Nordecon AS Annual Report 2015
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Annual report 2015 Business name Nordecon AS Registry number 10099962 Address Pärnu mnt 158/1, 11317 Tallinn, Estonia Domicile Republic of Estonia Telephone +372 615 4400 E-mail [email protected] Corporate website www.nordecon.com Core business lines Construction of residential and non-residential buildings (EMTAK 4120) Construction of roads and motorways (EMTAK 4211) Road maintenance (EMTAK 4211) Construction of utility projects for fluids (EMTAK 4221) Construction of water projects (EMTAK 4291) Construction of other civil engineering projects (EMTAK 4299) Financial year 1 January 2015 – 31 December 2015 Council Toomas Luman (chairman of the council), Andri Hõbemägi, Vello Kahro, Sandor Liive, Meelis Milder Board Jaano Vink (chairman of the board), Avo Ambur, Erkki Suurorg Auditor KPMG Baltics OÜ Nordecon – Annual report 2015 Contents Nordecon Group at a glance .................................................................................................................................. 4 Letter from chairman of the council ...................................................................................................................... 5 Group chief executive’s letter ............................................................................................................................... 6 Directors’ report ................................................................................................................................................... 7 Consolidated financial statements .......................................................................................................................40 Consolidated statement of financial position ......................................................................................................... 40 Consolidated statement of comprehensive income ............................................................................................... 41 Consolidated statement of cash flows.................................................................................................................... 42 Consolidated statement of changes in equity ........................................................................................................ 43 NOTE 1. Reporting entity ....................................................................................................................................... 44 NOTE 2. Statement of compliance and basis of preparation ................................................................................ 44 NOTE 3. Significant accounting policies ................................................................................................................. 47 NOTE 4. Changes in accounting policies and presentation of information .......................................................... 58 NOTE 5. Financial risk management ..................................................................................................................... 59 NOTE 6. Group entities ......................................................................................................................................... 66 NOTE 7. Changes in Group structure .................................................................................................................... 67 NOTE 8. Cash and cash equivalents ...................................................................................................................... 67 NOTE 9. Trade and other receivables ................................................................................................................... 68 NOTE 10. Prepayments ........................................................................................................................................... 69 NOTE 11. Inventories .............................................................................................................................................. 69 NOTE 12. Investments in equity-accounted investees ........................................................................................... 70 NOTE 13. Other long-term investments ................................................................................................................. 72 NOTE 14. Investment property ............................................................................................................................... 72 NOTE 15. Property, plant and equipment .............................................................................................................. 73 NOTE 16. Intangible assets ..................................................................................................................................... 74 NOTE 17. Loans and borrowings ............................................................................................................................. 76 NOTE 18. Finance and operating leases ................................................................................................................. 77 NOTE 19. Trade payables ........................................................................................................................................ 78 NOTE 20. Other payables ........................................................................................................................................ 78 NOTE 21. Deferred income ..................................................................................................................................... 79 NOTE 22. Provisions ................................................................................................................................................ 79 NOTE 23. Equity ...................................................................................................................................................... 79 NOTE 24. Earnings per share .................................................................................................................................. 80 NOTE 25. Share-based payments ........................................................................................................................... 80 NOTE 26. Operating segments ................................................................................................................................ 81 NOTE 27. Construction contracts in progress ......................................................................................................... 83 2/99 Nordecon – Annual report 2015 NOTE 28. Government grants ................................................................................................................................. 84 NOTE 29. Cost of sales ............................................................................................................................................ 84 NOTE 30. Administrative expenses ......................................................................................................................... 84 NOTE 31. Other operating income and expenses ................................................................................................... 84 NOTE 32. Finance income and costs ....................................................................................................................... 85 NOTE 33. Income tax expense ................................................................................................................................ 85 NOTE 34. Financial instruments and financial risk management ........................................................................... 85 NOTE 35. Contingent liabilities ............................................................................................................................... 89 NOTE 36. Assets pledged as collateral .................................................................................................................... 90 NOTE 37. Transactions with related parties ........................................................................................................... 90 NOTE 38. Parent company’s primary financial statements .................................................................................... 93 Statements and signatures of the board and the council ...................................................................................... 97 Independent auditors’ report ................................................................................................................................. 98 Profit allocation proposal ....................................................................................................................................... 99 3/99 Nordecon – Annual report 2015 Nordecon Group at a glance Nordecon AS (previous names AS Eesti Ehitus and Nordecon International AS) began operating as a construction company in 1989. Since then, we have grown to become one of the leading construction groups in Estonia and a strong player in all segments of the construction market. For years, our operating strategy has been underpinned by a consistent focus on general contracting and project management and a policy of maintaining a reasonable balance between building and infrastructure construction. We have gradually extended our offering with activities that support the core business such as road maintenance, concrete works and other services that provide added value, improve the Group’s operating efficiency and help manage our risks. Nordecon’s specialists offer high-quality integrated solutions