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 accord- ance 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 circum- stances.
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 accord- ance with Danish Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasona- ble 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 ac- counting 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.
KNI A/S has close, open and constructive dialogue with the company's bankers, which is why the company has not had funding difficulties and neither does it expect any in the coming period.
Drawings on credit lines
700,0 600,0 500,0 Drawings on 400,0 credit lines
Mio. kr. 300,0 200,0 100,0 0,0
Regnskabsår
6
Since the beginning of the new millennium, developments in service contract payments for product supplies to settlements, outlying districts and small towns have more than halved from DKK 90.2m to DKK 40.1m. Payments for supplies will decline by a further DKK 3.1m in 2011.
Accordingly, the payments KNI A/S receives for supplying settlements, outlying districts and small towns will thus end up by only accounting for a third of the payments received for the same services in 2000. See table below. The company has accordingly been successful in significantly rationalizing its operations whilst maintaining reasonable earnings despite the reduction in payments from Greenland's Self-rule and despite the depopulation of our market area.
Population figures in settlements declined between 2000 - 2009 by more than 1,200 individuals from about 10,200 to 8,900 or a decline of more than 12%. A drop in population figures in the settlements would ordi- narily mean that service contract payments should rise since there are fewer ihabitats over whom to distribute capacity costs.
Cross subsidies Payment from Greenland's Actual payment for (share of profit) from Difference from Polaroil Home Rule for service contract service contract for the year Cumulative Year The Energy Division for supplies supplies before +/- reduction 1999 44.9 45.3 90.2 0.0 0.0 2000 44.9 45.3 90.2. 0.0 0.0 2001 0.0 67.9 67.9 -22.3 -22.3 2002 0.0 55.6 55.6 -12.3 -34.6 2003 0.0 55.6 55.6 0.0 -34.6 2004 0.0 55.6 55.6 0.0 -34.6 2005 0.0 54.6 54.6 -1.0 -35.6 2006 0.0 52.1 52.1 -2.5 -38.1 2007 0.0 50.1 50.1 -2.0 -40.1 2008 0.0 45.1 45.1 -5.0 -45.1 2009 0.0 40.1 40.1 -5.0 -50.1 2010 0.0 40.1 40.1 0.0 -50.1 2011 0.0 37.0 37.0 -3.1 -53.2.
Between 2000 and up to and including 2010, KNI A/S received DKK 562.1m in service contract payments from Greenland's Self-rule, which received DKK 377.0m from KNI A/S during the same period.
(DKKm) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009/10 Dividend tax, KNI Pisiffik A/S 3.0 2.0 Dividend tax, KNI Pisiffik A/S - capital reduction 56.0 Dividend tax, KNI Pilersuisoq A/S 10.0 4.0 Corporation tax, KNI Pilersuisoq A/S 7.3 Corporation tax, KNI A/S 3.8 2.9 4.1 0.0 3.7 0.0 0.0 0.0 Dividend KNI A/S 18.0 9.0 4.6 4.8 20.8 2.0 0.0 Capital reduction, KNI A/S 211.1 9.9 Payments to Treasury 31.0 15.0 279.0 18.5 23.7 6.1 0.0 3.7 0.0 0.0 0.0
7
Trends in the financial year
Revenues and earnings, etc - trends The highlights of Group revenues and earnings, etc., compared to last year may be illustrated as follows: (DKKm)
Profit and Loss Statement - Group 2009/10 2009
(DKKm)
Revenues 2,105.3 482.2.
Gross earnings 351.2. 68.5
Earnings from financials 57.2 -7.0
Pre-tax earnings 53.4 -15.1
Profit/loss for the year 36.4 -10.5
The Group made a pretax operating profit of DKK 53.4m in 2009/10 which was in line with expectations and budgets.
Group pre-tax earnings - trend 2009/10 2009
(DKKm)
Energy Division - Polaroil 25.4 0.5
Retail and Wholesale Division - Pilersuisoq 13.0 -17.1
Shared Service Center - KNI 15.0 1.5
Neqi A/S -0.2. -1.0
Akia Sisimiut A/S 0.2 0.0
Intra-Group elimination / adjustments 0.0 1.0
Pre-tax earnings 53.4 -15.1
Earnings in the company's Energy Division amounted to DKK 25.4m and were slightly down on the fore- casts and the budget figure of DKK 30.1m, which was due among other things to a decline in bunker sales, a hydroelectric plant coming on stream early and a generally milder winter than normal.
Earnings at Pilersuisoq, the company's retail and wholesale division, amounted to DKK 13.0m which was considerably down on the budget figure of DKK 24.8m. This was mainly due to DKK 19.9m more being spent on consumables, higher costs of employment of DKK 3.8m, lower depreciation of DKK 2.2m and lower operating costs of DKK 4.7m.
8
The Shared Service Center reported earnings of DKK15.0m compared to a budgeted deficit of DKK 0.6m. The most significant reasons for this deviation were positive gains of DKK 6.8 m from property sales, termi- nating unused hedging agreements corresponding to DKK 24.6m and the value of interest rate contracts of the order of DKK -6.0m. On costs, there were extraordinary costs of DKK 8.4m for contract services, pri- marily IT expenditure for the RCM project
The pre-tax profit for the year of DKK 53.4m is regarded as satisfactory.
Allocation of profit/loss It is proposed that the profit of DKK 36.4m after tax for the year be carried forward to next year.
Commentary on the parent company's profit and loss statement
Retail and Wholesale Division - Pilersuisoq For the company's retail and wholesaling division, fiscal 2009/2010 was affected by the ongoing action plans for the division, including:
• Warehousing amalgamation and reductions • Warehouse and store amalgamations • New, more efficient store structure in South Greenland • Closure of the main depot in Qaqortoq • Relocation of regional warehousing from Qaqortoq to Narsaq. • Changes to divisional management structure. • Optimization – further development of the RCM stores and logistics system • New tools for stocktaking – handheld terminals, etc.
The Division's revenues totaled DKK 1,172.4m, down DKK 11.9m on the same period in the preceding year. The DKK 893.2m cost of consumables was by and large identical with the same period in the year before but was DKK 23.5m up on the budget figure of DKK 1,168.8m).
Retail and Wholesale Division - Pileruisoq (DKKm) 2009/10 2009
Retail revenues settlements 366.8 78.3
Retail revenues towns 381.5 82.2.
Wholesale revenues beer/soft drinks 311.8 72.7
Other wholesale revenues 112.3 31.5
Total revenues 1,172.4 264.7
Gross margin 23.8% 20.3%
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KNI has a service contract with Greenland's Self-rule for running stores in settlements, outlying districts and small towns. The DKK 40.1m payment received under this service contract was the same as for the previous year.
Gross margin fell by 0.7% from 24.5% to 23.8%.
Costs of employment in the division amounted to DKK 180.1m, up DKK 3.8m on budget.
KNI A/S implemented a new warehousing and logistics module for the ERP system in October 2008 called RCM (Retail Chain Management). The upgrade achieved KNI A/S’ desire for an up-to-date management tool to simplify procurement and logistics, enhanced sales service, integration from store sales with integrat- ed scanning for warehousing, thus giving KNI A/S a unique opportunity to cut inventories.
Over the past two years, everyone in the entire organization has been working specifically on getting the RCM module to function and work properly. Nowadays, all vital parts of the RCM system are working as they should and as expected. Goods can be ordered, they arrive at the right stores, and they can be correctly calculated.
It is, and throughout this financial year it has remained, a major challenge to understand how inventory valu- ations often generate figures that give the impression of some uncertainty about the validity of inventory valuations.
Not just as part of the year-end but also when doing monthly financial reports, considerable resources have had to be used to analyze inventory valuations whilst also making any corrections necessitated by the various analyses.
The above issues were the primary reason for the necessity for making individual manual corrections to in- ventory valuations as at 31 March 2010. Manual adjustments to inventory valuation figures accordingly amounted to DKK 27.8m.
After yet another financial year in which there were still major challenges in matching stocktaking and val- uations, further action will be taken in the coming financial year to further optimize processes in this area.
Such activities will include the following:
• In addition to the six monthly stocktakings, regular spot checks will be made on parts of inventories.
• During the summer of 2010, a new, more efficient inventory system will come on stream. The Inventory 2 system is also part of Axapta, and mainly differs by being able to calculate inventory valuations on an ongoing basis. Such a system will to a very great extent make it possible to have ongoing controls on physical and financial inventories and will thus also help KNI to generate more valid, correct data on inven- tory valuations.
Despite the implementation problems, the company's view is that the choice of the RCM module was correct and going forward, the new management tool will enable the company to operate up-to-date, valid controls on inventories, procurement and sales.
10
Energy Division Polaroil Revenues in Polaroil fell by DKK 169m from DKK 1,078.2 to DKK 909.2m compared to the same period last year. This was mainly due to part of the fishing fleet switching to heavy fuel, a product that Polaroil did not have in its range in 2009/2010 and a decline in mineral surveying activities. Other factors were that the winter of 2009/2010 in Greenland was unusually mild and some power supplies in Sisimiut switched from oil to hydroelectric power.
Energy Division Polaroil (DKKm) 2009/10 2009
Sales of liquid fuels (million litres). 223.2 51.1
Liquid fuel revenues (DKKm) 878.8 192.4
Other energy product revenues (DKKm) 20.8 3.6
Total gross margin 13.0% 13.0%
Liquid fuel imports (million litres) 242.9 52.8
There is a service contract with Greenland's Self-rule for the period from 2008 up to and including 2011. The Division does not receive payment for this service contract, but on the other hand any divisional earnings on oil sold under the service contract are maximized. During the financial year, an addendum was agreed to the service contract allowing the company now to earn up to DKK 40m on oil sold under the service contract (previously DKK 16m). The increase is to allow the company to make the necessary repairs and maintenance required to maintain Polaroil's production infrastructure at a proper level for production and safety purposes without having to borrow to fund this, etc. A very extensive upgrade plan has been drawn up.
The division has calculated its maintenance requirements at over DKK 500m, much of which is due to a backlog of maintenance for which there is, however, a plan for improvements over the next 15 years.
Consumer prices throughout the financial year remained at DKK 4.27 kr./l. The company's forex and product hedging contracts remain in force for more than another year which means that the company has an overview of oil product prices until early 2011. The policy is to hedge oil and forex prices on a two year timescale.
Polaroil has a total of 451 tanks for liquid fuels, 176 of which are in towns and 275 in the settlements. Tank capacity in the settlements is 21m litres for fuel and in the towns, 260m litres. Total tank capacity is 281 litres.
In the course of the financial year, the division implemented a range of action plans, most of which were completed. Divisional administration in Maniitsoq relocated to Sisimiut in March 2010. The challenges for the division are in maintaining sales, active participation in supplying oil and mineral survey activities in a competitive market and increasing environmental requirements and hence increasing demands on the skills of employees.
11
Commentary on the parent company's balance sheet
Tangible fixed assets Tangible fixed assets amounted to DKK 670.3, down from DKK 675.0m in 2009.
Investments totalling DKK 93.7m were made in 2009/10 compared to DKK 15.6m in 2009.
Inventories Inventories at the end of 2009/10 totalled DKK 831.0m compared to the opening balance of DKK 812.4m, an increase of DKK 18.2m which was mainly due to an increase in oil stocks at Polaroil.
Stocks (DKKm) 2009/10 2009
Retail and Wholesale Division - Pilersuisoq 410.1 407.7
Energy Division - Polaroil 419.0 403.6
Consumables 1.9 1.1
Total 831.0 812.4
Equity The company's equity rose from DKK 677.1m on 31 March 2009 to DKK 984.8m on 31 March 2010. The reason for this is that the company made a series of product, forex and oil hedging contracts in order to en- sure stable consumer prices for liquid fuels. The market value of these contracts is calculated at balance sheet date and is recognized directly under equity. The net market value on balance sheet date was DKK 270.3m.
12
Outlook for KNI A/S
Considerable focus is still on the retail and wholesale division Pilersuisoq. Accordingly, optimizing opera- tions in this part of the company remains a significant endeavour and will be so throughout 2010/2011 since operations are still less satisfactory in this part of the company. There are major challenges in the division in making it into a profitable business to ensure sufficient earnings for necessary and desirable improvements to the production infrastructure. It is expected that there will still be challenges in the retail and wholesale divi- sion Pilersuisoq since the economic development of settlements and outlying districts is not being driven forward at the same speed as for the large towns.
Earnings forecasts for the retail and wholesale division Pilersuisoq for fiscal 2010/2011 are high, and ambi- tious.
The company implemented action plans primarily for the retail and wholesale division Pilersuisoq in 2009. A similar action plan process will be undertaken in 2010 at Polaroil so as to boost earnings in this division.
The work being done on action plans is expected to continue and to be extended in 2010/11 and it is also expected that the Group will dispose of properties that do not directly or do not make positive - contribu- tions to the company's earnings. Some of the action plans contain reductions in service or headcount alt- hough the company aims to ensure the necessary headcount reductions by way of natural wastage or volun- tary agreements but it will not be possible to avoid redundancies.
In fiscal 2010/11, the company is expecting to make hedging contracts for oil purchases in 2011 and 2012 so as to be able to retain the relatively stable, low oil prices in Greenland compared to the rest of the western world. Some small upward or downward adjustments to sales prices may be expected, however.
The global financial crisis is not currently expected to have a major impact on KNI A/S’ operations in 2010/11 and so the company is forecasting pre-tax earnings for the next financial year of about DKK 90m.
13
Accounting policies
The annual report for the KNI A/S Group has been drawn up in accordance with the provisions of the Com- pany Accounts Act for Class C companies.
The annual report has been drawn up using the same accounting policies as last year. However, last year comprised only three months.
Miscellaneous recognition and valuation issues Assets are recognized in the balance sheet when as a result of a previous event, it is probable that future fi- nancial benefit will accrue to the company and their value can be reliably determined.
Liabilities are recognized in the balance sheet when as a result of a previous event, there is a legal or actual commitment and it is probable that future financial benefit will be lost to the Group and their value can be reliably determined.
Assets and liabilities are stated at cost price on first recognition. Measurement after first recognition is as described for each individual item below.
Predictable losses and risks are taken into account on first inclusion and valuation where these arise before the annual report has been drawn up and which either confirm or negate factors existing at balance sheet date.
In the profit and loss account, income is recognized as earned whereas costs are recognized at the amounts relating to the financial year.
Consolidated financial statements The consolidated financial statements relate to KNI A/S (parent company) and the company's (associated companies) controlled by the parent company. Control arises from whether the parent company either direct- ly or indirectly holds more than 50% of the voting rights or in some other way exerts or actually exercises controlling influence. Companies in which the Group directly or indirectly holds between 20% and 50% of the voting rights and exercises significant but not controlling influence are regarded as associated companies.
Consolidation policies The consolidated accounts are drawn up on the basis of the financial statements for KNI A/S and its subsidi- aries. The consolidated accounts are drawn up by amalgamating accounting items of the same type. On con- solidation, intra-Group income, expenses, balances, dividends and gains and losses on transactions between the consolidated companies are eliminated. The financial statements used in consolidation are drawn up in accordance with the Group's accounting policies.
Holdings in subsidiaries are set off against the proportionate share of the fair value of subsidiaries' net assets and liabilities at acquisition date.
Company mergers New or newly incorporated companies are included in the consolidated financial statements from acquisition date. Companies that are sold or wound up are included in the consolidated accounts until divestment date.
14
The amalgamation method is applied when acquiring companies with the same owner, Greenland's Home Rule, or companies that are directly or indirectly subject to control by Greenland's Home Rule. According to this method, holdings are valued and recognized at book value without revaluation of assets and liabilities since the company is regarded as having been merged throughout the entire accounting period.
When acquiring new companies without the same ultimate owner, the acquisition method is used according to which the identifiable assets and liabilities of newly acquired companies are recognized at fair value on acquisition date. Provision is made to cover expenditure for restructuring as part of the acquisition that has been decided upon and published. The taxation effect of revaluations is taken into account.
Positive differences (goodwill) between acquisition price of the acquired holding and the fair value of ac- quired assets and liabilities are recognized under intangible fixed assets and are depreciated systematically via the profit and loss account following an individual assessment of their service life, although not exceed- ing 20 years.
Minority interests Subsidiaries' accounting items are fully recognized in the consolidated financial statements. The proportion of subsidiaries’ results and equity attributable to minority interests is stated as separate items in the income statement and balance sheet.
Translation of foreign currencies Transactions in foreign currency are translated on first recognition at the transaction date exchange rate. Ac- counts receivable, liabilities and other monetary items in foreign currency that have not been settled on bal- ance sheet date are translated at the balance date exchange rate. Exchange rate differences arising between the rate on transaction date and the rate on settlement date are recognized in the profit and loss statement as financial items. Tangible and intangible fixed assets, inventories and other non-monetary assets purchased in foreign currency are translated at historic rates.
Derivatives Derivatives are stated at cost price on first recognition and thereafter at fair value. Derivatives are recog- nized under other accounts receivable and other accounts payable respectively.
Changes in the fair value of derivatives classified as and meeting the criteria for provision of hedging the fair value of a recognized asset or liability are recognized in the profit and loss statement together with changes in the valuation of the heged asset or liability.
Changes in the fair value of the derivatives classified as and fulfilling the conditions for hedging against future transactions are recognized directly under equity. When hedged transactions are realized, the accumu- lated changes are recognized as part of the cost price of the accounting items concerned.
Where derivatives do not satisfy the conditions for being treated as hedging instruments, changes in fair val- ue are recognized on an ongoing basis in the profit and loss statement as financial items.
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Profit and loss statement
Net revenues Net revenues relate to cash and invoiced sales made during the year less returns and discounts directly asso- ciated with these sales.
Payments from Greenland's Home Rule for community tasks are recognized as income at the amounts adopt- ed in the state budget.
Other operating income and operating costs Other operating income and operating costs relate to income and costs of a secondary nature compared to the Group's core operations.
Other external costs Other external costs include the costs of distribution, sale, advertising, administration, premises, bad debts, etc.
Costs of employment Costs of employment cover wages and salaries and social security costs, pensions, etc., for the Group's per- sonnel.
Financial items Financial items relate to interest income and charges, realized and unrealized gains and losses on securities, debts and foreign currency transactions.
Extraordinary items Extraordinary items relate to income and expenditure relating to events not associated with the Group's ordi- nary operations and which are therefore not expected to repeat.
Tax Tax for the year comprises current corporation tax and changes to deferred tax and is recognized in the profit and loss statement as the proportion that is attributable to the results for the year and directly under equity for that part that is attributable to items directly stated under equity.
Dividends are deductible for tax purposes in Greenland. The value for taxation purposes of dividends allo- cated in the annual report is therefore recognized in accordance with the above directly under equity.
Current tax payables and receivables respectively are recognized in the balance sheet as the computed tax charge on taxable income for the year.
Deferred taxes recognise all temporary timing differences between the carrying value of assets and liabilities for accounting and taxation purposes and where the tax value of assets is calculated on the basis of the planned use of individual assets.
Deferred tax assets, including the tax value of losses that can be carried forward for tax purposes are recog- nized in the balance sheet at the value at which the asset is expected to be realized, either by being set against deferred tax liabilities or as net tax assets. 16
Balance sheet
Group goodwill Any Group goodwill is depreciated linearly over estimated service life determined on the basis of manage- ment's experience in individual business areas. Depreciation is normally made over a period of five years but may in certain circumstances be up to 20 years for strategically acquired companies with a strong market position and long-term earnings profile, provided that it is thought that the longer period of depreciation bet- ter reflects the utility of the resources concerned.
The carrying value of goodwill is assessed regularly and is written down to recoverable value if the carrying value exceeds the expected future net income from the company or activity to which the goodwill relates.
Tangible fixed assets Land and buildings, production plant and machinery and other plant, operating equipment and fixtures and fittings are valued at cost price less accumulated depreciation and write down. Land is not depreciated. Cost price relates to the cost of acquisition, the expenses directly associated with acquisition and the cost of making the asset operational until the date at which it is ready to be taken into use.
Depreciation is based on cost price less the forecast residual value on conclusion of service life. Linear de- preciation is done on the basis of the following valuation of assets' expected service lives:
Buildings 20-50 years Tank farms/plant 10-20 years Ships 10-12 years Other plant, operating equipment, fixtures and fittings and IT equipment 3 - 10 years
Assets with a unit cost of less than DKK 100,000 are expensed in the profit and loss statement as at acquisi- tion date.
Tangible fixed assets are written down to recoverable value if this is lower than the carrying value.
Gains and losses on disposal of tangible fixed assets are stated as the difference between the sales price less cost of sales and the carrying value at sales date. Gains and losses are recognized in the profit and loss state- ment as adjustments to depreciation and write-down or under other operating income if the sales price ex- ceeds the original cost price.
IT equipment used previously to be depreciated subject to a forecast service life of three years. In the present financial year, this policy has been changed so that IT equipment will in future be depreciated over a period of between three to ten years. Changes in these accounting estimates are made on the basis of a valuation of whether parts of investments in IT equipment can properly, or more correctly, be depreciated over a period of between three to ten years.
17
Holdings in subsidiaries and associated companies Holdings in subsidiaries and associated companies are recognized and valued according to the net asset value (equity) method, meaning that capital interests are valued at the proportionate share of the companies' net asset carrying value less or plus undepreciated positive or negative Group goodwill and plus or less unreal- ized intra-Group gains and losses.
The parent company's share of companies' earnings is recognized in the profit and loss statement after elimi- nation of unrealized intra-Group gains and losses and less or plus depreciation on Group goodwill or Group badwill respectively. Subsidiaries and associated companies with negative net asset carrying value are valued at zero and any re- ceivables from these companies are written down by the parent company's share of the negative net asset value insofar as it is thought to be irrecoverable. If the negative net asset carrying value exceeds receivables, the residual balance is recognized under provisions insofar as the parent company has a legal or actual liabil- ity to cover the commitments of the company concerned.
Net revaluation of holdings in subsidiaries and associated companies is transferred to the net revaluation reserve for capital holdings insofar as the carrying value exceeds the cost price.
Other holdings Other holdings are recognised at market value.
Inventories Inventories are valued at cost price according to the FIFO convention or at net recoverable value if this is lower. The cost price of trade goods, raw materials and consumables relates to the cost of acquisition plus repatriation costs. The cost price of manufactured goods and goods during manufacture relates to the cost of raw materials, consumables and direct pay and indirect production costs.
Indirect production costs relate to indirect materials and pay, the cost of maintenance, depreciation and write down on the machinery used in the production process, factory buildings and equipment and the costs of factory administration and management. Financial expenses are not included in the cost price.
Net realizable value for inventories are recognized as the forecast sales price less costs of completion and costs associated with concluding the sale.
Accounts receivable Receivables are valued at amortised cost price which normally corresponds to the nominal value less depre- ciation for forecast losses.
Accruals Accruals are recognized under assets and relate to costs that have been incurred but relate to the subsequent financial year. Accrued items are valued at cost price.
Equity Dividends are recognized as a liability at the date of adoption by the general meeting. The proposed dividend for the financial year is shown as a separate item under equity.
18
Mortgage debt Mortgage debt is valued at cost price on the date of borrowing, corresponding to the proceeds received after deduction of associated transaction expenses.
Subsequently, mortgage debt is valued at amortised cost price. This means that the difference between the proceeds on borrowing and the nominal value to be repaid is recognized in the profit and loss statement dur- ing the term of the loan as a financial cost using the effective interest method.
Other financial commitments Other financial liabilities are recognized at amortised cost price; this usually corresponds to the nominal val- ue.
Accruals Accruals are recognized under liabilities and relate to payments received and carried forward to a subsequent financial year. Accrued items are valued at cost price.
Cash flow statement The cash flow statement is drawn up according to the indirect method and shows cash flows relating to oper- ations, investments and financing and the Group's cash balances at the beginning and end of the year.
Cash flows relating to operations are recognized as operating profits/losses adjusted for non-cash operating items, changes in working capital and corporation tax payments.
Cash flows relating to investments include payments associated with the purchase and sale of companies, operations and financial fixed assets and the purchase, development, improvement and sale, etc., of intangi- ble and tangible fixed assets, including the acquisition of financially leased assets.
Cash flows relating to financing activities include changes in the size or composition of the Group's share- capital and expenditure associated therewith, including raising loans, making financial leasing contracts, redemption of interest-bearing debt, purchase of own shares and dividend payments.
Liquid assets relate to cash at bank and short-term securities with insignificant risk, less short-term bank debt.
Segment data Information on business segments is provided. Segment data conforms to the Group's accounting policies and internal financial controls. Fixed assets in the segments relate to fixed assets used directly in individual segments' operations, including intangible fixed assets, tangible fixed assets and holdings in associated com- panies. Segment liabilities relate to debts and other provisions arising from the operations of individual seg- ments, including trade accounts payable and other debt. Deferred tax is not required to be included in seg- ment commitments.
19
Key figures and ratios The key figures have been drawn up in accordance with the Association of Danish Financial Analysts' ”Rec- ommendations for key figures 2005”.
Profit ratio = Operating profit x 100
Net revenues Return on investment = Operating profit x 100 Average operational assets Return on equity = Profit/loss for the year x 100 Average equity Working capital turnover ratio = Current assets Short term debt Equity ratio = Equity x 100 Balance Operating assets are defined as the balance less cash at bank, interest-bearing assets (including shares) and holdings in the associated companies.
20
Income statement 1. april 2009 - 31. march 2010 Parent Compagny Group 1/1 - 31/3 1/1 - 31/3 Note 2009/10 2009 2009/10 2009 (tkr.) (tkr.) (tkr.) (tkr.)
Net revenues 1 2.081.611 479.237 2.105.295 482.210
Treasury payments for social services 20 40.100 10.025 44.100 11.025 Other operating income 2 58.168 17.162 57.592 17.018 Consumables (1.684.432) (400.253) (1.698.762) (402.037) Other external costs 3 (153.102) (38.648) (157.069) (39.692) Gross earnings 342.345 67.522 351.156 68.524
Costs of employment 4 (235.075) (59.067) (240.836) (59.977) Depreciation and write-down 10 (51.336) (14.942) (53.083) (15.533) Earnings before financials 55.934 (6.486) 57.237 (6.986)
Results of affiliates 5 (111) (869) (0) 0 Results of associated companies 6 66 88 66 88 Financial income 7 4.207 967 2.972 600 Financial expenses 8 (25.358) (10.095) (25.486) (10.097) Product hedging 24.622 0 24.622 0 Interest hedging (6.001) 1.293 (6.001) 1.294 Pre-tax earnings 53.360 (15.101) 53.409 (15.101)
Tax on earnings for the year 9 (16.968) 4.606 (17.018) 4.606 Earnings for the period 36.392 (10.495) 36.392 (10.495)
Result disposition Retained profit 36.392 (10.495) 36.392 (10.495) Total disposition 36.392 (10.495) 36.392 (10.495)
21
Balance Sheet 31. march 2010 Parent Compagny Group Assets 1/1 - 31/3 1/1 - 31/3 Note 2010 2009 2010 2009 (tkr.) (tkr.) (tkr.) (tkr.)
Property 334.390 354.887 361.868 357.073 Technical plant and machinery 191.343 189.958 196.386 196.014 Operating equipment and stocks 102.281 100.696 102.507 100.911 Investment in progress 42.237 29.488 42.237 29.488 Tangible fixed assets 10 670.251 675.029 702.998 683.487
Holdings in affiliates 2.948 0 (0) 0 Holdings in associated company 0 1.658 0 1.658 Deposits 546 1.076 546 1.076 Financial fixed assets 11 3.494 2.734 546 2.733
Total fixed assets 673.745 677.763 703.545 686.221
Consumables 1.870 1.155 1.870 1.155 Raw materials and consumables 0 0 11.476 10.573 Retail/wholesale goods 410.129 407.690 409.618 407.179 Liquid fuels etc 419.003 403.574 419.003 403.574 Inventories 831.002 812.419 841.966 822.481
Receivables from sales 73.998 74.004 76.194 74.850 Receivables from affiliated companies 22.350 21.043 0 0 Product hedging 126.672 0 126.672 0 Other accounts receivable 19.509 24.301 20.576 25.629 Accruals 7.288 5.889 7.293 5.889 Receivables 249.817 125.237 230.735 106.367
Cash funds 14.424 16.138 16.430 16.138
Cash funds 1.095.242 953.794 1.089.131 944.986
Total assets 1.768.987 1.631.557 1.792.677 1.631.207
22
Balance Sheet 31. march 2010 Parent Compagny Group Liabilities 1/1 - 31/3 1/1 - 31/3 Note 2010 2009 2010 2009 (tkr.) (tkr.) (tkr.) (tkr.)
Share capital 12 310.000 310.000 310.000 310.000 Subsidiary acquisition at below book value 0 0 0 500 Special reserve for AGM use 283.163 283.163 283.163 283.163 Retained profit 289.352 252.959 289.352 252.459 Adjustments - derivatives 102.295 (168.996) 102.295 (168.996) Total liabilities 984.810 677.127 984.810 677.127
Provision for deferred tax 13 44.731 27.763 44.950 27.763 Aside for the balance of Affiliates 11 1.980 1.713 (0) 0 Provision for losses at affiliates 5.000 5.000 5.000 5.000 Total provisions 51.711 34.476 49.950 32.763
Bank debt 25.000 62.500 25.000 62.500 Mortgages 14 164 248 23.724 248 Long-term debt 25.164 62.748 48.724 62.748
Short-term part of long-term debt 53 66 1.336 66 Bank debt 459.743 555.461 459.743 555.461 Trade accounts payable 176.947 96.631 177.048 97.609 Other debt 15 45.402 36.052 45.909 36.438 Interest hedging 22.170 12.091 22.170 12.091 Product hedging 0 106.954 0 106.954 Forward contracts USD 2.208 49.951 2.208 49.951 Accruals 779 0 779 0 Short term debt 707.302 857.206 709.193 858.570
Total liabilities 732.466 919.954 757.917 921.317
Total liabilities 1.768.987 1.631.557 1.792.677 1.631.207
Contingent / guarantees 16 Fee to the General Assebbly elected auditor 17 Derivative financial instruments 15 Related party transactions and ownership 18 Business Management 19
23
Equity statement for parent company Share capital Retained profit Subsidiary - reserve Subsidiary acquisition at below book value Special reserve for AGM use Dividends Total Adjustments - derivatives (tkr.) (tkr.) (tkr.) (tkr.) (tkr.) (tkr.) (tkr.)
Equity 31 December 2005 300.000 360.654 0 500 283.163 19.474 2.000 965.791
Dividends paid 0 0 0 0 0 0 (2.000) (2.000) Capital increase 10.000 0 0 0 0 0 0 10.000 Earnings for the period 0 (152.222) 0 0 0 0 0 (152.222) Adjustment - USD forward contract 0 3 0 0 0 (71.886) 0 (71.883) Equity 31 December 2006 310.000 208.435 0 500 283.163 (52.412) 0 749.686
Earnings for the period 0 29.069 0 0 0 0 0 29.069 Adjustments - derivatives 0 0 0 0 0 175.000 0 175.000 Equity 31 December 2007 310.000 237.504 0 500 283.163 122.588 0 953.755
Earnings for the period 0 25.451 0 0 0 0 0 25.451 Adjustments - derivatives 0 0 0 0 0 (332.353) 0 (332.353) Equity 31 December 2008 310.000 262.955 0 500 283.163 (209.765) 0 646.852
Earnings for the period 0 (10.495) 0 0 0 0 0 (10.495) Adjustments - derivatives 0 0 0 0 0 40.770 0 40.770 Equity 31 March 2009 310.000 252.460 0 500 283.163 (168.995) 0 677.127
Earnings for the period 0 36.392 0 0 0 0 0 36.392 Subsidiary acquisition at below book value 0 500 0 (500) 0 0 0 0 Adjustments - derivatives 0 0 0 0 0 271.290 0 271.290 Equity 31 March 2010 310.000 289.352 0 0 283.163 102.295 0 984.810
24
Equity statement for group Share capital Retained profit Special reserve for AGM use Dividends Total Adjustments - derivatives (tkr.) (tkr.) (tkr.) (tkr.) (tkr.) (tkr.)
Equity 31 December 2005 300.000 361.154 283.163 19.474 2.000 965.791
Dividends paid 0 0 0 0 (2.000) (2.000) Capital increase 10.000 0 0 0 0 10.000 Earnings for the period 0 (152.222) 0 0 0 (152.222) Adjustment - USD forward contract 0 3 0 (71.886) 0 (71.883) Equity 31 December 2006 310.000 208.935 283.163 (52.412) 0 749.686
Earnings for the period 0 29.069 0 0 0 29.069 Adjustments - derivatives 0 0 0 175.000 0 175.000 Equity 31 December 2007 310.000 238.004 283.163 122.588 0 953.755
Earnings for the period 0 25.451 0 0 0 25.451 Adjustments - derivatives 0 0 0 (332.353) 0 (332.353) Equity 31 December 2008 310.000 263.455 283.163 (209.765) 0 646.852
Earnings for the period 0 (10.495) 0 0 0 (10.495) Adjustments - derivatives 0 0 0 40.770 0 40.770 Equity 31 March 2009 310.000 252.960 283.163 (168.995) 0 677.127
Earnings for the period 0 36.392 0 0 0 36.392 Adjustments - derivatives 0 0 0 271.290 0 271.290 Equity 31 March 2010 310.000 289.352 283.163 102.295 0 984.810
25
Cash flow statement for group 1. april 2009 - 31. march 2010
1/1 - 31/3 Note 2009/10 2009 (tkr.) (tkr.)
Earnings before financials 57.237 (6.986) Depreciation and write-down 53.083 15.533
Working capital changes 1 75.059 33.085 Cash flows from ordinary operating activities 185.380 41.632
Interest income and similar income 2.972 600 Interest expenses and similar income (864) (10.097) Interest hedging (6.001) 1.293 Cash flows from operating activities 181.487 33.429
Acquision of property, plant and equipment (93.670) (15.617) Sale of property, plant and equipment 18.166 1.233 Lending, fixed asset investments 2.187 5 Results of associated companies 66 88 Cash flows from investing activities (73.251) (14.291)
Instalments on long-term liabilities other than provisions 25.274 0 Cash flows from financing activities 25.274 0
Increase/decrease in cash and cash equivalents 133.510 19.138
Cash and cash equivalents at 1 April (601.823) (620.961) Cash and cash equivalents at 31. March (468.313) (601.823)
Notes to the cash flow statement
Note 1: Working capital changes Change in inventories (19.487) 113.597 Change in receivables 4.790 21.508 Change in trade payables and other payables, etc 89.756 (102.020) Change in provisions 0 0 75.059 33.085
Cash and cash equivalents at 31. March Bank debt (484.743) (617.961) Cash funds 16.430 16.138 (468.313) (601.823)
26
Notes to fiscalyear report
Parent Compagny Group 1/1 - 31/3 1/1 - 31/3 2009/10 2009 2009/10 2009 (tkr.) (tkr.) (tkr.) (tkr.)
1 Net revenues
Goods 1.172.402 264.715 1.172.402 264.303 Liquid fuels etc 909.209 214.522 909.209 214.522 Food products 0 0 23.208 3.385 Husleindtægter 0 0 476 0 2.081.611 479.237 2.105.295 482.210 KNI A/S only operates in a single geographic market
2 Other operating income
Service contracts 23.478 4.158 23.478 4.158 Rental income 19.614 5.163 19.632 5.167 Fee income 10.583 2.224 10.583 2.224 Material loans 1.610 351 1.610 351 Group contribution 600 150 0 0 Miscellaneous 2.284 5.116 2.290 5.118 58.168 17.162 57.592 17.018
3 Other external costs
Service travel (7.898) (2.787) (8.411) (2.803) Course - expenses (6.065) (1.847) (6.065) (1.847) Marketing costs, net 4.106 101 4.059 35 Office expenses (13.195) (5.144) (13.261) (5.175) Insurance (9.126) (982) (9.309) (1.032) External services (32.676) (8.112) (33.076) (8.439) Acquisitions (4.537) (1.498) (4.703) (1.520) Operating equipment (53.266) (12.929) (55.035) (13.397) Repairs and maintenance costs (17.540) (3.471) (18.210) (3.527) Rent - expenses (10.592) (2.387) (10.601) (2.387) Miscellaneous (2.315) 407 (2.458) 400 (153.102) (38.648) (157.069) (39.692)
4 Costs of employment
Wages and salaries (212.490) (53.938) (217.775) (54.740) Pensions (11.039) (2.591) (11.350) (2.632) Other social security expenses (13) (5) (13) (5) Other costs of employment (11.533) (2.533) (11.699) (2.600) (235.075) (59.067) (240.836) (59.977)
Salaries and remuneration og Directors and Board
Board (538) (169) Directors (1.888) (488)
Avarage number of employees 860 928 873 931
27
Notes to fiscalyear report
Parent Compagny Group 1/1 - 31/3 1/1 - 31/3 2009/10 2009 2009/10 2009 (tkr.) (tkr.) (tkr.) (tkr.)
5 Holdings in affiliated companies
Akia Sisimiut A/S 156 0 (0) 0 Neqi A/S (220) (1.005) 0 0 Internal gains - timing differences (47) 136 (0) 0 (111) (869) (0) 0
6 Results of associated companies
Akia Sisimiut A/S 66 88 66 88 66 88 66 88
7 Financial income
Interest income - contract of sale 505 79 505 79 Interest income - bank 1.340 467 1.345 467 Net forex gains/losses 1.121 55 1.121 54 Intra-Group interest 1.241 367 0 0 4.207 967 2.972 600
8 Financial expenses
Interest charges - banks (23.384) (9.815) (23.500) (9.613) Interest charges - mortgages (16) 0 (16) 0 Other bank charges 0 (114) (12) (63) Other bank charges (1.957) (166) (1.958) (421) (25.358) (10.095) (25.486) (10.097)
9 Tax on earnings for the year
Year deferred tax (16.968) 4.606 (17.018) 4.606 (16.968) 4.606 (17.018) 4.606
28
Notes to fiscalyear report
10 Tangible fixed assets
Parent Compagny Property Technical plant and machinery Operating equipment and stocks Investment in progress Total (tkr.) (tkr.) (tkr.) (tkr.) (tkr.)
Cost 1. april 2009 533.219 380.951 291.548 29.488 1.235.206 Additions during the year 0 0 0 67.635 67.635 Transferred from investment in progress 8.684 17.351 25.939 (51.974) 0 Disposals during the year (13.976) 0 (1.548) (2.912) (18.436) Cost 31. March 2010 527.927 398.302 315.939 42.237 1.284.405
Depreciations and write-downs 1. april 2009 178.332 190.993 190.852 0 560.177 Depreciations and write-downs of the year 17.930 15.966 24.354 0 58.250 Depreciations at write-downs divested assets (2.725) 0 (1.548) 0 (4.273) Depreciations and write-downs 31. March 2010 193.537 206.959 213.658 0 614.154
Book value 31. March 2010 334.390 191.343 102.281 42.237 670.251
Book value 1. april 2009 354.887 189.958 100.696 29.488 675.029
Depreciation and write-down
Depreciation and write-downs for the year: 1/1 - 31/3 2009/10 2009 (tkr.) (tkr.)
Property 17.930 4.534 Technical plant and machinery 15.966 3.992 Operating equipment and stocks 24.354 6.776 Loss/gain on sale of fixed assets (6.914) (360) Depreciation and write-downs total 51.336 14.942
Acquisitions less than 100 tkr. in 2009/10 charged with a total of 4,5 mio. kr. mod 1,5 mio. kr. i 2009. The assets are not affected in addition to regular mortgage.
29
Notes to fiscalyear report
10 Tangible fixed assets (continue)
Group Property Technical plant and machinery Operating equipment and stocks Investment in progress Total (tkr.) (tkr.) (tkr.) (tkr.) (tkr.)
Cost 1. april 2009 539.423 399.378 292.970 29.488 1.261.259 Additions during the year 25.753 200 82 67.635 93.670 Transferred from investment in progress 8.684 17.551 25.939 (51.974) 200 Disposals during the year (13.976) 0 (1.548) (2.912) (18.436) Cost 31. March 2010 559.884 417.129 317.443 42.237 1.336.693
Depreciations and write-downs 1. april 2009 182.350 203.564 192.058 0 577.972 Depreciations and write-downs of the year 18.391 17.179 24.426 0 59.996 Depreciations at write-downs divested assets (2.725) 0 (1.548) 0 (4.273) Depreciations and write-downs 31. March 2010 198.016 220.743 214.936 0 633.695
Book value 31. March 2010 361.868 196.386 102.507 42.237 702.998
Book value 1. april 2009 357.073 196.014 100.912 29.488 683.287
Depreciation and write-down
Depreciation and write-downs for the year: 1/1 - 31/3 2009/10 2009 (tkr.) (tkr.)
Property 18.392 4.616 Technical plant and machinery 17.179 4.477 Operating equipment and stocks 24.426 6.800 Loss/gain on sale of fixed assets (6.914) (360) Depreciation and write-downs total 53.083 15.533
Acquisitions less than 100 tkr. in 2009/10 charged with a total of 4,7 mio. kr. mod 1,5 mio. kr. i 2009.
30
Notes to fiscalyear report
11 Financial fixed assets
Parent Compagny Kapitalandele i øvrigt Holdings in affiliates Holdings in associated company Deposits Total
Cost 1. april 2009 0 5.000 1.500 1.076 7.576 Additions during the year 0 2.792 0 0 2.792 Disposals during the year 0 0 (1.500) 0 (1.500) Cost 31. March 2010 0 7.792 0 1.076 8.868
Adjustments 1 januar 2008 0 (6.202) 158 0 (6.044) Additions during the year 0 0 0 0 0 Disposals during the year 0 0 (224) (530) (754) Profit share 0 (64) 66 0 2 Adjustments 31. March 2010 0 (6.266) 0 (530) (6.796)
Internal profits early 1. april 2009 0 (511) 0 0 (511) Displacement of internal profits 0 (47) 0 0 (47) Internal profits 31. March 2010 0 (558) 0 0 (558)
Book value 31. March 2010 0 968 0 546 1.514
Book value 1. april 2009 0 (1.713) 1.658 1.076 1.021
Subsidiaries companies are followings: Equity in % Company Equity Home 2010 2009 capital 31/3 2010 (tkr.) (tkr.) Kommuneqarfik Neqi A/S Kujalleq 100 100 600 (1.422) Akia Sisimiut A/S Qeqqata Kommunea 82,5 50 3.000 3.570
31
Notes to fiscalyear report
11 Financial assets (continue)
Group Holdings in associated company Deposits Total (tkr.) (tkr.) (tkr.)
Cost 1. april 2009 1.500 1.076 2.576 Additions during the year 0 0 0 Disposals during the year (1.500) 0 (1.500) Cost 31. March 2010 0 1.076 1.076
Adjustments 1 januar 2008 158 0 158 Additions during the year 0 0 0 Disposals during the year (224) (530) (754) Profit share 66 0 66 Adjustments 31. March 2010 0 (530) (530)
Book value 31. March 2010 0 546 546
Book value 1. april 2009 1.658 1.076 546
1/1 - 31/3 2009/10 2009 (tkr.) (tkr.)
12 Share capital
Company´s share capital consists of shares a´ 1.000 kr. or multiples thereof. No shares are granted special rights 310.000 310.000
32
Notes to fiscalyear report
13 Deferred tax
Value for tax Difference in Parent Compagny Book value purposes the balance
Property 334.390 168.441 165.949 Technical plant and machinery 191.343 181.193 10.150 Operating equipment and stocks 102.281 102.644 (363) Financial fixed assets 3.494 8.113 (4.619) Receivables 0 6.188 (6.188) Provision for losses at affiliates 0 6.980 (6.980) Deficit carryover 0 17.284 (17.284) Basis 631.508 490.843 140.665
Provisions 31. marts 2010, 31,8% 44.731
The note for the group is omitted, because there are no joint assesment in Greenland
The change in the deferred tax is put together as folows: Parent Compagny Group 1/1 - 31/3 1/1 - 31/3 2009/10 2009 2009/10 2009 (tkr.) (tkr.) (tkr.)
Deferred tax primo 27.763 32.369 27.763 32.369 Deferred tax on net on net profit 16.968 (4.606) 17.187 (4.606) Deferred tax ultimo 44.731 27.763 44.950 27.763
14 Mortgages
Due within 1 Due after 1 Amortized Nominel debt Parent Compagny year year debt in total in total (tkr.) (tkr.) (tkr.) (tkr.)
Other long-term debt 53 164 217 0 53 164 217 0
Due after more than 5 years Other long-term debt 0 0
33
Notes to fiscalyear report
Parent Compagny Group 1/1 - 31/3 1/1 - 31/3 2009/10 2009 2009/10 2009 (tkr.) (tkr.) (tkr.) (tkr.)
15 Other debt
Accrued vacation pay 20.557 19.914 20.921 20.169 Accrued tax and pensions 6.055 6.546 6.107 6.611 Other debts 18.790 9.592 18.881 9.658 45.402 36.052 45.909 36.438
16 Contingent liabilities, other financial commitments and guarantees
Residual benefits of rents and lease obligations represent For collateral guarantees payment of
1/1 - 31/3 1/1 - 31/3 2009/10 2009 2009/10 2009 (tkr.) (tkr.) (tkr.) (tkr.)
17 Fee to the General Assebbly elected auditor
Audit fee 776 500 861 585 Regulatory previous years 0 35 0 35 Other assistance 1.104 0 1.104 0 1.881 535 1.966 620
34
Notes to fiscalyear report
18 Related party transactions and ownership for the parent company
Dominant influence Basis Grønlands Selvstyre Sole shareholder
Other related parties Neqi A/S Affiliated company in KNI-group Akia Sisimiut A/S Associated company
Michael Skourup 3900 Nuuk Chairman Vagn H. Andersen 3905 Nuussuaq Booard member Sofia Geisler 3952 Ilulissat Booard member Jens Kristian Therkelsen 3961 Uummannaq Booard member Jonas Aronsen 3911 Sisimiut Booard member H.P. Lynge-Larsen 3911 Sisimiut Booard member
Søren Lennert Mortensen 3911 Sisimiut Director
Transactions There has during the year - apart from intragroup transactions are eliminated in the consolidated financial statements been completed transactions with board, directors, executives, shareholders, affiliated companies or other related parties.
19 Board positions
Board members have the following board positions in other companies
Vagn Hansen Andersen Inuit Service Company A/S - chairman Rederiafviklingsselskabet af 1/4-2006 A/S - chairman Arctic Umiaq Line A/S - board member Malmbjerg Molybdenum A/S - board member
H. P. Lynge-Larsen Akia Sisimiut A/S, director
35
Notes to fiscalyear report
1/1 - 31/3 2009/10 2009 (tkr.) (tkr.)
20 Distribution of service contract, Grønlands Selvstyre
Narsarmiut 280 70 Aappilattoq 414 93 Tasiusaq- NAN 157 40 Alluitsup Paa 854 227 Saarloq 135 34 Ammassivik 243 62 Eqalugaarsuit 269 69 Qallimiut 51 7 Igaliku 192 47 Qassiarsuk 272 62 Qassimiut 154 37 Arsuk 451 114 Qeqertarsuatsiaat 614 163 Kapisillit 339 81 Atammik 573 147 Napasoq 383 90 Kangaamiut 811 217 Itilleq 332 76 Sarfannguaq 340 83 Attu 575 137 Iginniarfik 227 53 Ikerasaarsuk 232 54 Niaqornaasuk 712 180 Kangaatsiaq 1.941 498 Akunnaaq 332 84 Ikamiut 226 54 Qasigiannguit 2.259 552 Kitsissuarsuit 300 71 Ilimanaq 352 90 Oqaatsut 184 45 Qeqertarsuaq 2.106 527 Kangerluk 244 59 Qeqertaq 436 106 Saqqaq 533 132 Ikerasak 596 149 Uummannaq 2.581 645 Qaarsut 509 129 Saattut 637 164
36
Notes to fiscalyear report
1/1 - 31/3 2009/10 2009 (tkr.) (tkr.)
20 Distribution of service contract, Grønlands Hjemmestyre (continue)
Niaqornat 208 48 Ukkusissat 469 118 Illorsuit 319 77 Nuugaatsiaq 404 99 Upernavik kujalleq 490 123 Kangersuatsiaq 606 147 Upernavik 2.836 698 Aappilattoq - UPV 457 116 Innaarsuit 446 113 Tasiusaq - UPV 597 147 Nuussuaq 510 134 Kullorsuaq 878 221 Savissivik 317 61 Moriusaq 87 22 Qeqertat 77 19 Qaanaaq 1.575 415 Siorapaluk 229 60 Isortoq 247 62 Tasiilaq 4.200 1.055 Kulusuk 617 157 Tiniteqilaaq 369 89 Kuummiut 826 210 Sermiligaaq 464 119 Ittoqqortoormiit 1.026 267 40.100 10.025
37
Income statement 1. april 2009 - 31. marts 2010 Detail og Engros Pilersuisoq 2009/10 2009
Net revenues 1.172.402 264.715
Treasury payments for social services 40.100 10.025 Other operating income 36.212 7.118 Consumables (893.229) (210.886) Other external costs (124.808) (29.952) Gross earnings 230.677 41.020
Costs of employment (180.102) (45.864) Depreciation and write-down (26.038) (7.187) Earnings before financials 24.536 (12.031)
Financial income 11 2 Financial expenses (564) (242) Intra-Group interest (10.992) (4.775) Pre-tax earnings 12.991 (17.047)
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Income statement 1. april 2009 - 31. marts 2010 Energidivisionen Polaroil 2009/10 2009
Net revenues 909.209 214.522
Other operating income (286) 22 Consumables (791.206) (189.368) Other external costs (36.991) (9.162) Gross earnings 80.726 16.014
Costs of employment (25.915) (6.219) Depreciation and write-down (18.526) (4.652) Earnings before financials 36.285 5.143
Financial income 128 22 Financial expenses (34) (11) Intra-Group interest (10.956) (4.663) Pre-tax earnings 25.423 491
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Income statement 1. april 2009 - 31. marts 2010 Shared Service Center 2009/10 2009
Other operating income 21.644 9.872 Other external costs 9.297 616 Gross earnings 30.941 10.488
Costs of employment (29.057) (6.983) Depreciation and write-down (6.772) (3.103) Earnings before financials (4.888) 402
Results of affiliates (111) (869) Results of associated companies 66 88 Financial income 26.016 10.382 Financial expenses (24.759) (9.842) Product hedging 24.622 0 Interest hedging (6.001) 1.293 Pre-tax earnings 14.946 1.455
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