Balance Sheet 22

KNI A/S Secondary name: Pilersuisoq A/S (KNI A/S) Polaroil A/S (KNI A/S) J.M. Jensenip 2 PO Box 319 3911 Sisimiut Annual Report 2009 / 2010 Reg. No. 209,713 Adopted by the company's Annual General Meeting on........../……..2010 Chairman: _______________________ Contents Page Company data 1 Management statement 2 Auditors' Report 3 Key figures and ratios 4 Management report 5 Accounting policies 14 Income statement 21 Balance sheet 22 Equity statements 24 Cash flow statement 26 Notes 27 Segments - financial statements 38 Company data Company name KNI A/S Secondary name Pilersuisoq A/S (KNI A/S) Polaroil A/S (KNI A/S) Address J.M.Jensenip 2 PO Box 319 3911 Sisimiut Registration No. 209,713 GER No. 1660 7398 CVR/SE No. 1660 7398 Domicile municipality Qeqqata Kommunia T: (+299) 862 444 F: (+299) 866 263 E: [email protected] Websites www.kni.gl Shareholder: Greenland Self-rule, PO Box 1015, 3900 Nuuk - 100% Board of Directors: Michael Skourup, Chairman Vagn H. Andersen, Vice Chairman Jonas Aronsen Sofia Geisler H.P. Lynge-Larsen Jens Kristian Therkelsen Executive Management: CEO Søren Lennert Mortensen Auditors Deloitte Statsautoriseret Revisionsaktieselskab 1 Management statement We have today considered the annual report for KNI A/S for the financial year 1 April 2009 to 31 March 2010. The annual report has been drawn up in accordance with the provisions of the Company Accounts Act. We regard the accounting policies selected as appropriate and that the annual report gives a true and fair picture of the company's and Group's assets, liabilities, financial status, earnings and cash flows. Nuuk, June 9, 2010 Executive Management: Søren Lennert Mortensen Board of Directors: Michael Skourup Vagn H.Andersen Jonas Aronsen Chairman Vice Chairman Sofia Geisler H.P. Lynge-Larsen Jens Kristian Therkelsen 2 Auditors' Report To the shareholder of KNI A/S We have audited the annual report for KNI A/S for fiscal 2009/10, pages 1-40, comprising the Management Statement, Business Review, Accounting Policies, Income Statement, Balance Sheet, Equity Statement and Notes for the Group and the parent company and the consolidated cash flow statement. The annual report has been drawn up in accordance with the Company Accounts Act. Management’s responsibilities for the annual report Management is responsible for drawing up and presenting an annual report that gives a true and fair account in accordance with the Company Accounts Act. This responsibility covers formulating, implementing and maintaining internal controls that are appropriate for drawing up and presenting an annual report that gives a true and fair picture without significant misinformation, irrespective of whether this were to be due to errors or omissions, and the selection and application of appropriate accounting policies and the exercise of financial estimates that are reasonable in the circumstances. Auditors' responsibilities and basis of opinion Our responsibility is to express an opinion on the annual report based on our audit. We conducted our audit in accordance with Danish Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual report is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the annual report. The actions selected depend on the auditors’ assessment, including an assessment of the risk of material misinformation in the annual report irrespective of whether such misinformation is due to errors or omissions. In this risk assessment, the auditors consider the internal controls that are relevant for the company when drawing up and presenting an annual report that gives a true and fair view so as to plan an audit that is suitable in the circumstances but not so as to express an opinion on the effectiveness of the company’s internal controls. An audit also includes assessing whether the accounting policies used and significant estimates made by management are reasonable as well as evaluating the overall presentation of the annual report. We believe that our audit provides a sufficient and reasonable basis for our opinion. Opinion In our opinion, the annual report gives a true and fair view of the Group's and parent company's assets, liabilities and financial position at 31 March 2010 and of the results of the Group's and parent company's operations and the Group's cash flow for fiscal 2009/10 in accordance with the Company Accounts Act. Supplementary information Without expressing reservations, we refer to the management report, pp 10, in which management reports on the uncer- tainties attaching to measuring and recognising retail and wholesale products and the DKK 27.8m adjustments made in respect of entries. Nuuk, June 9, 2010 Deloitte Statsautoriseret Revisionsaktieselskab Peter A.Wistoft Claus Bech State Authorised Accountant State Authorised Accountant 3 Key figures and ratios Key figures and ratios Key figures (DKKm) 2006 2007 2008 2009 2009/10 Net revenues 2,071.1 2,068.0 2,281.6 482.2. 2,105.3 Earnings from operations -145.6 20.4 54.3 -7.0 57.2. Earnings from financials -16.7 -29.5 -29.4 -9.5 -3.8 Pre-tax earnings -235.9 44.0 37.0 -15.1 53.4 Profit/loss for the year -152.2 29.1 25.5 -10.5 36.4 Inventories 892.2 918.9 936.1 822.5 842.0 Trade accounts payable 100.5 95.4 83.6 74.9 76.2 Equity 749.7 953.8 646.9 677.1 984.8 Balance 1,785.8 2,046.3 1,770.2 1,631.2 1,792.7 Investments in tangible fixed assets 183.8 75.9 80.1 15.6 93.7 Key figures 2006 2007 2008 2009 2009/10 Gross margin 17.8% 18.6% 18.3% 16.6% 19.3% Profit ratio -7.0% 1.0% 2.4% -1.5% 2.7% Liquidity ratio 1.4% 1.6% 1.03% 1.10% 1.54% ROI -8.3% 1.1% 3.1% -0.4% 3.2% Return on equity -17.7% 3.0% 3.2% -1.5% 3.7% Equity ratio 42.0% 46.6% 36.5% 41.5% 55.9% 4 Management report Annual report Management is of the opinion that all significant information for assessing the company and the Group's financial status, results for the period and financial developments are stated in the annual report. Core business KNI A/S’ operations are based on Landsting Regulation No.4 of June 6, 1997 and Landsting Regulation No.1 of May 31, 2001 and Landsting Regulation No.7 of November 14, 2004. The parent company's core business in 2009/ 10 was in: Retail sales, and to a limited extent wholesaling, in settlements and twelve towns. Distribution and wholesaling of beer and carbonated drinks. Imports, distribution and sales of liquid fuels. Imports, distribution and sales of lubricants, bottled and industrial gases. Sales of services in settlements and outlying districts to relevant service partners. Parts of KNI’s operations cannot be run on commercial and market terms. This means that a service contract has been made with Greenland's Self-rule for payment for this tasking. The present service contract runs from 1 January 2008 to 31 December 2011. In signing the service contract, KNI A/S has undertaken to operate stores in settlements and small towns where it is not possible to run retailing and wholesaling on a profitable basis. A service contract has also been made for the sale of liquid fuels in Greenland for the period 1 January 2008 to 31 December 2011, for which the company does not receive payment but which does maximize what the company can earn on the oil sold under the service contract. Under the service contract, KNI A/S operates postal and banking services, helistop and other freight-related community-based tasking in settlements and outlying districts. All other core business between 1 April 2009 to 31 March 2010 was done on commercial terms. Ownership KNI A/S is wholly owned by Greenland Self-rule – the share capital is DKK 310m. At balance sheet date, Neqi A/S was wholly owned by KNI A/S. KNI A/S also had an 82.5% holding on balance sheet date in Akia Sisimiut A/S. 5 Other issues Average headcount figures for the parent company were as follows: 2006 2007 2008 2009 2009/10 Headcount 901 909 911 892. 861 This annual report is the first whole year report following the company's conversion of the accounting year from the calendar year to 1 April – 31 March. The most significant reason for converting the accounting year is for it to conform to the company's natural annual cycle. The company is reporting earnings for the company as a whole of DKK 53.4m compared to a loss of DKK 15.1m in the last accounting (conversion) period. The profit of DKK 53.4m was in line with budget and is regarded as satisfactory. Throughout the entire period, KNI A/S management consisted of CEO Søren Lennert Mortensen. Senior executives not on the KNI A/S’ executive management board during the period were: CFO Lars Møller-Sørensen - also Deputy CEO. Chain Manager Frederik Olsen, Pilersuisoq Energy Manager Peter Grønvold Samuelsen, Polaroil At the end of the financial year, KNI had drawings of DKK 484.7m on its credit lines compared to DKK 617.9m the preceding year, a reduction of DKK 133.2m. This reduction should however be seen in the light of an increase in trade receivables of DKK 79.4m.Total company credit lines amounted to DKK 715m.

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