Annual Report - Goodtechaarsrapport2014.goodtech.no/resources/files/Annual...Goodtech is a listed...

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Annual Report Goodtech ASA

Goodtech Annual Report 2014

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This is Goodtech

Goodtech is a technology group working to develop and renew systems and facilities that are essential to

society. With our core skills in the areas of electronics, automation, IT, machine and process technology, we

contribute to a more streamlined energy supply, enhanced infrastructure and more efficient and

environmentally friendly manufacturing.

Goodtech is listed on the Oslo Stock Exchange, has a turnover of NOK 2.4 billion and employs approx. 1,500 people

across more than 40 sites in Norway, Sweden and Finland.

The Group is organised into five business areas: Projects & Services, Infra, Solutions, Environment and Products.

Irrespective of whether the Company is working on electrical installations in industry and the public sector,

assembly of distribution boards, automation solutions, water treatment plants or streamlining solutions for industry,

Goodtech has a business presence in the local community. We leave a lasting impression through the facilities and

systems we build.

Upgrades to energy systems and infrastructure

Goodtech contributes to enhanced infrastructure by participating in projects such as the installation of

signalling systems on the Red Line in the Stockholm Metro and Gothenburg Central Station. With the

expansion to double tracks on the Stenkumla-Dunsjö and through Strängsnäs-Härad railway sections, we

contribute to increased capacity and enhanced safety and comfort for rail passengers. Goodtech also contributes to the improved use of existing power systems and the development of more

green energy. For example, the upgrade of the Krångede transformer station in northern Sweden will

make it possible to accept the increased production from the wind turbine farms planned for the area.

Goodtech has also developed a solution for the management of electric boilers in district heating systems

that are capable of improving the utilisation of existing boilers by up to 20%. This provides enhanced

predictability and greater flexibility in the energy system to increase security of supply and reduce the

consumption of fossil fuels.

Increased efficiency and competitiveness in industry

Goodtech contributes to streamlining and enhanced competitiveness in industry through its development

and supply of solutions for increased automation, better logistics, less transport and lower levels of energy

consumption. For example, Goodtech supplies technical systems in the area of power and automation

systems to LKAB’s iron ore port in Narvis, a new high-bay warehousing and logistics system for Plastal

outside Gothenburg, a new packaging line for fish feed in big bags for Havsbrun in the Faroe Islands and

new control units for all 288 electrolysis cells at Hydro’s aluminium plant on Karmøy.

Society’s need for greener products and solutions

Goodtech’s activities were originally founded on environmental technologies – and Goodtech has a strong

commitment to developing environmentally friendly solutions in all segments. Goodtech’s environmental

solutions range from mini treatment plans for the treatment of wastewater from holiday homes and

residential dwellings to large projects for the treatment of sludge, heat recovery from sludge and complete

biogas plants. In 2013, Goodtech won a contract for a complete biogas plant for Greve Biogass in Tønsberg

and for machinery for IVAR IKS as part of the expansion of the central treatment plant for Nord-Jæren.


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Key figures

Orders and profits (NOK million)

2010

2011

2012

2013

2014

Sales 1,085.2 2,007.6 2,179.0 2,433.8 2,364.2

EBITDA 70.0 64.3 76.7 86.2 22.2

EBITDA % 6.4 % 3.2 % 3.5 % 3.5 % 0.9 %

Earnings before tax (EBT) -31.5 11.5 51.2 54.6 -34.7

EBT % -2.9% 0.6% 2.4% 2.2% -1.5%

Profits after tax -43.6 18.6 51.3 41.5 -21.7

Profits for the year -45.8 17.7 54.5 41.5 -21.7

Order book 31.12

Cash flow

1,080.6 1,016.2 1,143.1 1,306.5 1,293.5

Cash flow from operating activities 73.1 -89.5 115.6 -8.7 59.9

Balance

Total assets 1,326.3 1,393.0 1,443.3 1,536.8 1,570.8

Equity 650.6 667.0 687.8 725.2 686.5

Equity ratio 49.1% 47.9% 47.7% 47.2% 43.7%

Return on equity -8.5% 2.8% 7.6% 5.9% -3.1%

Net interest-bearing debt 26.9 141.6 56.1 162.2 178.1

Net debt ratio 4.1% 21.2% 8.2% 22.4% 25.9%

Current ratio 1.11 1.21 1.19 1.13 0.90

Shares

Share price as at 31.12 (NOK) 2.01 1.57 11.65 15.90 12.00

Profits per share (NOK) -0.23 0.06 1.58 1.28 -0.67

Diluted profits per share (NOK) -0.23 0.06 1.58 1.28 -0.67

Dividend per share (NOK) 0.15 0.08 1.50 0.65 -

Historical information shown for 2011 and previous years has not been adjusted for the share consolidation that took place in 2012.

Employees

Number of employees as at 31.12 1,443 1,371 1,411 1,482 1,533

Number of full-time employees

Health and safety

646 1,372 1,388 1,438 1,490

Absence due to illness 3.26% 3.47% 4.33% 3.83% 4.29%

Definitions of key financial figures:

EBITDA: earnings before interest, taxes, depreciation and amortisation

EBITDA %: (earnings before interest, taxes, depreciation and amortisation)/sales earnings

EBT%: pre-tax profits/sales earnings

Equity ratio: Equity ratio/total equity

Equity profit ratio: profits after tax/average equity

Average equity: (Equity 1.1 + Equity 31.12)/2 Profits per share: profits

after tax/average outstanding shares

Net debt ratio: net interest-bearing debt/equity

Current ratio: Current assets/current liabilities


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Annual Report 2014

2014 has been a challenging year for Goodtech where failing results have made it necessary to intensify the

restructuring of the Group which included cost cutting and downsizing. As part of this restructuring, Goodtech also

clearly defined its future strategic core business.

With the measures that have now been implemented, the Board and management view market conditions, the

company’s strategic position and future prospects as good.

The Company Goodtech is a listed Norwegian technology group working in five business areas: Projects & Services, Infra,

Solutions, Environment and Products.

Goodtech ASA is the parent company and is listed on the Oslo Exchange. The Group is headquartered in Oslo and

has major interests in Sweden and on Åland as well as in Norway.

Vision and values

Goodtech’s vision is to create a better world through the integration of sustainable solutions. Goodtech contributes to a sustainable society through its upgrades to infrastructure and energy systems. Our

aim is to supply efficient solutions to increase competitiveness in industry and meet society’s environmental

challenges.

Goodtech’s business idea is to develop and deliver projects, services and products for Industry, Energy,

Environment and Infrastructure that add value for our customers. Goodtech is currently one of Scandinavia’s leading suppliers of automation, electronics, industrial and

environmental technology. The Group is one of Scandinavia’s leading electronics and automation

companies and the largest process assembly contractor.

Goodtech’s values are customer focus, commitment, sharing, innovation and high performance. Our values are the rules we live by. Our corporate culture and values are summarised in these five key

elements that underpin Goodtech’s strategies and contribute to our success and determination to make a

difference.

Strategy In order to increase its business focus and initiatives, Goodtech is in the process of defining its future strategic

core activities. This means increased independence for the operational units within the Group and a clearer

strategic division. Preparations are simultaneously being made for the sale of businesses outside this core

business area.

As a result of a new organisational structure with changed responsibilities and reporting structure from 1 January

2015, Goodtech has defined the following segments (business areas) effective from 1 January 2015: Projects &

Services Norway, Projects & Services Sweden, Solutions, Environment and Products. This means that Infra will

no longer be reported as a separate business area from 1 January 2015, but will form part of the Projects &

Services Sweden business area.

The process has been commenced for the sale of Goodtech Products AS, Goodtech Environment AS, Goodtech

Environment AB and Goodtech Solutions Manufacturing AB with the aim of completing each sale in Q2 2015

on condition that satisfactory terms can be achieved.

Projects & Services in Norway and Solutions will on completion of the sale of companies outside the

strategic core concentrate on automation and production technology.


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Key figures (NOK 1,000) 2014 2013 Change

Operating income 2,364,224 2,433,776 -2.9%

Operating profit (EBITDA)* 22,239 86,218 -74.2%

EBITDA margin % 0.9% 3.5% -2.6%

Pre-tax profits -34,732 54,621 Order book 1,293,543 1,306,466 -1.0%

Number of employees 1,533 1,482 3.4%

2014

*) before exceptional items

Most business areas saw lower turnover than expected in the first two quarters of 2014 due to weaker market

conditions and lower activity in the first part of the year. Activity levels were on the increase in the second half

of the year. A few major project write-downs reduced profitability for the year.

In 2014, Goodtech implemented cost reduction measures in the form of reduced staffing at local level and at head

office. Some general staff organisations were reduced by downsizing, and some staff functions were moved out of

the business areas to create greater operational momentum. The aim is to consolidate the competitiveness of the

business areas and increase execution capabilities.

The reduction in staff includes a total of 30 administrative posts and is designed to result in an annual cost

saving of approximately NOK 30 million. Additional cost reductions at local level are expected to result in a

saving on fixed costs of approximately NOK 10 million. These measures will be gradually introduced from

Q1 2015.

Measures and improvement programmes continue in the operational business areas and are designed to consolidate

sales and marketing efforts, improve project efficiency and reduce operating costs.

NOK 12.7 million have been spent on one-off costs related to the restructuring in 2014. This – together with

some project write-downs – resulted in pre-tax losses in 2014.

The Group had a good order intake in all business areas in 2014 with the award of several large contracts

in the various business areas. The order book had reached a high level by the end of the year. Market

prospects are good, but there is still some uncertainty about the global economy.

Projects & Services Projects & Services handles Goodtech’s various electronics, automation and assembly projects – from

preliminary

project stage and delivery to operation and maintenance.


Revenues 1,490,575 1,576,982 -5.5%

EBITDA 37,110 79,800 -53.5%

EBITDA margin % 2.5% 5.1% -2.6%

Order book 752,176 813,476 -7.5%

Number of employees 1,221 1,162 5.1%

Projects & Services had 1,221 employees at the end of the year, of whom 1,019 were in Sweden compared

to 1,162 (975 in Sweden) at the end of 2013.

The Group’s largest business area of Projects & Services saw lower activity levels than expected in 2014 due to

weaker market conditions and delayed start-up of some major projects. Activity levels, however, increased in

the second half of the year. Profits in the area were not satisfactory in 2014 due to project write-downs,

including depreciation of SEK 11.5 million in Q2 after final negotiations on an incineration project in Sweden

and weak operations within individual units in the first half of the year.


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Goodtech won several major contracts in 2014, including in the mining industry and the power and energy

market. At the beginning of the year, Goodtech won a contract for NOK 80 million with LKAB for the

supply of a turnkey logistics solutions for the transport of ore products to LKAB’s new docks in Narvik.

In October, Goodtech acquired Power Control AB, which has a turnover of approx. SEK 20 million and

employs nine electronic technology engineers. Power Control AB is an important element in Goodtech’s

investment and growth ambitions in the power market.

In 2014, several important contracts were also won in manufacturing and construction in Sweden, including a

contract for electronic and power installations worth more than SEK 30 million on the project Futurum

Fastigheter in Örebro AB is working on at Karolinska Skolan in Örebro.

Major contracts in Norway in 2014 include a contract with Hydro for the delivery of electronic and automation

boards for Hydro’s plant on Karmøy worth NOK 35 million and a contract with Tizir for the supply of an

electronics and automation system for TTI’s plant in Tyssedal worth approx. NOK 29 million plus options.

Major projects such as the Mall of Scandinavia in Stockholm contributed to high activity levels in Projects &

Services in the second half of the year. The Tuna project for Svenska Kraftnät was completed at the end of the

year.

The general market outlook for the areas of infrastructure and power in Sweden is regarded as good. Some

markets, such as onshore industry, oil and gas and construction, are still characterised by caution and

deferments. Increased investment in hydro power and wind power in the next two to four years will provide

increased market potential in the energy/power sector in Sweden and Norway overall. Prospects in the mining

industry in Northern Sweden look somewhat weaker due to currently low ore prices.

Infra

Group activities related to railway and metro have their own separate business area called Infra. This is an area in

which the Company has seen strong growth in recent years and in which the Company possesses significant expertise. The Group continues to increase capacity, structuring this business and positioning Goodtech in a market

where major investments are planned in the years ahead. The need for upgrading railways and an increased focus

on safety are strong drivers in this segment.


Revenues 325,386 294,412 10.5%

EBITDA -8,115 10,621 -176.4%

EBITDA margin % -2.5% 3.6% -6.1%

Order book 275,915 285,736 -3.4%

Number of employees 83 66 25.8%

The Infra business area is located entirely in Sweden.

Infra saw high activity levels in 2014 with several major on-going projects, but profits for the year were

affected by a great deal of tender work and delays to projects at the beginning of the year as well as a major

project write-down of SEK 8 million in Q4. Goodtech terminated the contract with the client and negotiations

are on-going for a new contract for the remaining part of the project.

Efforts continue to improve capacity utilisation and profitability.

Infra has won two major new railway contracts in 2014, which confirms our position in the market, and the order

book continues to be stable at a high level.

In June/July, Infra won a contract of over SEK 100 million in connection with the development of the Svealand

Railway. The contract is a turnkey project as subcontractor to NCC for all electrical, signalling and

telecommunication works on the development. In November, Goodtech signed a contract with Skanska Sverige AB

for a turnkey contract for electrical, signalling and telecommunication works in conjunction with the expansion to

double tracks between Stenkumla and Dunsjö, which is part of the railway line between Hallberg and Motala in

Sweden.


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Extensive investment plans are in place for infrastructure in Sweden and Norway. Many projects will commence

in the years to come. This provides excellent opportunities for increased activity and contracts in metro and

railways.

Market prospects for Infra also considered good in Norway, where we continue to work on preparing future

commitments and identifying specific partners. In 2014, Infra completed its first successful projects in

Norway.

Solutions

In this business area, Goodtech supplies production lines, machinery and logistics solutions. Goodtech is able to

offer its own technologies with brands such as Portabulk®, MTH Warehouse and LECAB production lines.

Goodtech also supplies its own technology and solutions in the area of robot cells and material transport.

Goodtech also exports selected products and technologies.


Revenues 206,256 199,301 3.5%

EBITDA -4,327 -10,282 -57.9%

EBITDA margin % -2.1% -5.2% 3.1%

Order book 85,754 73,184 17.2%

Number of employees 108 133 -18.8%

Solutions had 108 employees at the end of the year, of whom 90 were located in Sweden compared to 133

(110 in Sweden) at the end of 2013.

Solutions has shown an improvement compared to the previous year, but will not achieve positive EBITDA

for 2014 due to the negative contribution from operations in Gothenburg, which were sold in October, as well

project write-downs in the Swedish business.

The order book has gradually improved throughout 2014 and was at a high level at the end of Q4. During the year,

Solutions won several new contracts for the supply of equipment and packaging machines nationally and

internationally. Solutions has signed several contracts for logistics solutions, welding lines and material handling in

the area of automotive during the year.

Solutions is intensifying its focus on sales and marketing activities. Prospects remain at a good level in core

areas.

Solutions has implemented a number of improvements over the past two years and continues to focus on

improving quality and project methodology and well as consolidating its project organisation and resource

utilisation. Goodtech Solutions AB and Goodtech Solutions Manufacturing AB became certified to ISO

9001/14001 in 2014. It is expected that the measures and cost adjustments implemented in Solutions will provide

continued positive results in 2015.

In 2014, we experienced that parts of Scandinavian industry were reluctant to invest because of declining markets

which resulted in the postponement of investments and declining orders. At the same time we experienced greater

investment in our products and services in bulk and packing machines. The signals from parts of our markets are

still fluctuating, but the growth potential in the industry segments is good. We especially see excellent opportunities

ahead in pharmaceuticals and the food and automotive industries. New markets are being sounded out through new

partners in Europe, Scandinavia and South America. It is expected that these markets will contribute positively in

coming years.


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Environment This business area supplies environmental technology, water and wastewater treatment plants as well as solutions

in water purification. Most activities take place in Goodtech Environment AB, which is located in Åland (Finland)

and in Norway. Well-known brands include Biovac®, Fluidtec® and KOBIX. With Biovac®, Goodtech is the

market leader in mini treatment systems in Norway.


Revenues 294,444 296,566 -0.7%

EBITDA 11,682 8,016 45.7%

EBITDA margin % 4.0% 2.7% 1.3%

Order book 174,949 129,835 34.7%

Number of employees 76 78 -2.6%

Environment had 76 employees at the end of the year of whom 43 were on Åland compared to 78 employees last

year (42 on Åland).

Turnover in Environment in 2014 is at the same level as the previous year and EBITDA increased compared

to 2013.

The order book at Environment on Åland is full. Effective and active project management continues to

provide good margins, although the year ended on a slightly weaker level than expected due to slow progress

on the projects.

The order book was at a high level at the end of the year after Goodtech won a contract for approx. NOK 65

million for the expansion of the central treatment plant for IVAR at the end of the year.

The product side has shown increased activity in 2014, but the municipalities are still adopting a wait-and-see

attitude. Increased municipal regulation is expected to commence in several geographical areas in Norway

during 2015 and 2016.

There has been a significant increase in the sale of Biovac® products in the Swedish market which is due to the

implementation of environmental measures in a number of Swedish municipalities. This is excellent

confirmation of the potential we see in the Swedish market over the long term.

Market volume for major environmental projects was extremely good in 2014 while relatively few medium-sized

projects came out onto the market. It is expected that this will pick up in 2015. Some major project announcements

in both hydro and biogas are also expected.

The authorities are intensifying their focus on the EU Water Framework Directive with specific plans for new

areas that need to upgrade current wastewater solutions to meet future requirements.

Products

Goodtech is a distributor of automation, communication and electronic components and instrumentation.

Goodtech represents several well-known manufacturers.


Revenues 91,641 92,716 -1.2%

EBITDA 1,116 7,092 -84.3%

EBITDA margin % 1.2% 7.6% -6.4%

Order book 4,750 4,235 12.2%

Number of employees 28 24 16.7%

In 2014, Products produced a turnover equal to 2013. Weak EBITDA for the year due to increased sales and

marketing costs, projects with a lower margin and a significantly deteriorated currency situation in the second

half of 2014.


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In 2014, Products supplied big projects to Goodtech Projects & Services AS’s project for Hydro on Karmøy.

Products strengthened its sales division significantly in 2014 in order to generate increased sales and profits going

forward. A number of cost-efficiency measures have also been implemented. This includes a new ERP and

logistics system, improved handling of customer enquiries and an e-commerce solution.

Market prospects are generally regarded as being good. Some uncertainty is associated with the oil and gas market.

Great activity in manufacturing and water/transport. The inflow of prospects is good and tender activities are

increasing in Products.

Products generally have a low inflow of orders as the majority of sales in this segment are on-going product sales.

Only a minor part of the turnover is based on the registered order book.

Market prospects are regarded as good in the areas of oil and gas, transport and water/environment. In traditional

onshore industry, market prospects are weaker and investment levels continue to be relatively low.

The number of prospects is high and tender activities are increasing in Products.

Cash flow, investments, financing and liquidity

At the end of the year, the Group’s total capital was NOK 1,570.8 million of which current assets were NOK

769.2 million and fixed assets were NOK 801.6 million. The Group’s equity as at 31 December is NOK 686.5

million which gives an equity ratio of 43.7% compared to 47.2% last year.

2014 saw a strong cash flow from operations of NOK 59.9 million compared to a negative cash flow from operations

of NOK -8.7 million in 2013. Cash flow from operations will, of course, vary from period to period depending on the

composition of projects and project invoicing dates. Goodtech prioritises good cash flow management and in 2014

we focused intensely on measures to improve project cash flow, including improved billing procedures and

following up on outstanding receivables. These measures have had good results and they will continue to be a

priority going forward.

Net interest-bearing liabilities were NOK 178.1 million at the end of 2014, of which NOK 156.0 million are current

liabilities (NOK 162.2 million in 2014 of which NOK 43.8 million were current). SEB, Goodtech’s main bank,

waived its covenant requirements at the end of the year. A new waiver will be required from the bank as of 31

March 2015, given existing covenants. A detailed description of the waiver can be found in Note 26.

Goodtech is in discussion with the bank on the restructuring process and SEB regards the on-going liquidity

measures and structural processes as positive. The existing agreement with SEB expires on 31 December 2015

and is being renegotiated.

The net debt ratio (net interest-bearing debt/equity) constituted 25.9% at the end of 2014 compared to 22.4% in 2013.

Shares and shareholders The Company’s share capital consists of 32,528,905 shares with a nominal value of NOK 2 for a total of NOK

65,057,810. All shareholders in Goodtech have equal rights. All shareholders in Goodtech have equal rights. The Company has one share class, and each share carries one vote at AGMs. All shares are freely transferable, and no transferability limits for the Company’s shares have been set out in the Company’s Articles of Association.

El & Industrimontage Tannergård AB was the Company’s largest shareholder at year end, with 28.9% of the shares

in Goodtech. Holmen Industri Invest 1 AS is the second largest shareholder at 24.1%. This is followed by Skagen

Vekst with 6.5%. Sedlak Holding AS, a company owned by Board Member Veroslav Sedlak, owns 4.8% of shares.

EIO AS, a company owned by former Group CEO Vidar Låte, owns 4.6% of the shares.

About half the Group’s employees are shareholders in Goodtech ASA. At year end, Goodtech ASA had

126.160 own shares corresponding to 0.4% of the Company’s share capital.

In 2014, Goodtech took out a loan of NOK 12.6 million from four of the Company’s main shareholders. The

loan has been granted on market conditions and runs until 31 December 2015.


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See the section on shareholders in the Annual Report.

Staff, working environment and safety

Goodtech works proactively to focus on HSE in the workplace. Activities must be planned and carried out in such a

way that nobody is injured or becomes ill, the environment is not contaminated and property is not damaged.

Goodtech has in recent years worked in targeted areas to put HSE at the top of the agenda and reinforce the Group’s

safety culture. In conjunction with its investment in power and energy, Goodtech has further strengthened its focus

on HSE and safety in the workplace. HSE is the responsibility of Goodtech’s managers and follows the Company’s

line organisation, complies with legislation and authority requirements and must be run in accordance with

Goodtech’s guidelines in the HSE control system.

For Goodtech, HSE includes the following:

Safety in terms of human life and health, including the working environment

Safety in terms of the external environment

Safety in terms of property and materials

This means targeted measures and a focus on:

working to protect the environment and people, including safety in the workplace and continuous

improvements in terms of quality, the environment and the working environment

ensuring that we have the expertise with which to run and manage major and/or complex projects safeguarding and underpinning the Group’s methods

streamlining and safeguarding the Group’s project implementation

managing and developing the Group’s business management system (BMS) with processes, structures,

procedures and templates

Goodtech’s aim is to have the industry’s most efficient project implementation and methods as well as qualified staff

who prioritise safety, customers and employees. The priority is the management of routines and methods as well as

improvement in project-based activities represented by approx. 75% of Goodtech’s business.

The whole business area of Projects & Services, Infra and Solutions is ISO-certified.

Health, environment and safety in the workplace 2014 2013

Reported industrial accidents 102 75

Reported industrial accidents involving absence 13 18

Absence due to illness 4.29% 3.83%

Employee deaths 1 0

In 2014, the Group had two serious accidents, one a road accident that was fatal for one of our employees.

In recent years, Goodtech has increasingly focused on the reporting of accidents and undesirable incidents. The

health and safety of all employees and contractors is a top priority. In addition to ongoing risk assessments, it is

essential that we learn from our mistakes. Goodtech has systemised this through reporting and monitoring of

incidents and industrial accidents. In combination with ongoing risk identification and risk analysis, this constitutes

an important tool in preventive safety work. Efforts to reach Goodtech’s vision of zero injuries and accidents in the

workplace continue, and significant resources were expended to raise safety levels further.

Goodtech complies with the ethical guidelines contained in the UN Global Compact from 2000 and has incorporated

these in the Group’s ethical guidelines. This is a requirement that is also made of Goodtech’s subcontractors.

The Group’s general guidelines require that all employees are treated with respect and have a workplace that is

free of bullying and/or harassment. Goodtech aims to be a workplace with no discrimination on the basis of race,

gender or sexual orientation. The Group must not exercise any form of discrimination in its recruitment or

employment practices or in terms of access to education, promotion or reward. Goodtech’s general policies and

maxims are aligned to the Norwegian Discrimination Act’s aim of promoting equality, ensuring equal

opportunities and rights and preventing discrimination based on ethnicity, national origin, ancestry, colour,

language, religion and belief.

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The low absence figures in the Group indicate that the well-being and motivation among employees to go to

work is good. Goodtech conducts regular satisfaction surveys and appraisals and assesses any improvements

and changes on an on-going basis.

Employees 2014 2013

Number of employees 1,533 1,482

Number of female employees 8.5% 8.8%

Shareholder-elected women on the Goodtech board

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The Group aims to be a workplace offering full equality between women and men and strives continuously to

attract more female applicants for its job vacancies. The Group’s female employees currently work mainly in

finance, administration and marketing.

Remuneration to the CEO and the Board are stated in a note to the Annual Accounts. Salaries and other

remuneration to senior executives are detailed in Note 28 to the Annual Accounts.

Environmental reporting Goodtech makes positive contributions to the development of society by supplying cost-effective projects and

innovative technology solutions. At the same time, the Company consumes raw materials and causes emissions

to the air from its transport activities. The Group has identified and selected a number of significant

environmental aspects which it will continuously work to improve:

Choosing (and selling) energy-efficient solutions that reduce our customers’ energy consumption Minimising transport by means of planning, IT/telecommunications, coordinated procurement, pooling, use

of public transport and eco-friendly cars and by encouraging drivers to drive economically

Selecting health-friendly and eco-friendly products and materials Disposing of our waste as effectively as possible given local conditions, and attempting to reuse or recycle

most of what we use

Minimising the use of chemical products and selecting such products while taking health and the environment

into account Minimising the risk of environmental accidents in the form of fire or chemical leaks, but also having

contingency measures in place to deal with any accidents

We refer to our report on social responsibility contained in the section on people, society and environment in the

Annual Report.

Risk factors and risk management Goodtech ASA and the individual group companies are exposed to different types of market, operational and

financial risk. Some companies are also exposed to regulatory risk factors and political risk. Political decisions

related to infrastructure and the environment are examples of such risk factors.

The Board is concerned to ensure the systematic and planned management of risk in all parts of the business and

considers this to be a prerequisite for long term value creation for shareholders and employees. Goodtech works

actively to manage risk in all its business areas and risk assessments are regularly carried out to focus on and

assess the most significant risks.

A large part of Goodtech’s operations relates to the implementation of individual projects. The complexity, size,

duration and risks of these projects vary. To achieve good results, it is therefore vital that project risk is analysed at

the tendering stage and managed in a systematic and professional manner during the implementation phase. The

consolidated balance sheet includes the assets and liabilities related to ongoing projects. Some items include

estimate uncertainty where the Company’s management and project managers have exercised discretion based on

certain assumptions. These assumptions have been assessed and found realistic. The Group currently has some

major projects where clarification is ongoing with the client for a financial settlement. The best estimate is the basis

for the accounting treatment as at 31.12.2014.

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During the project period, situations or changes in market conditions may arise that may result in changed

estimates, thereby affecting the assets, liabilities, equity and profits. The Group has project risk assessment

policies and systems in place from tender stage through to finished project. Review and evaluation of projects is

conducted each month. The purpose of this is to limit adverse financial and production impacts through corrective

measures as well as having ongoing realistic project estimates. At the same time, Goodtech focuses on utilising

positive opportunities in each project.

The Group’s future operations will depend on the Group’s employees having the qualities and the skills required to

ensure that projects are completed in accordance with contracts that have been entered into. It will be vital in this

respect to meet clients’ future demands for service, technology and efficiency. Risk is reduced by a large spread in

the contracts in terms of number and size and no contracts are large and dominant in relation to total turnover.

Pressure is still being felt in the labour market, especially in project management. This could affect the availability

of relevant expertise. We prioritise these risk factors and seek to offset them through systematic work in each

individual operating units on managing and developing processes, procedures, methods and expertise to ensure

future growth and earnings in the core areas.

Goodtech operates in several European countries. Contracts are mainly in NOK, SEK, EUR and USD. Currency

fluctuations may result in adjusted income in NOK for foreign projects. A significant part of Goodtech’s business

is conducted in Sweden. The Group is therefore exposed in SEK. However, group policy is to keep most of the

purchases and sales of individual projects in the same currency, thus reducing the risks associated with currency

fluctuations. The Group has also established a multi-currency cash system that helps to reduce currency risks.

Over the past year, the Company has carried out no significant currency hedging transactions with banks.

Goodtech has customers in many different industries, something that makes the Group less vulnerable to market

fluctuations.

The risk of our partners being financially unable to meet their obligations is regarded as moderate, and

historically the Group has had only limited losses on receivables. Goodtech has set up clear guidelines and

criteria for evaluating credit risk. The Group also has a large spread of customers in terms of both numbers and

size, and its customers are mainly well-established companies and public institutions. This reduces

vulnerability to losses on individual customers.

The Board deems the liquidity of the Group to be satisfactory. The Group’s strategy is to have sufficient cash, cash

equivalents and/or credit options to be able to finance operations and investments in accordance with the Group’s

strategic plan. Excess liquidity is mainly kept in Norwegian kroner. Interest-bearing debt is mainly taken out in

NOK or SEK. To reduce Goodtech’s exposure to changes in interest rate levels, an agreement has been entered into

concerning fixed interest rates on the Company’s long-term loans. Otherwise the Group’s loans and borrowing

facilities have variable interest rates.

Goodtech’s work on strengthening its focus on HSE and safety in the workplace is detailed in the section on

staff, working environment and safety.

Regular risk assessments are performed where the most important risks are identified and evaluated.

Research and development Goodtech works continuously on technology development projects of all sizes. Much of its development is linked

to customer project solutions. We have brought the more solution-oriented technologies together under Solutions.

This is to provide a good and organic basis for investment in technology and product development. For example,

we sell our own technology solutions for high-bay warehousing, material handling and robot cells and

combinations of these.

Goodtech Recovery Technology AS (GRT) signed an R&D contract at the end of 2013 for the recovery of energy

with Dubai Aluminium (DUBAL). The pilot plant was installed and started in the first half of 2014 and has been

in operation at DUBAL since the summer. Project Performance Tests were successfully concluded on 12

December. Test results were also presented at the AustralAsian Aluminium Smelting Technology Conference in

Dubai on 6-11 December 2014.


13

GRT has prepared project plan for further progress that extends over three years and describes the

commercialisation process for GRT’s technology in collaboration with DUBAL. When this has been clarified, the

project will progress to a commercialisation phase. Cooperation with a partner is being considered in order to

finance future investments.

Corporate governance The Board of Directors of Goodtech has set out principles for corporate governance which will safeguard the

interests of the Company’s owners, employees and other stakeholders. These include a description of the

division of responsibilities between shareholders, the Board and the general management. The purpose of the

Company’s principles for corporate governance is to create greater predictability and transparency, and thereby

to reduce uncertainty linked with the business. These principles will support the targets which the Company is

aiming to achieve. The Board is seeking to maintain corporate governance guidelines which are compliant with

the Norwegian recommendation for corporate governance.

The Board of Goodtech appointed former marketing director Arve Teie as acting CEO from 1 September 2014 after

former CEO Vidar Låte in partnership with the Board made the decision to retire from the company to make room

for the on-going processes associated with the assessment of Goodtech’s structural and strategic alternatives. The

Board thanks Låte for his many years of service on behalf of Goodtech which under his management has multiplied

its earnings and developed into a leading Nordic supplier of projects, services and products in electronic and

processing technology, environmental technology and industrial technology.

Corporate governance principles adopted by the Board on 19 March 2015 are discussed in a separate section in the

Annual Report.

Annual Accounts The Group presents its Annual Accounts in accordance with International Financial Reporting Standards (IFRS).

The Annual Accounts for the parent company Goodtech ASA are presented in compliance with the Norwegian

Accounting Act and Norwegian accounting practice (NGAAP). The Board is of the opinion that the Annual

Accounts provide a true picture of the parent company’s and the Group’s assets and liabilities, financial position and

profits. In compliance with Sections 3-3a of the Norwegian Accounting Act and Good Accounting Practice (GRS), it

is confirmed that the conditions are in place for the continued operation of the Company.

Group and parent company profits The Goodtech Group showed profits of NOK -21.7 million in 2014. Profits per share from continuing

operations are NOK -0.67 per share.

The parent company Goodtech ASA showed profits of NOK 0.6 million in 2014. The Board proposes that no

dividends be paid for the financial year 2014. The Board proposes that parent company net profits be transferred to

other equity. Goodtech ASA’s (the parent company’s) equity after the proposed distribution of profits for the year

amounted to NOK 590.1 million.

Events after year end

Goodtech had won several new contracts by year end in all business areas. Skanska has chosen Goodtech as its

electrical contractor on the Trädgårdana care centre in Örebro which has an order value approximately SEK 10

million. LKAB has chosen Goodtech as its turnkey supplier of electrical installations in connection with the

planned increase in production in Malmberget. This contract has an order value of about SEK 25 million.

In the middle of March, Goodtech was awarded a major new railway project worth approx. SEK 120 million.

The award is for the turnkey contract for underground, electrical, signal, telecommunication, field and bridge

works on Project Y, the name given to the various subprojects in the Swedish Transport Administration’s

plans to provide faster passenger transport, increased capacity and safety between Jönköping, Nässjö and

Värnamo in Sweden. The contract is subject to the normal appeal period under Swedish law on public

procurement.

http://goodtech2013.cust.limecms.no/eierstyring_og_selskapsledelse/eierstyring_og_selskapsledelse


14

Future development of the Group

Through its ongoing improvement programme and downsizing of the corporate structure with the relocation of

some staff functions to the business areas, Goodtech will achieve reduced costs and a structure adapted to the

future needs of its operations. The aim is to consolidate the competitiveness of the business areas and increase

operational execution capabilities. The aim of the measures and improvement programmes continue in the

operational business areas is to consolidate sales and marketing efforts, improve project efficiency and reduce

operating costs.

Clarification of Goodtech’s core business and ensuring that the operational units within the Group become more

independent means a clearer strategic direction and will contribute to more efficient operation. This will provide a

stronger foundation for increased profitability going forward.

Goodtech considers the market situation to be satisfactory, but is still seeing fluctuations in individual markets that

affect investment and start-up projects.

Goodtech will continue to build on existing long-term customer relationships that make up a significant

part of our turnover. With the implementation of the structural and organisational changes as well as

ongoing and planned initiatives programmes, the Group will achieve an enhanced basis for profitability

and a clearer strategic direction towards good market potential in the various business areas. The Board

regards this as a sound basis for positive value creation for the Company’s shareholders and will continue

its active dividends policy for the future – adapted to the Company’s profits and financial situation.

Oslo, 19 March 2015

Stig Grimsgaard Andersen

Rolf Tannergård

Karl-Erik Staubo

Chairman of the Board Member of the Board Member of the Board

Veroslav Sedlak

Member of the Board

Anne M. Sødahl Wessel

Member of the Board

Åsa Otterlund

Member of the Board

Hilde Vik Matre

Member of the Board

Håvard Kristiansen

Member of the Board,

Employee Representative

Susanne Häggström



Christer Erita



Arve Teie

Acting CEO


15

Consolidated profits Goodtech Group

1 January - 31 December

(NOK 1,000) Note 2014 2013

Operating income 3 2,364,224 2,433,776

Cost of goods 3, 14 -1,124,010 -1,197,535

Salary and staff costs 4, 21, 28 -937,543 -905,011

Other operating expenses 5 -280,431 -245,012

Operating profit before depreciation and non-recurring items 22,239 86,218

Amortisation 10, 11 -24,549 -24,021

Depreciation and non-recurring items 6 -22,611 -3,087

Operating profits -24,921 59,110

Financial income 7 6,961 2,893

Financial expenses 7 -18,488 -11,298

Net financial expenses -11,527 -8,406

Profits from affiliated companies 12 1,717 3,917

Pre-tax profits -34,731 54,621

Tax costs 8 -13,050 13,133

Profits after tax -21,682 41,489

Profits for the year -21,682 41,489

Attributable to:

- Shareholders in parent company

-22,011

41,171

- Minority interests 329 318


Earnings per share (NOK)

9

-0.67

1.28

Diluted earnings per share (NOK) 9 -0.67 1.28

Total consolidated profits

(NOK 1,000) Note 2014 2013


Other comprehensive income

Items that will not be reclassified through profit or loss in subsequent periods Estimate deviation pensions, net of tax

Items that will be reclassified through profit or loss in subsequent periods

21 -781 -164

Cash flow hedges, net of tax 26 -480 238

Translation differences 6,441 44,329

Extended profit after tax 5,181 44,403

Total earnings -16,501 85,892

Attributable to:

- Shareholders in parent company

-16,830

85,574

- Minority interests 329 318

Total earnings -16,501 85,892

Notes 1-31 follow the annual accounts and form an integral part of these.


16

Consolidated balance sheet as at 31 December Goodtech Group

(NOK 1,000) Note 2014 2013

ASSETS Fixed assets Tangible fixed assets 10 70,972 61,841

Intangible assets 11 678,866 662,201

Investments in affiliated companies 12 5,754 3,556

Deferred tax assets 8 43,484 34,561

Other fixed assets 13 2,554 2,080

Total fixed assets 801,631 764,239

Current assets

Inventory 14 28,172 26,951

Trade receivables 15 407,776 446,847

Other current receivables 16 310,668 265,434

Cash and cash equivalents 17 22,560 33,365

Total current assets 769,176 772,598

Total assets 1,570,807 1,536,837


17

EQUITY AND LIABILITIES

Equity

Paid-in capital

Share capital 18 65,058 65,058

Own shares 18 -252 -52

Share premium 18 35,318 35,318

Other paid-in capital 18 500,000 500,000

Total paid-in capital 600,123 600,323

Retained earnings

Other equity 85,422 123,949

Total retained earnings 85,422 123,949

Minority interests 972 919

Total equity 686,517 725,192

Liablities

Non-current liabilities Loans 20 22,071 118,340

Pension obligations 21 1,813 679

Deferred tax 8 4,686 10,854

Provisions 2,975 -

Total non-current liabilities 31,545 129,873

Current liabilities

Loans and credit 20 178,596 77,218

Trade payables and other current liabilities 22 643,204 579,044

Payable tax 8 2,045 3,573

Provisions 23 28,900 21,936

Total current liabilities 852,745 681,771

Total debt 884,290 811,645

Total equity and liabilities 1,570,807 1,536,837


Oslo, 19 March 2015

Stig Grimsgaard Andersen Rolf Tannergård Karl-Erik Staubo


Veroslav Sedlak Anne M. Sødahl Wessel Åsa Otterlund

Member of the Board Member of the Board Member of the Board

Hilde Vik Matre Håvard Kristiansen Susanne Häggström

Member of the Board Member of the Board, Employee Representative

Member of the Board, Employee Representative

Christer Erita Arve Teie

Member of the Board Acting CEO



18

Change in group equity

(NOK 1,000) Note

Share capital

Own shares

Share premium

Other paid- in capital Other equity

Hedging reserves

Defined benefit plan actuaral gains

(losses) Translation differences Total

Non-controlling

interests Total

equity

Equity as at 1.1.2013 65,058 -70 35,318 500,000 97,220 -788 62 -9,586 687,213 602 687,815 Profits for the year - - - - 41,171 - - - 41,171 318 41,489 Extended profits - - - - - 238 -164 44,329 44,403 - 44,403 Dividends 18 - - - - -48,621 - - - -48,621 - -

48,621

Purchase of own shares 18 - 18 - - 88 - - - 106 - 106

Equity as at 31.12.2013 65,058 -52 35,318 500,000 89,858 -550 -102 34,743 724,272 919 725,192

Equity as at 1.1.2014

65,058

-52

35,318

500,000

89,858

-550

-102

34,743

724,272

919

725,192 Profits for the year - - - - -22,011 - - - -22,011 329 -

21,682

Extended profits - - - - - -480 -781 6,441 5,181 - 5,181 Dividends 18 - - - - -21,127 - - - -21,127 -150 -

21,277

Purchase/sale of own shares 18 - -200 - - -1,103 - - - -1,303 - -1,303

Other changes - - - - 533 - - - 533 -127 406

Equity as at 31.12.2014 65,058 -252 35,318 500,000 46,150 -1,030 -883 41,184 685,545 972 686,517

Notes 1-31 follow the annual accounts and form an integral part of these


19

Consolidated cash flow statement

(NOK 1,000) Note 2014 2013

Cash flow from operating activities


Adjusted for - Tax costs 8 -13,050 13,133

- Depreciation and amortisation 10, 11 34,423 24,021

- Share of profits after tax from affiliated companies 12 -1,717 -3,917

- Dividends received from affiliated companies 12 1,265 2,293

- Net change in provisions 23 -5,150 14,912

- Difference between expensed and paid pension 21 64 -1,032

- Interest income 7 -818 -615

- Interest expenses 7 7,090 4,754

- Other changes 3 239

Changes to working capital

- Inventory 14 -512 2,228

- Trade receivables and other receivables 15, 16 18,501 -73,455

- Trade payables and other current liabilities 22 64,086 -15,562

Cash flow from operating activities 82,503 8,490

Interest received 7 818 615

Interest paid 7 -7,090 -4,754

Tax paid 8 -16,294 -13,084

Net cash flow from operating activities 59,936 -8,734 Cash flow from investment activities

Purchase of fixed assets (**) 3, 10 -21,737 -26,262

Proceeds from sale of fixed assets 10 198 -

Purchase of intangible assets 11 -16,870 -16,924

Acquisition of subsidiaries, excluding liquidities 2 -9,011 -

Proceeds from sale of operations 2 - 4,000

Financial investments -3,621 -

Net cash flow from investment activities -51,041 -39,187 Cash flow from investment activities

Payment of dividends -21,277 -48,621

Proceeds from sale of own shares - 1,493

Purchase of own shares -1,303 -1,363

Loans 20 20,920 114,039

Change to current loans and credit 20 - -30,622

Repayment of loans 20 -29,986 -90,931

Net cash flow from financing activities -31,645 -56,004 Net change in cash and cash equivalents

-22,749

-103,925

Balance of cash and cash equivalents as of 01.01 17 -15,102 82,857

Effect of exchange rate changes on cash and cash equivalents -150 5,965

Balance of cash and cash equivalents as of 31.12 *) -38,001 -15,102 *) Consists of:

Cash and cash equivalents in the balance sheet 17 22,560 33,365

Overdraft 20 -60,561 -48,467

Cash and cash equivalents in the cash flow analysis -38,001 -15,102

**) Disbursements on the acquisition of buildings and machinery/fixtures as presented in Note 10.



20

Notes Goodtech Group 2014 Note 1 Accounting principles

Goodtech ASA is a public limited company registered in Norway. The company’s headquarters are located at Per Krogh’s vei 4, 1065 Oslo, Norway.

Goodtech is a technology group that contributes to the development of society through upgrading infrastructure and energy systems, improving efficiency and increasing competitiveness within the industry and through meeting society’s environmental challenges.

The company is the leading automation company and the largest process assembly contractor in the Nordic countries.

The company is listed on the Oslo Stock Exchange, has a turnover of around NOK 2.4 billion and employs 1,500 people at around 40 locations in Norway, Sweden and Finland.

The company is organised into five business areas; Projects & Services, Infra, Solutions, Environment and Products. The accounts were approved for publication by the Board on 19 March 2015. 1.1 Main policy

Goodtech presents its accounts in compliance with the Norwegian Accounting Act and International Financial Reporting Standards (IFRS) as determined by the EU with comparison figures provided for the previous year. New accounting standards adopted during the year are discussed below. New IFRSes and interpretations that have been published, but were not mandatory as of 31 December 2014 are discussed in Point 1.32.

The consolidated accounts are based on a historic cost accounts principle. Excepted are financial derivatives recognised at fair value over profits.

The consolidated accounts have been prepared with uniform accounting principles for similar transactions and events under otherwise similar conditions.

The applied accounting principles are consistent with the principles used in the previous accounting period. Amendments to IFRS with the latest implementation date in the EU for the financial year 1 June 2014 - 31 December 2014 were applied to the Group’s accounting principles in 2013.

1.2 Functional currency and reporting currency

The Group presents its accounts in NOK. This is also the parent company’s functional currency. Subsidiaries using other functional currencies are converted to the day rate for balance sheet items and the profit and loss account at average rates for the period. Translation differences are recognised in other comprehensive income. Upon loss of control, significant control or joint control, accumulated conversion differences relating to investment that are attributable to controlling interests are recognised.

1.3 Consolidation principles

Subsidiaries

The Group includes Goodtech ASA and companies of which Goodtech ASA has control, cf. Note 19. Control can also be achieved where the Group is exposed to variability of returns from the entity and is in a position to affect returns by its control over the entity. Subsidiaries are consolidated from the date control is achieved and deconsolidated when control ceases. The Group assesses whether it controls or does not control companies when facts and circumstances indicate that changes have taken place in one or more control elements. Minority interests are included in the Group’s equity.

The acquisition method is used for recognising company mergers in the profit and loss account. 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 ownership interests in subsidiaries that do not result in loss of control are accounted for as equity transactions. Consideration is recognised at fair value and the difference between any consideration paid and the carrying value of minority interests are recognised in the controlling owners’ equity.

In the event of a change in ownership resulting in loss of control, consideration is measured at fair value. The carrying value of assets and liabilities of the subsidiary and minority interests are derecognised on the date of loss of control. The difference between the compensation transferred, the carrying value of net assets and any minority interests is recognised in the profit and loss account as profit or loss. Amounts previously recognised in other comprehensive income in respect of that entity are treated as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

Investments in affiliated companies

Affiliated companies are units in which the Group has significant influence, but not control (usually an ownership share of between 20% and 50%) of financial and operational management. 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.


21

When the Group’s share of losses exceeds its interest in an associate, the Group’s recognised amount is reduced to nil and further losses are not recognised unless the Group has an obligation to cover the loss.

Investment in companies under joint control Under IFRS 11, investments in joint arrangements are classified as either joint operating arrangements or joint ventures depending on the contractual rights and obligations of each investor.

The Group has evaluated its investment in joint ventures as a joint operating arrangement. Joint operating arrangements are accounted for using the gross method.

The consolidated accounts include joint ventures using the gross method from the date that joint control commences until the joint control ceases. The gross method means that the proportion of joint ventures included line by line for assets, liabilities, income and expenses.

Joint ventures are entities over which the Group has joint control, established by contractual agreement between the parties. A joint venture involves the establishment of a separate entity in which each party has an interest and where there is joint control.

Elimination of transactions during consolidation

Internal group transactions and intra group balances, including internal earnings and unrealised gains and losses are eliminated. Unrealised earnings in respect of transactions with affiliated companies are eliminated by the Group’s share of the company. Unrealised losses are eliminated, but only to the extent that there is any indication of impairment of the asset sold internally.

1.4 Cash and cash equivalents

Cash and cash equivalents include cash, bank deposits, other short-term, easily transferable investments with a maximum of three months’ original term and withdrawals on bank overdrafts. Bank overdrafts are included in the loans balance under current liabilities.

In the cash flow statement, the credit facility is included in the balance of cash and cash equivalents. The amount of cash and cash equivalents is further detailed by cash and cash equivalents and use of the credit facility.

1.5 Trade receivables

Trade receivables are entered at acquisition price minus loss from depreciation.

1.6 Projects in progress and advance payments from customers

Production which has been carried out, but not invoiced is entered at acquisition price plus share of profit earned on the balance date, see point 1.21 for a description of policies for recognition of income. Acquisition price includes costs directly related to specific projects and a share of fixed and variable indirect costs involved in the Group’s contract activities based on either standard or current capacity utilisation – whichever is highest.

In determining such costs, expenses for future activities on a contract have not been included. These expenses are shown as goods, advance payment or other turnover assets depending on cost type.

The balance shows production that has been carried out, but not invoiced minus provisions for anticipated loss and advance payments under ‘Other current receivables’. In cases where advance payment exceeds the production that has been carried out the advance payment is recognised under ‘Trade accounts payable and other current liabilities’.

1.7 Inventory

Inventory is recognised in the profit and loss account at the lower of either acquisition price 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 which can be allocated based on either standard or current capacity utilisation – whichever is highest.

1.8 Financial derivatives and hedging instruments

Separate derivatives are valued at fair value. The Group uses interest rate swap contracts as hedging instruments for hedging cash flows related to long-term financing.

Cash flow hedging

The effective element of the change in the fair value of derivatives which are earmarked and qualify as hedging instruments in cash flow hedging are recognised in other comprehensive income.

Hedging profits or losses which are recognised in other comprehensive income and accumulated in equity are reclassified for the profit and loss account in the period in which the hedged item affects the profit and loss account. Profits or losses which are linked to the effective element of the interest rate swap contracts which secure loans with floating interest rates are recognised under ‘Financial expenses’.

When a hedging instrument expires or is sold, or when a hedge no longer meets to criteria for hedge accounting, any cumulative gain or loss is recognised in other comprehensive income in equity and is reclassified as profit at the same time as the hedged transaction is recognised. If a hedged transaction is no longer expected to take place, the carrying amount in equity is immediately transferred to the profit and loss account under ‘Net other (losses) gains’.


22

1.9 Financial assets

The Group classifies financial assets in the following categories: at fair value included in profits, loans and debts and assets for sale. The classification depends on what is intended with the asset. Management classifies financial assets on acquisition and carries out a new assessment of this classification on each reporting date. During the reporting period, the Group only has financial assets classified as ‘loans and liabilities’.

Loans and debts are non-derivative financial assets with fixed payments which are not transferable in an active market. These are classified as current assets unless they fall due more than 12 months after the balance date. If so, they are classified as fixed assets. Loans and debts are classified as ‘trade receivables, other current liabilities and other fixed assets’ in the balance and are entered at amortised cost.

1.10 Amortisation of financial assets

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 in the profit and loss account up to the balance sheet date. The amount of the amortisation is recognised in the profit and loss account. If the reason for the depreciation later ceases and the cessation can be objectively associated with an event taking place after the inclusion of the depreciation, 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 depreciated cost would have been, if the depreciation had not been included at the time when the write-down was reversed.

1.11 Tangible fixed assets

Fixed assets are measured at acquisition cost minus accumulated depreciation and amortisation. When assets are sold or disposed of, the carrying value in the balance sheet is deducted and any profit or loss recognised in the profit and loss account.

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 recognised in the profit and loss account, while other costs that are expected to provide future financial benefit are recognised in the balance sheet.

Depreciation is calculated on a straight-line basis over estimated useful life:

Buildings 20-30 years

Machinery, equipment etc. 3-10 years

Depreciation and amortisation period, method and retirement value are assessed annually.

1.12 Lease agreements

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 minus the accumulated depreciation and amortisation. 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. Direct costs associated with establishing the lease agreement are included in the cost of the asset.

The same depreciation time is used as for the Group’s other depreciable assets. If there is no reasonable certainty that the group will take over ownership at the end of the lease period, the asset depreciates over the shortest of the periods for the duration of the lease agreement or for the useful life of the assets.

Operational lease agreements

Lease agreements where the main risk and profit associated with ownership of the asset are not transferred to the lessee 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.

1.13 Fixed assets held for sale and disposals

Fixed assets and groups of fixed assets and debt are classified as for sale if their book value will be recovered through a sales transaction instead of through continued use. This is deemed to be the case when a sale is very probable and the fixed asset (or group of fixed assets and debt) is available for immediate sale in its present form. Management must have committed itself to a sale and the sale must be expected to be completed within a year from the date of classification.

Fixed assets and groups of fixed assets and debt classified as for sale are measured at the lowest value of previously booked value and fair value minus sales costs.

1.14 Intangible assets

Intangible assets acquired separately are recognised on the balance sheet at cost. The cost of intangible assets obtained through acquisitions are entered on the balance sheet at fair value in the consolidated opening balance. 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.


23

Intangible assets with finite lives are amortised over their useful economic life and assessed for impairment if there are indications of this. Depreciation method and period are reviewed at least annually. Changes to depreciation and/or period are treated as a change in estimate. Intangible assets with indefinite useful life are assessed annually for depreciation. See Point 1.16.

Patents and licences Patents and licences are recognised in the balance sheet at acquisition cost minus accumulated depreciation and amortisation. Depreciation is calculated on a straight-line basis over estimated useful life, which is varying from 5-10 years. Depreciation period and method are reviewed annually.

Research and development

Expenses associated with research activities are recognised in the profit and loss account when they arise. Development expenses are recognised in the profit and loss account when it is probable that the project will produce future financial benefit. The prerequisite for being recognised in the profit and loss accounts is that the project is technically and commercially viable, that the Group has sufficient resources to complete the project and that expenses can be reliably measured. Other development expenses are recognised in the profit and loss account when they arise. Development expenses which have previously been recognised are not recognised in the balance sheet in subsequent periods. Expenses which are recognised in the balance sheet include material costs, direct salary expenses and other directly attributable costs. Development expenses recognised in the balance sheet are entered as acquisition costs minus accumulated depreciation and amortisation.

Development costs depreciate on a straight-line basis over the estimated useful life of the asset. This may take place using either straight-line depreciation or project allocation of depreciation charge over the life of the asset.

Customer contracts

On acquisition of a company, customer contracts which fulfil the definition of intangible assets contained in IAS 38 are separated and recognised individually. Income-based models are used as a basis for determination of fair value. Customer agreements depreciate on a straight-line basis over the contract period.

1.15 Company mergers and goodwill

Mergers are recognised according to the acquisition method. For a description of how minority interests are measured see Note 1.20. Transaction costs are recognised as they are incurred.

The cost of an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed, and equity instruments issued. The cost includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Expenses related to the merger are recognised as they are incurred. Identifiable assets and liabilities are recognised at fair value on the acquisition date. Minority interests in the acquired entity are measured from time to time either at fair value or at their share of the acquiree’s net assets.

When a company is acquired in stages, the stake from previous purchases is reassessed at fair value at the time of the recognition of the value change.

Contingent consideration is measured at fair value on the acquisition date. The contingent consideration is classified as a liability under IAS 39 and is recognised at fair value in subsequent periods of change in value in the profit and loss account.

If the sum of the consideration, the fair value of previous ownership interests and any fair value of minority interests exceed the fair value of identifiable net assets acquired, the difference is recorded as goodwill. If the total is less than the company’s net assets, the difference is recognised. Goodwill is not amortised, but is tested for impairment at least annually, cf. Point 1.16.

The part of the fair value of the equity that exceeds the consideration (negative goodwill) is recognised immediately upon acquisition.

1.16 Decrease in value of non-financial assets

Intangible assets with indefinite useful lives are not amortised and are assessed annually for impairment. Tangible and intangible assets are tested for impairment when there are indicators that the future cash flows do not justify the carrying value. Depreciation is recognised with the difference between the carrying value and recoverable amount. The recoverable amount is the higher of fair value less sales costs and utility value.

When assessing decrease in value, fixed assets are grouped at the lowest level where it is possible to divide out independent cash flows (cash flow generating units). At each reporting date, the possibility of reversing previous write downs of non-financial assets (except goodwill) is assessed.

For assessment of the need for depreciation of goodwill, goodwill is allocated to the current cash-generating units. The allocation of goodwill is to the cash-generating units or groups of cash-generating units which are expected to gain from the purchase.

1.17 Loans

Loans are recognised in the profit and loss account at fair value when payment of the loan occurs, with deduction for transaction costs. In subsequent periods, loans are entered at amortised cost calculated using effective interest rate. The difference between the loan amount paid out (less transaction costs) and the redemption value is recognised in the profit and loss account over the term of the loan.


24

Loans are classified as current liabilities unless an unconditional right exists to defer payment of the debt for more than 12 months from the balance sheet date.

1.18 Provisions

A provision is recognised in the profit and loss account when the Group has an obligation (legal or self-imposed) as a result of an earlier event, there is a strong probability that a financial settlement will take place and the size of the obligation can be reliably measured. If the effect is significant, the provision is calculated by discounting anticipated future cash flows with a discount rate before tax which reflects current market conditions and risk applicable to the obligation.

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.

Provision for loss-making contracts is entered when the Group’s anticipated income from a contract is lower than the unavoidable costs involved in discharging obligations under the contract.

1.19 Equity

Expenses for equity transactions

Transaction costs directly associated with equity transactions are recognised in the profit and loss account allocated directly to the equity after deduction of tax.

Translation differences

Translation differences arise in conjunction with currency differences on consolidation of foreign units. For disposal of foreign units the accumulated translation difference associated with the unit is reversed and recognised in the profit and loss account for the same period as the profit or loss of the disposal is recognised in the profit and loss account.

1.20 Non-controlling interests

Minority interests included in the consolidated accounts constitute the minority interest’s carrying value of equity.

The subsidiary’s income and the components of other income and costs are attributed to the owners of the parent company and minority interests. Results are attributed to the parent company owners and to the minority interests even if this results in the minority interest having a deficit.

1.21 Principles for recognition as income

Income is recognised in the profit and loss account when it is probable that transactions will generate future financial benefit which will accrue to the group and the size of the amount can be reliably estimated. Sales income is presented after deduction of value added tax and discounts.

Sale of goods

Income from the sale of goods is recognised when delivery has taken place and the significant risks and rewards of ownership have been transferred to the buyer, and Goodtech no longer has control or administrative influence over the goods.

Construction contracts

Income from long-term construction projects is recognised in the profit and loss account as the project progresses when the result of the transaction can be reliably estimated. Progress is measured using one of two methods: accrued expenses on the balance date compared to total estimated project cost or hours worked compared to total estimated hours. The choice of method depends on the type of project; hourly or product-based. 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 in the profit and loss account in its entirety.

Services

Income from the sale of services is recognised in the profit and loss account as the project progresses. Progress is measured in accrued hours compared to total estimated hours. Some projects include the supply of both products and services. Such projects are recognised in the profit and loss account according to the principles for construction contracts. In the period in which a project is identified as giving a negative result, the estimated loss on the contract will be recognised in the profit and loss account in its entirety.

Royalties are recognised in the profit and loss account when they are earned in accordance with the provisions of the underlying agreement. Interest earnings are recognised in the profit and loss account based on the effective rate as they are earned.

Dividends are recognised when the shareholders’ right to receive dividends has been determined by the AGM.


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1.22 Foreign currency

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 in the profit and loss account continuously over the accounting period. The following exchange rates are used:

SEK EUR Exchange rate 1.1.2014 94.72 8.38 Exchange rate 31.12.2014 95.97 9.04 Average exchange rate 2014 91.86 8.35

Activities abroad

Assets and liabilities in foreign companies including goodwill and fair value adjustments which appear 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. Average exchange rate is calculated quarterly. Exchange rate differentials are allocated to equity. Translation differences in equity are recognised in the profit and loss account on disposal of the foreign enterprise. 1.23 Employee benefits

Pension schemes

The Group has various pension schemes. The pension schemes are generally financed through disbursements to insurance companies. The Group has both contribution based and defined benefit schemes. In accordance with the law on mandatory company pensions, all group employees in Norway participate in pension schemes that meet the requirements of the law.

For defined contribution plans, the company pays fixed contributions. The company has no legal or self-imposed obligations to inject further funds if it turns out that there are not sufficient assets to pay all employees the benefits that are related to their service in the current or previous periods. A defined-benefit plan is defined as a scheme which is not a defined-contribution plan.

A defined-benefit plan will typically define the amount an employee will receive from the retirement date, usually depending on age, years of employment and salary.

Defined-benefit pension schemes

Net obligation is calculated based on the present value of the future pension benefits which the employee has accrued on the date of balance, less the net realisable value of pensions assets. Gross liability is calculated by independent actuaries. The discount rate is derived on the basis of on the interest rate on corporate bonds and is adapted to the maturity of the liability. The calculation is based on a linear earnings model and includes employer’s contributions for net actually underfinanced schemes.

Introduction of a new defined-benefit scheme or improvement of an existing one involves changes in pension obligations. This is entered as cost on a straight-line basis until the effect of the change is taken up. The introduction of new schemes or changes to existing ones that occur with a retroactive effect, so that the employees have immediately earned a paid-up pension (or change in paid-up pension) are entered immediately. Gains or losses in respect of restriction or conclusion of pension schemes are entered as they occur.

Profit and loss resulting from the recalculation of the liability resulting from experience variances and changes in actuarial assumptions are charged directly against equity through comprehensive income in the period they occur.

Contribution-based pension schemes

Most of the group’s subsidiaries have contribution based pension schemes. The Group makes a fixed payment to an insurance company and has no legal or other obligation to make any further payment. Pension premiums are entered as costs as they occur.

Profit share and bonus schemes

The Group recognises a provision in the profit and loss account where it has contractual obligations or where a previous practice has created a self-imposed obligation.

1.24 Loan costs

Loan costs that are directly attributable to the acquisition or production of a qualifying asset are capitalised as part of the acquisition cost of the asset.

1.25 Public grants

Public grants are recognised in the profit and loss account when there is reasonable certainty that the company will fulfil the conditions associated with the grant and that the grant will be received. 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 grants are recognised in the balance sheet and calculated systematically over the useful life of the asset. Investment grants are calculated by deducting the grant from the value of the asset recognised in the profit and loss account.


26

1.26 Income tax

Tax costs consist of payable tax and changes in deferred tax. Deferred tax/tax advantage is calculated on all differences between accounting and tax values of assets and liabilities with the exception of temporary differences in connection with goodwill.

Deferred tax advantage is recognised in the profit and loss account when it is probable that the company will have sufficient tax surplus in later periods to utilise the tax advantage. The Group recognises in the profit and loss account tax advantages which have previously not been recognised to the extent that it has become probable that the Group can utilise such deferred tax advantage. The Group will likewise reduce deferred tax advantages to the extent that the group 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 previously temporary differentials have arisen.

Deferred tax and deferred tax advantages are recognised at nominal value and are classified as financial capital expenditure (long-term debt) in the balance sheet.

Payable tax and deferred tax are allocated in the profit and loss account to equity to the extent that the tax entries relate to equity transactions.

1.27 Segment information

Goodtech reports segment information in accordance with IFRS 8, Business Segments, which requires that segment information be based on internal management reports which are followed up regularly by the Group’s most senior decision-maker (Chief Operating Decision Maker) to evaluate the profits of the segments and to allocate resources to them. The Group presents segment information for business segments and geographical segments (see Note 2).

The Group reports on the following five main segments: Projects & Services, Infra, Solutions, Environment and Products.

Comparative data are normally prepared for changes in reporting segments. See Note 3 for segment information.

1.28 Contingent liabilities and assets

Contingent liabilities that are unlikely to be settled or which cannot be measured reliably are not recognised in the annual profit and loss account. Significant contingent liabilities are recognised with the exception of contingent liabilities where the probability of the liability is low.

A contingent asset is not recognised in the annual profit and loss account, but is recognised where it is probable that a benefit will accrue to the Group.

1.29 Events after the balance date

New information about the Group’s financial position on the balance date arising after the balance date is recognised in the profit and loss account. Events after the balance date which do not affect the group’s financial position on the balance date, but which will influence the Group’s financial position in the future are recognised if they are significant.

1.30 Uncertainty of estimates

In its presentation of the annual accounts in compliance with IFRS the group management has used estimates and assumptions deemed to be realistic. Situations or changes may arise which may mean that such estimates require adjustment and thereby affect the group’s assets, debt, equity or profit and loss.

The Group’s most important accounting estimates relate to the following:

Construction contracts

Warranty provisions

Estimates of goodwill

Deferred tax advantages

Construction contracts present a number of challenges from the tender phase to handover. The estimates on which the accounts are based rely on uniform principles and are subject to control procedures which are designed to ensure effective measurement of project results and progress. The complexity and scope mean that the project estimates have an inherent risk of error despite the Group’s efforts to ensure correct measurement. The Group uses payment on account for on-going contracts. A significant uncertainty lies in the expected result of the projects. Use of this method implies that the Group must estimate completed production as a proportion of total production to be performed.

Based on past experience, the Group has made warranty commitments on completed contracts. Provisions are presented in Note 23.

The Group’s recognised goodwill is assessed annually or when there are indications of a fall in value. Factors that may trigger a review of the asset value include poor profits compared to historical profits or poor anticipated profits, significant negative industry or financial developments or significant changes to overall business strategy. Assessments of recoverable amounts of assets and companies are partially based on management estimates, including determining own cash flow generating units, estimates of future profits, an asset’s income capacity and assumptions about future market conditions and use of synergy effects. Changes in circumstances and management assumptions may lead to write-downs.

Deferred tax assets based on losses carried forward are recognised to the extent expected future income for the company, taking into account Group contributions, in the medium term will be sufficient to utilise these losses. This makes it necessary to estimate the company’s future income. Such estimates may change over time and cause changes in the carrying value of deferred tax assets.


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1.31 Standards not yet effective

The following new standards, corrections and interpretations of standards had not come into effect by 31 December 2014 and have not been applied in these consolidated accounts. Goodtech anticipates that these standards will be applied in the consolidated accounts from the financial year 2015 or later. Commencement dates are those that apply to IFRS adopted by the EU. These may in some instances deviates from commencement dates according to IASB.

IFRS 9 Financial Instruments addresses the classification, measurement and recognition of financial assets and financial liabilities. In July 2014, IASB published the final sub-project of IFRS and the standard is now complete. The standard replaces those parts of IAS 39 that relate to the classification and measurement of financial instruments. The parts of IAS 39 that have not been amended as part of this project have been transferred to and incorporated in IFRS 9. The standard will have an impact on how the company presents its results. According to IFRS 9, profits on disposals of financial instruments available for sale are not recognised in the profit and loss account, but only included in the total profit and loss account. The standard will apply to accounting periods beginning 1 January 2018 or later. As the Group is currently organised and financed, no significant effects are anticipated on the basis of the proposed changes.

IFRS 15 ‘Revenue from contracts with Customers’ requires a division of customer contracts into separate performance obligations. A performance obligation may be a product or a service. Revenue is recognised when a customer obtains control of goods or services and thus has the ability to determine the use and receive the benefits of that product or service. The standard comes into force for the financial year 2017, but cannot be applied beforehand. Implementation of the standard is not expected to have any significant effect on the consolidated accounts.


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Note 2 Changes in the group structure

The process has been commenced for the sale of Goodtech Products AS, Goodtech Environment AS, Goodtech Environment AB and Goodtech Solutions Manufacturing AB with the aim of completing each sale in Q2 2015 on condition that satisfactory terms can be achieved.

As of 31.12.14, the ongoing sales processes had not progressed far enough to qualify for presentation as held for sale/discontinued operations in accordance with IFRS 5 at this point and the stated companies are thus included in the consolidated accounts in their entirety as of 31.12.14.

Business combinations and organisational changes 2014

Acquisition of companies 2014

On 30 October 2014, Goodtech acquired 100% of the voting shares in Power Control AB for SEK 12 million. On the acquisition date, Power Control employed nine power engineers in the field of electrical engineering and the company is an important piece in Goodtech’s efforts and growth ambitions in the power market.

The table below shows the fair value of identifiable assets and liabilities on the acquisition date:

(NOK 1,000) 30.10.2014

Tangible fixed assets 45

Trade receivables 1,670

Other current receivables 1,568

Cash and cash equivalents 2,506

Total identifiable assets 5,788

Trade payables and other current liabilities

2,227

Payable tax 2,017

Total identifiable liabilities 4,244

Net identifiable assets

1,544

Goodwill 9,972

Total consideration for the shares, paid in cash 11,516

Recognised goodwill of NOK 10.0 million results from the the value related to synergies expected to arise as a consequence of the takeover.

Power Control AB contributed NOK 2.5 million in operating income and a profit before tax of NOK 0.6 million to the consolidated accounts for the period between the acquisition date and 31 December 2014. If the merger had occurred at the beginning of the accounting period, the Group’s operating income would have been NOK 2,383 million and profit before tax a loss of NOK 26.8 million.

Disposal of companies 2014

Effective from 1 October 2014, the Group disposed of Goodtech Solutions AB, its material handling business in Gothenburg. At the time of the sale, the company had a turnover of NOK 7.3 million which forms part of the turnover of the Solutions business area. In 2014, the business reduced the Group’s EBITDA by NOK -4 million. Income and expenses from discontinued operations are considered as insignificant and have therefore not been presented separately in the profit and loss account for 2014.

The sale price of NOK 1.6 million will be settled by deferred payment. The payment will be made in annual instalments based on the achieved profits going forward, but settled no later than on 31 December 2022. Outstanding payments are treated as long-term loans provided on market terms. As part of the acquisition, the new owners have borrowed SEK 1 million on market terms which will be repaid over five years.

Organisational changes 2014

The power business in Sweden and Norway has been amalgamated in a new division called Power within the Projects & Services business area.

Mergers 2013

Company acquisitions 2013

The Group took over Profitek AB on 1 July 2013. The price of the acquisition was SEK 1.6 million. The acquisition included 21 employees, some equipment and current contracts.

The purchase price has been classified in its entirety as goodwill in the Group. Goodwill is associated with employees with special expertise and anticipated synergies with other group companies. These values do not meet the balance sheet criteria contained in IAS 38 and have therefore not been recognised separately.


29

Note 3 Segment information (NOK 1,000)

Operating segments

Segment information has been prepared in compliance with IFRS 8 and is based on the reporting the management uses when assessing performance, profitability and resource allocation.

Goodtech has organised its business into five reportable segments (business areas), based on the types of project, products and services supplied and various customer groups, as follows:

The Projects & Services business area supplies qualified technical solutions in the fields of electrics and process

assembly, power technology and automation to Nordic industry and the public sector. These deliveries include everything from large, technically demanding projects to smaller, on-going local projects.

The Infra business area provides services and solutions for upgrading infrastructure.

The Solutions business area supplies automation products and streamlining solutions for production, material

handling, warehousing and logistics to Scandinavian industry as well as to selected customers and industries internationally.

The Environment business area supplies customised environmental technology, products and solutions for

environmental problems to municipalities, industrial companies and the private sector. The Products business area supplies products in the field of automation, instrumentation, industrial communication

and logistics.

2014

Projects &

Services

Infra

Solutions

Environment

Products

Group

items

Total

Revenue from external customers 1,474,184 325,297 203,725 293,801 67,195 22 2,364,224

Inter-segment revenue 16,391 89 2,530 644 24,446 -44,100 0

Total segment revenue 1,490,575 325,386 206,256 294,444 91,641 -44,078 2,364,224

Cost of goods -506,346 -253,449 -112,328 -218,189 -60,394 26,695 -1,124,010

Salary costs -718,708 -62,497 -76,872 -43,168 -21,021 -15,278 -937,543

Other operating expenses -228,410 -17,555 -21,383 -21,405 -9,110 17,433 -280,431

Operating profit before depreciation and non-recurring items

37,110

-8,115

-4,327

11,682

1,116

-15,227

22,239

Amortisation -15,604 -177 -3,002 -2,579 -876 -2,311 -24,549

Depreciation -101 - -6,899 - - -2,873 -9,874

Non-recurring items -5,711 -262 -311 - - -6,453 -12,738

Operating profit 15,694 -8,554 -14,539 9,102 240 -26,864 -24,921

Net financial expenses -4,155 -19 477 -5,291 -1,082 -1,456 -11,527

Profit from affiliated companies 4,211 - - - - -2,494 1,717

Profit before tax 15,749 -8,574 -14,062 3,811 -842 -30,814 -34,731 Assets

1,111,941

13,368

152,074

180,259

37,614

75,550

1,570,807

Acquisition of plant and machinery 13,330 56 1,442 11,812 574 201 27,413


30

2013

Projects &

Services

Infra

Solutions

Environment

Products

Group

items

Total

Revenue from external customers 1,563,267 294,385 195,560 295,302 85,261 - 2,433,776

Inter-segment revenue 13,715 27 3,741 1,263 7,454 -26,200 0

Total segment revenue 1,576,982 294,412 199,301 296,566 92,716 -26,200 2,433,776

Cost of goods -615,517 -213,905 -101,470 -224,865 -58,364 16,586 -1,197,535

Salary costs -688,666 -53,539 -82,443 -41,202 -17,948 -21,212 -905,011

Other operating expenses -192,999 -16,347 -25,670 -22,482 -9,312 21,798 -245,012

Operating profit before depreciation and non-recurring items

79,800

10,621

-10,282

8,016

7,092

-9,028

86,218

Amortisation -18,525 -277 -2,215 -1,087 -461 -1,456 -24,021

Depreciation - - - - - - -

Non-recurring items - - - - - -3,087 -3,087

Operating profits 61,274 10,343 -12,497 6,929 6,631 -13,570 59,110

Net financial expenses -3,509 -2 -676 -3,792 -599 171 -8,406

Profit from affiliated companies 5,117 - - - - -1,200 3,917

Pre-tax profits 62,883 10,342 -13,172 3,137 6,032 -14,600 54,621 Assets

1,109,853

13,312

154,856

172,324

39,463

47,029

1,536,837

Acquisition of fixed assets 3,867 193 9,045 8,073 2,948 2,136 26,262

The segments are reported gross including sales to other segments. Group items include sales among the segments and group activities in the parent company Goodtech ASA that are not distributed among the segments.

Standard business conditions apply to transactions and transfers among the group’s segments similar to those employed with external parties.

Assets under other and eliminations mainly consist of parent company assets.

Income by product group 2014 2013

Sale of goods 127,667 142,209

Construction contracts 1,647,691 1,637,730

Services 569,292 632,692

Other revenue 19,574 21,145

Total revenue 2,364,224 2,433,776


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Information about geographical areas 2014 2013

Norway 515,749 464,386

Sweden 1,786,965 1,910,360

Finland 2,930 1,426

Denmark 13,132 5,227

Brazil 2,661 1,870

Poland 747 3,564

Russia 2,176 2,244

USA 3,141 7,135

Japan 19,886 16,227

United Kingdom 2,119 237

Ireland 1,156 -

Germany 889 111

Switzerland 748 -

Belgium 1,225 1,154

Faroe Islands 991 1,950

Estonia - 585

Czech Republic 40 953

Romania 2,339 -

Bahrain - 2,202

UAE - 5,607

Chile 6,251 7,349

Others 1,077 1,189

Total revenue 2,364,224 2,433,776

Information about geographical areas is based on where the customer is located.

Fixed assets 2014 2013

Home state/Norway 19,948 17,119

Sweden 41,711 42,475

Other 17,621 7,883


Fixed assets consist of plant and equipment, investments in associated companies and other non-current assets presented in the balance sheet.

Note 4 Salaries and staff costs

(NOK 1,000) 2014 2013

Salaries 665,863 641,008

Share-based compensation (share-saving scheme) - 263

Employer tax 169,959 164,065

Pension costs 58,757 54,648

Other staff costs 42,964 45,027

Total salary costs 937,543 905,011

Average number of full-time equivalents in the period

1,490

1,438

Number of employees as at 31.12. 1,533 1,482


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Note 5 Other operating costs

(NOK 1,000) 2014 2013

Rent and commercial premises 48,306 44,697

Travel expenses 40,052 40,585

Car expenses 35,053 32,544

Sales and marketing expenses 16,077 16,282

Consultants, advisors and other external services 50,692 28,905

IT costs 16,152 13,290

Fixtures 17,947 17,606

Postage and telephone 11,951 11,554

Losses on receivables 3,405 1,540

Other operating expenses 40,795 38,010

Total other operating expenses 280,431 245,012

Remuneration for auditors in Goodtech is included under ‘Consultants, advisors and other external services’ and is distributed as follows:

Auditor remuneration 2014 2013

Auditor’s fee 1,701 1,263

Other certification services 28 33

Tax consultancy 7 156

Other-non audit services 366 195

Total excl. VAT 2,102 1,647

Note 6 Depreciation and non-recurring items

Non-recurring items include items that are not considered to be of a recurring nature. Examples of such items may be impairment of goodwill, acquisition costs and restructuring costs.

In 2014, NOK 9.9 million in depreciation of goodwill and value added were recognised as non-recurring items of which NOK 6.9 million constitutes depreciation of goodwill in connection with the divestment of the materials handling division of Solutions Gothenburg. An impairment of added value associated with an old building in Åland of NOK 2.9 million was also recognised.

Non-recurring items relate to expenses of NOK 2.2 million for the retirement of the former CEO and restructuring costs in 2014 associated with internal improvement measures and ongoing structural and strategic processes.

Other non-recurring items in 2013 are consultancy fees associated with a completed agreement of intent on the possible sale of various businesses.

(NOK 1,000) 2014 2013

Impairment of goodwill and added value 9,874 -

Restructuring costs etc. 10,550 -

Other non-recurring items 2,188 3,087

Total 22,611 3,087


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Note 7 Financial income and financial expenses (NOK 1,000) 2014 2013

Interest income 818 615

Agio profit 5,968 2,118

Other financial income 175 159

Total financial income 6,961 2,893

Interest on loans -5,030 -3,233

Interest on credit facility -2,060 -1,521

Guarantees -445 -475

Agio loss -9,104 -5,425

Other financial costs -1,849 -644

Total financial costs -18,488 -11,298

Net financial costs -11,527 -8,406

Note 8 Tax (NOK 1,000)

Tax costs 2014 2013

Payable tax*) 1,842 13,506

Adjustments for previous years 98 106

Change in deferred tax assets -8,694 234

Change in deferred tax -6,295 -714

Tax costs -13,050 13,133

Effective tax rate in % 38% 24%

The effective tax rate in 2014 was significantly impacted by corrections from previous years.

*) Tax payable in balance sheet 2,045 3,573

Reconciliation of effective tax rate with tax rate in Norway

Tax costs differ from the amount that would have arisen if the nominal tax rate had been applied. The difference between the nominal rate and the effective tax rate is specified below. The main components are specified.

2014 2013

Pre-tax profits -34,732 54,621

Tax calculated at a tax rate of 27% (tax rate in Norway) -9,378 15,294

Activities with tax rate other than 27% 368 -4,955

Effect of change to tax rate

Share of profits from affiliated companies

-

-464

1,141

-

Permanent differences 351 1,878

Change to deferred tax on equity transactions -161 -

Correction of previously recognised deferred tax assets -3,298 -

Translation differences -470 -330

Other - 105

Tax costs -13,050 13,133

The Group has businesses in Sweden (22%) and Finland (20%) which have lower tax rates than 27%. Profits from affiliated companies are recognised after tax and therefore do not affect the Group’s tax expenses. Correction for previous years apply to changes to Norwegian companies after submission of the consolidated accounts in 2013.


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Deferred tax and deferred tax assets

Balance sheet

Deferred tax assets 2014 2013

Fixed assets -3,398 -5,764

Current assets -4,181 -165

Pension 839 244

Provisions 1,146 637

Profit and loss account -671 -838

Losses carried forward 49,748 40,448

Carrying value deferred tax assets 43,484 34,561

Deferred tax 2014 2013

Hedging reserve in equity 286 158

Fixed assets, R&D/customer contracts - 2,380

Provisions Sweden 3,928 7,091

Fixed assets, Finland 473 1,225

Carrying value deferred tax liability 4,686 10,854

Deferred tax relates to temporary differences in Sweden and industrial property in Finland which cannot be offset against deferred tax assets. Group recognises net liability and deferred tax assets only if the Group has a legal right to offset these and only liability and deferred tax assets that are within the same tax regime.

Breakdown change to deferred tax 2014 2013

As of 1 January, net assets/liabilities 23,707 25,437

Recognised in the profit and loss account 14,989 480

Recognised in other comprehensive income 161 -97

Correction previous years -61 -

Translation differences in deferred tax - -2,112

As of 31 December, net assets/liabilities 38,796 23,707

Change to deferred tax assets and deferred tax liability

Deferred tax assets

Fixed assets, R&D/customer

contracts Current assets Pension Provisions

Profit and loss account

Losses carried forward Total

Balance 01.01.2013 -5,594 -1,362 454 480 -1,087 41,843 34,735

Recognised in the profit and loss account -170 1,197 -149 156 248 -1,395 -113

Recognised in other comprehensive income - - -61 - - - -61

Balance 31.12.2013 -5,764 -165 244 637 -838 40,448 34,561

Recognised in the profit and loss account 2,366 -4,016 367 510 168 9,300 8,694

Correction previous years - - -61 - - - -61

Recognised directly in equity - - 289 - - - 289

Balance 31.12.2014 -3,398 -4,181 839 1,146 -671 49,748 43,484

Deferred tax liability Hedging reserve

in equity

Fixed assets, R&D/customer

contracts Provisions

Sweden Fixed assets

Finland

Total

Balance 01.01.2013 - 5,246 2,902 1,151 9,298

Recognised in the profit and loss account - -4,053 3,848 -508 -714

Recognised in other comprehensive income 158 - - - 158

Translation differences - 1,187 342 583 2,112

Balance 31.12.2013 158 2,380 7,091 1,225 10,854

Recognised in the profit and loss account - -2,380 -3,164 -752 -6,295

Recognised in other comprehensive income 128 - - - 128

Balance 31.12.2014 286 0 3,928 473 4,686


35

Group tax loss to be carried forward with expiry date: 2014 2013

2015 or later No due date -184,252 -149,807

Total loss to be carried forward -184,252 -149,807

Tax losses to be carried forward by country:

2014

2013

Norway -175,173 -149,514

Sweden -9,079 -293

Total loss to be carried forward -184,252 -149,807

Note 9 Earnings per share

Earnings per share are 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.

To calculate the diluted profits per share, the weighted average of the number of issued ordinary shares in circulation is used and adjusted for the effect of conversion of all potential shares which may be diluted. The company has no potential shares which may be diluted. The company has no potential shares which may be diluted.

(NOK 1,000) 2014 2013

Profit for the period allocated to the company’s shareholders -22,011 41,171

Weighted average number of issued shares (thousands) 32,467 32,454

Earnings/diluted earnings per share (NOK) -0.67 1.28

2014

2013

Ordinary shares issued as of 31 December (thousands) 32,403 32,503

Own shares held 126 26

Total 32,529 32,529

Weighted average number of ordinary shares as of 31 December 32,467 32,454


36

Note 10 Plant and equipment (NOK 1,000)

Buildings Machinery/fixtures Leasing vehicles Total

As of 1 January 2013

Acquisition cost

11,510

72,935

-

84,445

Accumulated depreciation -2,679 -36,977 - -39,657

Carrying value as of 01.01.13 8,831 35,957 - 44,788

Financial year 2013

Carrying value as of 01.01.13

8,831

35,957

-

44,788

Translation differences 1,083 2,171 - 3,254

Acquisi

tion

Dispos

al

Annual depreciation

5,714

-

-435

20,548

-

-12,029

-

-

-

26,262

-

-12,464


As of 31 December 2013

Acquisition cost 18,308 95,654 - 113,961

Accumulated depreciation -3,114 -49,006 - -52,121


Financial year 2014


Translation differences 645 9 - 654

Acquisition of subsidiary (Note 2) 45 - 45

Acquisition 8,979 12,758 5,632 27,368

Disposal - -150 - -150

Depreciation -2,873 - - -2,873

Annual depreciation -1,313 -13,885 -716 -15,914

Carrying value as of 31.12.2014 20,632 45,424 4,915 70,972


Acquisition cost

27,932

108,316

5,632

141,879

Accumulated depreciation -2,873 - - -2,873

Accumulated depreciation -4,427 -62,891 -716 -68,035

Carrying value as of 31.12.14 20,632 45,424 4,915 70,972 Economic life

1)

Depreciation method

20-30 years

linear

3-10 years

linear

4-5 years

linear

1) Asset categories presented in the above table are the aggregate sum of various asset components that belong to a specific category and depreciation rates represent the economic life allocated to components.

An old office building on Åland belonging to the Environment business area has been torn down. Remaining book value is amortised by NOK 0.5 million. Associated added value in the Group is written down by NOK 2.9 million. See Note 6.


37

Note 11 Intangible assets (NOK 1,000)

Development projects Customer contracts Goodwill Total

Financial year 2013


14,159

18,995

577,870

611,024

Translation differences - 1,453 45,199 46,652

Acquisition 14,483 - 1,600 16,083

Annual depreciation -98 -11,459 - -11,558



Acquisition cost

29,011

47,338

704,670

781,402

Accumulated depreciation and amortisation -467 -38,350 -80,000 -119,201


Financial year 2014


28,544

8,988

624,670

662,201

Translation differences - -288 5,683 5,395

Acquisition 16,870 - - 16,870

Acquisition of subsidiary (Note 2) - - 10,035 10,035

Depreciation -101 - -6,899 -7,000

Annual depreciation -25 -8,611 - -8,635

Balance as of 31/12/2014 45,288 89 633,489 678,866


Acquisition cost

45,881

47,050

720,388

813,703

Accumulated depreciation and amortisation -593 -46,961 -86,899 -134,837

Balance as of 31/12/2014 45,288 89 633,489 678,866

Depreciation %

Economic life 1)

Depreciation method

16.7%-25%

4-6 years

linear

1) Asset categories presented in the above table are the aggregate sum of various asset components that belong to a specific category and

depreciation rates represent the economic life allocated to components.

Development projects

Development costs are associated with development projects in Goodtech Recovery Technology AS and Goodtech Projects & Services AS.

Goodtech Recovery Technology AS capitalises development costs associated with the development of technology for streamlining the production of aluminium. The carrying value for this year is NOK 8.8 million. This is net acquisition after elimination of intercompany profits associated with hours purchased from group companies of NOK 4.3 million. Development costs will be amortised over their useful life.

Goodtech Projects & Services AS has activated NOK 8.1 million related to on-going development projects. The Company continuously assesses its development projects in terms of the market, substitutes and potential customers in order to assess the recoverable value of the development projects. Development costs are amortised over their useful life.

The Group had no research costs in 2014 (NOK 0.0 million in 2013).


38

Goodwill

Goodwill is not amortised. This asset is tested at least annually for impairment. At Goodtech, this is done at year end. If there is any indication of impairment, impairment tests are carried out more frequently.

Goodwill which has arisen through the business combination is allocated to the individual unit where the cash flow is identifiable.

Allocation of goodwill by cash-generating units: 2014 2013

Goodtech Intressenter AB 417,900 402,550

Goodtech Projects & Services AS 142,725 142,725

Goodtech Electro AS 302 302

Projects & Services 560,927 545,577

Goodtech Solutions AS

4,463

4,463

Goodtech Solutions AB 56,012 62,543

Solutions 60,475 67,006

Goodtech Environment AS

5,634

5,634

Environment 5,634 5,634

Goodtech Products AS

6,453

6,453

Products 6,453 6,453

Balance as of 31.12 633,489 624,670

Goodwill related to the acquisition of Profitek AB of SEK 10.0 million is included in goodwill for Goodtech Intressenter AB.

In connection with the sale of material handling operations in Solutions Gothenburg, goodwill related to Goodtech Solutions AB was written down by NOK 6.9 million.

See Note 2 for information related to the acquisition of Power Control AB and the material handling business in Gothenburg.

Other changes to goodwill during the accounting period are related to currency fluctuations.

Goodwill is in all entities related to employees with special skills and anticipated synergies with other Group companies.

Testing for value decrease of cash generating units that include goodwill

Impairment testing for cash-generating units with significant recognised amounts of goodwill is based on the recoverable amounts. Recoverable amounts are determined on the basis of an assessment of the cash-generating unit’s utility value. The utility value is calculated by discounting the expected future cash flows over a period of five years, including a terminal value based on Gordon’s growth formula. Cash flow projections are used based on financial budgets approved by management. Cash flow over and above approved budgets is derived on the basis of the Group’s long-term strategic plans.

Weighted rate of return used in the impairment test (WACC) After tax Before tax

Goodtech Intressenter AB 7.8% 9.8%

Goodtech Projects & Services AS 8.3% 11.2%

Goodtech Electro AS 8.3% 11.2%

Goodtech Solutions AS 8.3% 11.2%

Goodtech Solutions AB 7.5% 9.5%

Goodtech Environment AS 8.0% 10.8 %

Goodtech Products AS 8.0% 10.8%

The discount rate used is risk-adjusted for each cash-generating unit to reflect the asset’s specific risks and tax adjusted before tax using the methods described in IAS 36.

Risk-free interest rate is determined based on 10-year Norwegian and Swedish government bonds and 10-year swap interest in Norway and Sweden. The Norwegian and Swedish risk-free rate has been used in the respective calculations of return to be consistent with the units’ currency in cash flows.

Estimates of future cash flows are based on numerous assumptions. These include economic and market developments. The companies within the Group are affected by market fluctuations and estimates made in weak markets may differ significantly from the estimates made in stronger markets. This indicates that in companies operating in volatile markets it may be difficult to make the right long-term decisions when the market is characterised by short-term volatility.


39

Management expects that the market for the company’s products and services will increase in the coming years and that the company will be able to take a larger market share within the indicated segments. Stable growth in turnover and moderate improvement in EBITDA margins are assumed. Moderate growth expectations and increased earnings beyond the budget period have been assumed, and the conditions set are considered to be moderate. See also the sensitivity analysis below for further discussion of the units in which the discounted value is only marginally higher than the recognised value of capital employed.

Impairment of goodwill

Carrying out the impairment test in accordance with IAS 36 as at 31.12.14 found no basis for impairment or need to write down goodwill or intangible assets.

Sensitivity analysis

If conditions develop differently from what has been assumed, this may result in impairment of goodwill and intangible assets. Key assumptions used in the calculation of recoverable amounts are discount rates and developments in EBITDA.

In connection with impairment testing of goodwill, the Group has carried out sensitivity analyses for each cash-generating unit. The calculated amount of each cash flow-generating unit exceeds its recognised amount by a relatively wide margin for Goodtech Intressenter AB, Goodtech Projects & Services AS, Goodtech Solutions AS, Goodtech Electro AS, Goodtech Environment AS and Goodtech Products AS at the end of 2014. The Group believes that no changes in any of the key assumptions for impairment within a reasonable range of possibilities will cause the carrying value of some of these cash-generating units to exceed the recoverable amount.

Sensitivity analyses show that Goodtech AB is the unit that is most vulnerable to changes in key assumptions that go beyond reasonable changes.

Goodtech Solutions AB

The value of the goodwill associated with Goodtech Solutions AB is dependent on the Company achieving significant improvement of net income. Profits for the year were affected by the depreciation of individual system projects and project delivery. Measures have been taken to improve project efficiency and cost adjustments that are expected to lay the foundation for a positive performance in future periods. The Company has a good order book which is expected to generate the required profit margins.

Sensitivity analyses are performed based on the assumptions that are believed to be the most relevant: discount rate and EBITDA margin. The following levels are critical in terms of possible impairment, given that all other factors are held constant:

a) Increase in discount rate before tax to more than 9.5% b) EBITDA margin lower than 7.0% in future periods

An increase in the discount rate before tax to more than 9.5% or an EBITDA margin lower than 7.0% in future periods may trigger impairment. A growth in the terminal value of 1.0% in the calculation of minimum levels has been assumed.

Note 12 Investments in affiliated companies (NOK 1,000)

An overview of the Group’s investments in associated companies is shown below.

Company Office Activities Ownership 1)

Kraftkompaniet Stockholm, Sweden Electrical installations 40 %

1) Votes correspond to ownership, 40%

(NOK 1,000)

Kraftkompaniet

Tunnelentreprenad Bravida EIAB HB

BRA Miljöteknikk AB

Total

Carrying value as of 01.01.2013 1,744 - - 1,744

Share of profit 2013 3,556 361 - 3,917

Dividends paid -1,932 -361 - -2,293

Translation differences 189 - - 189

Carrying value as of 31.12.2013 3,557 - - 3,557

Share of profit 2014 1,717 - - 1,717

Dividends paid -1,265 - - -1,265

Translation differences 108 - - 108

Investment - - 1,638 1,638

Carrying value as of 31.12.14 4,116 - 1,638 5,754

Tunnelentreprenad Bravida EIAB HB was liquidated in 2013.


40

Condensed profit and loss statement

2014

2013

2014

Operating income 42,593 37,965 21,167

Operating costs -39,037 29,732 -20,706

Net financial items 19 33 -16

Pre-tax profits 3,575 8,267 444

In 2014, Goodtech Environment AS converted a customer debt with Bra Miljöteknik Sverige AB (556835-5472), one of the Company’s regular distributors, into share capital. The debt of NOK 1,638,205.90 was converted into a shareholding of 33.33%.

Two projects are on-going in Kraftkompaniet in which the Group has a 40% and 50% project share. The share of profits in 2014 is based on these shareholdings.

The following condensed financial information for the Group’s affiliated company is recognised using the equity method. The table shows 100% figures.

Condensed balance sheet

Kraftkompaniet

31.12.2014

31.12.2013

BRA Miljöteknikk AB

31.12.2014

Current items Cash and cash equivalents 32,745 10,458 534

Current assets 13,513 7,042 5,278

Non-current assets 167 262 981

Total assets 46,425 17,762 6,792

Current liabilities

36,346

9,078

4,210

Non-current liabilities - - 321

Total liabilities 36,346 9,078 4,531

Net assets/liabilities 10,079 8,684 2,261

Note 13 Other fixed assets

(NOK 1,000) 2014 2013

Non-current interest-bearing receivables 2,368 1,986

Other financial investments 187 94

Total other fixed assets 2,554 2,080

Non-current interest-bearing receivables are deferred payment of purchase price (NOK 1.6 million) and loan to new owners in connection with the disposal of the Gothenburg business in Goodtech Solutions AB (NOK 0.7 million), cf. Note 2.

The price of NOK 1.6 million is repayable in annual instalments of a minimum of 25% of the achieved annual profits, to be fully repaid by 31 December 2022. Agreed interest rate is STIBOR + 3%.

Loan to the new owners is to be paid off over five years in equal annual instalments, to be fully repaid by 30 September 2019. Agreed interest rate is STIBOR + 3%.

Non-current interest-bearing receivables of NOK 2.0 million in 2013 are losses and have been written down to zero as losses on receivables in 2014, cf. Note 15.


41

Note 14 Inventory

(NOK 1,000)

2014

2013

Raw materials 17,322 15,207

Goods under production 1,716 1,804

Finished goods 11,050 12,392

Unsaleability 1 -729

Depreciation -1,918 -1,722

Total net inventory 28,172 26,951

Total cost for the period

1,124,010

1,197,535

Recognised value of stock pledged as security 4,488 3,737

Inventory mainly includes sales products and materials used for the supply of goods and services.

Write-downs of inventory are recognised as costs of goods sold. Inventory recognised on the balance sheet and pledged as security is part of the floating charge with SEB and Nordea Bank Finland Abp. See also Note 20.

Note 15 Trade receivables (NOK 1,000)

2014 2013

Trade receivables 408,315 448,330

Provisions for loss 539 1,483

Trade receivables net 407,776 446,847

Change in provisions for loss

-944

1,004

Actual losses 3,376 662

Loss on trade receivable is classified in the same way as other operating expenses in the profit and loss account.

Trade receivables by age Not due 0-30 days 30-60 days 60-90 days More than 90 days Total

2014 314,627 57,551 8,980 3,052 23,565 407,776

77% 14% 2%

1% 6% 100%

2013

339,517

58,977

34,592

3,339

10,423

446,847

76% 13% 8%

1% 2% 100%

Provision for bad debts is distributed proportionately. Of outstanding receivables as at 31.12.14, NOK 364.3 million was paid as at 4 March 2014.

Current receivables 2014 2013

Trade receivables net 407,776 446,847

Other current receivables – ref. Note 16. 310,668 265,434

Total current receivables 718,444 712,281

Current receivables – value per currency 2014 2013 2014 2013

Amounts in local currency NOK NOK

USD 66 388 490 2,363

EUR 1,910 816 17,262 6,841

SEK 575,414 624,902 552,224 591,907

NOK 148,364 111,089 148,364 111,089

Other currencies 103 81

Total trade receivables and other current receivables 718,444 712,281


42

Note 16 Other current receivables (NOK 1,000)

2014 2013

Prepaid costs 16,145 24,090

Production completed, but not invoiced (fixed-price projects) 253,912 205,354

Production completed, but not invoiced (other projects) 23,639 27,931

Other current receivables 16,972 8,060

Total other current receivables 310,668 265,434

The Group produces a large part of its output on a fixed-price contract basis. These contracts are recognised in the profit and loss account as ongoing settlements. Progress is calculated as incurred production costs relative to expected total production costs.

Breakdown of ongoing settlement of current projects

Current projects are accumulated operating income for all current fixed-price projects.

Current projects as at 31.12. 2014 2013

Accrued income 3,294,323 3,379,560

Accrued costs -2,934,781 -3,221,364

Recognised profit 359,542 158,196

Projects where profits are higher than the A account invoiced amounts are presented as receivables on the balance sheet. Projects where profits are lower than the A account invoiced amounts are presented as liabilities.

Production completed, but not invoiced (fixed-price projects) 2014 2013

Included as income on projects in progress 1,751,855 1,733,138

Amounts invoiced on account 1,497,943 1,527,784

Completed, but not invoiced production 253,912 205,354

Amount invoiced on account, but not paid

48,460

46,445

Of this withheld amount 14,240 22,520

Invoiced, but not completed production (fixed-price projects) – liabilities

2014

2013

Included as income on projects in progress 1,542,468 1,646,422

Amounts invoiced on account 1,708,706 1,796,556

Invoiced, but not completed production (ref. Note 22) 166,238 150,134

Amount invoiced on account, but not paid

24,047

41,001

Of this withheld amount 11,049 14,525

Goodtech is currently in discussions with a client for a major project for Infra. Goodtech terminated the contract with the client and negotiations are on-going on financial settlement and a new contract for the remaining part of the project. The best estimate is the basis for the accounting treatment as at 31.12.

See Note 23 for provisions for losses.


43

Note 17 Cash and cash equivalents (NOK 1,000)

2014 2013

Cash and bank deposits 22,560 33,365

Cash and cash equivalents in the balance sheet 22,560 33,365

Credit facility

-60,561

-48,467

Cash and cash equivalents in the cash flow analysis -38,001 -15,102

The Group has established group account system. According to the agreement, Goodtech ASA is the consolidated account holder and the other group companies are sub-account holders or participants. The bank may offset against deposits, so that the net position represents the balance between the bank and the Group account holder.

Restricted deposits (withholding tax) are included in cash and cash equivalents and are as at 31 December 2014 NOK 9.8 million (2013: NOK 9.1 million).

Note 18 Share capital, premium and paid-in capital (NOK 1,000)

Share capital Own shares Share

premium Other paid-in

capital Total

As of 1 January 2013 65,058 -70 35,318 500,000 600,305

Change own shares for the year - 18 - - 18

As of 31 December 2013 65,058 -52 35,318 500,000 600,323 Change own shares for the year

-

-200

-

-

-200

As of 31 December 2014 65,058 -252 35,318 500,000 600,123

Share capital

Nominal value per share is NOK 2,00. All shares have equal voting rights. All issued shares are fully paid up.

The general meeting of shareholders authorised the Board to issue shares up to the value of NOK 32,528,904. The authority expires on 30 June 2015. The purpose of the authority is to give the Board financial freedom to make acquisitions etc. As of today’s date the authority has not been used.

Own shares

Over the years, Goodtech ASA has acquired 100,000 shares. In December, 126,160 shares, equivalent to 0.39% of the Company’s share capital, had been sold to employees.

The general meeting has authorised the Board of Directors on behalf of the Company to acquire own shares amounting to 6,453,460. The maximum amount which may be paid per share is NOK 80 and the minimum amount is NOK 2. The authority expires on 30 June 2015. Shares acquired under this authorisation may be used for the implementation of the share scheme for employees, for acquisitions where the consideration consists of shares, for the redemption of share holdings and for other purposes.

Dividends 2014 2013

Dividends paid per share (NOK) 0.65 1.50

Total dividends paid (NOK 1,000) 21,127 48,621

Dividend per share proposed by the Board - 0.65


44

20 largest shareholders as at 31 December 2014 No. of shares % of total

El & Industrimontage Tannergård AB 9,403,911 28.91

Holmen Industri Invest 1 AS 7,850,288 24.13

Skagen Vekst 2,116,842 6.51

Sedlak Holding AS 1,547,725 4.76

EIO AS 1,495,641 4.60

MP Pensjon PK 474,000 1.46

Svenska Handelsbanken AB 445,472 1.37

Skandinaviska Enskilda Banken AB (nom.) 440,078 1.35

Swedbank AB (publ) (Nom.) 320,000 0.92

Trollhaug Invest AS 300,000 0.92

Skandinaviska Enskilda Banken AB (nom.) 297,084 0.91

Avanza Bank AB 286,576 0.88

Termos Eiendom AS 250,000 0.77

Tvenge Torstein Ingvald 250,000 0.77

Nordea Bank AB (publ) (nom.) 216,955 0.67

Paulsberg Invest AS 200,000 0.61

Part Invest AS 150,010 0.46

Mustad Industrier AS 136,585 0.42

Raymond Harland 130,000 0.40

Goodtech ASA 126,160 0.39

Total 20 largest 26,437,327 81.21

Other shareholders 6,091,578 18.79

Total 32,528,905 100.00

At the end of 2014, Goodtech ASA had 1,836 shareholders compared to 1,870 at the end of 2013.

Shares owned by the Board and management as of 31.12.2014 No. of shares

Stig Grimsgaard Andersen (Chairman) *) 107,201

Rolf Tannergård via El & Industrimontage Tannergård AB (Member of the Board) 9,403,911

Karl Erik Staubo (Member of the Board) *) 35,000

Veroslav Sedlak via Sedlak Holding AS (Member of the Board/Executive Management) 1,547,725

Åsa Otterlund (Member of the Board) 27,965

Håvard Kristiansen (Member of the Board, Employee Representative) 2,388

Susanne Häggström (Member of the Board, Employee Representative) 454

Christer Erita (Member of the Board, Employee Representative) 1,570

Arve Teie (Acting CEO) 56,986

Synnøve Granli (CFO) 13,394

Magnus Falkman (Group CEO, Projects & Services Southern Sweden) 37,395

Magne Reierson (Group CEO, Projects & Services Norway) 10,454

Hans R. Vedde (Group CEO Solutions) 35,246

Rune Hoseth (Group CEO Environment) 2,988

Eiliv Elvebakk (Group CEO Products) 819

*) Also indirect ownership in Holmen Industri Invest 1 AS In addition, executive management in individual subsidiaries in the Group own minor shareholdings.

Share price

At year end, shares were quoted at NOK 12.00 per share, compared with NOK 15.90 at year end 2013.


45

Note 19 Group companies and minority interests

The largest subsidiaries that are included in the consolidation of the Goodtech group appear in the following table. Companies owned directly by Goodtech ASA are highlighted.

Company Group’s share

Voting share

Registered office

Country

Goodtech Industry Holding AS 100.0% 100.0% Oslo Norway

Goodtech Electro AS *) 50.0% 50.0% Oslo Norway

Goodtech Projects & Services AS 100.0% 100.0% Oslo Norway

Goodtech Solutions AS 100.0% 100.0% Porsgrunn Norway

Goodtech Recovery Technology AS 100.0% 100.0% Oslo Norway

Goodtech Products AS 100.0% 100.0% Oslo Norway

Goodtech Intressenter AB 100.0% 100.0% Umeå Sweden

Goodtech Projects & Services AB 100.0% 100.0% Umeå Sweden

Goodtech Process AB 100.0% 100.0% Umeå Sweden

Power Control AB 100.0% 100.0% Sundsvall Sweden

Goodtech Solutions AB 100.0% 100.0% Karlstad Sweden

Goodtech Solutions Manufacturing AB 100.0% 100.0% Arvika Sweden

Goodtech Environment AB 100.0% 100.0% Mariehamn Åland (Finland)

Goodtech Environment AS 100.0% 100.0% Lindeberg Norway

Goodtech Environment Gøteborg AB 100.0% 100.0% Gothenburg Sweden

*) Goodtech Industry Holding AS represents the majority of votes on the company’s board.

All subsidiaries are consolidated. Voting rights correspond to ordinary shares.

Minority interest in Goodtech Electro AS on the balance date is NOK 1.0 million. The minority interest is not regarded as significant for the Group. Consequently, summarised financial information has not been presented, cf. IFRS 12.


46

Note 20 Loans and credit facilities (NOK 1,000)

Carrying value

Interest-bearing liabilities Nom. interest rate Due Currency Value in local

currency Company 2014 2013

Non-current interest-bearing liabilities

Skandinaviska Enskilda Banken (SEB), long-term loan

Stibor + 2.5%

30.12.2015

SEK

28,000

Goodtech Intressenter AB

26,872

53,043

Nordea Bank Finland Abp Euribor + 1.75% 31.10.2023 EUR 1,748 Goodtech Environment AB 15,796 7,583

Various bank loans – variable interest rate 1.17%-5.05% 28.02.2031 SEK 8,582 Goodtech Solutions Manufacturing AB 8,236 9,972

Withdrawals from long-term credit facility (credit facility SEK 81 million)

Skandinaviska Enskilda Banken (SEB)

Stibor + 2.5%

30.12.2015

SEK

31,500

Goodtech Intressenter AB

30,231

30,784

Skandinaviska Enskilda Banken (SEB) Nibor + 2.5% 30.12.2015 NOK 45,000 Goodtech ASA 45,000 45,000

Total non-current interest-bearing liabilities 126,134 146,383 Total non-current liabilities

126,134

146,383

First year’s repayment on non-current liabilities -29,571 -28,751

Withdrawals from credit facility classified as current -75,231 -

Total non-current liabilities, excl. first year’s repayment 21,332 117,632 Current interest-bearing liabilities

Non-current liabilities, due < 1 year

29,571

26,907

Various bank loans, due < 1 year - 1,843

Shareholder loan 12,607 -

Withdrawals from credit facility re-classified as current 75,231 -

Credit facility (credit SEK 175 million) Nibor/Stibor + 2.5% NOK and SEK 48,957 48,467

Credit facility (credit SEK 0.5 million) BARU + 2.5% 136 -

Credit facility (credit EUR 1.5 million) Euribor + 1.1% 11,468 -


Total interest-bearing liabilities

199,301

194,850

Due dates for interest-bearing liabilities, excl. credit facility, are as follows:

2014

2013

Up to 1 year 118 146 29,459

1-3 years 4,333 106,764

3-5 years 2,641 2,515

More than 5 years 14,358 8,353

The Group’s corporate account system and accounts with short-term overdraft facilities are not included in the maturity summary.


47

Interest rate swaps

A fixed rate (interest rate swap) has been agreed on the long-term loan (the original loan was SEK 84 million) with SEB for the period 01.01.13 to 31.12.15 at 2.06% including 2.5% margin.

A fixed rate (interest rate swap) has been agreed on the long-term loan (the original loan was EUR 0.9 million) with Nordea for the period 31.07.13 to 31.10.23 at 1.91% including margin.

Carrying value

Interest rate Due Currency Nom. amount in currency Company 2014 2013

Interest rate swap (long-term loan of SEK 28 million) 2.06% + 2.5% 30.12.2015 SEK 28,000 Goodtech Intressenter AB 627 622

Interest rate swap (long-term loan of EUR 0.9 million) 1.91 % 31.10.2023 EUR 1,748 Goodtech Environment AB 738 86

Total fair value interest rate swaps

1,365

708

Reconciliation with balance sheet

The fair value of interest rate swaps included in ‘Loans’ and ‘Loans and credits’ in the balance sheet.

Carrying value

2014 2013

Interest-bearing liabilities 21,332 117,632

Interest rate swaps 738 708

Total long-term loans in balance sheet 22,071 118,340

Carrying value

2014 2013

Interest-bearing liabilities 177,969 77,218

Interest rate swaps 627 -

Total loans and credit facilities in balance sheet 178,596 77,218

List of used and unused credit facilities

Credit framework

Total framework NOK

Unused facility

SEB credit framework for Group (SEK 175 mill.) 167,948 118,991

Nordea Åland credit framework (EUR 1.5 mill.) 13,555 2,087

Westra Wermlands Sparbank (SEK 0.5 mill.) 480 343

Total credit facility 181,982 121,421

Long-term withdrawal facility (SEK 81 mill.) 77,736 2,505

Total 259,718 123,926

The Group’s main bank is Skandinaviska Enskilda Bank (SEB). The Group has established a group account for all its Norwegian and Swedish subsidiaries with SEB. The Group has operating credit facilities in several currencies of SEK 175 million and a long-term credit facility of SEK 81 million with SEB. The credit facility runs until 31.12.2015 and withdrawals as of 31.12.2014 are classified as current liabilities in the balance sheet.


48

A commitment fee of 0.25% per year will be paid on the unused portion of the long-term credit facility with SEB.

The agreement with SEB regarding loans, credits and guarantees sets requirements for financial key figures (covenants) for the Group. Covenants are measures quarterly. The Group may have net interest-bearing debt/EBITDA of maximum 2.5, and EBITDA/interest and amortisation must be a minimum of 1.5. Quarterly reporting of accounts information and covenants is also required.

Since Q2 2014, the Group has not met the bank covenants and the requirements for these have been waived these periods. Waiver as of 31.12.2014 was issued at the end of Q4. The agreement with SEB runs until 31.12.2015 and being renegotiated. All liabilities to SEB are classified as current as of 31.12.2014. A detailed description of the waiver can be found in Note 26.

Security and guarantees

As security for its commitment, SEB has a negative pledge clause, as well as first priority security on floating charges in Goodtech Projects & Services AB for SEK 106.9 million and Goodtech Process AB for SEK 6.0 million. Additionally, SEB uses accounts receivable in other subsidiaries in the Group as security. The recognised value of accounts receivable as of 31.12.2014 is stated in Note 15.

SEB also has an equity pledge in Goodtech ASA’s subsidiaries.

Nordea Bank Finland Abp has Goodtech Environment AB’s assets as security for up to EUR 1.6 mill. for the credit facility for EUR 1.5 million and other obligations. As the security for Goodtech Environment Ab’s loans, the parent company Goodtech ASA has provided Nordea Bank Finland Abp with security for loans and interest on the principal. The parent company Goodtech ASA has provided Westra Wermlands Sparebank with security of up to SEK 2 million for various bank loans to Goodtech Solutions Manufacturing AB. The Group’s total guarantees to banks and others constitute NOK 400.9 million of which NOK 218.7 million had been drawn as of 31.12.14.


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Note 21 Pensions (NOK 1,000)

The Group’s Norwegian companies are subject to the Norwegian Mandatory Pension Act and the pension schemes offered in Norway meet the requirements of this legislation.

Goodtech has both defined contribution and defined benefit pension plan for its employees. The Norwegian companies have primarily established defined contribution plan. The pension schemes are generally financed through disbursements to insurance companies. The Group’s defined contribution pension schemes in its Norwegian companies include most employees in Norway and constitute between 2% and 8% of employee salaries.

The Group’s companies outside Norway have pension plan that comply with local practice and local legislation.

Employees of the Swedish subsidiaries have pension plans (ITP - Industrins och Handelns tilläggspension) covered by insurances in Alecta AB. The ITP pension is managed by Alecta AB and Collectum. ITP includes all ‘tjänstemän’ in the Group’s Swedish operations. Industrins och handelns tilläggspension is a plan for employees in the private sector in Sweden. The pension plans in Sweden are based on mandatory collective agreement plan negotiated as part of collective agreements. The ITP pension plan includes pension, medical insurance and survivors pensions.

Employees born after 1979 are included in ITP Plan Option 1, which is a defined contribution plan where the pension premium each term is fixed based on percentage ranges as set out in the associated collective agreement. Employees born in 1978 or earlier are covered by ITP Plan Option 2, but may choose ITP Plan Option 1. ITP 2 is a defined benefit plan where the pension premium varies from term to term based on different calculation variables. Employees who have ITP 2 also has a defined contribution pension plan called ITPK. ITPK plan in Swedish companies make up 2% of employees’ salaries. The defined benefit plan for Goodtech’s employees acts as a defined contribution plan for the Group where annual premiums are expensed as incurred. This is a multi-employer plan where policyholders do not have access to the information needed to recognise the plan as a defined benefit plan. The pension plans therefore recognised similar to a defined contribution plan, in accordance with IAS 19.34.

Total pension costs for both defined contribution and defined benefit pension plan constitute NOK 58.8 million for 2014 (NOK 54.6 million for 2013) which are recognised as salary costs in the profit and loss account (cf. Note 4).

Defined benefit pension plan:

As of 31 December 2014, three people, two employees and one pensioner are covered by the Group’s defined benefit pension plan. The plan includes retirement pension from the age of 67 for life. The plan also includes disability, survivors and children’s pension. In addition, the Group has an unsecured pension agreement with three people.

Pension funds are valued at fair value at the end of the year.

Commitments (net present value of pension benefits accrued on the balance sheet date, adjusted for future salary increases) are valued using best estimates based on assumptions on the balance sheet date. The actuarial calculations of pension liabilities are carried out by an independent actuary.

The obligation is calculated using straight-line accumulation.


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Calculation of the year’s pension costs: 2014 2013

Current value of the year’s pension contribution 424 432

Net interest costs 6 37

Reversed cost of pension in previous periods -188 -566

Administration costs 19 48

Employer tax 41 139

Annual pension costs defined benefit pension plans 302 90

Annual pension costs defined contribution pension plan 1) 58,455 54,558

Total annual pension costs 58,757 54,648

Pension liability and pension assets:

2014

2013

Gross pension liability 9,451 8,044

Fair value pension assets 7,862 7,564

Net pension liability 1,589 480

Employer tax 224 199

Pension liabilities recognised in balance sheet 1,813 679

Change to liabilities:

2014

2013

Net pension liability 1.1. 679 1,621

Pension costs recognised in profit and loss account 302 90

Premium payments -239 -1,256

Estimate deviation included in other comprehensive income 1,070 224

Net pension liability recognised in balance sheet 31.12 1,813 679

On calculation of pension costs and net pension obligation the following assumptions have been made:

2014

2013

Discount rate 2.30% 4.00%

Return on pension assets 2.30% 4.00%

Salary growth 2.75% 3.75%

Pension adjustment 0.00% 0.60%

G-adjustment 2.50% 3.50%

Average turnover 0.00% 0.00%

1) The pension costs for the year for defined contribution pension plans include defined contribution pension plans in Norway and

defined benefit pension plans in Sweden that are recognised as defined contribution plans.

The Group applies a discount rate based on the OMF rate. The Group has determined that interest rates on business bonds reflects a more realistic rate compared to interest rates on government bonds.

The pension funds in an insurance-based plan consist of an insurance policy. The insurance policy is measured at fair value. Fair value corresponds to the transfer value of the policy and any premium funds. The life assurance investment profile is determined in guidelines from the Financial Supervisory Authority of Norway.

Pension assets by main investment category as a percentage of total pension funds: 2014 2013

Shares 10.4% 7.6%

Property 15.1% 16.6%

Bonds at amortised cost 35.8% 39.9%

Bonds 37.2% 33.6%

Other 1.5% 2.3%

Total 100.0% 100.0%


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Note 22 Trade payables and other current liabilities (NOK 1,000)

2014 2013

Trade payables 228,225 205,515

Unpaid public taxes 56,922 67,324

Holiday pay/salaries owed 102,936 95,018

Invoiced, but not completed production (fixed-price projects, cf. Note 16) 166,238 150,134

Invoiced, but not completed production (other projects) 5,885 11,058

Accrued costs 42,379 40,075

Other current liabilities 40,618 9,919

Total 643,204 579,044

Note 23 Provisions (NOK 1,000)

Current provisions Guarantees

Liabilities Onerous contracts Total

Balance 1 January 2013 6,825 - - 6,825

Currency effect on IB 489 - - 489

Reclassified balance as at 1 January 2013 3,789 - 5,750 9,538

Provision 2013 14,440 - 862 15,301

Provision reversed in 2013 474 - 1,894 2,368

Provision used in 2013 5,126 - 3,761 8,887

Effect of currency fluctuations 524 - 512 1,037

Balance 31 December 2013 20,468 - 1,468 21,936 Current provisions

Guarantees

Liabilities

Onerous contracts

Total

Balance 01 January 2014 20,468 - 1,468 21,936

Currency effect on IB 322 - 16 339

Reclassified balance as at 1 January 2014 - - - 0

Provision 2014 9,810 9,456 - 19,266

Provision reversed in 2014 6,644 - 776 7,419

Provision used in 2014 5,221 - - 5,221

Balance 31 December 2014 18,736 9,456 709 28,900

Warranties

Provision for warranty work relates to the possibility of future warranty work on products and services provided by Goodtech. The provision is based on estimates of liabilities under existing contracts and historical experience with the frequency and cost of work. The Group provides from 1- to 5-year warranties on products and services.

Warranty provisions are recognised when the underlying products or services are sold. Warranty provisions are included in the project forecasts and worked through the life of the project in line with the stage of completion. When projects are completed and handed over to the customer, warranty provision is assessed and recognised in the balance sheet. In 2014, several major projects were completed and recognised as a provision.

Liabilities

In 2014, provisions were made for severance and restructuring costs associated with internal improvement measures and ongoing structural and strategic processes, cf. Note 6.

Onerous contracts

Provision for loss-making contracts is entered when the anticipated income from a contract is lower than the unavoidable costs involved in discharging obligations under the contract. Completed, but not invoiced production recognised on the balance sheet as assets is written down before provision for losses on contracts are recognised in the balance sheet.


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Note 24 Joint ventures

At the end of 2011, Goodtech Projects & Services AB, in partnership with APQ EI AB, set up a project company called GAQ Contracting AB to handle the companies’ joint projects. 50% of GAQ Contracting AB is owned by Goodtech Projects & Services AB and 50% by APQ El AB. The shareholder agreements mean that Goodtech Projects & Services AB and APQ EI AB retain joint control of the company.

Joint ventures are recognised using the gross method (proportionate consolidation), based on a 50% stake. The Group recognises its assets, liabilities, income and expenses and its relative share of assets, liabilities, income and expenses. The stake in GAQ Contracting AB is defined as joint operations in accordance with IFRS 11 Joint Ventures.

Company Office Activities Ownership

GAQ Contracting AB Malmö, Sweden Assembly and consultancy in the electrical industry 50%

An overview of the share of assets, liabilities, earnings, expenses and net profit in GAQ Contracting AB which are proportionally consolidated in the consolidated profit and loss account can be found below. The amounts are shown gross before the impact of eliminations in the profit and loss account relating to intercompany transactions.

(NOK 1,000) 2014 2013

Assets Cash and cash equivalents 3,038 5,650

Other current assets 2,070 4,858


Liabilities

Other current liabilities 3,192 7,853


Net assets 1,916 2,655

Operating income

33,194

33,988

Operating costs 30,925 30,808

Net financial items 29 47

Pre-tax profits 2,298 3,227

Tax 511 725

Profits after tax 1,787 2,501

Goodtech Projects & Services AB and APQ EI AB are jointly and severally liable for the liabilities of GAQ Contracting AB. The companies are jointly and severally providing guarantees to third parties to whom GAQ Contracting AB is liable as part of its ordinary operations.

Note 25 Lease agreements (NOK 1,000)

In 2013, the Group’s Swedish subsidiary Goodtech Projects & Services AB signed new leases with a new leasing partner for the company’s service vehicles and cars. New leases are classified as operational leases (cars) and financial leases (service vehicles). Previously, company cars were leased on operational leases.

Current operational leases for company cars which were signed with the former leasing partner will continue to run as an operational leases until the end of the agreed lease period, also with the new leasing partner. New agreements will be established as financial leases. This means that over time, as the original operational leases expire, the number of operating lease agreements will be phased out and new agreements will be entered into as financial leases. The phase-out period is estimated to be about four years from 2013.

Financial leases are recognised as assets and liabilities in the balance sheet from 2014. As of 31 December 2014, the Group had financial lease agreements in place valued at NOK 4.9 million. These are associated with the lease of service vehicles in Sweden.

Financial lease agreements

Lease agreements have a contract period of between six and 48 months where lease agreements with a contract period of 48 months are classified as financial lease agreements and recognised in the balance sheet.


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A table of future minimum lease of current contracts can be found below:

Cars

Up to 1 year 1,387

2-5 years

More than 5 years

2,985

- Future minimum lease

4,373

Average interest

2.57 %

Discounting 153

Current value of future minimum lease 4,220

Operational lease agreements

The Group has operational leases associated with machinery, cars, equipment and buildings/offices. Costs associated with operational leases represent minimum lease payments during the notice period.

Lease expenses include the following:

Buidlings/ offices

Machinery/cars/ equipment Total

Annual lease of assets not recognised on balance sheet 36,436 27,547 63,983

Estimated lease payments next year 36,294 26,034 62,328

Future minimum lease payments under non-cancellable leases fall due as follows:

Up to 1 year 28,366

2-5 years 58,246

More than 5 years 3,818

Future minimum lease 90,429

Note 26 Financial risk and categories of financial instruments

Financial risk

The Goodtech Group has operations in several European countries and is exposed primarily to interest rate risk, currency risk, liquidity risk and credit risk.

The Board is intending to implement an annual review of procedures for risk management. The Group’s management has continuously assesses these risks and establishes guidelines for how they should be handled. Management within each business unit is responsible for ongoing monitoring of risks within their area of responsibility.

Asset management

The Board’s goal is to maintain a strong capital base to maintain investor, creditor and market confidence and to develop the business. By ensuring a good ratio between equity and debt, the Group will support its activities and thus maximise the value of its shares. The Group manages its capital structure and makes necessary changes to it based on a continuous assessment of the economic conditions under which the Group is operated as well as general prospects in the short and medium terms.

The Group monitors its capital by assessing its gearing ratio, which is defined as net interest-bearing debt divided by equity. Additionally, the Group’s policy is governed by capital requirements (covenants) related to liabilities to banks. The Group may have net interest-bearing debt/EBITDA of maximum 2.5, and EBITDA/interest and amortisation must be a minimum of 1.5.

No companies in the Group are subject to external capital requirements beyond covenants related to debt to banks.

Credit risk

The risk that counterparts do not have the financial ability to meet their obligations is regarded as low. Goodtech has set up clear guidelines and criteria for evaluating credit risk. In addition, the Group has a large spread of customers in terms of both number and size, and customers are mainly financially solid, established companies. The Group has no significant credit risk associated with a single counterpart or counterparts which can be viewed as a group as they present a similar credit risk. The creditworthiness of customers who require credit is regularly assessed. This reduces vulnerability to losses on individual customers, and recent years have shown few losses in this area. There is therefore no requirement for further provisions for such losses. See also Note 15 for information on age distribution and losses.

The Group considers its maximum risk exposure to be the recognised value of trade receivables and other current assets.


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Max. credit exposure 2014 2013

Cash and cash equivalents (Note 17) 22,560 33,365

Trade receivables (Note 15) 407,776 446,847

Other current receivables (Note 16) 310,668 265,434

Interest rate risk

The Group’s exposure to interest rate risks is mainly related to financing at variable interest rates. Excess liquidity is primarily invested in bank deposits and low-risk money market funds. Interest income and interest expenses recognised in the accounts are affected by interest rate fluctuations.

The main objective of managing financial interest rate risk is to reduce the financial risk and to minimise interest expenses over time. The Group’s interest-bearing debt is based on variable interest rates. The Group has entered into interest rate swaps, fixed-rate agreements, to hedge against two of its long-term loans. See Note 20.

Sensitivity analysis of interest rate risk

Changes in interest rates on the Group’s loan will affect the Group’s interest costs. Sensitivity analyses reflect a change in the interest rate of 0.5 base points relative to interest rates as at 31.12.2014. If all interest rates for all currencies had been reduced or increased by 0.5 base points for Goodtech ASA and its subsidiaries, interest expenses for the Group would be NOK 1.0 million higher or lower as at 31.12.2014 (NOK 1.0 million as at 31/12/2013).

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Liquidity management is exercised to ensure that liquidity is sufficient to meet liabilities when they fall due.

The Goodtech Group’s strategy is to maintain sufficient cash, cash equivalents and credit facilities to be able to finance operations and investments in accordance with the Group’s strategic plan. Unused credit facilities are described in Note 20. Excess liquidity is mainly kept in Norwegian kroner.

Since Q2 2014, the Group has not met the bank covenants and has received a waiver in these periods. SEB’s waiver of covenants means that structural processes in the Group, dividends and repayment of shareholder loans must be approved by SEB in advance. Goodtech is in continuous discussion with the bank on its restructuring process and SEB view the on-going liquidity measures and structural processes positively. The next measuring date for covenants is Q1 2015. A new waiver will be required from the bank as of 31 March 2015, given existing covenants.

The Group monitors its liquidity situation in the short and long terms through active monitoring and management through corporate accounts and in close dialogue with its subsidiaries. The Group carries out weekly monitoring of liquidity and overdue receivables with its subsidiaries and focuses on developments in its working capital.

The table below shows the maturity structure of the Group’s financial liabilities based on nominal payments of principal and estimated interest payments. Estimated future interest payments are based on the maturity profile of the Group’s financial liabilities.

Maturity profile for the Group’s financial liabilities as at 31.12.2014

(NOK 1,000) < 1 year 1-3 years 3-5 years More than 5 years Total

Interest-bearing liabilities

Bank loans

29,571

5,151

4,230

11,952

50,903

Settlement interest rate agreement, SWAP 1,365 - - - 1,365

Shareholder loan 12,607 - - - 12,607

Withdrawals from long-term credit facility 75,231 - - - 75,231

Credit facility 60,561 - - - 60,561

Total interest-bearing liabilities 179,334 5,151 4,230 11,952 200,666 Non-interest-bearing liabilities

Trade payables

228,225

-

-

-

228,225

Other current liabilities 242,856 - - - 242,856

Total non-interest-bearing liabilities 471,081 - - - 471,081

Total 650,414 5,151 4,230 11,952 671,747

Future interest payments

7,238

928

683

1,037

9,885

Total including interest payments 657,652 6,079 4,913 12,989 681,632


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Maturity profile for the Group’s financial liabilities as at 31.12.2013

(NOK 1,000) < 1 year 1-3 years 3-5 years More than 5 years Total

Interest-bearing liabilities

Bank loans

28,365

29,996

1,957

2,697

63,016

Withdrawals from long-term credit facility - 75,784 - - 75,784

Credit facility 48,853 1,157 1,157 4,884 56,051

Total interest-bearing liabilities 77,218 106,937 3,114 7,582 194,851 Non-interest-bearing liabilities

Trade payables

205,515

-

-

-

205,515

Other current liabilities 212,336 - - - 212,336

Total non-interest-bearing liabilities 417,852 - - - 417,852

Total 495,070 106,937 3,114 7,582 612,702

Future interest payments

3,767

4,143

526

841

9,277

Total including interest payments 498,837 111,080 3,640 8,423 621,979

Currency risk

Goodtech is exposed to currency risk, as the Group operates in several countries both within and outside Europe. Contracts are mainly in local currency (NOK, SEK, EUR and USD). Currency fluctuations may result in adjusted income in NOK for foreign projects. The main risks are related to fluctuations in SEK, USD and EUR. However, Group policy is to keep most of the purchases and sales of individual projects in the same currency, thus reducing the risks associated with currency fluctuations.

The recognised value of the Group’s net investment in foreign companies fluctuates as the Norwegian krone changes compared with the applicable currencies. Profit after tax for the Group is also affected by changes in exchange rates, as the profits in foreign companies are converted into Norwegian kroner at a weighted average exchange rate for the period.

The Group has also established a multi-currency cash system that helps to reduce currency risks. Over the past year, the Company has carried out no significant currency hedging transactions.

Sensitivity analysis of currency risk

The following table shows the Group’s sensitivity to potential changes in the krone exchange rate – all other factors being equal. The calculation is based on the same change against all applicable currencies. The effect on earnings comes from changes in the value of monetary items, and the effect on equity is the value of net investments in foreign currency.

Accounting effect 2014 Accounting effect 2013

(NOK 1,000) Pre-tax profits Equity Pre-tax profits Equity

10% increase/reduction NOK/SEK

10% increase/reduction NOK/EUR

(+/-) 1,179

(+/-) 287

(-/+) 4,802

(-/+) 3,775

(+/-) 4,606

(+/-) 768

(-/+) 3,234

(-/+) 4,040

Determination of fair value

A comparison of the recognised amounts and fair values of the Group’s financial instruments is shown below. With the

exception of the interest rate swap which is recognised at fair value, all financial instruments are measured at amortised cost.

There is no significant difference between the fair value and book value. The recognised value of cash and cash equivalents and bank overdrafts approximates fair value because these instruments have short maturities. Similarly, the recognised amount of accounts receivable and accounts payable approximates fair value as these are entered into on ‘normal’ terms. Liabilities to banks are based on floating interest rates and recognised value is regarded as approximating fair value.


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Categories of financial instrument 2014 2013 (NOK 1,000) Note Carrying value Fair value Carrying value Fair value

Financial assets carried at amortised cost

Cash and cash equivalents 17 22,560 22,560 33,365 33,365

Trade receivables 15 407,776 407,776 446,847 446,847

Other current receivables 39,210 39,210 23,053 23,053

Financial liabilities carried at amortised cost

Loans 20 21,332 21,332 117,632 117,632

Loans and credit 20 177,969 177,969 77,218 77,218

Trade payables 22 228,225 228,225 205,515 205,515

Other current liabilities 22 242,856 242,856 212,336 212,336

Financial liabilities carried at fair value

Interest rate swaps 20 1,365 1,365 708 708

Valuation hierarchy

The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of the input used in the preparation of the measurements. No financial assets or liabilities have been reclassified in such a way that the valuation method has been changed from amortised cost to fair value or vice versa.

The different valuation levels have been defined as:

Level 1: fair value is measured using quoted prices in active markets for identical financial instruments.

Level 2: fair value is measured using observable inputs other than Level 1 inputs – either directly (prices) or indirectly (derived from prices). Level 3: fair value is measured using inputs that are not based on observable market data (unobservable inputs).

2014

(NOK 1,000) Level 1 Level 2 Level 3


Interest rate swaps - 1,365 -

Total - 1,365 -


2013

Level 1 Level 2 Level 3

Interest rate swaps - 708 -

Total - 708 -

Note 27 Transactions with related parties (NOK 1,000)

Goodtech ASA is the parent company and has direct and indirect ownership and control of 14 companies. Directly owned companies are presented in Note 11 to the Goodtech ASA accounts while the indirectly owned companies are presented in Note 19 Group Companies and Minority Interests. Transactions between group companies are eliminated in the consolidated accounts. Activity between Group companies is presented in the segment information in Note 3 to the consolidated accounts. Intercompany balances with the parent company are presented in Note 10 to the Goodtech ASA accounts.

Goodtech has interests in joint ventures. Joint ventures are consolidated line by line in the consolidated accounts using the consolidation method, based on ownership share. Transactions and balances with joint ventures have been eliminated in the consolidated group accounts. See Note 24 to the consolidated accounts for information about the Group’s ownership interests in joint ventures. Transactions between group companies and joint ventures are based on the arm’s-length principle.

As part of a process to structure and streamline operations in the Group, Goodtech sold its 50% stake in Tunnelentreprenad AB in 2011 to EI & Industrimontage Tanner AB, owned by Rolf Tannergård. Rolf Tannergård is a Board Member and owner through EI & Industrimontage Tannergård AB of 28.9% of the shares in Goodtech ASA. In connection with the sale, a supply agreement was entered into between Goodtech Projects & Services AB and TEAB to safeguard Goodtech’s current interests and supply of resources for the Norra Länken project until 2015.

On 7 July, Goodtech ASA was granted a loan of a total of NOK 12.6 million by four of the Company’s main shareholders. The loan was granted on market terms and runs until 31 December 2015.


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Inter-group transactions are carried out done according to separate agreements on the arm’s-length principle and joint expenses in Goodtech are distributed among the Group companies in accordance with distribution formulas, depending on the various costs, according to the arm’s-length principle.

The Group has not identified other transactions with related parties than the ones mentioned above. Information on executive management employees is presented in Note 28 to the consolidated accounts.

Note 28 Remuneration for the board, management etc. (NOK 1,000)

Remuneration to board and board committees

Board remuneration consists of a fixed annual fee depending on the role on the Board and remuneration for participation in other committees established by the Board and is approved in arrears by the general meeting. The amounts shown in the table below are remuneration adopted by the general meeting in 2014.

Total remuneration for the Board, election committee and Board committees recognised in the accounts in 2014 was NOK 1.8 million, NOK 0.1 million and NOK 0.1 million respectively. In 2013, remuneration was NOK 1.7 million, NOK 0.1 million and NOK 0.1 million respectively.

See Note 18 for a list of shares held by directors and group management. Shareholdings of directors and executive management includes their families.

Period

Ordinary board fee

Fee committees

Total 2014

Total 2013

Board and election committee

Stig Grimsgaard Andersen Chairman of the Board 275 275 279

Karl-Erik Staubo Member of the Board 175 35 210 196

Veroslav Sedlak Member of the Board 175 175 175

Annema Sødahl Wessel Member of the Board 175 35 210 189

Tine G. Wollebekk Member of the Board Apr 12-Nov 13 88 88 179

Rolf Tannergård Member of the Board 175 175 -

Åsa Otterlund Member of the Board 175 25 200 -

Osvaldo Chamorro Member of the Board, Employee Representative Oct 11-Dec 13 51 51 88

Håvard Kristiansen Member of the Board, Employee Representative 88 88 88

Gunnar Strand Member of the Board, Employee Representative Dec 13-Apr 14 36 36 -

Göran Rönnbäck Member of the Board, Employee Representative Jul 12-Feb 14 67 67 73

Nicolas Brun-Lie Chairman of election committee 50 50 50

Per Raaum Member of election committee 30 30 30

Harald Skogholt Member of election committee 30 30 30

The employee representatives on the Board also receive normal salary, earn pension rights and receive other benefits as employees that are not included in the table above.

Remuneration for Group management

Group management

Currency Salary,fees

etc. Pension Other

benefits Total 2014 Total 2013

Arve Teie Acting Group CEO from 1.9.2014 NOK 1,411 67 103 1,581 1,239

Vidar Låte Former Group CEO until 1.9.2014 NOK 2,117 55 112 2,284 2,171

Synnøve Granli CFO NOK 1,390 66 45 1,501 1,253

Tobias Harnerud 1)

Group Director Business Support, from 2014 SEK 1,011 259 48 1,318 -

Stefan Helmvall 1)

Group Director, Projects & Services Sv Nord SEK 1,458 365 62 1,885 2,119

Magnus Falkman 1)

Group Director, Projects & Services Sv Syd SEK 1,444 386 99 1,929 1,927

Magne Reierson 1)

Group Director, Projects & Services Norge NOK 1,321 66 36 1,423 1,340

Anders Lundmark 1)

Group Director, Infra SEK 1,027 244 92 1,363 1,316

Hans Vedde Group Director, Solutions NOK 1,105 66 158 1,329 1,240

Rune Hoseth Group Director, Environment NOK 1,192 67 101 1,360 1,198

Eiliv Elvebakk 1)

Group Director, Products NOK 901 55 60 1,016 988

1) Remuneration is paid by a subsidiary in the Group.

Salaries, fees, etc. in the table above include additional allowances and holiday pay beyond the monthly salary. Other benefits include insurance, company car and electronic communications.


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Arve Teie became acting Group CEO on 1 September. Arve was previously employed as marketing director. Salary and other benefits in the table above include both positions.

Vidar Låte receives severance pay equivalent to 12 months’ salary after stepping down as Group CEO. Severance pay is paid as early retirement pay for six months in the period September 2014 – February 2015 and the remaining pay as a one-off payment in February/March 2015. Total agreed severance pay is NOK 1.9 million of which NOK 0.8 million were paid in 2014. Early retirement pay for 2014 is included in ‘Salaries, fees etc.’ as shown in the table above.

All figures are exclusive of employer contribution.

No loans or guarantees have been granted to management.

The Board’s declaration regarding determination of salary and other remuneration for management

The Board of Goodtech ASA has set out guidelines for salary and other benefits for management employees in the company and group companies (‘Goodtech’ or ‘the Group’) for the coming financial year. This statement has been prepared in accordance with § 6-16a. This will be considered at the Annual General Meeting in 2014. See Sections 5-6, paragraph 3, of the Norwegian Public Companies Act.

All companies in the Group must follow these guidelines as set out below. The objective is to coordinate salary policies and schemes for variable benefits across the Group. These policies are a guide.

1. Main principles for the company’s management salary policy

Management salaries must be competitive without Goodtech being a salary leader – the company must be able to attract and retain talented managers. Salaries (total remuneration received) should usually lie around the average level of managerial salaries for comparable managers in similar companies in the country in which the manager is resident.

Managerial salaries must be motivational – the salary must be put together in such a way that it motivates effort continually to improve the company’s results.

The main element of the managerial salaries must be the fixed salary, but additional variable benefits may be awarded to motivate managers’ efforts on behalf of the company. Variable benefits must be reasonable in relation to the company’s profits for the year. In order for these variable benefits to work as an incentive, the criteria must be related to factors that the individual is able to influence. Goodtech wishes the salary system to be structured in such a way as to nurture a team spirit internally in the group and stimulate efforts that produce results outside the individual’s area of responsibility. Part of the overall remuneration may also be awarded in the form of shares in the company.

The salary system must be flexible – so that it can be adapted when required.

In order to be able to offer competitive salaries, Goodtech must have a flexible salary system that can be adapted to special circumstances. Goodtech should have salaries that are competitive in terms of being able to attract and retain executives in the various geographical areas where Goodtech operates, and the payroll system must be flexible and allow adaptation when required. The salary system must be understandable and acceptable both internally in Goodtech and externally. The salary system should not be disproportionately difficult to explain to the public and should not be disproportionately complex to manage.

2. Principles for determining salary levels

The basis for determining salary levels must be the overall level of fixed salary and other benefits. This level must be competitive, but not lead the market. The fixed salary should usually form the main element of any manager’s salary.

3. Principles for benefits that can be given in addition to fixed salary

Remuneration for executive management employees may be awarded in addition to the fixed salary:

Benefits in kind

Bonuses

Share-based remuneration

Pension schemes

Early retirement benefits

Other remuneration

Specific benefits are detailed below. Unless otherwise indicated below, no special conditions, frameworks or allocation criteria apply to the benefit concerned.

Benefits in kind

Benefits in kind will usually consist of car scheme, newspaper/magazine subscriptions and electronic communication. Allocation of benefits in kind must be related to function or in line with market practice. These benefits should not be significant in relation to salary.

Bonuses A small number of sales bonuses and leadership bonuses of limited character are in place in some of the Group’s subsidiaries. The Group is in the process of preparing an incentive or bonus programme for executive management.

Share-based remuneration

The Group currently has no established bonus schemes or share-based incentive programmes in place for management. If the


59

Group establishes a share-saving scheme for employees, management employees will be given the opportunity to participate on an equal footing. The Board proposes that the general meeting give the Board authority to purchase own shares for this purpose.

Pension schemes

Management employees are included in the Group’s pension and insurance schemes for all employees. This ensures that they receive a pension commensurate with their salary levels.

Termination payment

The CEO and Group Directors have an agreement on pay after termination of employment schemes that varies between 12 and 18 months.

The mutual notice period for the CEO is six months. If Goodtech should terminate the employment, it is agreed that a package corresponding to up to 18 months’ salary will be provided. The CEO should usually have an agreement in place that allows the CEO to step down immediately, should this be in the interest of the Company. Early retirement pay must therefore be sufficiently favourable for the CEO to accept an agreement on a reduced notice period.

Agreements on pay after termination can be entered into for other managers to ensure that the composition of managers is always in the Company’s interests. Such agreements will in accordance with the Norwegian Working Environment Act not be binding on any management employees except the CEO.

Termination payment schemes must be designed so that they are acceptable internally and externally. In addition to salary and other compensation in the notice period such schemes must not entail rights to early retirement benefit for more than 18 months of which a maximum of 12 months are guaranteed.

Other remuneration

Other variable elements in the remuneration may be used or other special benefits allocated than set out above if this is deemed to be practical in order to attract and/or retain managers. No special limitations exist to the benefits that may be agreed.

General information

The Board has established a Remuneration Committee which is a preparatory and advisory committee to the Board. The task of the Remuneration Committee is:

To prepare cases for the Board’s consideration and decision on the remuneration of, and other matters relating to,

the Company’s senior executives.

To prepare the Board’s assessments and decisions regarding the Board’s statement on salary and other remuneration to senior executives in accordance with Section 6, 16a of the Norwegian Public Companies Act.

To propose guidelines for compensation and terms of employment for the Company’s executive management.

Remuneration for the CEO is determined by the Chairman of the Board in consultation with the Board. Remuneration for other management is determined by the CEO in consultation with the Chairman of the Board. The company uses standard employment contracts and standard employment terms regarding notice periods and payment on termination of employment for the positions of CEO and Group Directors.

Note 29 Contingent liabilities

Operational and project risk and uncertainty

From time to time, the Group receives claims resulting from its ordinary operations. This may be warranty claims and claims for damages resulting from injury to persons or property arising from the use of its products and solutions. Management is not aware of any on-going issues that will result in significant liabilities for the Group.

The Group’s operations are based on long-term contracts and some of them are fixed-price turnkey contracts. Failure to meet delivery schedules or performance guarantees or increases in contract costs may result in costs that cannot be covered and that may be greater than the income from the project. Where a project is identified as loss-making, provisions to cover future losses are recognised in the accounts. The accounting treatment is based on available information and recommendations. Circumstances and information may change in subsequent periods, and the final outcome may be better or worse than the assessments made at the time of preparation of the accounts.

Bank and corporate guarantees

The Group has provided SEB and other banks with guarantees in connection with the Group’s cash pool arrangement and operating credit facilities. See Note 20 for further discussion of these guarantees.

In partnership with its co-owner APQ EI AB, the Group’s subsidiary, Goodtech Projects & Services AB, is jointly and severally liable for the liabilities of their joint venture, GAQ Contracting AB. The companies jointly and severally provide guarantees to third parties to whom GAQ Contracting AB is liable. See also Note 24 to the consolidated accounts.


60

Note 30 Government grants

In 2014, the Group was granted NOK 0.4 million in subsidies by the Research Council of Norway for development projects involving the development of technology for streamlining production of aluminium (NFR Heat Pipe). In 2013, the Group received NOK 0.8 million in grants from the Research Council of Norway.

In 2014, the Group received grants for research and development through the SkatteFUNN scheme of NOK 1.5 million. This amount is fully recognised as a reduction of capitalised costs associated with the project. In 2013, the Group received NOK 1.2 million in grants.

The development project is recognised in the balance sheet, cf. Note 11.

Note 31 Events after the balance sheet date

No significant events affecting the accounts for 2014.


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Profit and loss account Goodtech ASA parent company

1 January – 31 December

(NOK 1,000)

Note

2014

2013

Operating income Sales income 2 17,781 19,746

Total operating income 17,781 19,746

Operating expenses

Salary costs 3 24,182 22,865

Amortisation 7 1,570 1,365

Other operating costs 3, 4 15,159 15,018

Total operating expenses 40,911 39,247

Operating profits - 23,130 - 19,501

Financial income and expenses

Income from investments in subsidiaries 11 19,993 25,348

Financial income 5 3,154 3,270

Financial expenses 5 2,121 625

Net financial items 21,026 27,994

Pre-tax profits - 2,104 8,493

Tax costs

6

- 2,687

1,389

Profits for the year 583 7,103

Allocation/coverage of profit

Allocation to/from retained earnings and additional paid-in capital 583 - 14,023

Allocation for dividends 13 - 21,127

Total allocations 583 7,103


62

Balance sheet as of 31 December

(NOK 1,000) Note 2014 2013

ASSETS Fixed assets Intangible assets Intangible assets 7 44 78

Deferred tax assets 6 42,528 40,172

Total intangible assets 42,572 40,250

Tangible fixed assets Tangible fixed assets 7 4,566 5,901


Financial assets

Investments in subsidiaries 11 480,864 480,864

Loans to Group companies 10 91,602 89,222

Total financial assets 572,466 570,086

Total fixed assets

619,603

616,237

Current assets Goods Inventory 68 -

Total net inventory 68 0

Receivables

Trade receivables 10 19,364 18,462

Other current receivables 10 69,609 40,297

Cash and cash equivalents 8 1,078 22,409


TOTAL ASSETS 709,723 697,405


63

(NOK 1,000) Note 2014 2013

EQUITY AND LIABILITIES

Equity Paid-in

capital

Share capital 12, 13 65,058 65,058

Nominal shares 13 - 252 - 52

Share premium 13 35,318 35,318

Other paid-in capital 13 489,628 489,628

Total paid-in capital 589,752 589,952

Retained earnings

Other equity 13 375 0

Total retained earnings 375 0

Total equity 590,127 589,952

Liabilities

Non-current liabilities

Interest-bearing liabilities 9 - 45,000

Non-current liabilities Group 9 - 4,000

Total non-current liabilities 0 49,000

Current liabilities

Interest-bearing liabilities 9 106,564 -

Trade payables 2,687 2,002

Unpaid public taxes 1,287 1,102

Other current liabilities 9 9,058 34,222

Provision for dividends 13 - 21,127


Total liabilities 119,596 107,454

TOTAL EQUITY AND LIABILITIES 709,723 697,405

Oslo, 19 March 2015









Member of the Board, Acting CEO



64

Cash flow statement (NOK 1,000)

Notes

2014

2013

Cash flow from operating activities Annual profit

Adjusted for:

- Tax costs

6

583

- 2,687

7,103

1,389

- Amortisation 7 1,570 1,365

- Interest income - 3,019 -

- Group contributions and dividends recorded as financial income 11 - 19,993 - 25,348

Payment of dividends 11 8,182 9,002

Payment of interest on loans - 3,082

Changes to working capital:

- Inventory

- 68

-

- Trade receivables and other receivables 1,843 - 10,193

- Trade payables and other current liabilities 864 9,361

Change in other accruals 631 - 65

Net cash flow from operating activities - 12,094 - 4,304

Cash flow from investment activities

Purchase of fixed assets 7 - 201 - 2,034

Purchase of intangible assets 7 - - 102

Change to non-current receivables - - 1,000

Net cash flow from investment activities - 201 - 3,136

Cash flow from investment activities

Long-term loans

Payment of loan

9, 10 -

- 33

49,000

-

Repayment of long-term loans 9 - 4,000 -

Short-term loans 9 12,607 -

Group contributions 17,346 13,206

Purchase/sale of own shares - 1,303 130

Payment of dividends - 21,127 - 48,741

Change in withdrawals group account - 61,484 - 18,300

Net cash flow from financial activities - 57,994 - 4,704

Net change in cash and cash equivalents

- 70,288

- 12,144

Balance of cash and cash equivalents as of 01.01 22,409 34,553

Balance of cash and cash equivalents as of 31.12 - 47,879 22,409


65

Notes to the annual accounts for 2014 for the parent company Goodtech ASA Note 1 Accounting principles

The company’s accounts have been prepared in accordance with the Norwegian Accounting Act and good accounting practice in Norway. The main standards are described below.

The use of estimates

In the preparation of these accounts, the management has used estimates and prerequisites that have affected the profit and loss account and the valuation of assets and debt as well as unsecured assets and liabilities on the balance date in accordance with good accounting practice.

Foreign currency

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 measuring. Foreign currency fluctuations are recognised in the profit and loss account continuously over the accounting period.

Criteria for recognition of income

Income is recognised when it is earned, i.e. when the claim for payment arises. This takes place when the service is provided, as the work is carried out. Income is recognised by the value of the payment on the transaction date.

Tax

Tax costs are presented together with the ordinary pre-tax profits. Tax costs consist of payable tax and changes in deferred tax. Deferred tax/tax advantage is calculated on all differences between accounting and tax values of assets and liabilities. Deferred tax/tax advantages are calculated on all differences between accounting and tax value on assets and debt. Deferred tax is calculated as 27% on the basis of the temporary differentials that exist between accounting and tax values and tax deficits to be carried forward at the end of the financial year. Net deferred tax assets are recognised to the extent that it is probable that they will be utilised.

Payable tax and deferred tax are allocated in the profit and loss account to equity to the extent that the tax entries relate to equity transactions.

Classification and valuation of balance sheet items

Current assets and short-term debt include items which become due for payment within a year after the date of acquisition and items associated with the goods cycle. Other items are classified as fixed asset/long-term debt.

Current assets are valued at the lower of acquisition cost and fair value. Short-term debt is recognised in the balance sheet at the nominal amount at the time it is taken out.

Fixed assets are valued at acquisition price, but are written down to fair value if the decrease in value is not expected to be temporary. Long-term debt is recognised in the balance sheet at the nominal amount at the time it is taken out.

Tangible fixed assets

Fixed assets are recognised in the balance sheet at acquisition cost minus the accumulated ordinary depreciation and amortisation. Fixed assets are recognised and depreciated on a straight-line basis over the anticipated life of the asset.

Direct maintenance of equipment is recognised continuously as an expense under operating expenses, while increased costs or improvements are added to the equipment’s price and amortised concurrently. If the recoverable value of the equipment is lower than the recognised value, depreciation is carried out to the recoverable amount. Recoverable amount means the highest of net sales price and value in use. Value in use is the current value of future cash flows that the asset is expected to generate.

Subsidiaries/affiliated companies/companies under joint control

Subsidiaries, affiliated companies and companies under joint control are assessed using the cost method in the company accounts. Investments have been assessed at their share acquisition price unless write-down has been necessary. Write-down to fair value has taken place when a decrease in value is due to factors that are not deemed to be temporary and when it is deemed necessary in accordance with good accounting practice. Write-down is reversed when the basis of the write-down no longer exists.

Dividends, group and other distributions from subsidiaries are recognised in the same year as appropriated in the subsidiary’s accounts. If the dividend/group contribution should exceed the percentage of earned income after acquisition, the excess represents repayment of invested capital, and the distribution is deducted from the investment value in the balance sheet.

Receivables

Trade debt and other liabilities are recognised in the balance sheet at their nominal value after deductions for provision for expected loss. Provision for losses is made on the basis of individual assessment of each liability. In addition, an unspecif ied provision is made for the remaining trade debts to cover assumed loss.


66

Cash and cash equivalents

Cash and cash equivalents for the company comprise cash, separate company bank deposits and net overdraft balance on the group account. The difference between net balance on the company’s overdraft and net balance in total on the group account is presented as an internal balance within the group.

Short-term positions

Short-term positions (shares and units as current assets) are valued at the lower of cost or fair value on the balance sheet date. Dividends and other distributions from the companies are recognised as other financial income.

Leasing

Rental agreements are assessed as financial or operational leasing based on an evaluation of the individual agreement. Equipment covered by rental agreements deemed to be financial leasing is recognised in the balance sheet and depreciated as ordinary business equipment. Payment of the rental liability is recognised as non-current liability. The liability is reduced by paid rent after deduction of calculated interest costs.

Operational leasing agreements are recognised in the balance sheet only to the extent that advance payment has been made to the lessor. The rental payments are classified as operating expenses and is distributed on a straight-line basis over the rental period.

Transactions with related parties

Transactions between group companies take place subject to standard market terms.

Cash flow statement

The cash flow statement has been prepared using the indirect method. This means that the analysis is based on the unit’s annual results in order to present cash flow from ordinary operations, investment activity and financing activity.

Note 2 Segment information (NOK 1,000)

Geographical distribution of income 2014 2013

Norway 14,140 15,619

Sweden 2,446 2,505

Finland 1,195 1,622

Total 17,781 19,746

Note 3 Salary costs, number of employees, remuneration, loans to employees etc. (NOK 1,000)

Salary costs 2014 2013

Salaries 19,237 16,787

Employer tax 2,730 2,549

Pension costs 800 875

Other benefits 1,415 2,654

Total 24,182 22,865

Salaries include Board fees of NOK 1.7 million in 2014 (NOK 1.9 million in 2013)

As at 31.12.2014, the company had 18 employees and the average number of FTEs over the year was 20. For information on remuneration for the Board and executive management, see Note 28 to the consolidated accounts. Compulsory occupational pension – OTP

The company has an agreement on a defined contribution pension, the Compulsory Occupational Pension (OTP). The scheme meets statutory requirements for compulsory occupational pensions. The scheme covers all employees. Pension premium paid is recognised continuously over the year.

Auditor remuneration: 2014 2013

Audit fees, statutory audit services 236 229

Other certification services - -

Tax consultancy - -

Other-non audit services 366 101

VAT is not included in the audit fee.


67

Note 4 Other operating costs (NOK 1,000)

Other operating expenses 2014 2013

Rent and commercial premises 1,200 1,036

Maintenance/service agreements 1,755 1,179

Travel expenses 762 1,144

Car expenses 289 343

Sales and marketing expenses 376 335

Foreign services etc. 8,174 8,535

Postage and telephone 347 403

Exchange, VPS costs etc. 1,014 1,026

Other operating expenses 1,242 1,017

Total other operating expenses 15,159 15,018

Note 5 Financial income/financial expenses (NOK 1,000)

Financial income 2014 2013

Interest income within the Group 3,019 2,929

Other interest income 10 -

Other financial income 126 341

Total 3,154 3,270

Financial expenses

2014

2013

Other interest expenses 1,123 468

Other financial expenses 998 156

Total 2,121 625

Note 6 Tax (NOK 1,000)

Annual tax is distributed as follows: 2014 2013

Payable tax

Change to deferred tax/deferred tax assets

-

- 2,356

-

-1,389

Insufficient/excess provision previous years - 331 -

Total tax costs - 2,687 1,389

Calculation of the year’s tax basis:

Pre-tax profits - 2,104 8,493

Permanent differences - 7,848 - 8,844

Change in temporary differences 90 - 531

Correction previous years 1,225 -

Assigned/Utilised loss to carry forward 8,636 882

Annual tax basis 1 0

Adjustment for previous years applies correction of contributions in 2013, which were corrected in 2014 after the presentation of the annual accounts for 2013.

Summary of temporary differences:

Current assets/current liabilities

- 49

- 61

Fixed assets 685 787

Losses carried forward - 158,149 - 149,513

Total temporary differences - 157,513 - 148,786

Calculated deferred tax assets

- 42,528

- 40,172

Carrying value deferred tax assets - 42,528 - 40,172

Reconciliation of effective tax rate:

27% tax on pre-tax profit

- 568

2,378

Permanent differences (27%) - 2,119 - 2,476

Effect of change to tax rate - 1,488

Calculated tax costs - 2,687 1,389

Effective tax rate (tax in relation to pre-tax profits) 128% 16%

Permanent differences include dividends received from subsidiaries and non-deductible expenses.


68

Note 7 Tangible and intangible assets (NOK 1,000)

Machinery and fixtures Intangible assets Total

Acquisition costs as at 01.01 9,621 102 9,723 Acquisition 201 201

Acquisition costs 31.12 9,822 102 9,924

Accumulated depreciation 31.12. -5,255 - 59 - 5,314

Book value as of 31.12 4,566 44 4,609

Annual depreciation

1,536

34

1,570

The company uses straight-line depreciation for all tangible and intangible assets. The useful life of machinery and equipment is calculated as 3-10 years and intangible assets 5 years.

Significant leases

Goodtech ASA leases offices on Per Kroghs vei 4 in Karihaugen. These offices are sublet by the subsidiary Goodtech Projects & Services AS. Rental costs for 2014 were NOK 1.2 million.

Costs associated with company vehicles was NOK 0.2 million in 2014. The lease agreement expires on 1 April 2017.

Note 8 Cash and cash equivalents (NOK 1,000)

2014 2013

Deposits/withdrawals from group account (withdrawals classified as current liabilities)

- 48,957 21,466

Bank deposits excluding group account 1,078 943

Total cash and cash equivalents - 47,879 22,408

Total cash and cash equivalents as presented in the balance sheet 1,078 22,408

Withdrawals from the group account scheme are classified as current interest-bearing liabilities in the balance sheet for 2014.

NOK 0.8 million of company funds are bound up in owed tax. The corresponding amount as at 31.12 last year was NOK 0.8 million. See Note 17 to the group accounts for a description of the group accounts system.

Note 9 Liabilities (NOK 1,000)

Non-current liabilities 2014 2013

Withdrawals from long-term credit facility - 45,000

Loans from Group companies - 4,000

Total non-current interest-bearing liabilities 0 49,000 Current liabilities

2014

2013

Withdrawals from long-term credit facility 45,000 -

Withdrawals from group account 48,957 -

Loans from shareholders 12,607 -

Total current interest-bearing liabilities 106,564 0

The Goodtech Group has a long-term credit facility amounting to SEK 81 million in SEB. The credit facility runs until 31.12.2015. Withdrawals from this credit facility as of 31.12.2014 are classified as current liabilities. SEB, Goodtech’s bank, has waived covenant requirements as of 31.12.2014. Interest rate for withdrawals under this long-term credit facility during the waiver period is NIBOR + 2.5%.

See also Note 20 in the consolidated accounts for information regarding the long-term credit facility.

In Q3, the Company was granted a loan of a total of NOK 12.6 million by four of the Company’s main shareholders. The loan was granted on market conditions and runs until 31 December 2015.


69

Total current liabilities 2014 2013

Current liabilities Group 1,556 26,934

Salary and holiday allowance owed 2,898 2,069

Accrued costs 3,174 4,781

Other current liabilities 1,430 438

Total other current liabilities 9,058 34,222

Note 10 Balances between group companies (NOK 1,000)

Receivables 2014 2013

Loans to group companies 91,602 89,222

Accounts receivable group 19,364 18,462

Other current receivables group 68,017 38,834

Total 178,983 146,519 Liabilities

2014

2013

Loans from group companies - 4,000

Trade payables within group 1,269 396

Other current liabilities group 100 26,934

Total 1,369 27,330

Loans to group companies consist of loans to Goodtech Industry Holding AS of NOK 87 million and loans to Goodtech Solutions AS of NOK 5 million. The loans are due for payment 30 days after demand from the lender and are classified as non-current liabilities. Loans are provided on market terms.

Other balances between Group companies are mainly related to the purchase and sale of products and services, contribution requirements and interest on outstanding receivables. These debts fall due for payment within one year.

The Group’s Norwegian and Swedish subsidiaries are part of the parent company’s group account arrangement with SEB. As of 31.12.2014, the subsidiaries had made withdrawals of NOK 36.0 million from the group account (as of 31.12.2013: credit of NOK 25.5 million). This item has been classified as current group liabilities and forms part of other current liabilities. In 2013, the item formed part of other current liabilities group.

Note 11 Subsidiaries (NOK 1,000)

Shares in subsidiaries owned by Goodtech ASA are shown below. Several of the subsidiaries in the table own shares in other subsidiaries. This is described in their respective annual accounts.

Company Ownership/

voting share Registered office

Acquisition cost

Acc. write-downs

Carrying value 2014

Income from investment in

subsidiaries

Goodtech Intressenter AB 100% Sweden 357,884 -74,577 283,307 -

Goodtech Environment AS 100% Norway 9,661 -163 9,499 -

Goodtech Industry Holding AS *) 100% Norway 123,501 -7,487 116,014 11,811

Goodtech Environment AB 100% Åland (Finland) 21,822 -8,699 13,123 8,182

Goodtech Solutions AB 100% Sweden 66,806 -7,885 58,921 -

Total 579,674 -98,810 480,864 19,993

Write-downs in Goodtech Environment AS and Goodtech Industry Holding AS are related to previously received contributions which then exceeded earned income in the period of ownership, and were treated as repayment of invested capital.

*) Income for the year on investments in subsidiaries consists of contributions from the subsidiaries Goodtech Projects & Services AS, Goodtech Products AS and Goodtech Environment AS. These companies are 100% owned by Goodtech Industry Holding AS.


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Note 12 Share capital (NOK 1,000)

For information about share capital/shareholders in the company/equity, see Note 18 to the consolidated accounts.

Note 13 Equity (NOK 1,000)

Share capital Own shares Share

premium Other paid-in

capital Other equity

Total

Equity as at 1.1 65,058 - 52 35,318 489,628 - 589,952

Change own shares - 200 - 1,103 - 1,303

Annual profits 583 583

Other changes 895 895

Equity as at 31.12 65,058 - 252 35,318 489,628 375 590,127

Note 14 Collateral and guarantees

The Group’s Norwegian and Swedish subsidiaries are part of the parent company’s group account arrangement with SEB. The Group’s withdrawals from the credit facility for the group account is NOK 49 million as of 31.12.2014.

Subsidiaries’ outstanding balances with the parent company under this arrangement are shown in Note 10. For further information about the group’s loans and credit facilities, see Note 20 to the consolidated accounts. Goodtech ASA has bank guarantees in place that are also used by its subsidiaries. Total credit facilities are NOK 400.9 million where NOK 218.7 million have been withdrawn as of 31. December 2014.

Goodtech ASA additionally makes available other guarantees on behalf of its subsidiaries to customers and suppliers as part of standard operations. As of 31.12.2014, parent company guarantees constitute NOK 0.8 million.

Goodtech ASA has provided Nordea Bank Finland Abp with guarantees for loans to Goodtech Environment AB of EUR 0.9 million and Westra Wermlands Sparebank with guarantees of up to SEK 2 million for loans to Goodtech Solutions Manufacturing AB.

For collateral and guarantees, see Note 17 to the consolidated accounts.

Note 15 Financial market risk

The company does not use financial instruments for the management of financial risk.

Interest rate risk

Interest rate risk arises in the short and medium term as a result of the company’s debt being at a variable rate.

Currency risk

The company is at low risk from developments in currency exchange rates. Loans to companies within the group are mainly in Norwegian kroner.

Note 16 Related parties

The purchase and sale of goods and services between group companies and related parties are all on market terms. Loans between group companies are based on market terms.

In 2014, the Company was provided with a short-term loan by four of the Company’s main shareholders. The loan was granted on market terms and runs until 31 December 2015, cf. Note 9.

No remuneration was paid by the parent company to related parties with the exception of the group companies and employees in 2014. See Notes 27 and 28 to the consolidated accounts for a detailed summary of transactions with related parties.


71

Declaration from the Board and CEO

The Board and CEO have today reviewed and approved the Annual Report and Annual Accounts for Goodtech

ASA, the Group and the parent company, as at 31 December 2014.

The Consolidated Annual Accounts have been produced in accordance with the EU approved IFRSs and related

interpretation statements and further Norwegian disclosure requirements contained in the Norwegian Accounting

Act and which must be applied as at 31.12.2014. The Annual Accounts for the parent company have been

produced in accordance with the Norwegian Accounting Act and Norwegian accounting practice as at 31.12.2014.

The Annual Report for the Group and parent company comply with the provisions contained in the Norwegian

Accounting Act and Norwegian accounting practice no. 16 as at 31.12.2014.

To the best of our knowledge:

- these Annual Accounts for 2014 for the parent company and the Group meet all current accounting standards

- the information contained in the accounts provides a true picture of the Group’s assets, liabilities and

financial position and profits as a whole as at 31 December 2014

- the Annual Report for the Group and parent company provides a true summary of

o the developments, results and position of the Group and parent company

o the most important risk and uncertainty factors facing the Group and Company

Oslo, 19 March 2015









Member of the Board, Acting CEO


PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 OsloT: 02316, org. no.: 987 009 713 MVA, www.pwc.noStatsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap

To the Annual Shareholders' Meeting of Goodtech ASA

Independent auditor’s report

Report on the Financial Statements

We have audited the accompanying financial statements of Goodtech ASA, which comprise thefinancial statements of the parent company and the financial statements of the group. The financialstatements of the parent company comprise the balance sheet as at 31 December 2014, and the incomestatement, and cash flow statement, for the year then ended, and a summary of significant accountingpolicies and other explanatory information. The financial statements of the group comprise thebalance sheet at 31 December 2014, income statement, statement of comprehensive income, changesin equity and cash flow for the year then ended, and a summary of significant accounting policies andother explanatory information.

The Board of Directors and the Managing Director’s Responsibility for the Financial Statements

The Board of Directors and the Managing Director are responsible for the preparation and fairpresentation of the financial statements of the parent company in accordance with NorwegianAccounting Act and accounting standards and practices generally accepted in Norway, and for thepreparation and fair presentation of the financial statements of the group in accordance withInternational Financial Reporting Standards as adopted by EU and for such internal control as theBoard of Directors and the Managing Director determine is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with laws, regulations, and auditing standards and practicesgenerally accepted in Norway, including International Standards on Auditing. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity’spreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

Independent auditor's report - 2014 - Goodtech ASA, page 2

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Opinion on the financial statements of the parent company

In our opinion, the financial statements of the parent company are prepared in accordance with thelaw and regulations and present fairly, in all material respects, the financial position for Goodtech ASAas at 31 December 2014, and its financial performance and its cash flows for the year then ended inaccordance with the Norwegian Accounting Act and accounting standards and practices generallyaccepted in Norway.

Opinion on the financial statements of the group

In our opinion, the financial statements of the group are prepared in accordance with the law andregulations and present fairly, in all material respects, the financial position of the group GoodtechASA as at 31 December 2014, and its financial performance and its cash flows for the year then endedin accordance with International Financial Reporting Standards as adopted by EU.

Report on Other Legal and Regulatory Requirements

Opinion on the Board of Directors' report

Based on our audit of the financial statements as described above, it is our opinion that theinformation presented in the Board of Directors report concerning the financial statements, the goingconcern assumption and the proposal for the allocation of the profit is consistent with the financialstatements and complies with the law and regulations.

Opinion on Registration and Documentation

Based on our audit of the financial statements as described above, and control procedures we haveconsidered necessary in accordance with the International Standard on Assurance Engagements ISAE3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, it isour opinion that management has fulfilled its duty to produce a proper and clearly set out registrationand documentation of the company’s accounting information in accordance with the law andbookkeeping standards and practices generally accepted in Norway.

Oslo, 19 March 2015PricewaterhouseCoopers AS

Bjørn LeiknesState Authorised Public Accountant (Norway)

Note: This translation from Norwegian has been prepared for information purposes only.

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