Moelven Industrier ASA is a public limited company registered in Norway. The company’s headquarters are located at Industriveien 2. 2390 Moelv. Norway.
The group's activities are described in the report of the board.
The consolidated accounts of the Moelven have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the interpretations of the IFRS interpretations committee (IFRIC), as determined by the EU.
The consolidated accounts were presented by the board on 09/03/2017 and the ordinary general meeting to discuss the annual accounts has been fixed for 26 April 2017.
The consolidated accounts are based on the principles of historic cost accounting with the exception of the following items:
The consolidated accounts have been prepared with uniform accounting principles for similar transactions and events under otherwise similar conditions.
Presented below are the most important accounting principles that have been used in preparing the consolidated accounts. These principles have been used in the same way for the comparison figures in the consolidated accounts.
The consolidated accounts include Moelven Industrier ASA and companies over which Moelven Industrier ASA has control of. Control is ordinarily achieved when the Group owns more than 50% of the shares in the company, but annual assessments are carried out of whether the Group also has control of companies where the stake is less than 50%. An investor controls an undertaking in which an investment is made when the investor is exposed to or has rights to variable returns from its involvement in that undertaking, and has the opportunity to influence these returns through its power over the undertaking. Non-controlling interest are included in group equity.
The acquisition method is used for recognising company mergers on the income statement. Companies which are bought or sold during the course of the year are included in the group accounts from the date on which control is achieved until the date on which it ceases.
Changes in holdings in the subsidiaries that do not lead to loss of control are entered as an equity transaction. The remuneration is entered at fair value and the difference between remuneration and the value of the holding entered on the balance sheet is entered against the majority owner's equity.
With changes in holdings that lead to loss of control. remuneration is measured at fair value. The balance sheet value of holdings and obligations in the subsidiary and the minority interests are deducted on the date of loss of control. The difference between the remuneration and the balance sheet value of the holding is included on the income statement as a gain or loss. Any remaining holding is measured at fair value and any gain or loss included on the income statement as part of the gain/loss on the sale of the subsidiary. Amounts included in other income and costs are entered on the income statement.
Associated companies are enterprises in which the group has significant influence. but not control. over the financial and operational management. We have holdings between 20% and 50% in our associated companies. The Group accounts include the Group’s share of profits from associated companies entered by equity method from the time significant control was achieved and until such control ceases.
When the group's losses exceed the investment in an associated company. the group's balance sheet value is reduced to zero and further loss is not entered unless the group has an obligation to cover this loss.
All other investments are entered in accordance with IAS 39. Financial instruments: Recognition and measurement more detailed information on which is given in note 26.
Internal group transactions and intra group balances. including internal earnings and unrealised gains and losses are eliminated. Unrealised earnings in respect of transactions with associated companies and jointly controlled enterprises are eliminated with the group's share of the company/enterprise. Unrealised losses are eliminated in the same way. but only to the extent that there are indications of depreciation of value of assets that are sold internally.
Below is a summary of new and revised standards that have been decided, but which have not come into force as at 09/03/2017.
Based on a preliminary analysis, the effect of the changes otherwise is not believed to have great significance for the annual accounts.
The group's presentation currency is NOK. This is also the functional currency of the parent company. Subsidiaries with other functional currencies are converted to the day rate for balance items and to the transaction rate for income statement items. Average monthly exchange rate is used as an approximation of transaction rate. Translation differences are entered against other income and costs ("OCI"). In any future sale of investments in foreign subsidiaries. accumulated translation differences that are referred to the majority owners will be entered on the income statement.
Management has used estimates and assumptions which have affected assets. liabilities. income. costs and information regarding potential obligations. This applies in particular to depreciation of fixed assets. assessment of added value and goodwill in connection with acquisitions. inventory. project assessments and pension commitments. Future events may cause the estimates to change. Estimates and the underlying assumptions are continually assessed. Changes in accounting estimates are entered into the accounts during the period in which the changes occur. Where changes also affect future periods. the effect is distributed across the current and future periods. See also note 4.
Foreign exchange transactions
Foreign exchange transactions are calculated at the exchange rate prevailing at the time of the transaction. Monetary items in foreign currency are converted to Norwegian kroner by using the rate of exchange on the balance date. Non-monetary items which are measured at historical exchange rates expressed in foreign currency are converted to Norwegian kroner by using the exchange rate at the time of transaction. Non-monetary items which are measured at fair value expressed in foreign currency are converted to the exchange rate determined at the time of the balance. Foreign currency fluctuations are recognised on the income statement continuously over the accounting period.
Assets and liabilities in foreign companies including goodwill and fair value adjustments which arise on consolidation are converted to Norwegian kroner by using the exchange rate on the balance date. Income and expenses in foreign enterprises are converted to Norwegian kroner by using the average exchange rate.
Exchange rate differences are entered in other income and costs ("OCI").
Income is recognised on the income statement when it is probable that transactions will generate future financial benefit which will accrue to the company and the size of the amount can be reliably estimated. Sales income is presented after deduction of value added tax and discounts. Internal sales within the group are eliminated.
Income from sale of goods is entered on the income statement once delivery has taken place and most of the risk and profit have been transferred.
Income from sale of services and long-term manufacturing projects is entered on the income statement as the project progresses. when the outcome of the transaction can be reliably estimated. In some of the companies. progress is measured as accrued costs in relation to total estimated costs. while in other companies. progress is measured on invoicing in relation to the contract total. When the result of the transaction cannot be reliably estimated. only income corresponding to accrued project costs will be recognised as income. In the period in which a project is identified as giving a negative result. the estimated loss on the contract will be recognised on the income statement in its entirety.
The group produces and sells energy to end customers. The sales is entered as income when the energy has been delivered and is read off at the customer's premises. Sales are entered based on the prices achieved. which are contract prices. but which can also be subject to price guarantee for the delivery period. Not including the financing element in sales is being considered. Otherwise. payment terms correspond to those that are normal in the market.
Interest earnings are recognised on the income statement as they are earned.
Dividends are entered when the shareholders' rights to receive dividends have been adopted by the general meeting.
For management purposes the group is organised into four different divisions according to products and range of services. The divisions represent the basis for the primary report segments. Financial information regarding segments and geographical distribution is presented in note 6.
In segment reporting. internal earnings on sales between the segments are eliminated.
Loan costs are entered on the income statement when the cost arises. Loan costs are entered on the balance sheet to the extent that they are directly related to the purchase manufacture of an asset and where the manufacturing period is long. A long manufacturing period means close to 12 months. Interest rate costs accrue during the build period until the asset is entered on the balance sheet. Balance entry of the loan costs is done until the point when the asset is ready for use. If the cost price exceeds the asset's fair value. it is written down.
Tax costs consist of payable tax and changes in deferred tax. Deferred tax/tax benefits are calculated on all differences between book and taxable values of assets and liabilities. with the exception of:
Deferred tax advantage is recognised on the income statement when it is probable that the company will have sufficient tax surplus in later periods to utilise the tax advantage. The companies enter deferred tax benefits that have not been previously entered to the extent that it has become probable that the company may make use of the deferred tax benefit. Likewise the company will reduce deferred tax advantages to the extent that the company no longer regards it as probable that it can utilise the deferred tax advantage.
Deferred tax and deferred tax advantages are measured based on anticipated future tax rates for the companies in the group where temporary differences have previously arisen.
Deferred tax and deferred tax advantages are recognised at nominal value and are classified as financial capital expenditure (long-term liability) on the balance sheet.
Payable tax and deferred tax are entered directly against equity to the extent that the tax entries relate to equity transactions.
Expenses associated with research activities are recognised on the income statement when they arise. Costs relating to development activities are entered on the balance sheet to the extent to which the product or process is technically and commercially realisable and the group has sufficient resources to complete the development. The costs that are entered include material costs. direct payroll costs and a proportion of directly attributable joint expenses. Development costs entered on the balance sheet are entered as acquisition costs minus accumulated depreciation and write-down.
Development costs entered on the balance sheet are depreciated on a straight line basis over the estimated lifetime of the asset.
Tangible fixed assets are measured at acquisition cost. less accumulated depreciations and write downs. When assets are sold or disposed of. the value on the balance sheet is deducted and any profit or loss is entered on the income statement.
Acquisition price for fixed assets is the purchase price including duties/taxes and costs directly associated with preparing the fixed assets for use. Costs after the fixed asset has been taken into use. such as continuous maintenance. are entered on the income statement. while other costs that are expected to provide future financial benefit are entered on the balance sheet.
Depreciation is calculated on a straight-line basis over subsequent decomposition and useful life:
Depreciation period and method are reviewed annually. Scrap value is estimated at each year end and changes in estimated scrap value are entered as estimate changes.
Plant under manufacture is classified as a fixed asset and is entered as cost until manufacture or development is completed. Plant under manufacture is not depreciated until the asset is taken into use.
Financial lease agreements
Lease agreements for which the group assumes the main risk and profit involved in ownership of the asset are financial lease agreements. At the beginning of the lease period. financial lease agreements are recognised at an amount corresponding to the lower of either fair value or the present value of the minimum lease. For calculation of the lease agreement’s present value the implicit interest cost in the lease agreement is used if it is possible to calculate this. If not. the company’s marginal borrowing interest is used. Direct expenses relating to establishing the lease contract are included in the asset's cost price.
The same depreciation period is used as for the company's other depreciable assets. Where reasonable certainty that the company will assume ownership at the end of the lease period does not exist. the asset is depreciated over the shorter of the duration of the lease agreement and the asset's economic life cycle.
Operational lease agreements
Lease agreements where the main risk and profit associated with ownership of the asset are not transferred are classified as operational lease agreements. Lease payments are classified as operating expenses and are recognised on a straight-line basis over the contract period.
Intangible assets acquired separately are entered on the balance sheet at cost. The cost of intangible assets obtained through acquisitions are entered on the group´s balance sheet at fair value at the time of the acquisition. Intangible assets entered on the balance sheet are entered in the accounts at cost less any depreciation or write down.
Internally generated intangible assets. with the exception of recognised development costs. are not entered on the balance sheet but are entered as costs on an ongoing basis.
Useful lifetime is either predetermined or non-predetermined. Intangible assets with a predetermined useful life are depreciated over this period and tested for write down if so indicated. Depreciation method and period are assessed at least annually. Changes in depreciation method and/or period are treated as estimate changes.
Intangible assets with a non-predetermined useful life are tested for depreciation at least annually. either individually or by cash flow generating unit. Intangible assets with a non-predetermined useful life are not depreciated. The useful life is assessed annually to determine whether the assumption of non-predetermined useful life is reasonable. If not. a change is made to predetermined useful life.
Costs relating to the purchase of new software are entered on the balance sheet as an intangible asset if these costs are not part of the acquisition cost of hardware. Software is normally depreciated on a straight line basis over 3 years. Costs arising as a result of maintaining the future usefulness of software are entered as costs if the changes to the software do not increase the future financial benefit of the software.
Business combinations are entered in accordance with the acquisition method. Refer to note 3.24 with regard to the measurement of minority interests. Transaction costs are entered on the income statement as they occur.
Remuneration for the purchase of a company is measured at fair value on the date of acquisition.
When a company is purchased. all assets and obligations taken over are assessed for classification and assignment in accordance with contract conditions. economic circumstances and relevant conditions on the date of acquisition. Assets and debts taken over are entered on the balance sheet at fair value on the consolidated opening balance unless IFRS 3 indicates that other measurement rules shall be used.
Allocation of added value in company amalgamations is amended if new information arises regarding fair value on the date of taking control. Allocation can be changed up to 12 months after the date of acquisition if this is specified at the time of acquisition. The minority interests are calculated as the minorities' percentage of identifiable assets and debts.
In the case of step by step acquisition. earlier assets are measured at fair value on the date of acquisition. Changes in the value of earlier assets are entered on the income statement.
Goodwill is calculated as the sum of the remuneration and book value of the minority interests and fair value of previously owned assets. less the net value of identifiable assets and obligations calculated on the date of acquisition. Goodwill is not depreciated but tested at least annually for loss in value.
The part of the fair value of the equity that exceeds the remuneration (negative goodwill) is immediately entered on the income statement on the date of acquisition.
Public grants are entered in the accounts when there is reasonable certainty that the company will fulfil the conditions associated with the grant. Recognition of operational grants is calculated systematically over the grant period. Grants are recognised as deductions from the cost that the grant is intended to cover. Investment subsidy is entered on the balance sheet in a systematic way over the life cycle of the asset. Investment subsidy is entered either as deferred income or as a deduction when determining the value of the asset on the balance sheet.
According to IAS 39 Financial Instruments – recognition and measurement. financial instruments within the scope of IAS 39 are classified in the following categories: financial assets at fair value through profit or loss. held to maturity. loans and receivables. available for sale and other obligations.
Financial instruments that are primarily held for the purpose of selling or buying back in the short term. financial instruments in a portfolio of identified instruments that are controlled together and where there are clear signs of short term realisation of gains and derivatives that have not been designated as hedging instruments are classified as held for trading purposes. These instruments are included in the category financial assets at fair value through profit or loss. together with financial instruments that qualify as. and have been designated as. instruments at fair value through profit or loss. Financial guarantee contracts are measured at the higher of what follows from IAS 37 Provisions. Contingent Liabilities and Contingent Assets and IAS 18 Revenue. unless the contracts qualify as. and have been designated as. instruments at fair value through profit or loss.
Financial assets with fixed or determinable cash flows and fixed redemption dates. where the group has the intention of and the ability to hold the investment to maturity. are classified as investments held to maturity. with the exception of those instruments that the company designates as instruments at fair value through profit or loss or available for sale. or which meet the criteria for inclusion in the category loans and receivables.
Financial assets with fixed or determinable cash flows that are not listed in an active market are classified as loans and receivables. with the exception of instruments that the group has designated as instruments at fair value through profit or loss or available for sale.
All other financial assets are classified as available for sale.
Financial obligations that due not fall into the category held for trading purposes and that have not been designated as instruments at fair value through profit or loss are classified as other obligations.
Financial instruments held to maturity are included in financial fixed assets. unless the redemption date is within 12 months of the balance date. Financial instruments in the group that are held for trading purposes are classified as current assets. Financial instruments available for sale are presented as current assets if management has decided to dispose of the instrument within 12 months of the balance date.
Investments held to maturity. loans and receivables and other obligations are recognised at amortised cost. Financial instruments classed as available for sale and held for trading purposes are recognised at fair value. as observed in the market on the balance date. without deduction for costs connected with sale.
Gains or losses resulting from changes in the fair value of financial investments classified as available for sale are recognised as other income and costs until the investment is realised. On realisation. accumulated gains or losses on the financial instrument that have previously been recognised against equity are reversed and the gain or loss is entered on the income statement.
Gains or losses resulting from changes in the fair value of financial investments classified as held for trading purposes or that have been designated as instruments at fair value through profit or loss are entered on the income statement and presented as financial income or cost.
The fair value of financial instruments that are traded in active markets is determined at the end of the reporting period by referring to the listed market price from traders of financial instruments (buying rate for long positions and selling rate for short positions). without deduction for transaction costs.
For financial instruments that are not traded in an active market. the fair value is determined with the aid of a suitable valuation method. Such valuation methods involve the use of recent market transactions at arm's length between well-informed and voluntary parties. if such are available. referral to the current fair value of another instrument that is practically the same. discounted cash flow calculation or other valuation model.
An analysis of fair value of financial instruments and other details regarding the measurement of these is given in the note 26.
The group performs financial hedging transactions. However on the basis of an assessment of cost and benefit of hedge accounting in accordance with IAS 39. it has been decided that the group does not perform hedge accounting.
Financial derivatives that are not recognised as hedging instruments are assessed at fair value. Changes in fair value are entered on the income statement on an ongoing basis.
An inbuilt derivative is separated from the host contract and recognised as a derivative if and only if all the following conditions are fulfilled:
Financial assets valued at amortised cost are written down when it is probable based on objective evidence that the instrument’s cash flow has been affected negatively by one or more events occurring after the initial recognition of the instrument. The write-down amount is entered on the income statement. If the cause of the write down later ceases and the cessation can be objectively associated with an event taking place after the inclusion of the write-down. the previous write-down is reversed. This reversal must not result in the balance value of the financial asset exceeding the amount of what the amortised cost would have been. if the loss in value had not been included at the time when the write-down was reversed. Reversal of earlier write down is presented as income.
Financial assets classified as available for sale are written down when there are objective indications that the value of the asset has fallen. The accumulated loss that has been entered directly to equity (the difference between acquisition cost and current fair value less write-down that has previously been included on the income statement and any amortisation amount) is removed from equity and entered on the income statement. If the fair value of a debt instrument classified as available for sale increases at a later date. and the increase can be objectively linked to an event that occurred after the write-down was entered on the income statement. the write-down shall be reversed on the income statement. Write down of an investment in an equity instrument is not reversed on the income statement.
Inventory is recognised on the income statement at the lower of acquisition cost or net sales price. Net sales price is an estimated sales price for ordinary operations minus estimated costs for completion. marketing and distribution. Acquisition cost is allocated by use of the FIFO method and includes expenses accrued when acquiring the goods and the costs of bringing the goods to their current condition and location. Proprietary goods include variable and fixed costs that can be allocated based on normal capacity utilisation.
The Building Systems division primarily performs contract assignments (projects). Revenue from projects are recognised by the degree of completion. based primarily on a comparison of accrued project costs and estimated total costs of the project.
Additional claims and disputed amounts are not normally entered until agreement has been reached or there is a court judgement. However part of the claim is entered if there is an overwhelming probability of the anticipated outcome. Provision is made for claims activities based on historical experience and identified risks. Guarantee periods are normally from three to five years.
For projects that are expected to result in a loss. the entire loss is entered on the income statement as soon as it is identified. Costs of tendering and other preparatory work are entered as they arise.
For projects that are directed by outside companies. invoicing is performed monthly with 30 day payment terms. Invoicing is normally done in line with the completion of the work. but there are also payment schedules that do not correspond to progress.
For projects. both income and costs are scheduled. Income that has been earned but not yet invoiced is entered under the item "Completed. not invoiced". Invoiced income that has not yet been earned (forward payment plans) is entered under the item "Prepayments from customers" under other short term liabilities; see note 19.
Scheduling of costs (accrued. not entered) is recognised as trade accounts payable. while provisions for claims activities on concluded projects are entered as claims provisions etc.
Part of the outstanding receivables is secured in the form of bank guarantees or other forms of security. There is not considered to be any credit risk associated with public sector customers. Refer to note 5 on financial risk.
When the result of the transaction cannot be reliably estimated, only income corresponding to accrued project costs will be recognised as income.
Cash includes cash holdings and bank deposits. Cash equivalents are short term liquid investments that can be immediately converted into a known amount of cash and that have a maximum of 3 months to maturity.
In the cash flow statement. the bank overdraft has been subtracted from the balance of cash and cash equivalents.
On repurchase of own shares. the purchase price including immediate costs is entered as a change in equity. Nominal value of own shares are presented in a separate accounting line while paid amounts beyond nominal value as a reduction of equity. Losses or gains on own share transactions are not entered on the income statement. but is recognised in equity.
Costs of equity transactions
Transaction costs directly associated with equity transactions are entered directly to equity after deduction for tax.
Translation differences arise in conjunction with currency differences on consolidation of foreign units.
Currency differences on monetary items (liability or receivable) that are in reality part of a company's net investment in a foreign unit are also entered as translation differences.
For disposal of foreign units the accumulated translation difference associated with the unit is reversed and entered on the income statement for the same period as the profit or loss on the disposal is entered on the income statement.
Minority interests in the consolidated accounts represent the minority's holding of the balance sheet value of equity. With acquisitions. minority interests are measured according to their proportionate share of identified assets.
The subsidiary company's results. as well as the individual components of other income and costs. are attributable to owners of the parent company and the minority interests. The total result is attributed to the parent company's owners and to the minority interests. even if this leads to a negative minority interest.
The group's Norwegian companies:
All the Norwegian companies have collective contribution-based pension schemes. These are schemes with a savings portion and a risk portion with earnings right. Pension premiums are entered as costs as they occur.
The collective contributory pension was ended in 2015. All new employees will now attend the collective contributory pension. The closed schemes are defined benefit plans that give a few employees entitlement to agreed future pension benefits. The benefits are based on the number of years of earning and pay level on retirement.
The group's foreign companies
Many of the group's foreign companies offer their employees pensions based on agreed individual contribution-based pension schemes. In Sweden. most employees are covered by a collective occupational pension agreement. The scheme is defined as a multi-employer plan. Salaried staff born before 1979 are included in an individual occupational pension scheme that is also defined as a defined benefit plan. Because of the difficulty of reliably measuring the benefit level of these plans. there is insufficient information on an individual basis to enter the plans in the accounts as defined benefit schemes. The plans are entered as if they were contribution-based schemes. Salaried staff born after 1979 are included in an occupational pension scheme that is premium based and is therefore treated in the accounts as contribution-based.
Defined-benefit pension schemes
Defined-benefit pension schemes are valued at present value of the future pension benefits that have been earned on the date of balance. Pension funds are valued at fair value.
Changes in defined-benefit pension commitments that are due to changes in pension plans are distributed over the estimated average remaining earnings period. Estimate changes and changes in financial and actuarial assumptions (actuarial gains and losses) are entered in other income and costs (OCI). The period’s net pension costs are classified as payroll and personnel costs.
Gains and losses on the curtailment or settlement of a defined-benefit pension scheme are recognised on the income statement on the date the curtailment or settlement occurs.
Curtailment occurs when the group decides on a significant reduction in the number of employees covered by a scheme or changes the conditions for a defined-benefit pension scheme so that a considerable part of the present employees' future earning no longer qualifies for benefits or only qualifies for reduced benefits.
Contributory pension scheme
All Norwegian employees are now a part of the group's contribution-based pension schemes. Contributions are given to the pension plan for full-time employees and represent from 3.6 % to 21.7 % of pay. Pension premiums are entered as costs as they occur.
A provision is recognised when the group has an obligation (legal or self-imposed) as a result of an earlier event. it is probable (more probable than not) that a financial settlement will take place as a result of this obligation and the amount can be reliably measured. If the effect is considerable. the provision is limited by discounting anticipated future cash flow by using a discount rate before tax that reflects the market price of the monetary value and. if relevant. the risk associated with the specific provision.
A provision for guarantees is included when the underlying products or services are sold. The provision is based on historical information about guarantees and a weighting of possible outcomes according to the probability of their occurrence.
Restructuring provisions are included when the group has approved a detailed and formal restructuring plan and the restructuring has already started or has been made public.
Conditional liabilities are not recognised in the annual accounts. Significant conditional liabilities are reported. with the exception of conditional liabilities where the probability of the liability is low.
A conditional asset is not recognised in the annual accounts. but is reported where it is probable that a benefit will accrue to the group.
New information about the company’s financial position on the balance date that arises after the balance date is taken in to consideration in the annual accounts. Events after the balance date that do not affect the company’s financial position on the balance date. but which will influence the company’s financial position in the future. are reported if they are significant.
The following exchange rates against the Norwegian kroner (NOK) have been used in consolidating the accounts.
In preparing the annual accounts in accordance with IFRS, the company's management have used estimates based on good faith and assumptions which are believed to be realistic. Situations or changes may arise which may mean that such estimates require adjustment and thereby affect the company’s assets, debt, equity or profit and loss.
The company’s most important accounting estimates relate to the following:
Anticipated useful life of the company's production equipment is affected by the technological development and profitability of the plant. Choice of depreciation period is an estimate.
If there are indications of a fall in value, the inventory in the subsidiaries must be tested for value loss. Book value is then compared with estimated net sales value. Management must take many things into account when making this estimate.
The company's recognised goodwill and intangible assets are assessed for write down annually. Impairment testing of intangible assets are presented in Note 10b. The company is greatly affected by economic cycles that lead to considerable fluctuations in fair value in the company. The group is particularly affected by developments in the export markets in Europe and Africa, as well as fluctuations in the building industry in Scandinavia. Exchange rates and market interest rates also affect valuation. Valuations of the various established segments will naturally vary within a range of +/- 20%. For businesses in less mature markets, the range may be even greater. Moelven must distribute the cost price of acquired companies over acquired assets and acquired debt based on estimated fair value. The valuation estimates require management to make considerable assessments in the choice of method, estimates and assumptions. Significant acquired intangible assets that Moelven has included, comprise customer base and goodwill. The assumptions made for the assessment of intangible assets include, but are not limited to, estimated average lifetime of customer relationships based on natural loss of customers. The assumptions made for the assessment of assets include, but are not limited to, the reacquisition costs of fixed assets. Management's assessments of fair value are based on assumptions that are deemed to be reasonable, but that have a built in uncertainty, and as a result of this the actual results may differ from the calculations.
Project assessment is dependent on estimates of degree of completion, anticipated final status, any loss projects, guarantee obligations and claims. The managements of the subsidiaries within Building Systems use figures based on experience, among others, in preparing the estimates.
Following a review of the overall project portfolio in Building Systems, it has been revealed that the valuation in the fourth quarter report was too high. Based on a careful assessment of the portfolio, an impairment totalling NOK 40 million has been implemented in the annual accounts. The decrease is related to an unresolved final settlement on a major single project. The dispute is related to disagreement about both economic and legal conditions in which the customer declares to have claims against Moelven. There is not made any provision in the financial statements for the demands of the client. Out of consideration for the final process, there is given no information on the matter beyond this, based on the rules of "contingent assets and liabilities" IAS 37 section. 92.
Projects under construction are presented in note 19.
The Moelven group is exposed to several types of financial risk in its activities. The main objective of the group's financial policy is to reduce risks and ensure a predictable financial framework for the industrial operations. The adopted policy should minimize the potential negative effects that financial markets may have on the Group's cash flow. The Group's position on financial risk is that it is the industrial activities rather than financial transactions that shall create the conditions necessary for profitability.
Financial risk management is handled by the Group's central finance department in collaboration with the various operational units. The main financial risks are mainly of systematic character and principles of management are described below:
Market risk is the risk that a financial instruments fair value or future cash flow will fluctuate as a result of changes in market prices. Market risk includes three types of risk: currency exchange rate risk, interest rate risk and other price risk.
In this context, transaction risk means the exchange rate risk that is caused by the possibility of exchange rate changes in the period between the time a transaction in foreign currency is agreed and the time of settlement. About 15 per cent of the group's operating revenues occur from markets outside Scandinavia and carry exchange rate risks. Both raw materials and finished goods are imported into Norway from Sweden. The most important foreign currencies are EUR, SEK and GBP, but Moelven Group is also exposed to USD, CAD, CHF and AUD.
Moelven uses currency forwards to counteract large profit fluctuations as a result of variations in exchange rates. The group companies shall perform all currency hedging with the group's central finance department, which hedges the group's total net exposure externally. Norwegian subsidiaries hedge against NOK, Swedish ones against SEK. Results from Swedish subsidiaries are included as part of net investment in foreign subsidiaries and are, in accordance with current financial policy, not hedged for exchange rate fluctuations.
In accordance with the financial policy, net exposure in foreign currency shall be hedged against rate fluctuations according to the following main principles:
Because of the hedging strategy that has been chosen, changes must be long-term so as to have the full effect on the group's profitability. During the hedging period, operational adaptations may be made to compensate for the external changes.
The table below shows the transaction volume for the major currencies in 2016 and 2015. The Group does not use hedge accounting, and the effect on equity of changes in market values of currency hedges therefore corresponds with the effect on net profit.
Added to the exposure in the table above, the Group has ha net exposure in SEKNOK of approx. NOK 140 million. The exposure is due to net exports from the Swedish group companies to Norway. Since a large proportion of the Group's total production takes place in Sweden, the Group has significant operational costs in Sweden. However, only Norwegian entities' operating costs in SEK are currency hedged. Net income from the Swedish subsidiaries are included in retained earnings, and the currency risk arising in connection with these units' operating income and expenses are taken into account the risk related with the risk of conversion to equity.
The table below shows sensitivity in the results before tax to exchange rate changes when all other conditions remain unchanged. The calculations are on the basis of rate changes being constant for the whole year. The effects of currency hedging, changes in the market value of financial hedging instruments and revaluing of balance sheet items have not been taken into account.
The market value of financial instruments depends on the balance sheet exchange rate in relation to hedging rates that have been achieved. Changes in market value will result in an unrealized gain or loss is recognized as financial items. The table below shows how the profit before tax would have been affected by a change in the balance sheet date.
The calculation is made on the basis of actual hedging volumes in the specified currencies per 31.12.2016.
In this context, translation risk means exchange rate risk due to the balance sheet including items that are denominated in a foreign currency. For the Group companies, this translation risk is eliminated in that financing shall occur in the same currency as the asset is entered in the accounts.
About half of the Group's total balance sheet is connected to activities in Sweden. The balance sheet figures will therefore be affected by the prevailing exchange rate between the Swedish and Norwegian kroner. A large part of equity is secured against this in that share investment in most of the group's Swedish subsidiaries is financed in Swedish kroner.
The table below shows the effect on consolidated equity by a change in the exchange rate of +/- 10 per cent:
Interest rate risk is the risk that a financial instrument's fair value or future cash flows will fluctuate because of changes in market interest rates. Net interest bearing debt provide the basis for interest rate risk.
The Group companies will be financed with loans from the parent company in the currency of the subsidiary's local currency. Mainly, this means either in NOK or SEK. All external borrowing is done by the parent company, which also makes hedging in accordance with financial policy. Hedging instruments that can be used are the ordinary interest rate swaps, FRAs and composite swaps, of a kind normally used for such purposes. The total duration of outstanding debt and hedging transactions is used as target setting for the interest hedging activities. The total duration should be minimum of 12 md and maximum 60 months No interest rate hedging agreements shall be entered into more than 10 years.
The Group's average net debt in 2016 was NOK 1 143,0 million (1271,1). If the interest rate risk had been unhedged, a one percentage point change in interest rates would have led to a change in the Group's financing costs of NOK 11.6 million. According to the financial policy, however, parts of Group net debt is secured by the use of financial hedging instruments, primarily interest rate swaps, where floating rate swapped to fixed rate. At the end of 2016, the hedged portion was 48.7 per cent. Market value changes of interest rate instruments are recognized in the profit and loss account, but do not affect the cash flow. The unrealized item from interest rate instruments will normally be greater than those realized records, because market value is related to the remaining time to maturity of the instrument.
Estimated effect on profit before tax by a change in interest rates and yield curves in the future are shown in the table below. The Group does not use hedge accounting, and the effect on equity is therefore equal to the effect on net profit.
Other price risk is the risk that a financial instrument's fair value or future cash flow will fluctuate because of changes in market prices (apart from changes that are due to interest rate risk or exchange rate risk), regardless of whether these changes are caused by factors that are specific for the individual financial instrument or the instrument's issuer, or by factors that affect all corresponding financial instruments that are traded in the market.
The price of electric power is another important factor that affects the group's profitability. About 210 GWh of electric power a year is bought from the group's electricity suppliers on the Nasdaq OMX exchange.
According to the group's financial policy, the need for electric power shall be secured against price fluctuations so as to ensure stability and predictability. The anticipated power requirement is hedged within stated maximum and minimum levels by forward buying on Nasdaq OMX with a 5 year maximum horizon.
The price of electric power is denominated in EUR. The Group's power costs are therefore affected by both price changes and exchange rate changes. Based on the Financial Supervisory Authority statements in 2016, concerning the long-term supply agreements of power, the embedded currency derivative used in the hedging of electric power has been calculated and separated for 2016. In accordance with IAS 39, the value is included in the Group's financial statement, while the actual supply contracts are excluded. The value per 31.12.2016 amounted to NOK 0.6 million. The group's annual electricity consumption has been relatively stable, apart from increases caused by business combinations. The table below illustrates the effects on results before tax of a change in the electricity price of +/- 1 EUR per MWh at different exchange rate levels for EURNOK.
The effect on profit before tax of exchange rate changes on the total consumption per year is shown in the table below:
The table below shows the sensitivity to changes in the price level for electricity forward contracts at Nasdaq OMX. The starting point in secured volume per 31.12.2016 and provided that the price curve for futures contracts changed with 1 EUR / MWh.
Liquidity risk is risk that the company will run into difficulties in fulfilling obligations connected with financial commitments that are settled with cash or another financial asset.
In mid-June an agreement was signed for a new long-term credit facility to replace the facilities with maturity in September 2016 and June 2017 respectively. The new loan agreement include normal default clauses with regard to equity ratio of 33 per cent, net equity value of NOK 1.1 billion and debt ratio of maximum 1.0. As of 31 December 2016, the group's key figures were better than the agreed levels. In addition to the long-term credit facilities, the Group has unutilised credit limits in its bank systems, amounting altogether to about NOK 312 million. Short term credit facilities are renewed annually. As of 31 December 2016 NOK 105.8 million of the short term credit facilities was drawn. Long-term cash flow forecasts are prepared in connection with the strategy and budget process. The finance department monitors the utilisation of the credit facilities against the long-term liquidity needs so as to ensure that the group has sufficient long-term financing.
Short-term cash flow forecasts are prepared in the different group companies and reported weekly to the group's finance department, which aggregates the forecasts and monitors the group's total forecasted liquidity needs. Based on these forecast, the finance department ensures that the group has sufficient liquidity to meet operational obligations. Surplus liquidity is used to pay off long-term liabilities. Short-term investments are only made exceptionally.
As a result of seasonal variations in raw materials supplies and market activity, the group's working capital varies by NOK 300-400 million between the highest point in May/June and the lowest in November/December.
The above table does not show cash flows from accounts payable, other interest-bearing liabilities and cash flows from derivatives. An overview of the nominal value of financial derivatives is presented in Note 26.3.
Refinancing risk is the risk of difficulties arising in refinancing the group's long-term liabilities.
In accordance with the group's financial policy, the remaining time to maturity of financing shall be a minimum of 1 year.
The Group's long-term financing is based on syndicated loans from a few selected financial institutions with which the group has cooperated closely for an extended period. The background to this is the significance of these financial institutions' focus on the mechanised wood industry, combined with industry competence and knowledge of risk profiles and seasonal/cyclical fluctuations. The present financing has been taken up with negative pledge declaration and default clauses, linked with key figures on the balance sheet. The loan agreements do not contain any profit-related default clauses.
Credit risk arises in transactions with derivatives, bank deposits and financial institutions, as well as transactions with customers and suppliers.
As a general rule, the Group only enters into financial transactions with financial institutions that participate in the long-term financing of the group. None of these has a credit rating poorer than A with the major credit rating agencies. The Group has corresponding principles in relation to bank deposits and investments.
In accordance with the group's financial policy, credit sales should only be granted at satisfactory security in the form of credit insurance or guarantees. The Group's framework agreement for credit insurance has been drawn up with a third party that is acknowledged in the market and has a credit rating of A.
In some cases it is not possible to obtain satisfactory security for credit sales. A function has therefore been established for determining internal credit limits and follow-ups of credit sales.
The group's objectives for asset management are:
- Ensuring continued good operations for the group so as to give a satisfactory and predictable return for the owners
- Ensuring sufficient financial room for manoeuvre to achieve the established targets for growth
- Keeping capital costs as low as possible
The board's dividend policy is based on facilitating a predictable and satisfactory cash yield on investments made by Moelven's shareholders. The main rule of the group's dividend policy indicates a cash dividend corresponding to 50 per cent of profit after tax, with a minimum of NOK 0,40 per share. The considerations of the company's financial position and other capital sources have to be satisfactorily safeguarded.
The Board's objective for equity ratio is a minimum of 40 per cent, a level that is appropriate in light of the economic fluctuations that have been seen in recent years. In addition, Moelven's operations have a seasonal requirement for working capital that cause great variations in the equity ratio.
The Board has an objective of a debt ratio of 0.50 for a normal seasonal balance. The debt ratio is arrived at by dividing net interest-bearing debt by equity.
The divisions are divided in accordance with Moelven's three core activities: Timber (industrial goods), Wood (construction materials) and Building Systems (projects). There is also a division named ""Other"" in which the remaining units are placed. The divisions are built up around independent subsidiaries with activities clearly defined within the divisions. All transactions between the divisions are conducted on normal commercial terms. The split into divisions differs from the formal legal ownership structure.
Group management represents the group's decision maker. The operating segments are managed by their peculiarity.
The segments are divided in accordance with who the customers are. Timber has mainly industrial customers, Wood has mainly end users and building product chains as customers and Building Systems has customers in the contracting sector. The others are the remaining companies, mainly the parent company, timber supply and bioenergy.
In Timber and Wood especially, there is a great deal of collaboration between segments, but there are internal transactions between all four segments. Transactions between the segments are agreed on the arm's length principle. Income from customers outside the segment is reported to group management according to the same principles as the consolidated income statement.
Group management is mostly focused on the following key figures: Sales income, profit margins, net operating capital, employed capital and returns on employed capital, interest-bearing debt and investments.
The accounting principles that form the basis for segment reporting are the same as those used for consolidated accounting and are described in note 3.
Reconciliation between reported segments operating revenues, profit before tax, assets and liabilities and other significant conditions.
The presentation of geographical segments shows operating revenues based on the geographical location of the customers.
No customers represents more than 10 % of income.
Presentation of number of employees, fixed assets, employed capital and investments is shown based on geographical location of the assets.
In sales income for the group, internal deliveries and services between the group companies amounting to NOK 6.228 million have been eliminated (NOK 5.839 million).
Earnings were impacted by an impairment loss of NOK 16.5 million as a result of the restructuring of Moelven Tom Heurlin AB. The impairment of the cash-generating entity's value is entirely recognized in profit and the recoverable amount is estimated to be the value in use.
Temporarily out of order
For 2016 there is a facility to book value of NOK 4.8 million which is temporarily out of service. The plant is not impaired as the entry into service is assessed on an on-going basis.
The group recognised expenses of NOK 18,4 million in relation to operating leases in 2016. The equivalent expense in 2015 was NOK 23,3 million.
Minimum lease payments relating to operating leases
Leases where control and substantially all the risks have been transferred to the group are classified as finance leases. Further information are given in note 3.
Minimum lease payments relating to finance leases
As of 31. December 2016 goodwill in the group entered on the balance sheet amounted to NOK 13.3 million. This is linked to the acquisitions of Sør-Tre Bruk AS, Granvin Bruk AS and Eco Timber AS that were completed in 2010. These three acquired companies are all in the Wood division and it is the division's operation that is deemed to be the cash flow generating group that goodwill shall be tested against.
Goodwill is tested at the level monitored by group management, which means that there are groups of cash flow generating units (CGUs).
The recoverable amount of CGU is determined based on an assessment of the division's value in use. Value in use is estimated by discounting expected future cash flows after tax, discounted at an appropriate discount rate after tax that takes into account maturity and risk.
The projections of cash flows based on budgets approved by management for the first four years. The cash flows are arrived at by taking the historical figures for the CGUs as a basis, but with an allowance for an expected moderate growth in the total market, Moelven's market share and the prices of the products. In management's opinion it is reasonable to assume that considerable development of new products and technologies will occur in these areas. Net expectations for operating margins are improvements. When it comes to fixed assets and production capacity, the management believes that these have the capacity needed to handle future growth. After four years, it is placed a conservative estimate of 2.5 per cent nominal growth in net cash flows. In the terminal period, investments and depreciation equal.
The rate used for discounting cash flows is 8,0 per cent. This is based on a risk-free rate of 1,6 per cent, an added risk premium of 5.9 per cent, an equity beta of 1.2 and a liquidity premium of 3.0 per cent. In addition this is weighted up against the long-term borrowing rate of 3.0 per cent. The risk premium is based on observations of comparable companies.
There was no write down of goodwill in either 2016 or 2015. In 2016, a company with a recorded goodwill of NOK 3.6 million was sold from Buildings Systems.
Maximum exposure to possible write down of goodwill is NOK 13.3 million. We have calculated sensitivity for the write down assessments, and a 5.5 per cent change in discount rate would lead to write down of the goodwill in the Wood division in the consolidated accounts.
The average number of employees in 2016 was 3 521, and in 2015 it was 3 405. Moelven had 3 492 employees at the end of 2016 compared to 3 426 employees at the end of 2015.
Reconciliation of tax calculated with the group's weighted average tax rate and tax costs as they appear on the income statement:
Deferred tax benefits and deferred tax are netted when there is a legal right to give and receive group contribution between the entities.
The table below shows the basis that has resulted in recognised deferred tax benefits and deferred tax.
NOK 34.4 million of the total loss carry-forward refers to a Norwegian company where the ownership holding is below the limit for group contributions. The management of this company is in the process of reviewing possible production measures to improve profitability. Part of the loss carry-forward is recorded at deferred tax assets. The group has no recorded deferred tax regarding carry-forward losses in other countries than Norway.
1) The company has deviating accounting with balance sheet date 31.08. The result of four months will be insignificant for Moelven Group. It is therefore not prepared any interim balance.
2) The company was established in autumn 2015 and effects associated with the company is not taken into account in preparing the consolidated financial statements for 2015. Based on an assessment 31.12 the effects of the company is not significant to the consolidated financial statements.
Write down of inventory to fair value in 2016 is included in profit and loss with NOK 18.0 million. The equivalent value in 2015 was NOK 22.6 million. The book value of inventories pledged as security in 2016 was NOK 1.1 million and NOK 5.5 million in 2015.
Part of the outstanding receivables is secured in the form of bank guarantees or other forms of security. There is not considered to be any credit risk associated with public sector customers. Refer to note 5 on financial risk.
Other receivables consist of other deferred income, prepayments and operations-related items. The groups accounts receivable are mainly secured through credit insurance.
Currency breakdown of accounts receivable before provision for loss
For projects that are directed by outside companies, invoicing is performed monthly with 30 day payment terms. Invoicing is normally done in line with the completion of the work, but there are also payment schedules that do not correspond to progress.
For projects, both income and costs are scheduled. Income that has been earned but not yet invoiced is entered under the item ""Completed, not invoiced"". Invoiced income that has not yet been earned (forward payment plans) is entered under the item ""Prepayments from customers"" under other short term liabilities, see note 25. Only one of these items is used per project. Thus each project shows either a net receivable for the customer or a net liability to the customer.
Scheduling of costs (accrued, not entered) is recognised as trade accounts payable, while provisions for claims activities on concluded projects are entered as claims provisions etc.
Earnings per share is calculated by dividing the share of the annual profits allocated to the company’s shareholders by a weighted average of the number of ordinary shares issued over the year, less own shares.
Equity per share is calculated by dividing the share of equity assigned to the company’s shareholders by a weighted average of the number of ordinary shares issued over the year, less own shares.
The following companies are included in the Group. The list is group according to division structure. Book value shows the book value in the separate financial statement of the owner of the company.
The pension funds and commitments on the balance sheet mainly relate to the group's Norwegian companies.
The group's defined benefit scheme regarding the Norwegian companies was ended in 2015. New employees will be affiliated a contributions based pension scheme. The contribution scheme include a risk coverage in case of disability.
The Group is required to have an occupational scheme by legislation on compulsory occupational pensions. The pension schemes fulfil the requirements of this legislation.
Unsecured schemes relate to guaranteed pension liabilities. These are calculated in accordance to IFRS pension costs. There are no unsecured pension commitments that have not been included in the calculation mentioned above. The remaining pension commitments in balance sheet, are related to agreed arrangements for a small number of previous and current employees.
All employees in the Norwegian companies in the group should be comprised by the right to early retirement (AFP), early retirement schemes in the private sector from the age of 62 if they fulfil the requirements of this scheme. The new AFP scheme which came into force in 2011 is defined as a defined-benefit multi-employer plan, but accounted for as a defined contribution scheme until reliable and sufficient information enabling the companies to account for its proportionate share of pension costs, pension obligations and pension funds in the scheme. The company's obligations related to the new AFP scheme is therefore not recorded as a liability.
Many of the group's foreign companies offer their employees pensions based on agreed individual contribution-based pension schemes.
In Sweden, most employees are covered by a collective occupational pension agreement. The scheme is defined as a multi-employer plan. Salaried staff born before 1979 are included in an individual occupational pension scheme that is also defined as a defined benefit plan. Because of the difficulty of reliably measuring the benefit level of these plans, there is insufficient information on an individual basis to enter the plans in the accounts as defined benefit schemes. The plans are accounted for as if they were contribution-based, in accordance with good accounting practice. Salaried staff born after 1979 are included in an occupational pension scheme that is premium based and is therefore treated in the accounts as contribution-based.
Moelven Industrier is operating business that can effect the external environment. Moelven performs periodical mapping of the environmeltal effect of our production. Based on these mappings, Moelven has assessed that the recognition criteria of a reliable estimate is not fulfilled. There is therefore not recognized any provisions regarding environmental effects.
Prepayments from customers relates to invoiced income on projects that has not been earned (invoiced, not performed).
Refer to note 19 Projects.
Level 1: Listed price in an active market for an identical asset or obligation
Level 2: Valuation based on observable factors other than listed price (used in level 1) either direct or indirect (derived from prices) for the asset or obligation.
Level 3: Valuation based on factors that are not obtained from observable markets (non-observable assumptions).
The table shows the nominal gross value in NOK. Sales of foreign currency is sales against NOK and SEK. Calculation of nominal value in NOK is done by using the nominal value of SEK converted to NOK by using the balance sheet date rate. Acquisitions of foreign currency are mainly sales of SEK against NOK and SEK against EUR. Power contracts are bought forward contracts for electricity.
*The market value of power derivatives for own consumption was NOK 5.9 million in 2016 and minus NOK 8.9 million in 2015.
The last capital increase was in 2004 when Moelven aquired the Are Group. The share capital was increased by NOK 52,5 million.
In accordance with section 6-16a of the Public Limited Company Act, the board of Moelven Industrier ASA has prepared a declaration on the fixing of pay and other remuneration for senior executives within the group. The declaration, which was adopted by the general meeting of 26 April 2016, has been the guideline for the 2016 financial year. An identical declaration, which will be presented to the general meeting of 26 April 2017, will be the guideline for the 2017 financial year.
The declaration covers the group management of Moelven Industrier ASA. Group management means the CEO and the heads of the divisions.
Moelven shall have a level of pay and other terms of employment that is necessary in order to be able to keep and recruit managers with good competence and the capacity to achieve the objectives that are set.
Moelven's main principle is that senior executives shall have fixed salary. Salary is adjusted annually, normally with effect from 1 July.
Moelven shall have other benefits, in the form of free car, free newspapers and free telephony for example, where this makes work easier and is deemed to be reasonable in relation to general practice in the market.
Over and above the main principle of fixed pay, the board wishes it to be possible to offer other variable forms of remuneration in cases where this is found to be appropriate. Bonuses may be used to a limited extent and by special agreement and shall be directly dependent on operating profit.
Moelven has no form of remuneration for companies within the group that is linked to shares or the development of the share price, including shares, subscription rights and options. In the event of the establishment of such a scheme, it shall cover a large number of employees and such remuneration shall represent a smaller proportion than the fixed pay.
Moelven shall have pension conditions that are on a level with the general market in the home country. New employees shall join contributory pension schemes.
In the event of immediate termination of employment by the company, management shall as a standard be entitled to pay for 18 months, less pay earned by any new employer during this period.
Management pay policy in previous financial years has been in line with the content of this declaration.
The board reserves the right to deviate from these guidelines if there are serious grounds for doing so in individual cases. If the board should deviate from these guidelines, their reasons for doing so must appear in the minutes of the meeting.
On termination of employment, the President and CEO and the Managing Directors of Timber and Wood have 18 months' pay after termination, less pay from new position/employer. The Managing Director of Building Systems has a similar agreement for 6 months.
The chairman of the board of directors receives NOK 500.000 and the board members NOK 120.000 in annual remuneration. Deputy members of the board receive NOK 5.500 per meeting. The chairman of the corporate assembly receives NOK 60.000 in annual remuneration. The members and deputy members of the corporate assembly receive NOK 5.500 per meeting.
The share capital of Moelven Industrier ASA consists of 129,542,384 shares with a face value of NOK 5 and there is only one share class. In total the shares are distributed among 934 shareholders, of which the six largest, Eidsiva Vekst AS, Felleskjøpet Agri SA and the forest owner cooperatives Glommen Skog SA, Mjøsen Skog SA, AT Skog SA and Viken Skog SA, control a total of 99.6 per cent. There is several shareholders' agreements between these shareholders. Among other things, this shareholders' agreement has clauses that determine that the company shall be run as an independent unit with a long-term perspective and with continued focus on Scandinavia as the main market. The agreement also contains clauses regarding the composition of the board, dividend policy, strategic focus areas and share transfer.
Transactions with the owners are performed in some areas of the ordinary activities. Among other things, this relates to purchase of timber, where the Norwegian forest owner cooperatives are suppliers. There will also be deliveries of biofuel from the Moelven group to a bioenergy plant owned by Eidsiva Energi AS, with possible buy-back of bioenergy for Moelven's industries in connection with the energy plant. Also, Eidsiva Energi Marked AS sells electric power to Moelven's Norwegian industrial operations. All these transactions have in common that the arm's length principle shall be applied. Where other suppliers can offer better prices or terms, these will be used. About 40 per cent of Moelven's total purchasing requirement for timber of 4.3 million cubic metres comes via the Norwegian forest owner cooperatives.
Moelven' supply of energy raw materials to Eidsiva's bioenergy plant represents between 40 and 50 GWh on an annual basis, while buying back energy represents between 20 and 30 GWh. Net delivery of energy raw materials is 20 GWh.
The extent of the sale of electrical power corresponds to about 40 per cent of Moelven's total consumption of 210 GWh.
Moelven has a long tradition of running its operations in accordance with all the laws and ethical guidelines of the industry and is of the opinion that competition is positive for all parties in industry. In order to ensure that this culture is maintained, ethical guidelines and guidelines for complying with legislation on competition have been devised.
No subsequent events have taken place that should have any effect on the 2016 annual report.