholder like Grieg Foundation and the work it represents.
Selected contributions 2009
34
Oseana – Os Art and Culture Centre
The Heart Fund – Children Energy Centre
SOS – Village in Bergen
This cultural building will be quite important for the development of the village Os that is located south of Bergen. The art and culture centre will house a wide range of functions from exhibition and museum functions to performing arts and debate meetings.
Located at Haukeland University Hospital in Bergen, the “Children Energy Centre” focuses on training and physical activities in order to increase the quality of life for children with heart diseases.
In September 2009 Norway’s first SOS village opened in Bergen. The village has eight houses for SOS families, and the funding for one of these homes (NOK 3.4 million) was donated by Grieg Foundation in 2006. In addition to this Grieg Foundation supports several other SOS Children’s Villages projects. In 2009 the total contribution was NOK 5 million.
Contribution 2007/08/09: NOK 55 million that were donated in 2009
Contribution NOK 1 million over the years 2007/08/09: NOK 3 million
Contribution NOK 5 million totally in 2009
United World College: The 12th United World College opened in Costa Rica August 2006. Students are selected based on an extensive scholarship program. They are selected on the basis of merit and regardless of their social or economic status. Given its historic connection with SOS Children’s Villages, UWCCR aims to ensure that students from socioeconomically disadvantaged backgrounds are admitted to the school each year. Contribution from Grieg Foundation: 5-year scholarship for 100 students (2005-2010) Contribution 2009: NOK 7,8 mill. Photo by SOS Children’s Villages.
T HE
GRIEG
GROUP
ANN UAL
REPORT
2009
35
36
the grieg group financial statementS 2009
700
600
500
400
FINANCIAL statements GRIEG GROUP 2009 300
200
100
Operating profit
0
Ordinary profit before tax
Ordinary profit before tax
Operating profit
400 400 Grieg maturitas Group
Financial summary 2005-2009 320 Mill. NOK 240
240
160
160
1000
800
Operating profit
800
-160
500
700
600
-160
438
-240
581
570
531
-320
-320
-400
-400
594
557
546
394
400
370
305
-240
400
663 602
500
-80
-80 589
600
Mill. NOK
0
685
700
Financial summary 2005-2009
80
0
300
300
199
200
200
119 100
100
69
63
Ordinary profit before tax
Ordinary profit before tax
Operating profit
Operating profit
2009
2008
2007
2005
2009
2008
2007
2006
2005
2006
0
0
grieg logistics group
ks Joachim grieg & co
grieg seafood group
Financial summary 2005-2009
Financial summary 2005-2009
Financial summary 2005-2009 (NGAAP)
Mill. NOK
Mill. NOK
20
20
20
18
18
14
Ordinary profit before tax
12
11 10
10
14
14
13
12
16
10
10
9
8
8
6
6
5
8
Operating profit
700
14 12
6
6
80
300
-80
6
200
-160
2
2
2
0
-320
0
0
181
62 57
38 24
-169
-402
-400 2009
2009
2008
2007
2008
-240
2007
100
2006
4
2005
4
Ordinary profit before tax
ry profit before tax
Ordinary profit before tax
Ordinary profit before tax
Ordinary profit before tax
ing profit
Operating profit
รง
รง
the GRIEG group financial statements 2009
153 121
0
8
4
0
143
160
500 10 400
10 8
7
600
240
2009
15
320 800
16 16
16
2008
16
400
900
2007
18
Mill. NOK
2006
18 18
1000
2005
19 19
2006
fit
933
Ordinary profit before tax 900 80
2005
before tax
grieg shipping group
320
Operating profit
37
directors’ report 2009
Grieg Maturitas AS is the parent company of the Grieg Group which is based at Grieg-Gaarden in Bergen. The activities of the Grieg Group relate mainly to shipping, logistics, shipbroking, digital mapping systems, wind power and investment advisory services. The Group also has major owner interests in fish farming activities.
Going concern
The Annual Accounts for 2009 have been prepared on a going concern basis.
Annual Accounts Grieg Maturitas AS Grieg Maturitas AS is a holding company with income in the form of dividends from subsidiaries. Operations resulted in a loss of NOK 3.4 million, against a loss of NOK 2.6 million in 2008. Net financial items, mainly dividends from subsidiaries, totalled NOK 65.9 million, against NOK 235.6 million in 2008. The pre-tax profit was NOK 62.5 million in 2009, which was down from NOK 233 million in the previous year. Total assets amounted to NOK 546 million, against NOK 515 million in 2008. The increase was mainly attributable to investments in the form of capital increases in subsidiaries and a reduction in accounts payable. The company’s equity rose by NOK 3 million to NOK 485 million and at yearend the equity ratio stood at 89%, against 94% in 2008. The company’s liquidity is satisfactory. The Board believes that the annual accounts give a correct picture of Grieg Maturitas AS and of the Group’s assets and liabilities, financial position and results. Group accounts 2009 was a good year for the Grieg Maturitas Group with pre-tax profits of NOK 581 million on a turnover of NOK 4 523 million. The corresponding figures for 2008 were pre-tax profits of NOK 63 million and a turnover of NOK 2 189 million. The significant increase in turnover was due to the full consolidation of Grieg Star Shipping with effect from and including 2009. The net cash flow in 2009 was negative by NOK 177 million. Group liquidity is at a good level and at year-end the equity ratio stood at 63%, against 55% in the previous year. For a more detailed account of the consolidated accounts we refer to the comments on the annual accounts of subsidiaries in the sections below.
Main companies Grieg Shipping Group Based on a shipping market which experienced a dramatic downturn in 2009 compared with 2008, but with a considerable increase in financial income, the Grieg Shipping Group can report consolidated profits of NOK 370 million before tax in 2009, reflecting an 86% increase on NOK 199 million recorded in 2008.
38
Revenues totalled NOK 728 million in 2009, against the record high freight revenues of NOK 1 170 million in 2008. The reduction in revenues was due to lower transport volumes and freight rates for the open-hatch vessels, despite a sound contribution from other dry bulk shipping activities. The Group’s operating costs were 6% up on the previous year at NOK 659 million, but nonetheless below budget. The increase was due a rise in the price of lubricating oil, as well as higher personnel costs onboard and ashore, and higher depreciation charges following the delivery of new vessels. The Group’s operating profit therefore fell from NOK 546 million in 2008 to NOK 69 million in 2009. Net financial items made a positive contribution of NOK 301 million, against a loss of NOK 347 in the previous year, reflecting an improvement of NOK 648 million. The change was mainly due to realised and unrealised gains on financial assets and currency conversion. Interest rates also remained low throughout 2009 and the Grieg Shipping Group posted lower interest costs in 2009 compared with 2008. The pre-tax profit was NOK 370 million, against NOK 199 million in 2008. The Group’s cash flow from operations in 2009 amounted to NOK 595 million, while the net change in liquid funds was negative by NOK 105 million after payment of dividends and an increase in debt. Long-term interest-bearing debt increased from NOK 1 910 million to NOK 2 140 million due to further borrowing on the delivery of two new vessels and a further two on order. At year-end, book equity stood at NOK 3 434 million. At year-end 2009 the Group had total assets of NOK 6 240 million, with current assets accounting for NOK 2 020 million, and the financial investment portfolio accounting for about one third. Liquidity in the form of bank deposits and cash at year-end totalled NOK 122 million. Regulatory framework The shipowning companies of the Group comply with the new shipping tax regime which was adopted in 2007. Under transitional rules on compliance with the new scheme, retained profits in the period covered by the previous tax regulations would in effect have been taxed over a ten-year period. One third of the total transitional tax, referred to as the ”environment fund”, would not be payable provided that this amount was used for investments in initiatives aimed at protecting the environment. Since 2008, the environmental tax related to the environmental fund has been booked as equity since utilisation of this fund has not been subject to a deadline. On 12 February 2010 the Norwegian Supreme Court ruled that the transitional rules are in breach of article 97 of the Norwegian Constitution which prohibits retroactive taxation. The ruling states that two thirds of the transitional tax must be deemed to be unconstitutional retroactive taxation. In consequence of this, the tax assessments pertaining to income years 2007 and
the grieg group financial statementS 2009
2008 have been annulled. For the Grieg Shipping Group, the Supreme Court Ruling means that the company’s profits and equity have both increased by NOK 442 million. Grieg Logistics Group The turnover was slightly higher, rising by NOK 1 million from NOK 861 million to NOK 862 million in 2009. Operating costs fell from NOK 848 million in 2008 to NOK 847 million, thereby improving the operating profit by NOK 2 million to NOK 15 million. Net financial costs made a negative contribution, reducing pre-tax profits by NOK 5 million to NOK 6 million in 2009. The increase in financial costs was largely due the company’s share of the loss recorded by an associated company. Total assets ended the year NOK 8 million down at NOK 175 million, with current assets accounting for NOK 142 million, against NOK 154 million in 2008. Total debt and liabilities came to NOK 122 million, against NOK 126 million in 2008. Equity totalled NOK 53 million against 57 million in 2008, down NOK 4 million from the previous year, while the equity ratio was unchanged at 31%. KS Joachim Grieg & Co Operating revenues were NOK 6 million down at NOK 43 million due to a sharp decline in the market in the second half of 2008 which continued into 2009. Operating costs fell NOK 3 million to NOK 36 million, mainly due to a reduction in payroll costs and bad debts. The operating profit of NOK 8 million reflected a decline of NOK 2 million compared with 2008. Net financial income was NOK 2 million down on 2008 and totalled NOK 3 million. The decline was due to lower exchange gains on the USD. Pre-tax profits totalled NOK 10 million, which was NOK 4 million down on 2008. Fixed assets were unchanged from 2008, while current assets were NOK 8 million lower at NOK 21 million. Total assets were NOK 8 million lower at NOK 25 million. Total debt and liabilities fell by NOK 8 million to NOK 20 million, partly due to the repayment of debt to Group companies. Equity stood at NOK 5 million, unchanged from 2008. GRIEG INTERNATIONAL GROUP Operating revenues increased by NOK 18 million to NOK 82 million in 2009, while operating costs were higher at NOK 87 million, compared with NOK 76 million in 2008. The result was an operating loss of NOK 5 million, but an improvement of NOK 6 million on the operating result for 2008. Net financial items totalled NOK 64 million against NOK 155 million in 2008, with well over half of the net financial result attributable to dividends from owner interests. The remainder came from gains on the sale of investments in equity funds and unrealised gains on similar investments. The pre-tax profit was NOK 59 million, against NOK 143 million in 2008. Total assets amounted to NOK 1 015 million, which was NOK 23 million down
the GRIEG group financial statements 2009
from 2008. Of this, current assets account for NOK 335 million, with liquid funds showing an increase of NOK 10 million. The Group’s debt at year-end 2009 came to NOK 73 million, against NOK 126 million in 2008, while equity was NOK 30 million higher at NOK 942 million. Grieg Investor AS Sales were NOK 1 million lower at NOK 30 million in 2009. The operating profit fell from NOK 7 million in 2008 to NOK 5 million in 2009 as a result of lower revenues and higher operating costs partly due to an increase in manpower. The pre-tax profit was NOK 5 million, a reduction of NOK 3 million compared with 2008. Total assets came to NOK 25 million, down NOK 1 million from 2008, with current assets accounting for NOK 22 million. Total debts and commitments were NOK 1 million down on 2009, totalling NOK 13 million. Booked equity at year-end stood at NOK 11 million, against NOK 12 million in 2008. Grieg Seafood Group The Grieg Maturitas Group has a 44% shareholding in Grieg Seafood ASA, and the company is incorporated in the consolidated accounts as an associated company. 2009 was a considerably better year for Grieg Seafood compared with 2008. The main contribution came from activities in Norway, while the performance in Shetland and Canada was negatively affected by biological factors. Reversal of a previously unrealised currency loss, as well as good prices, contributed to the improved results. The consolidated result (NGAAP) was a profit of NOK 181 million before tax, which was an improvement of NOK 583 million from 2008. Book equity (NGAAP) stands at NOK 1 266 million. The Grieg Seafood Group’s financial position has improved considerably as a result of higher earnings, a capital issue and the conversion of a bond loan.
Financial risk
The Grieg Maturitas Group is exposed to financial risk. A large proportion of the Group’s revenues, assets and liabilities are denominated in foreign currency, mainly USD. Changes in exchange rates therefore affect the accounts which are prepared in NOK. The Group companies involved have strategies and procedures which reduce both the foreign exchange risk and the interest rate risk. Several of the Group companies have considerable investments in securities, and changes in the value of these investments have a direct effect on the financial result. The funds are managed in accordance with a long-term strategy with a defined mandate and adopted risk parameters. The Group’s liquidity exposure is considered to be low. The risk that the Group’s counterparties will be unable to meet their financial obligations is considered to be relatively low due their financial strength and the diversified customer portfolio, and the fact that the level of losses on receivables has been historically low. In those parts of the Group which have a large customer portfolio the risk is reduced thanks to good procedures for
39
assessing creditworthiness. Given the economic downturn, both nationally and internationally, it is important to have a strong focus on the credit risk attached to each of the companies.
The market and prospects ahead
As 2009 started, there was well-founded pessimism about the expected development of the international economy, in view of the financial crisis and the global economic recession. Pessimism in the shipping market was further strengthened by a dramatic decline in global trade and a historically high order book for newbuildings. However, what saved the world economy in general and the shipping market in particular in 2009 was the level of activity in China, where imports of raw materials increased significantly. This led to a situation where the freight rates for dry bulk rose from the lay-up levels in 2008 to an average spot rate of USD 17 000 per day for supramax dry bulk carriers. Global industrial production and the development of dry bulk rates, as well as paper production, consumption and transportation, are historically closely correlated. As 2010 starts, expectations are moderately optimistic, with the level of seaborne dry bulk transportation expected to show an improvement on 2009. However, there is great uncertainty attached to the supply side and to the development of the international economy. So far this year, the market for pulp has been relatively good with tight supply and increasing prices, which is also reflected in the demand for seaborne transportation. Nevertheless, the outlook for the forestry products market is greatly dependent on developments in China, since it is hardly likely that a drop in Chinese imports will be offset by increased demand in Western Europe or North America. Competition is expected to remain intense, and considerable periodic fluctuations in rates and volumes can be expected. The uncertainty regarding overcapacity in the dry bulk market is also linked to the order book for newbuildings, and how much of this will be delivered and when. However, it must be borne in mind that the Group is engaged in industrial business activity and fleet earnings, through Grieg Star Shipping AS, are largely related to long-term freight contracts. This means that the revenues are less volatile than in the general dry bulk market and that changes in market conditions are generally more likely to have delayed effect on profits. The activities of Grieg Logistics’ are mainly focused on the Norwegian petroleum and maritime industry. The market is characterised by a low level of activity in the wake of the financial crisis and hard competitive terms which keep margins under pressure. A focus on quality, flexibility and service-mindedness has led to an increasing percentage of contract tenders that have been won. In 2009 Grieg Logistics signed a number of long-term logistics contracts which will form the basis of the company’s earnings in 2010. The positive development of the marine services section and other activities is also contributing to a better trend in the current year. The company’s ambition is to strengthen its earnings and market position in its various business areas in 2010.
40
The Grieg International Group consists of the companies Grieg International, Grieg Athena and Maris AS. Grieg International and Grieg Athena have a number of private equity investments – both direct and indirect through various fund investments. A positive development is expected for the companies in the portfolio in 2010. The companies are also well placed for further investment and the Board is optimistic about the likely course of development. In 2009, Maris was mainly focused on the development of new electronic ship navigation systems, in addition to improvement of the existing systems. The market for these products is considered to have considerable potential, not least because of the obligatory electronic mapping system which is to be introduced from 2012, as well as a major long-term delivery contract that has been entered into with the UK Hydrographic Office. The focus on independent financial advice will affect the development of Grieg Investor positively, and the company sees good potential for further growth. In the period ahead the company will continue to have a diversified customer base comprising local authorities, foundations, pension funds, insurance and life companies, as well as family-owned investment companies. As regards Grieg Seafood ASA, prices at the start of 2010 have developed well and are at a historically high level for the time of year. 2010 is again likely to see a reduction in overall offers of Atlantic salmon globally, which can be expected to lead to further good price development. It will take several years for the harvested volume in Chile to reach the level it had before the outbreaks of disease. The level of smolt set out and salmon egg production in Norway in 2009 also indicates a limited increase in supply from Norway in the next few years. Based on the overall picture, the outlook for market balance, and thus for prices, appears to be good for the next two years. The unusually cold weather in Northern Europe has also led to a lower growth rate during the winter, which will further contribute to the establishment of market balance. Grieg Seafood expects the harvested volume in 2010 to be considerably up on 2009. An increased focus on operations and steps to reduce production costs, along with better fish health and an improvement in biological factors, as well as the ongoing build-up of expertise within the organisation are expected to improve results further in the period ahead.
Working environment
Grieg Maturitas AS has appointed a Managing Director who took up her position in October 2009. The Board considers the working environment and the level of job satisfaction to be good. The incidence of sick leave in 2009 stood at 0. There have been no reports of injuries or accidents in the workplace. At 31 December 2009 the Grieg Group had 1640 employees. Of those, the
the grieg group financial statementS 2009
crews of vessels owned by the Grieg Group accounted for 36% and employees engaged in fish farming 31%.
External environment
60
1,3
770
5,3
Total
2 930
3.2
The activities of Grieg Maturitas AS do not pollute the external environment. A number of the company’s subsidiaries, mainly those involved in shipping, are engaged in activities which entail a risk that the external environment could be polluted or affected. The guiding principle is that accidents and damage to the environment can be prevented. The pollution risk is limited by establishing appropriate operating procedures, a high level of maintenance and continuous training and drilling of personnel onboard and ashore. As well as complying with both national and international environmental regulations, laws and rules, the companies strive to play a proactive role in implementing environmental procedures and technology in order to reduce the risk of environmental damage. This is mainly based on finding solutions through innovation and technological development so that emissions of CO2, NOx and SOx can be reduced. The most effective way of reducing CO2 emissions in the future is to reduce the fleet’s total energy consumption. A number of development projects have therefore been started which are expected to result in upgrading of the fleet with a reduction in fuel consumption of around 20% within the docking period for the respective vessels. It is expected that this goal will be achieved for all vessels by 2015. The treatment of ballast water, the management of waste and the recycling of vessels present important challenges which are being actively addressed.
Of which proportion of long term sick leave
1 418
1,6
All areas of Group activity have a continuous focus on steps that can be taken to make improvements in relation to the environment.
Health and environment The Group encourages and facilitates participation in physical activity. In 2008 the Group became involved in the GoActive project initiated by Grethe Waitz whereby employees engage in keeping fit for the benefit of the fight against cancer. Most kinds of fitness activity are registered on the Internet, and for each milestone reached by the employees, Grieg donates an amount to Active against Cancer. Absence from work in the Norwegian part of the Group is distributed as follows: Total absence
Total absence(%)
Grieg Logistics Group
1 399
3,8
Grieg Shipping Group
690
2.3
Company
Joachim Grieg & Co Other companies
Three minor injuries were reported on land. Among the sailing personnel, 4 crew members had to leave ship due to injury. There is a continuous focus on training and work processes in order to reduce the risk of serious occurrences in the future. Equal opportunities The company and the Group do not accept discrimination on the basis of gender, religion, cultural background, race, handicap or in any other form. We wish to have a business based on respect and complete equality for all employees. Of the Group’s 369 employees in Norway, 41% are women. The company’s Board of Directors comprises three women and one man. The chair is a woman.
Profit for the year and allocations
Grieg Maturitas AS recorded a profit for the year of NOK 63 113 844 which the Board proposes to allocate as follows: Dividends Other equity
NOK 60 000 000 3 113 844
Total allocation
63 113 844
Distributable equity at 31.12.2009
221 227 045
The Board would like to thank all employees of the Group for their untiring efforts in 2009.
Bergen, 23 March 2010 The Board of Directors of Grieg Maturitas AS
Elna-Kathrine Grieg Chair
Elisabeth Grieg Board member
the GRIEG group financial statements 2009
Camilla M. Grieg Board member
Per Grieg jr. Board member
Wenche Kjølås Managing Director
41
42
the grieg group financial statementS 2009
profit and loss statement 01.01-31.12 grieg maturitas as grieg maturitas group Figures in NOK 1 000 Figures in NOK 1 000 2009
2008
Note
operating Revenues Gross freight revenues - shipping Other operating revenues
Note 2 2
Total
2009 3 514 264 1 008 929
2008 1 165 798 1 023 199
4 523 193
2 188 997
1 721 117 806 542 376 842 37 231 669 970 410 087 227 173 155 513
336 199 37 694 700 049 230 006 194 625 120 458
4 404 474
1 619 030
118 719
569 966
25 642 336 447 265 841 -10 528 4 649 -73 114 -86 751
31 589 40 690 -284 962 -6 547 -173 085 -79 425 -26 349 -9 200
-
-
518 2 885
2 615
3 403
2 615
-3 403
-2 615
65 310 649 -35
234 706 1 003 35 -169 -1
65 924
235 574
Total
462 186
-507 289
62 521
232 959
Ordinary profit before tax
580 905
62 677
593
456
435 559
183 332
63 114
233 415
1 016 465
246 009
60 000 3 114
32 000 201 415
346 583 669 882 -
100 274 145 735 -
OPERATING COSTS
4 4
Voyage costs - shipping Timecharter costs - shipping Ship operating costs Cost of sales Freight and cost of services Payroll and social security costs Ordinary depreciation Other operating costs
3 4, 5 6, 7 4
Total Operating profit
FINANCIAL ITEMS 8 10
10
20
Distributions from subsidiaries Interest income Other financial income Change in value of market-based assets Write-down of financial fixed assets Result of investment in associated companies Interest expenses Imputed interest cost of shipping tax Other financial expenses
Tax income/(- cost) PROFIT FOR THE YEAR
10
9 10
20
OTHER INFORMATION To minority interests Majority proportion Proposed dividend Transferred to other equity
the GRIEG group financial statements 2009
43
Balance Sheet as of 31.12 grieg maturitas as grieg maturitas group Figures in NOK 1 000 Figures in NOK 1 000 2009
2008
Note
Note
2009
2008
14 209 99 248 57 656
13 175 107 411 68 524
171 113
189 110
265 328 34 711 558 815 3 217 440 92 336
266 695 23 267 658 217 2 515 531 88 147
4 168 630
3 551 857
670 269 37 675 172 593 75 753 22 705
479 088 25 393 146 821 82 776 20 344
978 995
754 422
5 318 738
4 495 389
110 014
88 403
ASSETS FIXED ASSETS
44
Intangible assets Research and development Contracts Deferred tax assets Goodwill
2 528 -
1 935 -
2 528
1 935
-
-
Operating assets Land and real estate Loading and discharging equipment Newbuilding contracts Vessels Vehicles, machinery and equipment
-
-
Total
465 326 -
328 173 -
465 326
328 173
Total
467 854
330 108
Total fixed assets
20
7 7 7
Total
8
Long-term financial assets Shareholdings in subsidiaries Investments in associated companies Loans to associated companies Shareholdings and other investments Other receivables Pension fund assets
6 6 6 6 6
9 14 12 4,14 5
-
-
CURRENT ASSETS Stocks Stocks and bunkers
-
-
Total
110 014
88 403
65 270 61
158 165 224
Receivables Customer accounts receivable Shipping tax receivable Receivables from subsidiaries Receivables from associated companies Other receivables
103 701 104 904 13 187 229 341
113 431 572 272 008
65 331
158 389
Total
451 133
386 011
-
-
Investments Market-based shares Market-based bonds Other financial instruments
33 880 371 050 1 452 756
13 752 437 295 1 558 478
-
-
Total
1 857 687
2 009 525
12 420
26 135
390 286
568 882
77 751
184 524
Total current assets
2 809 120
3 052 820
545 606
514 632
TOTAL ASSETS
8 127 858
7 548 209
17
Cash and bank deposits
13
15 15 15
17
the grieg group financial statementS 2009
grieg maturitas as grieg maturitas group Figures in NOK 1 000 Figures in NOK 1 000 2009
2008
Note
Note
2009
2008
1 005 260 515
1 005 260 515
261 521
261 521
3 267 013 1 581 250
2 656 906 1 235 321
4 848 263
3 892 227
21
5 109 784
4 153 748
20
51 482 10 076
43 585 12 116
61 558
55 701
2 263 857 39 269
2 061 264 341 633 59 836
2 303 126
2 462 733
16 770 114 495 19 818 31 080 112 553 358 673
16 323 173 697 110 706 31 638 127 388 416 274
653 390
876 026
EQUITY AND LIABILITIES EQUITY 22
Paid-up equity Share capital (1 005 388 shares of NOK 1) Share premium reserve
1 005 260 515
1 005 260 515
261 521
261 521
Total
223 755 -
220 641 -
Retained earnings Other equity/group reserves Minority interests
223 755
220 641
Total
485 276
482 162
21
Total equity
22
21
LIABILITIES -
-
Provisions for commitments Deferred tax Other commitments
-
-
Total
-
-
Other long-term liabilities Mortgage loans Debt to subsidiaries Long-term shipping tax Other long-term liabilities
-
-
Total
146 142 60 000 42
470 32 000 -
60 330
32 470
Total
60 330
32 470
Total liabilities
3 018 074
3 394 461
545 606
514 632
TOTAL EQUITY AND LIABILITIES
8 127 858
7 548 209
21
Current liabilities Bank overdrafts Supplier accounts payable Taxes payable Public debt Debt to subsidiaries Dividend Other current liabilities
16, 17 20 16
17 20
21
Bergen, 23 March 2010 The Board of Directors of Grieg Maturitas AS
Elna-Kathrine Grieg Chair
Elisabeth Grieg Board member
the GRIEG group financial statements 2009
Camilla M. Grieg Board member
Per Grieg jr. Board member
Wenche Kjølås Managing Director
45
cash flow analysis grieg maturitas as Figures in NOK 1 000 2009
2008
62 521 -65 244 188 -2 536
232 959 -3 -153 886 -736 78 334
158 301 -137 153 21 148
88 470 -74 3 88 399
-328 -32 000 -32 328 -13 715 26 135 12 420
-4 173 -140 000 -144 173 22 560 3 575 26 135
12 420
26 135
grieg maturitas group Figures in NOK 1 000 2009
2008
CASH FLOW FROM OPERATION ACTIVITIES Profit before tax Taxes paid Gain/loss on sales of fixed assets Dividends receivable taken to income Ordinary depreciation Ordinary depreciation of docking costs Write-down of fixed assets Items classified as investment or financial activities Change in inventory Change in accounts receivable from customers Change in accounts payable to suppliers Change in accruals Effect of change in exchange rate Share of profit from associated companies (equity method) Net cash flow from operation activities
580 905 -93 068 -9 549 227 174 32 402 12 099 -135 158 -21 611 9 731 -59 202 -37 853 73 138 -4 649 574 360
62 677 -74 817 52 715 194 625 29 210 6 547 -110 130 870 -18 965 21 869 7 104 401 877 173 085 746 667
CASH FLOW FROM INVESTing activities Sale of fixed assets Purchase of fixed assets/newbuilding contracts Purchase of intangible assets Payments from other group companies Payments on other claims (short/long-term) Net cash flow from addition of subsidiary Sale of shares and units Payments on purchase of shares in group companies Purchase of shares and securities Net cash flow from investing activities
21 116 -862 368 -4 684 -29 720 731 959 -674 057 -817 754
69 -136 334 -31 647 8 093 628 046 -1 202 759 -734 532
CASH FLOW FROM FINANCing activities Net change in bank overdraft Repayment of debt to group companies Loan repayment (short/long-term) Loan proceeds Equity payment received Repayment of equity Dividends paid Net cash flow from financing activities Net cash flow for the period Opening balance of cash and cash equivalents Cash and cash equivalents received on acquisition of subsidiary as of 31.12 Cash and cash equivalents 31.12
447 -146 329 286 279 55 556 -1 751 -127 388 66 814 -176 580 568 882 -2 016 390 286
2 998 -153 587 381 001 -303 959 -73 547 -61 412 517 283 113 011 568 882
390 286
568 882
THIS CONSIST OF: Bank deposits, cash in hand, etc.
The Cash Flow Analysis has been prepared exclusive of changes pertaining to Grieg Cod Farming Group as this was established as a sub-group as of 31.12.09. The companies of the sub-group have therefore had no effect on the cash flows for the year.
46
the grieg group financial statementS 2009
note 1
accounting principles
GENERAL
The annual accounts for Grieg Maturitas AS have been prepared in accordance with Norwegian accounting legislation and on the basis of Norwegian accounting standards and generally accepted accounting practice.
OPERATING REVENUES
Operating revenues are entered as income at the time of delivery. The time of delivery is understood to mean the time of transfer of risk and control related to the delivery. Freight revenues from voyages are recognised on the basis of the number of days the voyage lasts.
CLASSIFICATION OF ASSETS AND LIABILITIES – MAIN RULE
Assets intended for long-term ownership or use are classified as fixed assets. Other assets are classified as current assets. Receivables due within one year are classified as current assets. The corresponding criteria are applied to classify liabilities. Fixed assets are valued at acquisition cost, but are written down to fair market value where the decline in value is not expected to be temporary. Fixed assets with a limited economic lifetime are depreciated. Long-term liabilities are stated in the balance sheet at the nominal amount on the establishment date. Current assets are valued at the lower of acquisition cost and fair market value. Current liabilities are stated in the balance sheet at the nominal amount on the establishment date. Certain items are stated on the basis of special valuation rules, in accordance with accountancy legislation, as detailed below. Other assets and liabilities are classified as fixed assets and long-term liabilities, respectively. Shareholdings which are strategic investments are classified as fixed assets.
CONSOLIDATED ACCOUNTS
The consolidated accounts include the subsidiaries specified in note 8 and show the accounts of the parent company and the subsidiaries as a single economic unit. Shareholdings and investments in subsidiaries are eliminated on the basis of the acquisition method. The cost of shareholdings and investments in subsidiaries is eliminated against the book equity of the shares/ investments at the date of acquisition. Any difference arising is posted to the identifiable assets. Any surplus value that cannot be attributed to specific assets, or the company’s own intangible assets, is described as goodwill and is amortised over its estimated lifetime. Intra-group transactions and internal balances are eliminated. On the consolidation of foreign subsidiaries, the profit and loss accounts are translated into NOK at the average exchange rate for the year. The balance sheets are translated at the year-end rates. Any translation differences are posted directly to Group equity.
GRIEG STAR SHIPPING GROUP
Grieg Star Shipping Group is fully consolidated in the Group accounts for 2009. In respect of 2008, only the balance sheet was consolidated as Grieg Star Shipping AS was a subsidiary with effect from 31.12.08. The accounting figures in the Group’s profit and loss account for 2008 and 2009 are therefore not comparable.
STOCKS
Stocks of goods are stated at cost or at written down value to take account of obsolescence. The stock of bunkers consists of fuel and diesel and recognised at cost on the basis of the FIFO method.
FOREIGN CURRENCY
Assets and liabilities denominated in foreign currencies are stated at the yearend exchange rate. the GRIEG group financial statements 2009
FOREIGN EXCHANGE HEDGING
Derivatives purchased in order to reduce the currency risk for the sub-group Grieg Shipping Group are recognised as hedging transactions. Gains/losses of foreign exchange contracts are therefore recorded in the same period as the hedged transactions. In other companies of the Group, hedging instruments are recognised at fair value through profit or loss.
INTEREST RATE HEDGING
Interest rate hedging contracts are recognised and classified in the same way as the related mortgage loan. The interest received/paid under the contract is therefore recognised in the interest period in question and is included in interest cost/income for the period.
ACCOUNTS RECEIVABLE
Accounts receivable are stated at nominal value less provisions for expected losses. The loss provision is based on an individual assessment of each account receivable.
INVESTMENTS IN SUBSIDIARIES
A company is defined as a subsidiary if the Group has a decisive influence on its operations. This is normally the case where the Group holds more than 50% of the voting share capital.
INVESTMENTS IN LIMITED PARTNERSHIPS
Investments in limited partnerships are recorded on the basis of the cost method whereby the investment is stated at cost in the balance sheet. The distribution of profits/contribution to cover losses from investments in limited partnerships is taken to income/charged against profits under financial items. Profits from investments in limited partnerships are taxable in the hands of the respective participants. Reference is made to separate specifications in this connection.
JOINTLY CONTROLLED ACTIVITIES
In the case of investments in companies where two or more of the participants have joint control of the business regulated through a cooperation agreement between the participants, the investment is recorded on the basis of the gross method. None of the participants have a decisive influence. The proportion of costs, income, assets and liabilities is incorporated in the accounts on the respective lines. The figures are specified for each main group in a note to the accounts.
INVESTMENTS IN ASSOCIATED COMPANIES
Investments in associated companies are recorded on the basis of the equity method in the consolidated accounts. The share of the results recorded by associated companies is posted separately under financial items. The investments in associated companies are posted as a financial asset.
SHAREHOLDINGS
Long-term shareholdings are recorded on the basis of the cost method whereby the investment is stated at cost in the balance sheet. Share dividends are recorded as other financial income.
FIXED ASSETS
Fixed assets that can be depreciated are stated in the balance sheet at cost and depreciated on a straight-line basis over the expected lifetime of the asset. Periodic classification and maintenance costs are posted in the balance sheet and amortised on a straight-line basis until the next planned docking. The docking costs are included in the balance sheet along with the value of the ship. The amortisation of docking costs is included in operating costs.
47
note 1
accounting principles (continued)
NEWBUILDING CONTRACTS
Shipyard instalments paid are posted as fixed assets in pace with the payment schedule.
INTANGIBLE ASSETS
Goodwill is amortised over its economic lifetime. The surplus value attached to the fleet’s contracts of employment and the company’s right to renominate Star Shipping tonnage is defined as ”Contracts of employment” in the balance sheet and is amortised over 20 years. Expenses related to the company’s own development are recorded in the balance sheet from the point when it is likely that the development work will result in an identifiable intangible asset. Research and development relates to the development of electronic computerised mapping systems with radar integration. These costs are amortised over 3 years.
WRITE-DOWN OF FIXED ASSETS
Where there is reason to believe that the book value of a fixed asset is higher than its fair value, an impairment test is carried out. The test is carried out on the lowest level of fixed assets with independent cash flows. If the book value is lower than both the sale value and recoverable amount (present value in the event of continued use/lease), the asset is written down to the higher of the sale value and the recoverable amount. Previous write-downs are reversed if the basis for the write-down no longer exists (exceptions include write-downs of goodwill).
PENSION COMMITMENTS
The companies of the Group have different pension schemes. The pension schemes are generally financed through payments to insurance companies. The Group has both defined benefits schemes and defined contribution schemes, as well as a compulsory occupational pension scheme (OTP). Effective from 01.01.09 most of the companies of the Group have changed their pension schemes from a defined benefits based to a defined contribution based scheme.
FINANCIAL CURRENT ASSETS
Short-term investments in shares and mutual funds are regarded as part of the trading portfolio and are stated at fair value at year-end. Dividends received and other distributions are entered as income under other financial income.
TAXATION
The tax charge in the profit and loss account consists of the tax payable and the change in net deferred tax. Taxes are charged when they arise. Deferred tax in the balance sheet is calculated on the basis of timing differences between values for taxation and accounting purposes. Taxable and tax-deductible timing differences which are reversed or can be reversed within the same period are netted against each other and entered net. Some of the companies of the Group are subject to the taxation regime for shipowning companies pursuant to chapter 8 of the Taxation Act. Tax payable related to the fund for environmental initiatives in connection with the transition to the new taxation regime is stated as discounted present value. As a consequence of the Norwegian Supreme Court’s ruling that two thirds of the transitional tax in connection with the transition to the new taxation regime unconstitutional taxation of previous earned income, tax paid previously in this connection has been written back and posted under current receivables. The entire amount of the related transitional tax provision has been written back. For further information, please refer to note 20.
STATEMENT OF CASH FLOWS
The statement of cash flows is prepared on the basis of the indirect method. Accordingly, the cash flows from investment and financing activities are reported gross, while the accounting result is reconciled against the net cash flow from operations. Cash and cash equivalents include cash, bank deposits and other short-term liquid investments that can immediately and with no major exchange rate risk be converted into a known amount and maturing less than three months from the transaction date.
Under defined contribution plans, including OTP, the Group pays contributions to publicly or privately administered insurance plans for pensions that are either compulsory, contractual or voluntary. The Group has no other pension commitments after the contributions have been paid. The contributions are posted as a payroll expense when due. A defined benefits scheme is a pension scheme which defines the pension payment which an employee will receive on reaching retirement age. The pension payment normally depends on one or more factors, such as age, the period of service with the company and the salary level. The pension commitment under defined benefits schemes posted in the balance sheet are the present value of the defined benefits schemes at yearend less the fair value of the pension fund assets, adjusted for unposted estimate divergences. The pension commitment is calculated annually by an independent actuary based on a linear accrual of pension entitlements. Changes in benefits under the pension plan are posted in the profit and loss account on an ongoing basis.
ESTIMATES
When preparing the annual accounts in accordance with good accounting practice, the management make estimates and assumptions which affect the profit and loss account and the valuation of assets and liabilities. Contingent losses which are likely and quantifiable are charged against income on an ongoing basis.
48
the grieg group financial statementS 2009
note 2 operating revenues Specified by area of Activity Figures in NOK 1 000
GROUP Freight revenues Logistics and clearance services Maritime information technology Shipbroking Investment consulting fee Total operating revenues specified by area of activity Other operating revenues Total other operating revenues Total operating revenues
note 3
2009 3 514 264 858 175 78 617 14 865 28 835 4 494 756
2008 1 165 798 857 178 64 066 48 877 30 858 2 166 777
28 437 28 437
22 220 22 220
4 523 193
2 188 997
Geographic area Global Global Global Global Norway
Cost of sales, specified
Figures in NOK 1 000
GROUP Consumption of goods purchased Total
2009 37 231 37 231
2008 37 694 37 694
The consumption of goods purchased relates to Maritime Information Systems AS.
the GRIEG group financial statements 2009
49
note 4
PAYROLL COSTS, NUMBER OF EMPLOYEES, REMUNERATION, LOANS TO EMPLOYEES ETC.
Figures in NOK 1 000
PARENT COMPANY 2009 453 65 518
Salaries Social security costs Total
2008 -
Payroll costs relate to the managing director who was appointed with effect from 01.10.09. No remuneration was paid to the Board of Directors in 2009. The company’s Board members have received salaries and other remuneration totalling NOK 7 677 610 from the respective companies in which they are employed.
group 2009 311 099 42 126 33 546 23 316 410 087 507
2008 177 041 28 452 12 117 12 396 230 006 306
31.12.2009 45 784 13 781 13 982 2 188 75 735
31.12.2008 50 046 12 945 13 141 2 115 78 247
Salaries Social security costs Pension costs Other benefits Total Average number of employees LOANS TO SHAREHOLDERS AND OTHER CLOSELY RELATED PARTIES Silves Odissey, Investimentos e tecnologia, Lda (Portugal) Vitare AS Salthavn AS AS Polycorp Total No loans/guarantees have otherwise been given to shareholders or other closely related parties. AUDITOR Statutory audit Taxation advice Other non-audit services Other confirmation services Total remuneration to Group auditor Remuneration to other auditors
50
2009 Parent 190 239 429
2008 Group 1 903 163 1 507 183 3 756 3 090
Parent 121 407 528 15
Group 1 578 2 022 166 3 766 15
the grieg group financial statementS 2009
note 5
PENSION COSTS, PENSION FUND ASSETS AND PENSION COMMITMENTS
Group Effective from 01.01.09 most of the companies of the Group have changed to a defined contribution based pension scheme. All companies of the Group have pension schemes which meet the requirements of the Compulsory Occupational Pension Act. Defined benefits based pension scheme The contribution plan covers part-time and full-time employees and corresponds to between 5% and 8% of salary. At 31.12.09, 291 employees were covered by the scheme. Contributions charged in 2009 totalled NOK 8 923 000. Defined benefits based pension scheme Grieg Star Shipping Group (Norway and Canada) and Mosjøen Industriterminal AS have defined benefits based pension schemes. The net pension fund assets for these subsidiaries is included in the balance sheet figures at 31.12.09. The group pension scheme is funded through the accumulation of pension fund assets with an insurance company. The schemes give an entitlement to defined future benefits. These benefits depend mainly on the number of pensionable years, the level of salary on reaching retirement age and the amount of the benefits from the National Insurance. The accounting treatment of pension costs, pension commitments and pension fund assets is in accordance with the Norwegian Accounting Standard for Pension Costs. The estimate divergence is amortised over remaining contribution time. In 2009 a total of 125 persons (including pensioners and persons on early retirement) were covered by the benefits based scheme.
Figures in NOK 1 000 Net pension expenses, including National Insurance contributions Present value of pension entitlements Interest expenses on pension entitlements Return on pension fund assets Effect of changed estimates posted in profit and loss account Administrative expenses Net pension expenses Employees' share Pension expenses for the year
Calculated pension commitments Pension fund assets (at market value) Unposted effect of estimate divergences Net pension fund assets
2009 12 471 9 542 -7 882 3 707 1 471 19 309 19 309
2008 11 386 7 117 -6 669 715 121 12 670 -1 270 11 400
31.12.2009 -211 418 143 912 90 211 22 705
31.12.2008 -178 596 146 454 52 486 20 344
Financial assumptions Discount rate Anticipated rise in salaries Anticipated return on pension fund assets Anticipated rise in pensions, regulation of National Insurance base rate CPA acceptance rate
the GRIEG group financial statements 2009
2009 Norway 5,40 % 4,25 % 5,60 % 4,00 % 50,00 %
2008 Canada 7,25 % 3,25 %
5,80 % 4,00 % 5,80 % 3,75 % 50,00 %
51
note 6
fixed assets
Figures in NOK 1 000
Group
Acquisition cost at 01.01.09 Additions Disposals Acquisition cost at 31.12.09 Depreciation at 01.01.09 Ordinary depreciation Depreciation - docking Depreciation on disposals Accumulated depreciation at 31.12.09 Balance sheet value Economic lifetime Depreciation plan Group tonnage (TDW) Annual lease of unposted fixed assets Lease period
Vehicles, machinery and equipment 113 601 11 948 -1 340 124 209
Loading and discharging equipment 23 267 18 097 41 364
Land and real estate 309 871 4 339 -1 000 313 209
Vessels 4 715 233 926 210 -69 561 5 571 882
Total 5 161 977 960 594 -70 901 6 050 670
25 479 14 767 -8 373 31 873 92 336 3-20 years Linear 1 068 3 years
6 653 6 653 34 711 10 years Linear 10 030 0-3 years
43 176 6 508 -1 802 47 882 265 328 13-50 years Linear -
2 199 702 176 563 32 402 -54 224 2 354 443 3 217 440 27 years Linear 1 006 253 584 281 0-5 years
2 268 358 204 492 32 402 -64 399 2 440 853 3 609 817
The Group owns 23 vessels as well as a 50% interest in Star Eviva from the company ANS Billabong II which is employed under a joint venture. The vessels are depreciated on the basis of an expected economic lifetime of 27 years, and based on a residual value corresponding to the expected scrap value. Capitalised docking costs are depreciated over the period between two dockings. The depreciation charge for docking is posted as an operating cost. At 31 December 2009 the Group has capitalised four newbuilding contracts amounting to TNOK 558 815. Remaining contract amount to be paid regarding newbuildings is TNOK 230 490.
52
the grieg group financial statementS 2009
note 7
INTANGIBLE ASSETS
Figures in NOK 1 000
Group Acquisition cost at 01.01.09 Additions Acquisition cost at 31.12.09 Amortisation at 01.01.09 Amortisation Accumulated amortisation at 31.12.09 Balance sheet value Economic lifetime Amortisation plan
Goodwill 107 597 107 597 39 075 10 868 49 943 57 656 5-20 years Linear
Contracts 163 265 163 265 55 854 8 163 64 017 99 248 20 years
Research and development 29 797 4 684 34 481 16 622 3 650 20 272 14 209 3 years Linear
Total 300 660 4 684 305 344 111 551 22 681 134 232 171 113
Contracts are surplus values related to the vessels’ contracts of employment. Parts of goodwill relate to the companies’ right to renominate Grieg Star Shipping tonnage. Research and development relates to the development of electronic computerised mapping systems as a replacement for paper charts. Product development costs approved under the SkatteFunn tax deduction scheme are capitalised. GOODWILL RELATED TO THE FOLLOWING COMPANIES IS AMORTISED OVER MORE THAN 5 YEARS: Grieg International II AS Grieg Shipping Group Maritime Information Systems AS Grieg Investor AS Mosjøen Industriterminal AS Total
Acquisition cost 2009 2008 72 274 72 274 9 996 9 996 14 379 14 379 12 058 12 058 -1 110 -1 110 107 597 107 597
On the purchase of the shareholding the amortisation period was defined as being in accordance with the expected economic lifetime.
the GRIEG group financial statements 2009
53
note 8
INVESTMENTS IN SUBSIDIARIES
Figures in NOK 1 000
Parent company
Book value 27 648 36 627 107 607 204 427 85 955 83 2 980 465 326
Share of profits/ dividend 21 096 4 024 24 075 7 653 7 139 1 324 65 310
Ownership %
Proportion of voting shares %
Bergen Vancouver B.C., Canada Atlanta, USA Gothenburg, Sweden Livorno, Italy Bergen Bergen Oslo Bergen
100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00
100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00 100,00
Bergen Bergen Bergen Bergen
100,00 100,00 100,00 36,25
100,00 100,00 100,00 36,25
Bergen Oslo Tønsberg Oslo
24,38 75,00 82,39 40,00
32,25 100,00 84,85 40,00
Grieg Holdings AS owns the following companies: KS Joachim Grieg & Co / AS Joachim Grieg & Co Grieg Trade KS Grieg Cod Farming AS / Grieg Cod Juveniles AS
Bergen Bergen Bergen
100,00 100,00 97,44
100,00 100,00 97,44
Grieg Ltd AS owns the following companies: Grieg Shipping Group AS Grieg Property AS Grieg Holdings AS Grieg Development AS / Grieghallen Parkering AS Grieg Investor Holding AS / Grieg Investor AS
Bergen Bergen Bergen Bergen Oslo
30,09 38,90 16,13 11,27 20,00
39,81 51,87 21,51 11,27 20,00
Tønsberg Singapore Nederland Mosjøen
100,00 100,00 51,00 81,00
100,00 100,00 51,00 81,00
Company Grieg Shipping Group AS Grieg Property AS Grieg International AS Grieg Holdings AS Grieg Ltd AS Grieg Logistics AS Grieg Group Resources AS Total
Registered office Bergen Bergen Oslo Bergen Bergen Bergen Bergen
Ownership % 64,46 61,60 90,83 71,58 78,78 59,09 100,00
Proportion of voting shares, % 85,27 82,13 90,83 95,44 78,78 78,78 100,00
Book equity 100% 2 633 285 227 429 835 162 670 009 396 832 62 113 2 876 4 827 704
Ownership includes both direct and indirect ownership.
Group Grieg Shipping Group AS owns the following companies: Grieg Star Shipping AS Grieg Star Shipping (Canada) Ltd.* Grieg Star Shipping (USA) Inc. Atlantic Cargo Services AB Grieg Star Shipping SRLV Grieg Shipping AS Grieg Shipowning AS Grieg International II AS Grieg Shipping II AS * Grieg Star Shipping (Canada) Ltd. has a 100% shareholding in Squamish Terminals Ltd. Grieg Property AS owns the following companies: Grieg Gaarden KS AS Nestun Uldvarefabrik CSG15 AS Grieg Development AS / Grieghallen Parkering AS Grieg International AS owns the following companies: Grieg Shipping Group AS Grieg Athena AS Maritime Information Systems AS Grieg Investor Holding AS / Grieg Investor AS
Grieg Logistics AS owns the following companies: Slagen Harbour Service AS Grieg Logistics Pte Ltd Grieg Logistics Triangle B.V. Mosjøen Industriterminal AS
54
Registered office
the grieg group financial statementS 2009
note 9
INVESTMENTS IN ASSOCIATED COMPANIES
Figures in NOK 1 000
Group These investments are incorporated in the consolidated accounts applying the equity method. Grieg Cod Grieg Seafood ASA Aon Grieg AS Farming AS (1)
NorWind AS OceanWind AS
Others
Total
Miscellaneous information Year of acquisition Registered office Ownership 31.12 Proportion of voting shares 31.12
1992 Bergen 44 % 44 %
1998 Lysaker 20 % 20 %
2006 Bergen 97 % 97 %
2007 Bergen / Oslo 40 % 40 %
2008 Bergen / Oslo 50 % 46 %
Analysis of surplus values Equity on acquisition Equity effect of re-stated opening balance Attributable surplus values Goodwill Acquisition cost Disposals at cost Total acquisition cost at 31.12
585 657 68 512 36 983 691 152 691 152
36 130 551 6 040 42 721 42 721
32 496 32 496 -32 496 -
22 719 7 281 30 000 30 000
5 055 5 055 5 055
414 4 036 4 450 4 450
682 472 551 68 512 54 340 805 875 -32 496 773 379
Profit / loss for the year Share of profit / loss Estimate changes, previous years Write-down of excess value Amortised goodwill Profit / loss for the year
56 657 -14 256 -1 622 40 779
2 178 -15 510 -412 -13 744
-21 -21
-18 654 -728 -19 382
-3 351 -3 351
367 367
37 177 -15 510 -14 256 -2 762 4 649
Book value at 31.12 Opening balance at 01.01. Additions Disposals Profit / loss for the year Other changes Closing balance at 31.12.
409 572 198 182 40 779 -9 671 638 861
30 950 -13 744 17 206
10 000 1 900 -3 061 -21 -8 818 -
24 800 8 001 -19 382 13 419
3 351 -3 351 -
414 367 781
479 088 208 082 -3 061 4 649 -18 489 670 270
Unamortised proportion Excess values 31.12
79 755
1 509
-
5 743
-
-
87 007
Excess values related to goodwill in associated companies are depreciated over 1-10 years based on the expected remaining economic lifetime. 1) The Grieg Group had a 48% shareholding in Grieg Cod Farming AS from 1 January to 21 December 2009. The Grieg Group’s share of the company’s results for 2009 is consolidated as ownership through investment in an associated company. The Grieg Group increased its shareholding to 97% on 21 December 2009, with the effect that the company was no longer an associated company and the balance sheet at year-end has been consolidated as a subsidiary.
the GRIEG group financial statements 2009
55
note 10
SPECIFICATION OF FINANCIAL ITEMS
Figures in NOK 1 000 Parent Company 2009 2008 55 208 594 795 649 1 003
Interest income from Group companies Interest income from associated companies Other interest income Total interest income Interest paid to Group Companies Other interest expenses Total interest expenses
note 11
-
169 169
Group 2009 2 674 22 968 25 642
2008 1 936 29 653 31 589
73 114 73 114
79 425 79 425
INVESTMENTS IN JOINTLY CONTROLLED ACTIVITIES
Figures in NOK 1 000
Group The Group has the following investments: Company ANS Billabong II
Date of acquisition 15.12.92
Registered office Bergen
Ownership and voting rights 50 %
Joint and several liability* 1 729
* The joint and several liability relates to book debt for ANS Billabong II as at 31.12.09. The main figures included in the accounts in accordance with the gross method are specified below: Share of Profit and Loss Items Revenues Depreciation Vessel operating costs Operating profit Net financial items Profit Distributed Share of Balance Sheet items Vessels Receivables Total assets Current liabilities Net share Surplus values at 01.01.09 Amortisation 2009 Surplus values at 31.12.09 Net share Net share at 01.01.09 Share of profit Amortisation of surplus values Distributed Net share at 31.12.09
56
2009 16 853 -287 -7 823 8 743 -2 192 6 550 8 734 31.12.2009 4 777 7 644 12 421 863 11 558 107 -107 -
13 742 6 657 -107 -8 734 11 558 the grieg group financial statementS 2009
note 12
SHAREHOLDINGS AND OTHER INVESTMENTS
Figures in NOK 1 000
Group Company
Ownership
Silver Pensjonsforsikring AS KS Brage Supplier Holmen Industri Invest I AS Atlantic Cod Farms AS Mercell Holding AS FSN Capital Stril Offshore AS Nordenergie Renewable Technocean AS Argentum Primary Fund Unison ASA Borea Opportunity II AS Stochasto Holding AS Capital Partners AS Såkorn Invest AS Prudential Shipping and Mgt Corp Sundry investments in funds Sundry shareholdings Total shareholdings and investments
7,66 % 12,50 % 26,66 % 4,66 % 13,94 % 1,30 % 4,50 % 1,85 % 8,60 % 7,60 % <1% 1,55 % <10% <10% 2,93 % 20,00 %
Acquisition cost
Book value
43 989 24 000 23 378 11 918 20 058 14 427 11 250 10 306 10 000 4 000 3 000 3 240 1 347 935 375 152 2 812 3 810 188 997
43 989 24 000 23 378 3 405 14 789 14 427 11 250 10 306 10 000 4 000 1 322 3 240 1 347 0 375 152 2 812 3 801 172 593
Share investments are valued on the basis of the cost method. The investments are written down to market value if the decline in value is not considered to be temporary.
note 13
stocks and bunkers
Figures in NOK 1 000
Group Stocks of finished goods Stocks of bunkers Total stocks and bunkers
2009 9 771 100 243 110 014
2008 9 728 78 675 88 403
Valuation principles
Stocks of finished goods are valued at the lower of full processing cost and fair market value. Stocks of bunkers consist of fuel and diesel which are booked at cost on the basis of the FIFO method.
the GRIEG group financial statements 2009
57
note 14
RECEIVABLES DUE IN MORE THAN ONE YEAR
Figures in NOK 1 000
Group Loans to associated companies Other receivables (fixed assets) Total
note 15
2009 37 675 75 753 113 428
2008 25 393 82 776 108 169
MARKET-BASED FINANCIAL INVESTMENTS
Figures in NOK 1 000
Group Market-based shares Market-based bond investments Other financial instruments Total
Cost 25 522 478 358 1 254 169 1 758 049
Market value 33 880 371 050 1 452 756 1 857 687
Financial investments are recorded on the basis of the market value at year-end. The value change in the period is posted in the profit and loss account. The foreign currency effect is posted under other financial income or financial expenses.
note 16
DEBT PAYABLE IN MORE THAN 5 YEARS
Figures in NOK 1 000
Group Vessel mortgage debt Other mortgage debt Other long-term debt Total
58
2009 1 260 476 126 674 5 248 1 392 398
2008 813 272 131 795 5 248 950 315
the grieg group financial statementS 2009
note 17
MORTGAGES / GUARANTEE LIABILITY
Figures in NOK 1 000
Group Debt secured by mortgage (including overdraft facilities) Vessel mortgage debt Other mortgage debt - long-term Total mortgaged debt - long-term Overdraft facilities - short-term Total mortgaged debt Group assets have been given as mortgage security.
2009 2 115 841 148 016 2 263 857 16 770 2 280 627
2008 1 912 699 148 565 2 061 264 16 323 2 077 587
Balance sheet value of mortgaged assets Receivables Vessels Real estate Operating equipment Equities Stocks Total
2009 46 792 2 992 249 89 148 6 781 4 381 9 429 3 148 780
2008 43 994 2 515 531 83 903 3 619 9 445 2 656 492
2009 76 957
2008 48 928
4 320
4 320
Restricted advance tax deductions
15 063
11 706
Overdraft limit of which overdraft utilised
73 528 16 770
26 880 16 323
Group Total guarantee liability Share of uncalled limited partnership capital
the GRIEG group financial statements 2009
59
note 18
FINANCIAL RISK
The Group uses various financial derivatives to manage its financial market risk. This includes forward contracts, options, interest rate swaps and freight forward agreements (FFA).
Interest rate risk
Interest rate risk arises in the short and long term when parts of the Group’s debt are at a floating rate of interest. The Group’s strategy is to hedge the company’s net interest rate exposure (cash flow hedging). Non-interest bearing financial instruments are regarded as natural hedging which reduces the need for direct hedging of interest rates. In principle, the Group should be at least 100% covered, including interest-bearing financial instruments, but it should also have a certain level of hedging (at least 30%) using market-based hedging instruments. In this case, interest rate swap agreements are mainly used. The interest rate hedging agreements are recognised and classified in the same way as the related mortgage loan. At 31.12.09 the sub-group Grieg Shipping Group was party to interest rate swap agreements totalling USD 165 million, directly hedging 45% of the subgroup’s future interest rate risk. At the same date, the unrealised loss attached to these agreements, and not posted in the balance sheet, was NOK 57.1 million, with an average period of maturity of 6.5 years.
Foreign exchange risk
The Group’s main focus in relation to foreign exchange hedging is to ensure that costs and liabilities are denominated in the same currency as revenues and assets. The basic currency for the sub-group Grieg Shipping Group is the USD, and its strategy is to ensure that it covers its currency exposure related to administration costs, operating costs, tax and dividend payments that are denominated in another currency than USD. In this connection, the sub-group is mainly exposed to NOK, followed by EUR and CAD and this exposure is largely covered through forward foreign exchange contracts. Gains/losses on foreign exchange contracts are booked in the same period as the period when the hedged transactions are settled. Non-USD denominated financial investments which are part of the sub-group’s financial investment portfolio are also taken into consideration when the sub-group’s net foreign exchange exposure is assessed.
exchange rates: NOK 6.032, CAD 1.1682 and EUR 1.4368, hedging the Group’s foreign exchange requirements for 2010.
Freight rate risk
The shipping industry is very cyclical and characterised by large and unforeseeable fluctuations in freight rates. The Group’s shipping activities are of an industrial nature which makes it possible to cover exposure to spot rates by entering into long-term time-charter contracts for the vessels. As a result, the Group’s revenues fluctuate less than is the case with spot rates in the general dry bulk market. The Group also uses FFA-contracts as a risk management instrument. The FFA contracts are settled on an ongoing basis as an adjustment of operating income. As at 31.12.09 the Grieg Shipping Group had two FFA contracts which runs from 1.1.2010 to 31.12.2010. As these are OTC (over-the-counter) contracts, there is a credit risk attached to settlement of the contracts. The contracts are regarded as opposing business which cancel each other out. The unrealised gain, which is not posted in the balance sheet, amounts to NOK 42.2 million.
Bunker prices
The Group uses derivative contracts to hedge bunker prices. The exposure to bunkers is defined as the annual consumption of bunkers in contracts of affreightment with no bunkers clause. The result of the hedging contracts is classified as an adjustment of operating costs. The average at 31.12.2009, including bunkers clauses, was 67%. As at 31.12.09 the Grieg Shipping Group had made derivative contracts to hedge bunker prices for a total of 24 960 mt. At the same time, the contracts showed an unrealised gain of NOK 2.5m which is not posted in the balance sheet.
Options
As at 31.12.09 the Group held no options.
At 31.12.09 the Grieg Shipping Group had entered into forward contracts to hedge a total of NOK 129.7 million. At the same time, the unrealised gain on these contracts amounted to NOK 5.2 million with the following average
note 19
CONTINGENCIES AND EVENTS AFTER YEAR-END
The Grieg Group is neither a party to any court case nor the subject of any other litigation.
60
the grieg group financial statementS 2009
note 20
taxation
Figures in NOK 1 000
Parent company The following is a specification of the difference between the accounting result before tax and the tax base for the year. Ordinary result before tax Permanent differences (including dividends received) Change in timing differences Basis of tax payable in profit and loss account Losses brought forward Tax base for the year Tax payable in the balance sheet Division of tax charge Increase / (decrease) in deferred tax Tax charge (recovery) on ordinary result
2009 62 521 -64 498 -399 -2 376 2 376 -
2008 232 959 -234 587 105 -1 523 1 523 -
-
-
593 593
456 456
DEFERRED TAX Deferred tax is calculated on the basis of the differences between values for accounting and taxation purposes at year-end. Deferred tax has been calculated on the basis of the following items:
Profit and loss account Taxable dividends Total taxable differences Tax loss carried forward Tax credit carried forward Total tax-deductible differences Basis of calculation of deferred tax (assets) Deferred tax / (assets) on net timing differences
31.12.2009 553 604 1 157
31.12.2008 691 67 758
-8 279 -1 906 -10 185
-5 761 -1 906 -7 667
-9 028 -2 528
-6 909 -1 935
In accordance with the accounting standard for the treatment of taxation, taxable and tax-deductible timing differences which are reversed or can be reversed within the same period are netted against each other and entered net.
the GRIEG group financial statements 2009
61
note 20
taxation (continued)
Group TAX CHARGE FOR GROUP The following is a specification of the difference between the accounting result before tax and the tax base for the year. Profit before tax Profit before tax, companies subject to shipping tax Profit before tax, companies not subject to shipping tax Permanent differences Change in temporary differences Application of tax loss carried forward Basis of tax payable, companies not subject to shipping tax Tax payable, companies not subject to shipping tax
2009 580 905 -370 103 210 802 -162 745 -1 293 -4 228 42 536 11 910
2008 62 677 -199 086 -136 409 186 694 5 037 7 55 329 15 492
Tax payable in profit and loss account Tax payable on profit for the year, companies not subject to shipping tax Tax payable (on financial income), companies subject to shipping tax Tax payable on gain arising on transition to new shipping taxation as at 01.01.2007 Long-term shipping tax Utilisation of tax loss carried forward under own tax scheme (shipping) Change in tax provisions in previous year Increase / (decrease) in deferred tax Tax charge for the year on ordinary result
11 910 8 726 -104 904 -341 634 -11 604 -5 601 7 548 -435 559
15 492 18 687
-161 -37 245 -183 332
2 848
1 591
31.12.2009 11 910 -4 683 -1 786 -13 14 446 -56 19 818
31.12.2008 15 492 20 332 22 430 52 452 110 706
The tonnage tax for the year is charged against profits under operating costs Tax payable in balance sheet Tax payable, companies not subject to shipping tax Tax effect of Group contribution Transferred from non-shipping tax liable to shipping tax liable activity Tax payable, companies not subject to shipping tax, arising through demerger/merger Tax payable, companies subject to shipping tax Tax payable on transition to new shipping tax Tax payable in advance Total tax payable in balance sheet
-180 104
SHIPPING TAX In December 2007 the Norwegian Parliament (Storting) adopted a new shipping tax regime. Grieg’s shipowning companies, which were also covered by the previous scheme, have complied with the new shipping tax regime since 01.01.2007. Transitional rules on the transition into the new tax regime meant that retained earnings earned in the period when the old shipping tax regime applied were in reality taxed over a 10-year period, with two thirds of the transitional payable in annual installments, with each installment corresponding to 10% of the total tax payable, over the next ten years. The remaining one third would lapse if it was invested in environment-friendly initiatives. No provision was made for remaining one third of the transitional tax. On 12 February 2010 in considering whether the transitional rules were in breach of article 97 of the Norwegian Constitution, the Supreme Court ruled that the transitional rules constituted unconstitutional taxation of previously retained earnings. As a consequence of the ruling, the tax assessments for 2007 and 2008 have been annulled. It is expected that the tax paid in 2007 and 2008 will be repaid in the current year. This tax is posted as a short-term receivable. The provision related to two thirds of the transitional tax was written back in the accounts with effect for 2009. No provisions have been made in relation to possible changes of shipping tax regulations as a consequence of the Supreme Court ruling. Environmental initiatives were implemented in 2009 which could reduce the environmental fund of NOK 254,0 million by NOK 6,4 million.
62
the grieg group financial statementS 2009
note 20
taxation (continued)
Long-term shipping tax payable in balance sheet Provision for tax payable in period 2009 - 2016 (present value)* Allocation to fund for environmental initiatives (present value)* Long-term shipping tax payable in balance sheet
2009 -
2008 341 633 341 633
* As a consequence of the Supreme Court ruling on 12 February, the provision for tax related to the gain on the transition to a new tax regime has been written back. The balance on the fund for environmental initiatives has been set at zero as the requirement concerning utilisation of the fund no longer has a time limit.
Fund for environmental initiatives Fund for environmental initiatives (nominal value) 01.01 Investments in environmental initiatives Fund for environmental initiatives (nominal value) 31.12
2009 254 428 254 428
2008 261 140 -6 712 254 428
Provided that the required approval of environmental initiatives implemented in 2009 is given by Det Norske Veritas, the Group’s fund for environmental initiatives will be reduced by NOK 6,4 million.
DEFERRED TAX FOR GROUP Parts of the Group’s activities fall within the shipping taxation scheme. Deferred tax for non-shipping taxation Deferred tax for shipping taxation Deferred tax in balance sheet
31.12.2009 -3 612 55 094 51 482
31.12.2008 4 886 38 699 43 585
A) Deferred tax for non-shipping taxation Deferred tax is calculated on the basis of the differences between values for accounting and taxation purposes at year-end. Deferred tax has been calculated on the basis of the following items: Taxable timing differences Tax-deductible timing differences Tax loss to be carried forward Net timing differences that can be netted Deferred tax on net timing differences Unposted deferred tax assets Net deferred tax in balance sheet
31.12.2009 42 224 -54 798 -166 973 -179 548 -50 273 46 661 -3 612
31.12.2008 77 418 -45 093 -69 155 -36 830 -10 312 15 199 4 886
In accordance with the accounting standard for the treatment of taxation, taxable and tax-deductible timing differences which are reversed or can be reversed within the same period are netted against each other and entered net.
B) Deferred tax related to activities that fall within the shipping taxation scheme Deferred tax is calculated on the basis of the differences between values for accounting and taxation purposes at year-end. Deferred tax has been calculated on the basis of the following items: Timing differences related to financial items Revaluation account Deferred tax account - profit and loss Other temporary differences Financial loss carried forward Total Deferred tax at 28% for companies subject to shipping taxation the GRIEG group financial statements 2009
31.12.2009 86 867 46 239 71 907 -8 248 196 765 55 094
31.12.2008 65 57 799 247 995 -167 648 138 211 38 699
63
note 21
equity
Figures in NOK 1 000
Parent company Equity - Opening Balance Profit of the year Provision for dividend Equity - Closing Balance
Share capital 1 005 1 005
Share premium reserve 260 515 260 515
Other equity 220 641 63 114 -60 000 223 755
Total 482 162 63 114 -60 000 485 276
Share premium reserve 260 515 260 515
Group reserves 2 656 906 669 882 -60 000 -4 301 4 526 3 267 013
Minority interests 1 235 321 346 583 -497 -52 553 55 556 -1 751 294 -1 703 1 581 250
Total 4 153 748 1 016 465 -497 -112 553 55 556 -1 751 294 -6 004 4 526 5 109 784
Group Equity - Opening Balance Profit for the year Payment of extraordinary dividend Provision for dividend Capital increase Capital decrease Increase / decrease in minority interest Currency conversion differences Other changes Equity - Closing Balance
note 22
Share capital 1 005 1 005
SHARE CAPITAL AND SHAREHOLDER’S INFORMATION
At 31 December 2009 the share capital of Grieg Maturitas AS consisted of 1 005 388 shares of nominal value NOK 1. THE SHARE CAPITAL CONSISTS OF THE FOLLOWING SHARE CLASSES Class A-shares B-shares Total
Number of shares 201 600 803 788 1 005 388
Nominal 1,1,-
Book 201 600 803 788 1 005 388
B-shares 112 755 88 192 39 157 161 790 200 947 200 947 803 788
Total 163 155 88 192 39 157 212 190 251 347 251 347 1 005 388
The A class shares carry both voting and dividend rights. The B class shares carry no voting rights, but are entitled to dividends. THE COMPANY’S SHAREHOLDERS ARE AS FOLLOWS Kvasshøgdi AS Ystholmen AS Salthavn AS Salthavn II AS GMC Invest AS Suletind AS Total
64
Ownership 16,23 8,77 3,90 21,10 25,00 25,00 100,00
A-shares 50 400 50 400 50 400 50 400 201 600
the grieg group financial statementS 2009
To the Annual Shareholders’ Meeting of Grieg Maturitas AS
PricewaterhouseCoopers AS P.O. Box 3984 - Dreggen NO-5835 Bergen Telephone +47 95 26 00 00 Telefax +47 23 16 10 00
Auditor’s report for 2009 Auditor’s report for 2009 We have audited the annual financial statements of Grieg Maturitas AS as of December 31, 2009, showing a profit of NOK 63 113 844 for the parent company and a profit of NOK 1 016 464 522 for the group. We have also audited the information in the Board of Directors’ report concerning the financial statements, the going concern assumption, and the proposal for the allocation of the profit. The annual financial statements comprise the financial statements of the parent company and the group. The financial statements of the parent company comprise the balance sheet, the statements of income and cash flows and the accompanying notes. The financial statements of the group comprise the balance sheet, the statements of income and cash flows and the accompanying notes. The regulations of the Norwegian accounting act and accounting standards, principles and practices generally accepted in Norway have been applied in the preparation of the financial statements. These financial statements are the responsibility of the Company’s Board of Directors and Managing Director. Our responsibility is to express an opinion on these financial statements and on other information according to the requirements of the Norwegian Act on Auditing and Auditors. We conducted our audit in accordance with the laws, regulations and auditing standards and practices generally accepted in Norway, including standards on auditing adopted by The Norwegian Institute of Public Accountants. These auditing standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. To the extent required by law and auditing standards an audit also comprises a review of the management of the Company’s financial affairs and its accounting and internal control systems. We believe that our audit provides a reasonable basis for our opinion. In our opinion, • the financial statements have been prepared in accordance with the law and regulations and give a true and fair view of the financial position of the company and of the group as of December 31, 2009, and the results of its operations and its cash flows for the year then ended, in accordance with accounting standards, principles and practices generally accepted in Norway • the company’s management has fulfilled its duty to produce a proper and clearly set out registration and documentation of accounting information in accordance with the law and good bookkeeping practice in Norway • the information given in the Board of Directors’ report concerning the financial statements, the going concern assumption, and the proposal for the allocation of the profit are consistent with the financial statements and comply with the law and regulations. Bergen, 23 March 2010 PricewaterhouseCoopers AS Jon Haugervåg State Authorised Public Accountant (Norway) Note: This translation from Norwegian has been prepared for information purposes only. Alta Arendal Bergen Bodø Drammen Egersund Florø Fredrikstad Førde Gardermoen Gol Hamar Hardanger Harstad Haugesund Kongsberg Kongsvinger Kristiansand Kristiansund Lyngseidet Mandal Mo i Rana Molde Mosjøen Måløy Namsos Oslo Sandefjord Sogndal Stavanger Stryn Tromsø Trondheim Tønsberg Ulsteinvik Ålesund PricewaterhouseCoopers and “PwC” refer to the international network of member firms of PricewaterhouseCoopers International Limited (PwCIL). Members of The Norwegian Institute of Public Accountants • Register of Business Enterprises: NO 987 009 713 • www.pwc.no
the GRIEG group financial statements 2009
65
Photos by Hung Ngo
www.grieg.no
Bergen, Norway
Oslo, Norway
Grieg-Gaarden P.O. Box 234 Sentrum C. Sundtsgate 17/19 5804 BERGEN, NORWAY
Karenslyst Allé 2 P.O. Box 513 Skøyen 0214 OSLO, NORWAY
Tel.: +47 55 57 66 00 Fax.: +47 55 57 68 55
Tel.: +47 23 27 41 00 Fax.: +47 23 27 41 01
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