A smarter solution starts from inside
Annual
Report
2014
Data Respons is a full-service, independent
technology company and a leading player
in the embedded solutions market.
ESTABLISHED: 1986
VISION: A smarter solution starts from inside
OFFFICES: Denmark (1), Germany (2),
Norway (6), Sweden (3) & Taiwan (1)
BUSINESS FORM: Public limited company,
listed on the Oslo Stock Exchange (ticker: DAT)
CERTIFICATIONS: ISO9001:2008,
ISO 14001:2004 AND OHSAS 18001:2007
NUMBER OF EMPLOYEES: 369
2
DATA RESPONS ASA | ANNUAL REPORT 2014
CONTENTS
KEY FACTS
04 BOARD OF DIRECTORS’ REPORT
09 The Board of Directors
12 INVESTOR INFORMATION
14 Key figures
18
19
19
20
22
24
25
49
FINANCIAL STATEMENTS AND NOTES
Income statement
Statement of comprehensive income
Statement of financial position
Statement on changes in equity
Statement of cash flows
Notes
Auditor’s report
DATA RESPONS ASA | ANNUAL REPORT 2014
3
CHAPTER 1: BOARD OF DIRECTORS’ REPORT
BOARD OF DIRECTORS’ REPORT
ORDER INTAKE
1000
889
883
2010
2011
(NOK million)
945
843
819
2012
2013
800
600
By focused efforts on the company’s key markets
and a more efficient organisation, Data Respons
achieved growth and improved profitability in
2014
400
200
0
REVENUE
1000
(NOK million)
849.9
800
2014
844.2
800.8
849.2
706.8
600
400
200
0
2010
EBITDA
2011
2012
2013
2014
(NOK million)
57.6
50.4
45
40
35
30
25
20
15
10
5
0
4
13.4
3.3
45
40
35
2011
2012
In accordance with the Norwegian Accounting Act § 3.3a the board confirms that the
company fulfils the requirements necessary
to operate as a going concern, and the 2014
financial statements have been prepared on
the basis of this assumption.
Data Respons ASA is a publicly listed company and prepared the consolidated financial
statements for the Data Respons group for the
financial year 2014 in accordance with IFRS
(International Financial Reporting Standards)
as adopted by the European Union.
income statement
The report includes comparisons with figures for the
same period in 2013 (in parenthesis).
35.4
2010
statement on the annual
financial statements
2013
2014
DATA RESPONS ASA | ANNUAL REPORT 2014
Operating revenue for 2014 was NOK 849
million (801), a growth of 6 %. EBITDA was
NOK 57.6 million (50.4). EBIT was NOK 54.5
million (46.5). Profit before tax was NOK
50.4 million (44.1). Data Respons had a cash
35.4
flow from operating activities of NOK 51.4
million (51.8) in 2014. The order intake totalled NOK 945 million (819) and the order
backlog ended on NOK 723 million (626).
The company’s profitability showed strong
improvement during 2014. The profit improvement is due to the strong focus on core
business, a well-functioning global value
chain and a more cost effective organisation. Both business segments contributed to
the positive development, with high activity
levels in products & solutions deliveries and
good overall utilisation in services.
57.6
Data Respons is well positioned as a leading
full-service embedded technology company
and the positive development in the company’s strategic markets has continued during 2014. Revenue growth and a lower cost
base have improved profitability. A strong
market presence with a competitive global
business model has resulted in a record high
order intake of NOK 945 million. Healthy
50.4
CHAPTER 1: BOARD OF DIRECTORS’ REPORT
The profitability continued to improve
during 2014 and the company expects
this development to continue.
cash flow from operations has also contributed to a solid financial position at December 31, 2014.
formation technology index. The company
has offices in Norway, Sweden, Denmark,
Germany and Taiwan.
balance sheet, liquidity & cash flow
business segments
The company’s book value of total assets
at the end of 2014 was NOK 460 million.
The company’s equity was NOK 288 million,
which gives an equity ratio of 63 %.
Current assets amounted to NOK 271 million and current liabilities were NOK 166
million. At December 31, 2014, the noncurrent assets amounted to NOK 189 million, of which deferred tax assets of NOK 3
million and other intangible assets including
goodwill of NOK 179 million.
The group’s cash flow from operations was
NOK 51.4 million (51.8). The cash balance
as of December 31, 2014 was NOK 42.8
million, of which NOK 4.6 million was restricted. The group had no interest bearing
debt and considers the debt ratio to be appropriate for the group. Data Respons has
unused credit facilities of NOK 80 million,
and further information on the credit facilities can be found in Note 17.
financial risk
The group’s activities expose it to a variety of
financial risks, such as price, interest rates, currency, credit and liquidity. Overall these risks
are regarded as low. Management of financial
risk is performed by the group’s central finance
department under the guidelines set out by
the Board of Directors. The main principle is
to minimise exposure to financial risk, and the
group holds no financial assets or liabilities for
speculative purposes. For further details on financial risk management, see Note 19.
operations
Data Respons is a leading embedded solutions
provider for the industrial market in Europe.
Embedded solutions can be described as the
brains of a machine, system or industrial end
product. Data Respons supplies embedded
solutions to leading OEM companies, system
integrators and vertical product suppliers in
a range of vertical markets such as Telecom,
Medical, Transportation, Defence, Oil Services, Maritime and Automation.
Data Respons ASA is listed on the Oslo Stock
Exchange (Ticker: DAT), and is part of the in-
products and solutions
Operating revenue for 2014 was NOK 480
million (442), a growth of 8 %. EBITDA was
NOK 36.9 million (34.7). The order intake totalled NOK 531 million (454) and the order
backlog ended on NOK 567 million (515).
The company experienced high activity levels
for products & solutions during 2014, with a
growth of 8 %. The international operations
have contributed especially to the growth. The
order intake was record high due to several
large contract signings with key customers in
Telecom, Transportation, Medical and Industry.
Both the Norwegian and international business
units had record sales, resulting in an all-time
high order intake and order backlog.
The long-term profitability is expected to continue to improve based on a more cost-effective and focused business model. This includes
strategic relationships with customers in our
main markets, a stronger coordination of the
Nordic operation centres and the transferral of
tasks to our Asian organisation and global partners. Fluctuations in revenue and profitability
between periods are to be expected in the
products & solutions business segment.
KEY FIGURES
NOK million
Operating revenue
EBITDA
Order backlog
Order intake
Employees
2013
800.8
50.4
626
819
367
ORDER BACKLOG (NOK million)
723
700
580
600
613
613
626
2011
2012
2013
500
400
300
200
100
0
2010
2014
REVENUE BY COUNTRY
9%
Sweden
4%
Norway
44%
Germany
43%
Denmark
REVENUE BY INDUSTRY
The company’s long-term strategy to strengthen total solution capabilities and to focus on
the whole value chain has given Data Respons
a unique position. Data Respons’ long experience with its own operations in Asia is of
special importance.
In order to meet the continued demand
for increased performance and more functionality, many of our customers focus on
strategic partnerships. Whilst Data Respons
builds and delivers customised embedded
solutions, our customers can achieve lower
costs of ownership, increased efficiency and
shorter time-to-market.
2014
849.2
57.6
723
945
369
14%
Defence
Medical
Oil Services
Maritime
Automation
Transportation
Telecom
Other industries
13%
8%
15%
14%
15%
8%
13%
NUMBER OF EMPLOYEES
500
457
446
394
400
367
369
2013
2014
300
200
Data Respons is positioned as the leading
channel for embedded computer solutions
and products in the Nordic region. The company has a strong and increasing base of recurring solution customers and has a solid
100
0
2010
2011
2012
DATA RESPONS ASA | ANNUAL REPORT 2014
5
CHAPTER 1: BOARD OF DIRECTORS’ REPORT
Data Respons had a strong cashflow from
operations in 2014 and the board proposes
a dividend of NOK 1.00 per share.
REVENUE BY REPORTING SEGMENT
2014
2013
Products & solutions
497.6
442.4
Services
370.3
363.0
-0.7
-4.6
849.2
800.8
NOK million
Eliminations
Group
REVENUE BY SEGMENT
Products &
Solutions
56%
44%
Services
BACKLOG BY SEGMENT
22%
Products &
Solutions
78%
Services
EMPLOYEES BY SEGMENT
Products &
Solutions
37%
63%
Services
EMPLOYEES BY COUNTRY
Norway
43%
2%
39%
6
Germany
Sweden
13%
Denmark
DATA RESPONS ASA | ANNUAL REPORT 2014
order backlog. Solution deliveries secure
long-term and strategically important customer relationships and provide a significant
potential for future growth.
services
Operating revenue for 2014 was NOK 370
million (363), a growth of 2 %. EBITDA was
NOK 30.9 million (25.1). The order intake totalled NOK 415 million (365) and the order
backlog ended on NOK 156 million (111).
The company experienced good demand from
its key customers during the year. The services
segment showed both growth and positive development in profitability due to high overall
utilisation, a good market position and concentration on core market regions. The record high
order intake indicates a good start to 2015.
Data Respons continues to leverage on its
leading position in offering customers access to highly skilled specialists with a broad
range of expertise from different embedded
solution disciplines. A strong competence
platform is strategically important in order
to develop new recurring solution customers
and to stand out as a complete solutions provider in the market.
market development
Data Respons has a solid customer base within several industry sectors. Our geographical
footprint and more than 25 years of experience have given the company relevant vertical competence within these markets. Data
Respons’ customer list includes world-leading
companies like ABB, Ericsson, Kongsberg
Group, Saab, Tomra, Cisco, Raytheon, FMC
Technologies, Bombardier, Scania, Siemens,
Schlumberger, Statoil, National Oilwell Varco,
Rolls Royce, Laerdal Medical and Hexagon.
Data Respons has a strong and well-distributed customer list. The number of blue-chip
customers increased during the year and the
company expects this trend to continue going
forward. The business environment remains
volatile, but we continue to see opportunities in several of our key markets. The sharp
decline in oil prices will influence the oil services sector and related business areas. The
development in the oil services sector, which
accounts for 14 % of the revenue, is being
monitored carefully. On the other hand, the
company perceives the cost focus in the oil
sector more as a long-term opportunity for
growth as Data Respons offers expertise on
standardised computer solutions and a cost
effective global value chain.
Based on feedback from our customers and
partners, the company expects a growing
market for IOT (Internet of things) devices,
advanced communication solutions, connected and integrated systems and the use
of consumer-based technologies. In addition,
there is a growing demand for reliable, safe
and robust solutions for tough environmental
conditions, areas in which Data Respons has
strong competence and experience.
Main markets like Telecom, Defence, Transportation, Oil Services and Maritime account
for 75 % of the company’s total revenue. Data
Respons’ strong competence and complete
value chain in delivering services and products and solutions for extreme and special
environmental conditions, make the company
an attractive partner for these segments.
geographic regions
Data Respons is located in Norway, Sweden,
Denmark, Germany and Taiwan. Our business
model is based on close cooperation with our
customers and understanding their business
needs. To facilitate close cooperation, Data Respons believes in having regional offices, with
skilled engineering staff, in important industrial
clusters to build strategic and long-term relationships with our key customers.
Norway is the largest market area with 44 % of
the group’s revenue, attributable to a strong development in sectors such as Maritime, Industry, Telecom, Medical, Defence and Oil Services.
Sweden accounts for 43 % of the revenue and
experienced a continued positive development in revenue and profitability in 2014. The
Swedish company has built a strong position
in several vertical markets such as Transportation, Telecom, Defence and Industry gaining
the ability to win new embedded solution contracts with large customers. The company’s services segment has frame agreements with more
than 20 large industrial companies.
Denmark and Germany represent respectively
4 % and 9 % of the revenue. In our Asian or-
CHAPTER 1: BOARD OF DIRECTORS’ REPORT
ganisation, there have been high activity levels
as an increasing number of solution deliveries
and projects are carried out in cooperation
with our Asian partners.
organisation and work force
At the end of 2014, the group had 369 employees working at 13 offices in Norway (143),
Sweden (157), Denmark (8), Germany (48)
and Taiwan (13). The average number of employees at the parent company was 5. The average number of employees in the group was
362, and there were 64 female employees in
the group at the end of the year, of which 13
in top or middle management. equal pay for
work of equal value, regardless of gender, is
practiced at Data Respons. Salary and terms of
employment for comparable positions are the
same for women and men.
Recruitment, promotion and development of
the staff are based on merit and equal opportunity regardless of ethnicity, colour, religion,
gender, age, national origin, sexual orientation, marital status and disability. Discrimination, bullying or harassment is not accepted at
Data Respons. Employees are asked to report
incidents of such behaviour to their immediate
supervisor or the employee representative.
corporate governance
Data Respons’ organisation is structured and
managed in accordance with the Norwegian
Code of Practice for Corporate Governance.
The Board of Directors states that Data Respons has been in compliance with the code
throughout 2014. The Board of Directors’ report on corporate governance can be read at
the company’s website:
www.datarespons.com/investors
objectives
The objectives of the company are to provide
products and services and own and manage
stocks and shares within IT-related activities,
and other activities naturally connected to this.
nomination committee
Data Respons has incorporated in the articles
of associated that the company should have
a Nomination committee. The Nomination
Committee is elected by the annual general
meeting. The committee makes proposals to
the general meeting regarding the election of
shareholder-elected members to the board
and propose remuneration of the Board of
Directors. The annual general meeting decides
the remuneration of the Nomination Committee. The committee is comprised of three
members, none of which are board members
or employees at Data Respons. The committee involves shareholders, board members and
the CEO in proposing candidates to the Board
of Directors. Shareholders can propose candidates through the company website.
The Nomination Committee proposes the remuneration of the directors for the coming
year to the general meeting. Proposals from
the Nomination Committee are justified, and
the proposals from the Nomination Committee
are made available on the company’s website
along with the invitation to the AGM. The current members of the Nomination Committee
are Haakon Sæter, Andreas B. Lorentzen and
Narve Reiten.
In addition, the company has an Election Board
for the election of employee representatives
to the board, and consists of three members
which are employed at Data Respons.
board of directors
The work of the board is governed by detailed rules of procedure. The board has an
annual programme of work including specific
topics and fixed items such as the approval
of the annual financial statements, interim
financial statements and budgets. The board
is also responsible for overall strategy and for
setting long-term goals, as well as important
decisions about acquisitions, establishment of
new operations and major investments. The
Board of Directors evaluates its performance
and competence annually.
The composition of the Board of Directors
complies with the requirement that the board
be independent from the company management, and independent from major business
associates of the company. Management is
not represented on the Board of Directors. At
least two of the members of the board elected
by shareholders are independent of the company’s main shareholders.
The Chairman of the Board of Directors and
other board members are elected by the
company’s shareholders in the general meeting. board members are normally elected for a
term of one year until the next annual general
meeting. Page 9 of the annual report provides
a detailed description of the individual members’ backgrounds, qualifications and shareholdings.
The board has appointed an Audit Committee which provides assistance to the board in
fulfilling their responsibility to the shareholders, potential shareholders, and investment
community relating to corporate accounting,
reporting practices of the company, and the
quality and integrity of the financial reports of
the company. As part of this process, the external auditors participate in several meetings
of the Audit Committee. In carrying out its
responsibilities, the Audit Committee should
ensure that the corporate accounting and reporting practices of the company are in accordance with all legal requirements and are
of the highest quality. The Audit committee
consists of three board members.
The board has also appointed a compensation committee consisting of two board members. The Board’s Compensation Committee
is a subcommittee of the Board of Directors
of Data Respons ASA and is independent of
management. Its role is to make preparations for the board’s discussions of questions
involving compensation. The Compensation
Committee is responsible only to the full cor-
porate board and its authority is limited to
making recommendations to the board.
In 2014 there were 6 directors on the board,
4 of whom were elected by the general meeting and 2 of whom were elected by the employees. In 2014 the board held a total of 9
meetings. In 2014 there were 3 men and 3
women on the board.
internal control
The Board of Directors evaluate, at least annually, the company’s most significant risks
and the related internal control measures in
place. The Board of Directors oversees and
evaluates the company’s internal control and
risk management functions related to financial
reporting. Management is responsible for establishing and maintaining adequate internal
control of financial reporting.
The objective of the internal control of financial
reporting is to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of Data Respons’ financial statements for external reporting purposes in accordance with International Financial Reporting
Standards. The effectiveness of internal control
of financial reporting is evaluated annually by the
Board of Directors.
As part of the audit of the financial statements,
the external auditor reports on the effectiveness
of internal controls related to financial reporting
to the audit committee and the Board of Directors at least once every year.
corporate social responsibility
Taking overall responsibility is an important
core value at Data Respons. The group aspires
to be a responsible corporation in terms of labour standards, human rights and environmental protection. The company has implemented
corporate social responsibility policies, which
are publicly available on the company website:
www.datarespons.com/us/drcsr/
The CSR policies are in accordance with UN
Global Compact Principles and cover governance and integrity management, anti-corruption policies, environmental protection,
human rights and labour standards. CSR is
an important focus for Data Respons, and
several aspects of our CSR policy have been
strengthened both in internal operations and
through the company’s interactions with external stakeholders.
Among our internal initiatives, CSR policies
and procedures are integrated into the internal audit procedures, CSR training has been
made mandatory for new employees and the
level of knowledge concerning company CSR
policies has been implemented as a standard
in the annual employee survey. Furthermore,
a whistleblower regime that secures a potential whistleblower’s complete anonymity has
been implemented and made available for all
employees. From 2014, we have also included questions on awareness of CSR policy and
whistleblower systems in our internal audit
DATA RESPONS ASA | ANNUAL REPORT 2014
7
CHAPTER 1: BOARD OF DIRECTORS’ REPORT
procedures. Initial results have shown a strong
awareness across the group.
Further planned internal initiatives includes adding CSR risk analysis to the Management review
meetings, covering both segment and group
top management levels. For 2015 we are also
starting a new procedure for product recycling
design in order to minimise product life cycle
environmental impact.
For external stakeholders, Data Respons has taken a clear position to cooperate with customers
and give sincere answers to surveys and requests
regarding CSR, Green Compliance and Conflict
Minerals. With regards to suppliers, we have
included UN Global Compact 10 principles in
contracts with our major partners. The Global
Compact principles cover areas such as human
rights, labour rights, the environment and anticorruption. In 2013 we reached agreements
with our major partners to get full support on
tracking conflict minerals, a process that has
been fully implemented during 2014.
We have also in 2014 implemented a combined
ISO 14001 and CSR audit at our major partners,
which will be followed up by new audits in
2015. We have also expanded our contractual
requirements with our key suppliers to include
Green Compliance standards such as RoHS2 (restriction of hazardous substances in electronic
material) and REACH (registration, evaluation,
authorisation and restriction of chemicals).
Specific environmental goals for the group have
been implemented in 2014. When defining
our goals, an important objective for us was to
define how we can contribute to the national
environmental goals of Norway. Our best way
to contribute has been considered to be a reduction in emissions from transportation activities. By reducing the percentage of air freight
and increasing freight by boat or train, we can
achieve a significant reduction in emissions.
A goal has been set for 2015 to have a minimum of 50 % of our goods originating from
Taiwan to be sent by either boat or train,
measured by kilograms transported. This is a
highly ambitious goal for 2015, considering a
percentage of shipment by boat or train at approximately 30 % in 2014. Environmental goals
also include delivery of either R&D projects or
products to a set number of customers within
Green technology. The goal of 6 customers for
2014 was reached, and targets have been increased for 2015. Further environmental goals
for the group include development of energy
efficient products, decreasing CO2 emissions
from personal travel and green purchasing.
We believe that measures undertaken throughout the year has significantly raised the awareness and knowledge of CSR policies within the
firm, as well as contributed to our major partners taking important steps in securing a responsible complete value chain. We are continuously
striving for a closer integration of CSR policies
into our strategy, day-to-day operations and in
contact with stakeholders. Going forward, we
expect improvements and have several actions
planned for the immediate future.
Among other initiatives, we will increase our
scope to cooperate with all suppliers by including questions on CSR policies and actions in our
supplier surveys. In 2015 we will also initiate environmental talks with our customers to discuss
how we can reduce the environmental footprint from our deliveries to the end customers,
specifically how we can cooperate on reducing
emissions from transportation. We will continue
to place demands on our suppliers and monitor their progress, and we are certain that our
actions and demands will ensure a continued
responsible value chain in the future.
safety, health & environment (she)
Data Respons is not regulated by environmental
licences or injunctions. The company does not
pollute the external environment. Average sick
leave over the course of the year was 1.9 %, and
none of the group’s subsidiaries recorded work
related accidents that resulted in serious personal injury or property damage. The working
environment is regarded as good, and improvement measures are implemented continuously.
Employees and management have a constructive collaboration, which has a positive impact
on our operations.
allocation of the result for
the year
Data Respons ASA achieved a profit before tax
of NOK 34.3 million (42.5) in 2014. The net
profit for the year was NOK 28.8 million (32.2)
and total comprehensive income was NOK 28.8
million (31.7). The Board of Directors propose
to distribute a dividend of NOK 1.00 per share
for 2014, in total NOK 48.6 million. Following
the resolution by the Annual General Meeting
on Thursday April 16, 2015 the DAT share will
be traded ex-dividend on April 17, 2015.
Taking the proposed dividend into consideration, NOK 19.7 million will be transferred from
other equity. Before distribution of dividends,
the parent company had equity of NOK 292.6
million at December 31, 2014. The equity in
the company accounts for 96 % of total assets
and is considered adequate based on the extent and risk of the company’s operations.
outlook
The company believes that the long-term outlook
for the embedded solutions market is positive.
The need for more intelligent and cost effective
products, better infrastructure and enhanced user
functionality are driving forces in the market.
Data Respons is well positioned as a complete
solutions provider for the industrial market in the
Nordic region and in Germany. The company has
customers in a wide range of vertical industries
and a balanced portfolio of blue-chip customers.
Although the market conditions are mixed, we
continue to see opportunities in several of our
key markets.
Profitable growth, positive operational cash flow
and a strengthened position in key markets are
Data Respons’ main focus areas. The company’s
growth, cash flow and profitability levels can
fluctuate between periods. Based on the current
demand from our customers, a more focused organisation and a strong order backlog, the company expects growth, improved profitability and
positive cash flow from operations going forward.
declaration on the financial
statements
We confirm that the financial statements for
the year 2014, to the best of our knowledge,
have been prepared in accordance with International Financial Reporting Standards (IFRS),
gives a true and fair view of the company’s and
group’s consolidated assets, liabilities, financial
position and results of operations, and that
the annual report includes a fair review of the
development, results and position of the company and group, together with a description of
the most central risks and uncertainty factors
facing the companies.
THE BOARD OF DIRECTORS OF DATA RESPONS ASA
Høvik, March 19, 2015
8
Ole Jørgen Fredriksen
Kathryn Moore Baker
CHAIRMAN OF THE BOARD
MEMBER OF THE BOARD
Ulla-Britt Fräjdin Hellqvist
MEMBER OF THE BOARD
Erik Langaker
Åsa Grübb-Weinberg
Jarl Guntveit
Kenneth Ragnvaldsen
MEMBER OF THE BOARD
EMPLOYEE REPRESENTATIVE
EMPLOYEE REPRESENTATIVE
CEO
DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 1: BOARD OF DIRECTORS’ REPORT
The Board of Directors
OLE JØRGEN FREDRIKSEN
KATHRYN MOORE BAKER
MEMBER OF THE BOARD
ERIK LANGAKER
CHAIRMAN OF THE BOARD
Number of shares/options: 225 544/0
Number of shares/options: 0/0
Number of shares/options: 350 000/0
Fredriksen (born 1950) was elected Chairman of the Board in April 2009. Fredriksen
has a Bachelor degree from the Norwegian
School of Economics & Business Administration (NHH), and has held various key
management positions within the computer industry. He is an independent advisor
with broad experience from 10 different
Board positions in stock listed companies.
Fredriksen was co-founder, CEO and President of ASK ASA for 15 years.
Baker (born 1964) was elected to the
Board in April 2011. She is a partner at
Reiten & Co and has over 25 years of experience in strategy, finance and company
development. Ms. Baker has a BEcon from
Wellesley College and an MBA from the
Amos Tuck School at Dartmouth College.
She has extensive board experience from
companies such as SafeRoad, BW Gas,
Bertel O. Steen Invest and EuroProcessing
International.
Langaker (born 1963) was elected to the
Board in November 2011. Langaker has
20 years of experience in finance and
M&A from international markets. Langaker
has founded/co-founded more than 10
technology companies. He has extensive
board experience from companies such
as StormGeo Group, GeoKnowledge and
Viken Fibernett.
ULLA-BRITT FRÄJDIN-HELLQVIST
ÅSA GRÜBB-WEINBERG
JARL GUNTVEIT
Number of shares/options: 10 000/0
Number of shares/options: 0/0
Number of shares/options: 7 000/0
Fräjdin-Hellqvist (born 1954) was elected
to the Board in November 2011. She holds
a MSc in Engineering Physics from Chalmers
and has held leading positions at Volvo Cars
and the Swedish Confederation of Enterprise
She has extensive board experience and is
currenly Chairman of the Board at Kongsberg
Automotive and Vindora Holding, board
member at several public, private and state
owned companies. Fräjdin-Hellqvist works
as an independent contractor and partner.
Grübb-Weinberg (born 1955) was elected
as an employee representative in April
2010. She holds a degree in social studies from Stockholm University and has
broad experience from various technology-based companies. Grübb-Weinberg
has worked in Data Respons since 2006
and is currently Account Manager at the
Stockholm office.
Guntveit (born 1966) was elected as an
employee representative in May 2012.
He holds a Bachelor of Engineering in
Computer Science from Gjøvik University College. He has 20 years experience
from various technology-based companies and as entrepreneur. Guntveit has
worked in Data Respons since 2006 and
is currently OEM Solution Manager at
the Høvik office.
MEMBER OF THE BOARD
EMPLOYEE REPRESENTATIVE
MEMBER OF THE BOARD
EMPLOYEE REPRESENTATIVE
DATA RESPONS ASA | ANNUAL REPORT 2014
9
INDUSTRY K
10 DATA RESPONS ASA | ANNUAL REPORT 2014
Servicing a diverse range of customers
require in-depth industry knowledge
and an understanding of the conditions
and markets our customers deal with.
KNOWLEDGE
DATA RESPONS ASA | ANNUAL REPORT 2014 11
CHAPTER 2: INVESTOR INFORMATION
INVESTOR INFORMATION
Data Respons ASA is listed on the Oslo Stock
Exchange (Ticker: DAT), and is included in the
information technology index. The company has
offices in Denmark, Germany, Norway, Sweden
and Taiwan.
12 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 2: INVESTOR INFORMATION
Key figures
SHARE INFORMATION
FINANCIAL CALENDAR 2015
16.04.15 Presentation of Q1 15
16.04.15 Annual General Meeting
17.04.15 Ex Dividend Date
10.07.15 Presentation of Q2 15
15.10.15 Presentation of Q3 15
27.01.16 Presentation of Q4 15
SHARE PRICE PERFORMANCE
14
2014
2013
Highest price (NOK)
Lowest price (NOK)
14.00
7.46
9.30
5.50
Price at year end (NOK)
Market value (NOK million)
Dividend per share
13.00
631.2
1.00
8.00
387.3
1.00
TRADING AND TRANSACTIONS
2014
2013
Number of transactions
Average number of transactions per day
Number of shares traded (million)
1 399
6
11.5
751
3
8.3
SHAREHOLDER STRUCTURE
2014
2013
894
3,3 %
48.6
872
1.5 %
48.4
13
12
11
10
9
8
7
JANUARY 2014
DECEMBER 2014
ANALYST COVERAGE
Number of shareholders
Forreign ownership
Number of shares owned by Data Respons
Number of shares outstanding
ABG SUNDAL COLLIER
Aleksander Høst
aleksander.host@abgsc.no
Data Respons believes that it is important to have an open and
active dialogue with the stock market­, and that all shareholders are
treated equally.
DATA RESPONS ASA | ANNUAL REPORT 2014 13
CHAPTER 2: INVESTOR INFORMATION
Key figures
KEY FIGURES
2014
2013
2012
2011
2010
Revenue
849 226
800 783
844 187
849 885
706 807
Operating expenses
791 597
750 387
808 795
836 443
703 498
57 629
50 397
35 392
13 440
3 309
3 153
3 866
4 596
5 325
6 893
-
-
-
87 316
-
54 477
46 530
30 796
-79 201
-3 584
NOK 1 000
income statement
EBITDA
Depreciation and amortisation
Impairment of goodwill
Operating profit/loss
Profit/loss before tax and non-controlling interest
50 376
44 062
25 157
-82 451
-7 711
Net profit/loss after tax
40 801
31 685
12 804
-92 597
-11 167
balance
Total assets
460 300
477 680
428 455
443 692
542 706
Equity
288 136
291 218
255 330
243 057
334 587
42 833
44 143
7 010
4 894
4 738
Cash and cash equivalents
key figures
Revenue growth
Gross margin
6.0 %
-5.1 %
-0.7 %
20.2 %
-2.7 %
46.9 %
47.4 %
48.4 %
50.6 %
55.8 %
EBITDA margin
6.8 %
6.3 %
4.2 %
1.6 %
0.5 %
EBIT margin
6.4 %
5.8 %
3.6 %
-9.3 %
-0.5 %
Net profit margin
4.8 %
4.0 %
1.5 %
-10.9 %
-1.6 %
Cash flow from operations
51 450
51 762
31 904
1 773
-22 645
Return on equity
14.1 %
11.6 %
5.1 %
-32.1 %
-3.4 %
Return on total assets
11.6 %
10.3 %
7.1 %
-16.1 %
-0.7 %
163.5 %
163.4 %
150.5 %
132.9 %
128.0 %
Equity ratio
62.6 %
61.0 %
59.6 %
54.8 %
61.7 %
Working capital
62 428
68 752
78 492
59 291
50 818
Liquidity ratio
key figures for shares
Earnings per share (EPS), basic (NOK)
0.78
0.61
0.27
-1.92
-0.23
Cash flow per share from operations (NOK)
1.06
1.07
0.66
0.04
-0.47
Dividend per share (NOK)
1.00
1.00
0.25
0.00
0.00
Book equity per share (NOK)
5.93
6.01
5.29
5.03
6.93
2.19
1.33
1.08
1.08
1.59
Number of shares as of December 31
Price / book
48 553 794
48 416 794
48 284 794
48 284 794
48 284 794
Average number of shares
48 500 516
48 330 261
48 284 794
48 284 794
47 799 562
5
3
2
2
4
Average number share transactions per day
Share price as of December 31 (NOK)
13.00
8.00
5.71
5.45
11.05
Market capitalisation (NOK million)
631.2
387.3
275.7
263.2
533.5
definitions
Return on equity
Profit/loss for the year / Average equity
Liquidity ratio
Current assets / current liabilities
Working capital
(Current receivables + Inventories) - Current liabilities
Return on total assets
EBIT / Average total assets
Equity ratio
Equity / Total assets
Earnings per share (EPS)
For calculation of EPS, see Note 9
14 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 2: INVESTOR INFORMATION
Key figures
GROUP
KEY FIGURES
REVENUE BY SEGMENT
56%
44%
Products &
Solutions
Services
OPERATING REVENUE (NOK million)
NOK million
2014
Revenue
EBITDA
Order backlog
849.2 800.8
57.6 50.4
626
723
Employees
369
2013
367
1000
800
849.9
844.2
2011
2012
800.8
849.2
706.8
600
400
200
0
2010
2013
2014
PRODUCTS AND SOLUTIONS
KEY FIGURES
REVENUE
56%
OPERATING REVENUE (NOK million)
NOK million
2014
2013
500
Revenue
EBITDA
Order backlog
479.6
36.9
567
442.4
34.7
515
400
133
134
Employees
432.0
444.7
442.4
2011
2012
2013
479.6
327.1
300
200
100
0
2010
2014
SERVICES
KEY FIGURES
REVENUE
44%
OPERATING REVENUE (NOK million)
NOK million
2014
2013
Revenue
EBITDA
Order backlog
370.3
30.9
156
363.0
25.1
111
231
228
Employees
500
400
383.9
424.3
408.5
363.0
370.3
2013
2014
300
200
100
0
2010
2011
2012
DATA RESPONS ASA | ANNUAL REPORT 2014 15
Data Respons offers the benefit of a comprehensive
Nordic-to-Asia value chain, covering all phases of the
development and production of embedded solutions.
16 DATA RESPONS ASA | ANNUAL REPORT 2014
BRIDGE
TO ASIA
DATA RESPONS ASA | ANNUAL REPORT 2014 17
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
FINANCIAL STATEMENTS
Data Respons places great importance on
providing up-to-date information on its
activities and ­
financial development to
shareholders and other participants in the
securities market.
18 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Income statement / Statement of comprehensive income
INCOME STATEMENT
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
Sales revenue
2
848 580
800 489
844 137
8 027
7 968
10 985
Net income from associated companies
4
646
294
50
-119
-463
-
NOK 1000
Note
Total revenue and other income
849 226
800 783
844 187
7 908
7 506
10 985
Cost of goods sold
450 799
421 436
435 453
-
-
-
Payroll expenses
10,15
282 116
272 241
311 153
9 595
8 691
10 580
3
3 153
3 866
4 596
842
851
816
3,5, 18
58 682
56 710
62 189
8 475
8 199
9 414
54 477
46 530
30 796
-11 004
-10 235
-9 825
Depreciation and amortisation
Other operating expenses
Operating profit/loss
Group contribution and dividends from subsidiaries
Other financial income
4,16, 19
Impairment of shares in subsidiaries
Other financial expenses
3,4
16,19
Profit/loss before tax
Income tax expense
11
Profit/loss for the year
-
-
-
49 269
57 325
36 323
6 557
6 917
2 719
1 647
5 284
940
-
0
-
-
-6 015
-1 580
-10 657
-9 386
-8 358
-5 603
-3 816
-3 420
50 376
44 062
25 157
34 309
42 543
22 438
-9 575
-12 377
-12 353
-5 490
-10 354
-7 114
40 801
31 685
12 804
28 819
32 188
15 323
37 672
29 399
12 804
-
-
-
3 129
2 286
-
-
-
-
profit attributable to
- Equity holders of the company
- Non-controlling interest
Earnings per share, basic (NOK)
9
0.78
0.61
0.27
-
-
-
Earnings per share, diluted (NOK)
9
0.77
0.61
0.26
-
-
-
STATEMENT OF COMPRENSIVE INCOME
GROUP
NOK 1000
Note
Profit for the year
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
40 801
31 685
12 804
28 819
32 188
15 323
5 399
11 256
-3 065
-
-
-
438
2 058
-
-
-
-
other comprehensive income
Items that may subsequently be reclassified to
profit or loss
Currency translation differences
Items that will not be reclassified to profit or loss
Currency translation differences on
non-controlling interests
Actuarial gains and losses on defined benefit plans
10
-
-728
1 818
-
-745
548
Tax on actuarial losses
11
-
206
-509
-
208
-153
Other comprehensive income
5 837
12 792
-1 757
-
-536
394
Total comprehensive income
46 639
44 477
11 047
28 819
31 652
15 718
43 072
40 133
11 047
-
-
-
3 567
4 344
-
-
-
-
comprehensive income attributable to
- Equity holders of the company
- Non-controlling interest
DATA RESPONS ASA | ANNUAL REPORT 2014 19
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Statement of financial position
STATEMENT OF FINANCIAL POSITION
NOK 1000
Note
2011
2009
GROUP
ASSETS
NOK 1000
2010
Note
2011
2010
2009
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
non-current assets
Intangible assets
3,5
178 823
175 077
152 997
50
-
-
Machinery and equipment
3,13
5 007
6 191
7 658
787
1 262
1 677
Shares in subsidiaries
4
-
-
-
306 333
285 911
291 845
Investments in associates
4
2 525
2 304
551
740
858
-
Pension funds
10
74
844
-
-
-
-
158
827
1 113
-
687
-
11
2 759
1 564
10 595
11 957
10 819
20 965
189 346
186 807
172 914
319 866
299 538
314 487
Other non-current assets
Deferred tax assets
Total non-current assets
current assets
Inventories
Trade receivables
Other current receivables
6,13
7,8,13
7,8
Current financial assets
Cash and cash equivalents
56 572
54 912
-
-
-
177 094
175 130
255
-
1 111
16 125
13 064
18 245
971
1 915
6 557
-
-
244
-
-
-
42 833
44 143
7 010
-17 303
19 773
371
Total current assets
270 954
290 873
255 541
-16 077
21 688
8 038
Total assets
460 300
477 680
428 455
303 789
321 226
322 526
20 DATA RESPONS ASA | ANNUAL REPORT 2014
17
41 896
170 100
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Statement of financial position
STATEMENT OF FINANCIAL POSITION
Note
GROUP
EQUITY AND LIABILITIES
2014
2013
2012
2014
2013
2012
24 277
24 208
24 142
24 277
24 208
24 142
170 427
169 420
168 778
170 427
169 420
168 778
73 191
78 157
62 410
97 853
117 071
96 930
267 895
271 785
255 330
292 556
310 699
289 851
Note
NOK 1000
DATA RESPONS ASA
equity
Issued capital
9
Share premium
Retained earnings
Equity attributable to equity holders
of the company
Non-controlling interests
Total equity
20 241
19 433
-
-
-
-
288 136
291 218
255 330
292 556
310 699
289 851
2 292
1 623
1 522
-
-
-
liabilities
non-current liabilities
Deferred tax liabilities
11
Pension liabilities
10
Other non-current liabilities
5,13
-
41
1 808
-
41
-520
4 179
6 821
-
-
-
-
6 471
8 484
3 330
-
41
-520
Total non-current liabilities
current liabilities
Interest-bearing loans and borrowings
13,17
Trade payables
Income tax payable
-
-
-
-
-
26 266
79 985
87 231
88 391
831
951
2 151
11
Public duties payable
5 820
2 190
1 652
6 627
-
-
26 323
28 914
28 356
983
334
348
-
-
291
-
-
291
Current financial liabilities
Other current liabilities
8,12
53 565
59 642
51 104
2 792
9 202
4 138
Total current liabilities
165 693
177 978
169 795
11 233
10 487
33 195
Total liabilities
172 164
186 462
173 125
11 233
10 527
32 675
Total equity and liabilities
460 300
477 680
428 455
303 789
321 226
322 526
THE BOARD OF DIRECTORS OF DATA RESPONS ASA
Høvik, March 19, 2015
Ole Jørgen Fredriksen
Kathryn Moore Baker
CHAIRMAN OF THE BOARD
MEMBER OF THE BOARD
Ulla-Britt Fräjdin Hellqvist
MEMBER OF THE BOARD
Erik Langaker
Åsa Grübb-Weinberg
Jarl Guntveit
Kenneth Ragnvaldsen
MEMBER OF THE BOARD
EMPLOYEE REPRESENTATIVE
EMPLOYEE REPRESENTATIVE
CEO
DATA RESPONS ASA | ANNUAL REPORT 2014 21
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY
attributable to equity holders of the company
GROUP
NOK 1000
Note
Equity as of January 1, 2012
Profit for the year
Noncontr.
Interest
Total
Equity
Issued
capital
Share
premium
Treasury
shares
Translation
differences
Other
equity
Total
24 142
325 496
-
-992
-105 590
243 057
-
243 057
-
-
-
-
12 804
12 804
-
12 804
Other comprehensive income for the year
-
-
-
-3 065
1 309
-1 757
-
-1 757
Total comprehensive income for the year
-
-
-
-3 065
14 113
11 047
-
11 047
-
-
-
-
1 226
1 226
-
1 226
Employee share option sheme
15
Reduction of share premium
9
Equity as of December 31, 2012
Profit for the year
-
-156 718
-
-
156 718
-
24 142
168 778
-
-4 057
66 466
255 330
-
255 330
-
-
-
-
-
29 399
29 399
2 286
31 685
Other comprehensive income for the year
-
-
-
11 256
-522
10 734
2 058
12 792
Total comprehensive income for the year
-
-
-
11 256
28 877
40 133
4 344
44 477
-
-
-
-346
-11 701
-12 047
19 825
7 778
-
-
-
-
-12 898
-12 898
-4 736
-17 634
Changes in non-controlling interests
4
Dividends
Employee share option sheme
15
-
-
-
-
560
560
-
560
Issue of share capital
9
66
642
-
-
-
708
-
708
24 208
169 420
-
6 853
71 304
271 785
19 433
291 218
-
-
-
-
37 672
37 672
3 129
40 801
Equity as of December 31, 2013
Profit for the year
Other comprehensive income for the year
-
-
-
5 399
-
5 399
438
5 837
Total comprehensive income for the year
-
-
-
5 399
37 672
43 072
3 567
46 639
Dividends
-
-
-
-
-48 417
-48 417
-2 759
-51 176
Employee share option scheme
15
-
-
-
-
380
380
-
380
Issue of share capital
9
69
1 007
-
-
-
1 076
-
1 076
24 277
170 427
-
12 252
60 939
267 895
20 241
288 136
Equity as of December 31, 2014
22 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Statement of changes in equity
STATEMENT OF CHANGES IN EQUITY
Total
Equity
DATA RESPONS ASA
NOK 1000
Note
Equity as of January 1, 2012
Profit for the year
Issued
capital
Share
premium
Treasury
shares
Other
equity
24 142
325 496
-
-76 731
272 907
-
-
-
15 323
15 323
Other comprehensive income for the year
-
-
-
394
394
Total comprehensive income for the year
-
-
-
15 718
15 718
Employee share option sheme
15
-
-
-
1 226
1 226
Other comprehensive income for the year
9
-
-156 718
-
156 718
-
24 142
168 778
-
96 930
289 851
Profit for the year
Equity as of December 31, 2012
-
-
-
32 188
32 188
Other comprehensive income for the year
-
-
-
-536
-536
Total comprehensive income for the year
-
-
-
31 652
31 652
Dividends
-
-
-
-12 071
-12 071
Employee share option sheme
15
-
-
-
560
560
Issue of share capital
9
66
642
-
-
708
24 208
169 420
-
117 071
310 699
Profit for the year
-
-
-
28 819
28 819
Other comprehensive income for the year
-
-
-
-
-
Total comprehensive income for the year
-
-
-
28 819
28 819
Dividends
-
-
-
-48 417
-48 417
Equity as of December 31, 2013
Employee share option scheme
15
-
-
-
380
380
Issue of share capital
9
69
1 007
-
-
1 076
24 277
170 427
-
97 853
292 556
Equity as of December 31, 2014
DATA RESPONS ASA | ANNUAL REPORT 2014 23
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Statement of cash flows
STATEMENT OF CASH FLOWS
GROUP
NOK 1000
Note
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
50 376
44 062
25 157
34 309
42 543
22 438
4 596
842
851
816
cash flow from operating activities
Profit before income tax
Depreciation and amortisation
3
3 153
3 866
Net income from associated companies
15
-646
-294
-50
119
463
-
380
560
1 226
380
560
1 226
4 100
2 469
5 639
-45 313
-52 778
-32 263
Employee share option scheme
Finance cost - net
Changes in working capital:
- Inventories
15 386
-390
3 418
-
-
-
- Trade receivables
10 351
16 064
-11 243
-255
1 111
757
-9 123
-9 192
4 971
-121
-1 200
-661
729
-834
-1 107
-41
-184
-581
-15 699
-855
668
-1 502
-1 257
-1 995
- Trade payables
10
- Provisions for pensions
- Other accruals
Income tax paid
-7 557
-3 694
-1 371
-
-
-
Net cash flow from operating activities
51 450
51 762
31 904
-11 583
-9 892
-10 262
-1 800
-3 310
-
-
-
-
-
-1 106
-
-
-
-
-
-
-
7 941
13 421
-
cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired
Loss of control in subsidiaries
5,13
4
Dividends from subsidiaries
-
-
-
34 534
43 904
36 323
Purchase of machinery and equipment
Group contributions received
3
-1 707
-2 181
-2 847
-366
-436
-461
Interest received
16
1 186
2 013
1 107
759
1 613
772
Purchase of intangible assets
3
-50
-
-
-50
-
-
Purchase of financial assets
4
-
-
-
-22 050
-9 422
-
Proceeds from sale of financial assets
4
-
-
-
1 814
7 778
-
Payments regarding loans to subsidiaries
8
-
-
-
-
11 677
6 550
Other investing activities
550
1 148
-1 529
-
-
57
-1 821
-3 436
-3 268
22 580
68 535
43 241
17
-
-
-24 083
-
-26 266
-31 794
Proceeds from issue of shares
9
1 076
708
-
1 076
708
-
Interest paid
16
-960
-2 494
-2 437
-732
-1 612
-1 627
-48 417
-12 071
-
-48 417
-12 071
-
-2 633
-4 442
-
-
-
-
Net cash flow from investing activities
cash flow from financing activities
Net change in overdraft facilities
Dividends paid to equity holders of the company
Dividends paid to non-controlling interests
Proceeds from sale of interest in a subsidiary
-
7 778
-
-
-
-
Net cash flow from financing activities
-50 934
-10 522
-26 520
-48 073
-39 241
-33 421
Net change in cash and cash equivalents
-1 267
37 804
2 115
-37 076
19 402
-442
Cash and cash equivalents at the start of the period
44 143
7 010
4 894
19 773
371
813
Exchange gains/losses on cash and cash equivalents
-5
-671
-
-
-
-
42 833
44 143
7 010
-17 303
19 773
371
Cash and cash equivalents at the end of the period
24 DATA RESPONS ASA | ANNUAL REPORT 2014
4
17
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
NOTES TO THE
FINANCIAL STATEMENTS
Data Respons’ financial statements and
notes for 2014 have been prepared in
accordance with International Financial
Reporting Standards (IFRS) as approved
by the European Union.
DATA RESPONS ASA | ANNUAL REPORT 2014 25
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 1
NOTE 1 ACCOUNTING PRINCIPLES
general information
or sold, translation differences related to the subsidiary are recognised
in the income statement.
Data Respons ASA is a public limited company registered in Norway.
The company’s head office is located at Sandviksveien 26, 1363 Høvik,
Norway. The group’s business operations are described in Note 2.
consolidation
accounting principles
subsidiaries
Data Respons’ consolidated financial statements and the company financial statements of Data Respons ASA for 2014 have been prepared
in accordance with International Financial Reporting Standards (IFRSs)
and the interpretations set out by the International Accounting Standards Board, as approved by the European Union. The financial statements are based on the historical cost principle with the exception of
financial derivatives. The consolidated financial statements have been
prepared using consistent accounting principles for similar transactions
and events under otherwise similar circumstances.
new and amended standards adopted by the group
There are no new standards, amendments or interpretations effective
for the financial year beginning on January 1, 2014 that have a material
impact on the group or parent company financial statements.
new standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after January 1,
2014 and have not been applied in preparing these consolidated financial statements. None of these are expected to have any impact on the
consolidated financial statements of the group, except the following set
out below:
IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. The
complete version of IFRS 9 was issued in July 2014. It replaces the
guidance in IAS 39 that relates to the classification and measurement of
financial instruments. The standard is effective for accounting periods
beginning on or after January 1, 2018. Early adoption is permitted. Data
Respons does not expect any significant impact from adopting IFRS 9.
IFRS 15, ‘Revenue from contracts with customers’ deals with revenue
recognition and establishes principles for reporting useful information
to users of financial statements about the nature, amount, timing and
uncertainty of revenue and cash flows arising from an entity’s contracts
with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and
obtain the benefits from the good or service. The standard replaces IAS
18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for annual periods beginning on or
after January 1, 2017 and earlier application is permitted. Data Respons
is currently assessing the impact of IFRS 15 and plans to adopt the new
standard on the required effective date.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a significant impact on Data
Respons’ financial statements.
functional currency and presentation currency
The Data Respons group presents its financial statements in NOK. This
is also the functional currency of the parent company. Subsidiaries with
a different functional currency are translated using the closing date rate
for balance sheet items and monthly average rates for the income statement. Translation differences are charged against other comprehensive
income. When a foreign subsidiary is partially or completely disposed of
or sold, translation differences related to the subsidiary are recognised
in the income statement.
Translation differences are charged against other comprehensive income. When a foreign subsidiary is partially or completely disposed of
26 DATA RESPONS ASA | ANNUAL REPORT 2014
The consolidated financial statements comprise the financial statements
of Data Respons ASA and its subsidiaries. Control is achieved when the
parent company is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, Data Respons ASA
controls an investee if, and only if, the company has:
„„ Power over the investee (i.e., existing rights that give it the current
ability to direct the relevant activities of the investee)
„„ Exposure, or rights, to variable returns from its involvement with
the investee
„„ The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights result
in control. To support this presumption and when Data Respons has less
than a majority of the voting or similar rights of an investee, the company considers all relevant facts and circumstances in assessing whether
it has power over an investee, including:
„„ The contractual arrangement with the other vote holders of the
investee
„„ Rights arising from other contractual arrangements
„„ Data Respons’ voting rights and potential voting rights
Data Respons re-assesses whether or not it controls an investee if facts
and circumstances indicate that there are changes to one or more of the
three elements of control. Consolidation of a subsidiary begins when
the company obtains control over the subsidiary and ceases when the
company loses control of the subsidiary. Assets, liabilities, income and
expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated financial statements from the date the
company gains control until the date the company ceases to control
the subsidiary.
Profit or loss and each component of other comprehensive income
(OCI) are attributed to the equity holders of the parent company and to
the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. When necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies into line with the Data Respons’ accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the group are eliminated
in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of
control, is accounted for as an equity transaction. If Data Respons loses
control over a subsidiary, it derecognises the related assets (including
goodwill), liabilities, non-controlling interest and other components of
equity while any resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
Acquired subsidiaries are recognised in the consolidated financial statements based on the historical cost to the parent company. Historical
cost includes best estimate on future additional payments based on
earn-out agreements. The historical cost is allocated to identifiable
assets and liabilities in the subsidiary, which are recorded in the consolidated financial statements at fair value at the time of acquisition.
Acquisition-related costs are expensed as incurred. Identifiable assets
are defined as both tangible fixed assets and intangible assets, excluding goodwill. Any excess value or shortfall in value beyond that which
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 1
can be attributed to identifiable assets and liabilities is recognised in the
balance sheet as goodwill. Excess values in the consolidated financial
statements are depreciated on a straight-line basis over the anticipated
economic life of the acquired assets, less any residual value. Goodwill
and excess values attributed to intangible assets with an indeterminable
useful life are not depreciated, but are tested for impairment in accordance with IFRS.
associates and joint ventures
An associate is an entity over which Data Respons has significant influence. Significant influence is the power to participate in the financial
and operating policy decisions of the investee, but is not control or joint
control over those policies.
A joint venture is a type of joint arrangement whereby the parties that
have joint control of the arrangement have rights to the net assets of the
joint venture. Joint control is the contractually agreed sharing of control
of an arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control.
The considerations made in determining significant influence or joint
control are similar to those necessary to determine control over subsidiaries. Data Respons’ investments in its associate and joint venture
are accounted for using the equity method. Under the equity method,
the investment in an associate or a joint venture is initially recognised
at cost. The carrying amount of the investment is adjusted to recognise
changes in Data Respons’s share of net assets of the associate or joint
venture since the acquisition date.
As of 2014, Data Respons presents net income according to the equity
method from associated companies and joint ventures as part of the
company’s operating profit. The two joint ventures are linked closely to
the core operations of Data Respons. By including share of net income
in the operating profit a better view of the group’s overall operational
performance is provided. The share of net income from associates and
joint ventures is included as a separate line in the condensed consolidated income statement as other revenue and comparative figures have
been adjusted accordingly.
revenue recognition
Revenue is recognised when it is probable that transactions will generate future financial benefits that will pass to the company, and the value
of such benefits can be estimated reliably. Sales revenue is recognised
net of value added tax and discounts. Data Respons has revenue from
products, services or a combination of both:
products
Revenue from the sale of products is recognised when delivery has been
made and most of the risk and return potential has been transferred.
services
Revenue from the sale of services is recognised according to the stage
of completion. The stage of completion is measured as accrued hours
in relation to total estimated hours. Estimated loss on contracts will be
recognised in the income statement in its entirety in the period when
it has been identified.
solutions
Revenue recognition from the sale of a solution combining development services and the subsequent delivery of products is dependent on
the pricing model selected. In cases where the customer pays separately
for development work and the products, and pricing is established independently, revenue is recognised in accordance with the principles
applicable to services and products described above.
If the customer only pays for the finished product, the company, in
cases where there is a contractual delivery, recognises revenue and capitalises development work in line with the percentage of completion.
Capitalised development work is subsequently expensed in line with
the delivery of the products.
interest income
Interest income is recognised as it is accrued. Dividends and group contributions are recognised as income when they have been approved by
the general meeting of the distributing company.
classification and valuation of balance
sheet items
Current assets and current liabilities comprise of items that fall due within
one year of the balance sheet date, as well as items related to the operating cycle. Other items are classified as non-current assets or non-current
liabilities. Financial instruments are classified and measured in accordance
with IAS 39 Financial Instruments; Recognition and Measurement. For
the group it is primarily loans and receivables that are relevant categories.
Financial assets with fixed or determinable cash flows that are not listed
in an active market are classified as loans and receivables.
Data Respons will on occasion use derivatives to hedge against fluctuations in currency exchange rates. Derivatives not designated as hedging
instruments according to IFRS are recognised at fair value with changes
against other financial income/expenses.
Derivatives designated as fair value hedges are recognised at fair value
in the statement of financial position. The corresponding change in value of the hedged item is also recognised in the statement of financial
position. The net effect of the two is charged against other financial
income/expenses.
receivables
Accounts receivable and other receivables are recognised in the balance
sheet at nominal value, less provisions for estimated losses. Provisions
for losses are made on the basis of individual assessment of the individual receivables, as well as past experience.
machinery and equipment
Machinery and equipment is recognised in the balance sheet and depreciated on a straight-line basis over the estimated useful life less
any residual value. Direct maintenance of machinery and equipment
is expensed as other operating expenses, while enhancements or improvements that increase the capacity are added to the cost price and
depreciated in line with the asset. Depreciation periods and profiles and
residual values are assessed annually.
intangible assets
Intangible assets consist of identifiable intangible assets. Intangible assets
are recognised in the balance sheet if it is probable that the expected
future financial benefits attributable to the asset will pass to the company
and the asset’s historical cost can be measured separately and in a reliable manner. Intangible assets with a limited useful life are recognised at
historical cost, less accumulated depreciation and impairment.
Depreciation is charged on a straight-line basis over the estimated useful
life. The depreciation period and method are reviewed annually. Intangible assets with an indeterminable useful life are not depreciated, but
are tested annually for impairment at the balance sheet date, or more
frequently if there is an indication of impairment.
goodwill
The difference between the historical cost at the time of acquisition and
the fair value of net identifiable assets at the time of acquisition are classified as goodwill. Goodwill is recognised in the balance sheet at historical cost, less any accumulated impairments. Goodwill is not depreciated,
but is tested annually for impairment at the balance sheet date, or more
frequently if there is an indication of impairment. In cases where negative goodwill is identified in connection with business combinations, the
purchase price allocation is reassessed before any negative goodwill is
recognised in income.
research and development
Costs associated with maintaining software or products are recognised as
an expense as incurred. Expenses relating to development activities are
recognised in the balance sheet if the following criteria are met;
DATA RESPONS ASA | ANNUAL REPORT 2014 27
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 1
„„ Development relates to an identifiable, unique product or software
controlled by Data Respons
„„ There is an ability to use or sell the product or software
„„ It is technically and commercially feasible to complete the development
„„ The company intends to and has adequate resources to complete the
development
„„ It can be demonstrated how the product or software will generate
probable future economic benefits
„„ The expenditure attributable to the development can be reliably
measured.
Expenses that are recognised in the balance sheet include materials expenses, direct payroll expenses and other directly attributable expenses.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Capitalised development expenses are recognised in the balance sheet
at historical cost, less any accumulated depreciation and write-downs.
Capitalised development expenses are depreciated over the estimated
useful life of the asset, which does not exceed three years. Intangible
assets under development, however, are not depreciated and are tested
for impairment annually or more frequently if there is an indication of
impairment.
valuation of investments in subsidiaries
Subsidiaries are valued in accordance with the historical cost method in
the parent company’s financial statements. Investments are valued at the
historical cost of the shares unless a write-down of the shares has been
necessary, in which case they are written down to fair value.
provisions
Provisions are made in the financial statements where the group has a liability (legal or self-imposed) as a result of a past incident, if it is probable
that a financial settlement will be made as a result of this liability, and if
the amount of such a settlement can be measured reliably. If the impact
is significant, the provisions are calculated by discounting the estimated
future cash flows by a discount rate before tax that reflects the market’s
pricing of the current value of money and, where relevant, risks specifically linked to the liability.
Provisions for restructuring are included if the group has approved a detailed and formal restructuring plan, and the restructuring has either started or been announced. Provisions for loss-making contracts are included
when the group’s estimated revenue from a contract is lower than the estimated expenses that will be incurred to fulfil the contractual obligations.
inventories
Purchased inventory is valued at the lower of historical cost (using the
FIFO principle) or net realisable value. Write-downs are made for any
inventory that is assumed to be obsolete.
currency
transactions in foreign currency
Transactions in foreign currencies are translated to functional currency
at the rate in effect on the date of the transaction. Monetary items in
foreign currencies are translated to functional currency using the rate in
effect at the balance sheet date. Exchange rate fluctuations are recognised in the income statement on an on-going basis during the accounting period.
foreign operations
The assets and liabilities of foreign operations, including goodwill, are
translated to NOK using the exchange rate in effect at the balance sheet
date. Revenue and expenses relating to foreign operations are translated
to NOK using monthly average exchange rates. Translation differences
resulting from the translation of net investments in foreign operations
are specified as currency translation differences under other comprehensive income.
28 DATA RESPONS ASA | ANNUAL REPORT 2014
government grants
Government grants are recognised in the financial statements where it
is reasonably certain that the company will fulfil the terms of the grants,
and that the grants will be received. Operating subsidies are accounted
for systematically over the period that the subsidies are received. Grants
are recorded in the financial statements as a deduction in the expenses
they are meant to cover.
pension liabilities
A defined contribution plan is a pension plan under which the group
pays fixed contributions into a separate entity. Data Respons has no legal
or constructive obligations to pay further contributions if the fund does
not hold sufficient assets to pay all employees the benefits relating to
employee service in the current and prior periods. A defined benefit plan
is a pension plan that is not a defined contribution plan. The group does
not have any significant defined benefit pension arrangements.
For defined contribution plans, the group pays contributions to publicly
or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. company has no further payment obligations
once the contributions have been paid. The contributions are recognised
as payroll expenses when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the
future payments is available.
employee share option scheme
Employee share options are calculated at the fair value at the time they
are granted and accrued on a linear basis over the vesting period until
the exercise date. The employer’s social security contributions linked
to vested options are accrued correspondingly over the life-span of
the option.
income tax
Income tax expense in the income statement comprises both income
tax payable for the period and changes in deferred tax. Deferred tax is
calculated at the current tax rate on the basis of temporary differences
between the financial accounting and tax-related values, and tax loss
carry forward at the end of the financial year.
Negative and positive temporary differences that reverse or may reverse
during the same period are offset and the tax effect of the net amount is
calculated. The tax loss carry forward is recognised in the balance sheet
as a deferred tax asset if it is considered adequately probable that the
losses can be utilised in the future.
cash and cash flow statement
The cash flow statement has been prepared in accordance with the indirect method. Cash and cash equivalents include cash, bank deposits and
other short-term liquid investments that can be converted immediately
and without any significant exchange rate risk to a known cash amount,
and with maturity date less than three months from the purchase date.
segments
The group is organised into operating segments based on the underlying operations as these are reported to and monitored by group management. The business segments reported are Products & Solutions and
R&D Services.
contingent liabilities and assets
Contingent liabilities are not recognised unless these arise from, and are
assessed as a result of business combinations. Material contingent liabilities
are disclosed unless the probability of the liability materialising is remote.
Contingent assets are not recognised in the annual financial statements.
events after the balance sheet date
New information received after the balance sheet date relating to the company’s financial position at the balance sheet date has been taken into consideration in preparing the annual financial statements. Events occurring
after the balance sheet date that do not affect the company’s financial position at the balance sheet date, but that will affect the company’s financial
position in the future are disclosed in if these are material.
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
use of estimates
The management has used estimates and assumptions that have affected
assets, liabilities, income, expenses and information on potential liabilities.
This applies in particular to the recognition of revenue related to long-term
manufacturing projects, development projects, capitalised development
expenses, estimation of earn-out liabilities and the valuation of goodwill.
Accounting estimates may change as a result of future events. Estimates
and their underlying assumptions are assessed continuously. Changes to
accounting estimates are included in the financial statements for the period in which the change occurs. If the changes also apply to future periods,
the impact is spread over the current and future periods.
estimated impairment of goodwill
Data Respons tests, at least annually, whether goodwill has suffered any
impairment. The recoverable amounts of cash generating units have
been determined based on value-in-use calculations. These calculations
require the use of estimates (see Note 3).
revenue recognition
Data Respons uses the percentage of completion method in accounting for its fixed price contracts to deliver certain solutions projects.
Use of the percentage of completion method requires the company
to estimate the services performed to date as a proportion of the total
services to be performed. No significant fixed price contracts are active
as of December 31, 2014.
earn-out liabilities
Earn-out liabilities are usually contingent on the future financial performance of subsidiaries, which needs to be estimated when calculating the
expected earn-out liabilities. Re-estimation effects following changes in
estimates of future financial performance of subsidiaries are recognised
in the income statement (see Note 5).
PASSION FOR
EMBEDDED SOLUTIONS
DATA RESPONS ASA | ANNUAL REPORT 2014 29
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 2
NOTE 2 OPERATING SEGMENTS
The group is divided into two operating segments: Products & Solutions and Services.
products & solutions
The products & solutions segment consists of development and delivery of custom solutions by combining engineering services with standard embedded computer products from leading partners or deliveries of standard embedded computer products.
services
Data Respons offers consultancy services for a range of technology related development projects.
operating segments 2014
NOK 1000
Products & Solutions
Services
Corporate*
Eliminations **
Group
External revenue
478 726
369 855
-
-
848 580
Internal revenue
145
455
8 027
-8 626
-
Net income from associated companies
765
-
-119
-
646
Total revenue
479 636
370 309
7 908
-8 626
849 226
Operating expenses
442 722
339 431
18 071
-8 626
791 597
36 913
30 878
-10 163
-
57 629
EBITDA
operating segments 2013
NOK 1000
Products & Solutions
Services
Corporate*
Eliminations **
Group
External revenue
439 913
360 576
-
12 096
800 489
Internal revenue
1 706
2 422
7 968
-12 096
-
Net income from associated companies
757
-
-463
-
294
Total revenue
442 376
362 998
7 506
-12 097
800 783
Operating expenses
407 686
337 908
16 890
-12 096
750 387
34 690
25 090
-9 384
-
50 397
EBITDA
operating segments 2012
NOK 1000
Products & Solutions
Services
Corporate*
Eliminations **
Group
External revenue
443 365
400 771
-
-
844 137
Internal revenue
1 257
7 745
10 985
-19 986
-
Net income from associated companies
50
-
-
-
50
Total revenue
444 672
408 516
10 985
-19 986
844 187
Operating expenses
412 769
396 018
19 994
-19 986
808 795
31 903
12 498
-9 009
-
35 392
EBITDA
* The item “corporate” includes all transactions recognised in the parent company Data Respons ASA.
**The item “eliminations” includes eliminations of intercompany revenue and expenses.
30 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 2
Revenue is reported to mangement in four geographic regions: Norway, Sweden, Denmark and Germany.
revenue 2014
NOK 1000
Products & Solutions
Services
Eliminations
Group
Norway
267 052
111 154
-254
377 951
Sweden
106 825
259 924
-312
366 437
Denmark
31 839
-
-
31 839
Germany
78 020
-
-
78 020
Eliminations
-4 864
-768
-34
-5 666
478 871
370 309
-600
848 580
Sales revenue
revenue 2013
NOK 1000
Products & Solutions
Services
Eliminations
Group
Norway
269 352
103 803
-903
372 252
Sweden
84 523
259 241
-2 857
340 908
Denmark
27 064
-
-
27 064
Germany
62 262
-
-
62 262
Eliminations
-1 581
-47
-368
-1 995
441 619
362 998
-4 128
800 489
Sales revenue
revenue 2012
NOK 1000
Products & Solutions
Services
Eliminations
Group
Norway
303 270
100 817
-5 567
398 521
Sweden
70 175
292 106
-2 176
360 105
Denmark
31 007
9 894
-
40 901
Germany
49 955
6 555
-
56 510
Eliminations
Sales revenue
-9 786
-857
-1 258
-11 900
444 622
408 516
-9 001
844 137
DATA RESPONS ASA | ANNUAL REPORT 2014 31
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 3
NOTE 3 INTANGIBLE ASSETS, MACHINERY AND EQUIPMENT
GROUP
DATA RESPONS ASA
Goodwill
Other
intangible
assets
Total
intangible
assets
Machinery
and
equipment
Machinery and
equipment
297 997
2 748
300 745
59 934
10 251
Additions
12 452
-
12 452
2 219
436
Disposals
-
-
-
-119
-
9 628
-145
9 483
3 447
-
-
-
-
-2 348
-
Cost or valuation as of December 31, 2013
320 078
2 603
322 681
63 134
10 688
Accum. depr. and impairm. as of January 1, 2013
NOK 1000
Cost or valuation as of January 1, 2013
Translation differences
Additions from acquired companies
145 000
2 748
147 748
52 276
8 574
Depreciation for the year
-
-
-
3 887
851
Disposals
-
-
-
-119
-
Translation differences
-
-145
-145
3 160
-
Additions from acquired companies
Accum. depr. and impairm. as of December 31, 2013
-
-
-
-2 262
-
145 000
2 603
147 603
56 943
9 425
Net book value as of December 31, 2013
175 077
-
175 077
6 191
1 262
Cost or valuation as of January 1, 2014
320 078
2 603
322 681
63 134
10 688
1 268
1 268
1 707
366
Additions
Disposals
-
-
-
-588
-
2 580
-106
2 473
1 774
-
Cost or valuation as of December 31, 2014
322 658
3 765
326 423
66 026
11 054
Accum. depr. and impairm. as of January 1, 2014
145 000
2 603
147 603
56 943
9 425
Translation differences
Depreciation for the year
-
101
101
3 051
842
Impairment for the year
-
-
-
-69
-
Disposals
-
-
-
-590
-
Translation differences
-
-106
-106
1 684
-
Accum. depr. and impairm. as of December 31, 2014
145 000
2 599
147 599
61 019
10 267
Net book value as of December 31, 2014
177 658
1 167
178 823
5 007
787
Both the parent company and group use straight-line depreciation for all machinery and equipment. The estimated economic life of machinery and
equipment is 3 to 5 years. Intangible assets are amortised over the life of the asset, which is estimated to be from 2.5 to 10 years.
EXPENCED LEASE RENTALS IN THE GROUP
NOK 1000
Rental of premises in Norway
Rental of premises outside Norway
2014
2013
2012
10 481
10 723
10 987
6 835
7 411
8 509
Operational leasing of IT equipment
1 861
2 121
1 934
Operational leasing of vehicles
1 161
2 696
2 996
The group does not have any purchase options on the properties. In Norway the lease for the head office at Høvik ends at June 30, 2020, while the
terms of lease for the foreign units vary from a lease requiring 9 months’ notice to a lease with an expiry date of January 31, 2019. The leases will
continue on unchanged terms. Leasing contracts on vehicles have a duration of 36 months.
32 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 3
intangible assets
Other intangible assets consist of capitalised development expenses, as well as intangible assets recognised at fair value upon the acquisition
of companies. In 2014, one development project was capitalised of NOK 1.2 million. The project consist of development of a new and improved generation of products with significant future earnings potential.
changes in goodwill 2014
There was no acquisitions in 2014.
All goodwill is recorded in local currency, and as a result, changes in currency exchange rates will affect the value of goodwill. Compared to the currency rate at the acquisition date, goodwill was adjusted upwards by NOK 10 236 thousand at the end of 2014, compared to an upwards adjustment
of NOK 7 656 thousand at the end of 2013.
impairment test of goodwill
Goodwill recognised through the acquisition of companies and units is allocated to the individual cash generating unit if the cash flows are still identifiable. In cases where units have been merged and operations are integrated, it is difficult to isolate the cash flows. In these cases the combined
goodwill will be assessed for the merged unit.
allocation og goodwill
NOK 1000
Data Respons Norge AS
Data Respons AB (SE)*
Sylog Sverige AB (SE)
iWise AB (SE)*
Data Respons GmbH (DE)
Total
2014
2013
2012
70 547
70 547
70 547
-
11 374
10 266
87 152
62 014
55 971
-
12 628
-
19 958
18 513
16 213
177 658
175 077
152 997
The recoverable amount for the cash flow-generating units is calculated based on the value the asset will generate for the business operations. Cash
forecasts are based on budgets approved by the Board of directors for 2015 with a projection for a five-year period based on the assumptions below.
Cash flows beyond the budgeted period are extrapolated using estimated growth rates for the individual units. Future EBIT margin and cash flow is
based on the management’s best estimate and judgment.
* Goodwill formerly allocated to Data Respons AB and iWise AB is tested as part of the Sylog Sverige AB CGU. Data Respons AB’s business operations
in Göteborg, which carried the company’s goodwill, are transferred to Sylog as of January 1, 2015, and operations of iWise AB are already integrated
very closely into the operations of Sylog. The most import assumptions for calculation of the recoverable amount are as follows:
discount rate:
A calculated WACC of 10.4 % (2013: 11.6 %) after tax has been used as the discount rate for all units. CGUs in the group are based in the Nordic
/ Northern European region, and regional differences are not estimated to make a significant impact on the applied WACC rate at the balance
sheet date. The corresponding WACC before tax is 14.2 %. The WACC before tax is calculated on the basis of the applied WACC after tax and
using a 27 % tax rate.
revenue growth:
Historically the group has achieved a strong growth, and management believe that the long-term outlook for the embedded solutions market
is prosperous. However, as the group is focusing efforts in key markets and downsizing less profitable business units, growth rates are expected
to vary among the companies. Expected growth rates in 2015 vary between -5 % and 14 % (2013: -1 - 19 %). Beyond 2015, the group expects
growth rates at 2-10 % (2013: 2-10 %) in the forecasted four-year period.
extrapolated growth rate:
The growth rate beyond five years has been set at 0 % (2013: 0 %) for all units.
ebit margin:
The group has used EBIT margins that reflect management’s best estimate of earnings potential in the period. EBIT margins applied in the calculation
of value-in-use range from 6 % to 10 % (2013: 6-14 %), dependant on past financial performance and expected profit margins for each unit.
sensitivities:
No indications of impairment losses have been identified for Data Respons Norge AS, Sylog Sverige AB or Data Respons GmbH in 2014. The recoverable amounts of these cash generating units exceed their carrying amounts by significant margins. A sensitivity analysis has been performed for these
CGUs, in order to determine if a reasonable change in key assumptions would cause the units’ carrying amounts to exceed their recoverable amounts.
A reduction in the estimated growth rate by 5 percentage points, a reduction in the estimated EBIT margin by 1 percentage point or an increase in
WACC after tax by 1 percentage point would not lead to impairment losses in either of the units.
DATA RESPONS ASA | ANNUAL REPORT 2014 33
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 4
NOTE 4 SUBSIDIARIES AND OTHER INVESTMENTS
GROUP
Company
Date of acquisition
Registered office
Ownership and voting interest
Data Respons Norge AS
27.11.2001
Bærum
100 %
Data Respons Asia AS
17.02.2000
Bærum
100 %
Data Respons AB
27.11.2001
Kista (SE)
100 %
Data Respons A/S
27.11.2001
Herlev (DK)
100 %
Data Respons GmbH
17.02.2005
Karlsruhe (DE)
100 %
Digitas AS
01.04.2006
Bærum
100 %
Sylog Sverige AB
06.07.2007
Kista (SE)
75 %
Professional Finder AB
06.07.2007
Kista (SE)
75 %
iWise AB
05.12.2013
Stockholm (SE)
75 %
Sylog Väst AB*
26.09.2014
Stockholm (SE)
100 %
YABS AB
08.10.2013
Stockholm (SE)
60 %
Lundinova AB
16.01.2008
Lund (SE)
50 %
TechPeople A/S
16.05.2012
Herlev (DK)
50 %
subsidiaries
associates / joint arrangements
* Sylog Väst AB was established in 2014 and has been dormant during the year.
** YABS AB was formally established in 2013 but operations commenced in 2014.
sylog sverige ab
Data Respons controls 75 % of shares and voting rights in the subsidiary Sylog Sverige AB, and non-controlling interests hold the remaining 25 %.
During 2014, YABS AB was established and Sylog Sverige AB controls 80 % of shares and voting rights in the company.
Profit allocated to non-controlling interests were NOK 3.1 million in 2014 (NOK 2.3 million in 2013), and at the end of the year non-controlling
interests amounted to NOK 20.2 million (NOK 19.4 million at the end of 2013).
Summarised financial information for 2014 and at December 31, 2014:
NOK 1000
Sylog*
Current assets
83 883
Non-current assets
12 795
Current liabilities
72 205
Non-current liabilities
Revenue
Profit or loss
Dividends paid to non-controlling interests
6 471
233 161
12 440
2 633
* Includes fully owned subsidiaries of Sylog Sverige AB: Professional Finder AB and iWise AB and YABS AB which is owned 80 % by Sylog Sverige AB.
34 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 4
lundinova ab
50 % of Lundinova AB was sold on June 5, 2013 from Data Respons ASA to Lundinova Invest AB, leaving 50 % ownership for Data Respons ASA.
Shares, voting rights and board representation is divided equally among the two owning parties, and important decisions require consensus between the owners. The investment is classified as a joint venture according to IFRS 11, a nd is accounted for using the equity method.
techpeople a/s
50 % of TechPeople A/S was acquired on May 16, 2012 by Data Respons A/S. KIF Invest ApS owns the remaining 50 % of the company. Shares,
voting rights and board representation is divided equally among the two owning parties, and important decisions require consensus between the
owners. The investment is classified as a joint venture according to IFRS 11, and is accounted for using the equity method.
The group’s share of the result in the joint ventures, and its aggregated assets and liabilities, are as follows:
DAT share
NOK 1000
Financial year 2014
Revenue
Profit or
loss
Other
compr.
income
Total
compr.
income
Operating
cash
flow
Assets
Liabilities
Carrying
value
8 703
-130
0
-130
-101
2 165
1 426
740
16 197
788
0
788
661
4 589
3 598
1 785
Lundinova AB
TechPeople A/S
At December 31, 2014
Data Respons received a dividend payment of DKK 0.5 million from TechPeople A/S in 2014.
Data Respons has no commitments to provide financial support to any of the joint ventures.
DATA RESPONS ASA
Company
Currency
Issued capital
Ownership
Book value (NOK 1000)
Data Respons Norge AS
NOK
1 387
100 %
163 153
Data Respons Asia AS
NOK
1 100
100 %
-
subsidiaries
Data Respons AB (SE)
Data Respons A/S (DK)*
Data Respons GmbH (DE)
Digitas AS
Sylog Sverige AB (SE)
SEK
100
100 %
24 457
DKK
2 277
100 %
22 050
EUR
100
100 %
52 056
NOK
100
100 %
-
SEK
100
75 %
44 615
306 333
Total subsidiaries
associates / joint arrangements
Lundinova AB (SE)
Total joint ventures
SEK
100
50 %
740
740
* Data Respons A/S carried out a share capital increase of DKK 20 million in 2014.
Investments in subsidiaries are carried using the historical cost method in the parent company’s financial statements. Investments in joint ventures
and associates are accounted for using the equity method. The impairment test performed as of December 31, 2014 did not result in any impairment
of book value of the investments.
The impairment test for book value of subsidiaries and joint ventures in the Data Respons ASA company accounts were based on the same assumptions as used in the impairment test of goodwill in the group accounts. Refer to Note 3 for further specification.
DATA RESPONS ASA | ANNUAL REPORT 2014 35
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 5 - 6
NOTE 5 BUSINESS COMBINATIONS
BUSINESS ACQUISITIONS
There were no business acquisitions in 2014.
SUMMARY OF ACQUISITIONS IN PREVIOUS YEARS
On December 5, 2013, Sylog Sverige AB acquired 100 % of the shares in iWise AB. The total consideration for the shares was NOK 14.1 million, consisting of a cash consideration of NOK 5.6 million and estimated additional payments
of NOK 8.5 million that are contingent on the company’s financial performance over the period of 2014 - 2016. Considering the realised profits of
iWise during 2014, the estimated earn-out obligation has been reduced by NOK 1.1 million, resulting in a gain that is recognised as other operating
expenses in the income statement. An interest cost related to the earn out obligation of NOK 0.3 million has been expensed as a financial item in the
income statement.
The following table summarises the assets acquired and the liabilities assumed recognised at the acquisition date:
2013
NOK 1000
iWise AB
Cash and cash equivalents
2 280
Trade and other receivables
7 076
Trade and other payables
Deferred tax liabilities
Total identifiable net assets
-7 244
-427
1 685
Goodwill
12 452
Total consideration
14 138
NOTE 6 INVENTORIES
NOK 1000
GROUP
GOODS PURCHASED FOR RESALE
NOK 1000
Historical cost
General provisions for obsolescence
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
42 798
57 145
57 585
-
-
-
-902
-573
-2 673
-
-
-
Book value
41 896
56 572
54 912
-
-
-
Value of inventory pledged as collateral
40 000
40 000
40 000
-
-
-
36 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 7 - 8
NOTE 7 TRADE AND OTHER RECEIVABLES
NOK 1000
GROUP
2014
2013
2012
2014
171 907
178 822
177 326
-1 807
-1 729
-2 196
170 100
177 094
3 162
1 604
NOK 1000
Trade receivables
Provisions for impairment of receivables
Trade receivables, net
Accrued revenue
DATA RESPONS ASA
2013
2012
255
-
1 111
-
-
-
175 130
255
-
1 111
3 621
-
-
-
Prepayments
9 534
8 269
9 831
917
1 111
913
Other current receivables
3 429
3 192
4 793
54
805
5 644
Total other receivables
Total receivables
Provisions as of January 1
16 125
13 064
18 245
971
1 915
6 557
186 225
190 158
193 375
1 226
1 915
7 667
1 729
2 196
1 827
-
-
-
-121
-1 405
-
-
-
-
200
973
369
-
-
-
Realised losses
Provisions for the period
Disposals from sold companies
-
-35
-
-
-
-
Provisions as of December 31
1 807
1 729
2 196
-
-
-
Losses on trade receivables are classified as other operating expenses in the income statement. Maximum credit risk is represented by the row Total receivables.
AGING ANALYSIS OF TRADE RECEIVABLES
NOK 1000
Carrying amount
Not due
Number of days past due date
0-30
31-61
61+
Trade receivables as of December 31, 2014
171 907
124 765
41 574
2 228
3 340
Trade receivables as of December 31, 2013
178 822
122 614
45 550
6 154
4 504
Trade receivables as of December 31, 2012
177 326
120 092
50 290
2 301
4 643
NOTE 8 INTERCOMPANY BALANCES
DATA RESPONS ASA
NOK 1000
Data Respons Norge AS
Current receivables
Current liabilities
2014
2013
2012
2014
2013
2012
255
-
322
359
23
1 255
Data Respons Asia AS
-
-
1 147
-
-
-
Data Respons AB
-
-695
4 057
13
-
-
Sylog Sverige AB
-
-
-
-
45
52
Lundinova AB
-
-
132
-
-
-
Data Respons A/S
-
-
942
-
-
-
Data Respons GmbH
-
-
3
-
6 792
-
255
695
6 603
371
6 861
1 307
Total
Sales revenue for Data Respons ASA consists mainly of group management fee.
There are no significant intercompany receivables or liabilities at the end of 2014.
DATA RESPONS ASA | ANNUAL REPORT 2014 37
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 9
NOTE 9 SHARE CAPITAL, SHAREHOLDERS, EARNINGS PER SHARE
The registered share capital of Data R espons ASA consisted of 48 553 794 shares with a par value of NOK 0.50 as of December 31, 2014. Each share
carries one vote. A total of 11.5 million shares were traded on the Oslo Stock Exchange in 2014, an increase from 8.3 million shares in 2013. At the
end of the year Data Respons ASA had 863 Norwegian shareholders and 31 foreign shareholders. The foreign shareholders owned 3.3 % of the shares.
During 2014, no treasury shares were bought or sold. The company did not own any treasury shares at the end of the year.
In 2014, 137 000 new shares were issued in connection with the company’s employee share saving scheme. Data Respons has implemented an employee share saving scheme directed at all employees in Norway, where each employee may subscribe to a maximum of 5 000 shares. The subscription
price was set to NOK 8.36 per share, representing the weighted average share price of transactions in the DAT share on Oslo Stock Exchange in the
period of April 25 - May 2 less a 20 % discount. A total of 43 employees subscribed to 137 000 new shares.
On the basis of an authorisation granted by the annual general meeting held on April 24, 2014, the Board of Directors resolved to increase the share
capital by NOK 68 500 from NOK 24 208 397 to NOK 24 276 897 through the issue of 137 000 new shares with a nominal value of NOK 0.50 per
share. The Articles of Association were adjusted accordingly.
LIST OF 20 LARGEST SHAREHOLDERS AS OF DECEMBER 31, 2014
Shareholder
Ordinary shares
Proportion of ownership
14 666 051
30.21 %
MP PENSJON PK
4 821 000
9.93 %
STOREBRAND VEKST
2 768 854
5.70 %
JP MORGAN CHASE BANK, NA
2 090 282
4.31 %
FOUGNER INVEST AS
1 926 000
3.97 %
VARNER INVEST AS
1 500 000
3.09 %
MERTOUN CAPITAL AS
1 300 000
2.68 %
STOREBRAND NORGE I
1 169 877
2.41 %
DNB NOR MARKETS, AKSJEHAND/ANALYSE
1 100 000
2.27 %
BERNT AS
CUSTOM HOLDING AS
1 000 000
2.06 %
HERAL INVESTMENT TRUST (BAILL)
965 676
1.99 %
VERDIPAPIRFONDET DNB SMB
667 500
1.37 %
SILVERCOIN INDUSTRIES AS
567 366
1.17 %
HAAKON MORTEN SÆTER
563 211
1.16 %
STOREBRAND LIVSFORSIKRING AS
554 423
1.14 %
LEIF HÜBERT
500 000
1.03 %
VENTOR AS
499 000
1.03 %
ALTEA PROPERTY DEVELOPMENT AS
431 478
0.89 %
NHO - P665AK
386 712
0.80 %
TVETERAAS EIENDOMSSELSKAP AS
379 092
0.78 %
TOTAL
37 856 522
77.97 %
OTHER
10 697 272
22.03 %
TOTAL NUMBER OF SHARES
48 553 794
100.00 %
SHARE ISSUES IN 2014
Date
21.05.2014
Type
Subscription price
Number of shares
After new issue
Capital increase
8.36
137 000
48 553 794
38 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 9
POWER OF ATTORNEY TO ISSUE SHARES AND PURCHASE TREASURY SHARES
Passed
Year
issued
Type
Maximum
share limit
Shares issued/
purchased 2014
Remaining
number of shares
Duration
24.04.2014
Capital increase
2014
2 000 000
137 000
1 863 000
Until 16.04.2015
24.04.2014
Treasury shares
2014
2 000 000
-
2 000 000
Until 16.04.2015
The Board of Directors has been granted power of attorney to increase the company’s share capital by a maximum of NOK 1 000 000 through the
issue of maximum 2 000 000 new shares, each with a par value of NOK 0.50. The authorisation is valid until the annual general assembly in 2015
and can be used by the board in connection with acquisitions of new companies as part of the company’s strategy, in connection with the company’s
employee share saving scheme or to raise cash. The company’s shareholders have waived their pre-emptive subscription rights in accordance with
Section 10-4 of the Norwegian Public Limited Companies Act. The board may decide that the share deposit shall take the form of assets other than
cash or rights to incur particular obligations for the company pursuant to Section 10-2 of the Norwegian Public Limited Liability Companies Act.
The Board has been granted power of attorney to purchase up to 2 000 000 treasury shares with an equivalent nominal value of NOK 1 000 000. The amount
which may be paid per share is to be minimum NOK 1.00 and maximum NOK 20.00. The Board is free to choose the method by which the purchase or sale is
executed. The authorisation is valid until the annual general meeting in 2015. The purpose of the authorisation is to give the company the facility to implement
buy-back of shares with subsequent cancellation, in order to optimise the company’s capital structure. Furthermore, the company wishes to be able to use such
authorisation to purchase and sell treasury shares in connection with complete or partial settlement for acquired companies or in conncection with the company’s
employee share saving scheme.
EARNINGS PER SHARE
The earnings per share ratio is calculated by dividing the Profit/loss for the year attributable to the company’s shareholders by a time-weighted average
of outstanding ordinary shares throughout the year, less the company’s treasury shares.
The diluted earnings per share ratio is based on the same calculation as above, however, it also takes into account potential shares that have been outstanding during the period and will have a diluting effect, i.e. reduce the earnings per share for the ordinary shares. The company has only one category
of potential shares that can result in dilution: share options. Potential ordinary shares are treated as dilutive only if their conversion to ordinary shares
would decrease profit per share or increase loss per share from continuing operations attributable to ordinary equity holders.
2014
2013
2012
Profit/loss for the year attributable to the equity holders of the company (NOK 1000)
37 672
29 399
12 804
Weighted average number of outstanding shares (1000)
48 501
48 330
48 285
NOK 1000
Effect of dilution:
-Employee share option scheme
400
-
1 450
48 901
48 330
49 735
Earnings per share, basic
0.78
0.61
0.27
Earnings per share, diluted
0.77
0.61
0.26
Weighted average number of outstanding shares, diluted (1000)
CALCULATION OF TIME-WEIGHTED SHARES
Number of shares*
Number of days
Weighted number of shares
01.01.2014
Date
48 416 794
140
18 828 753
21.05.2014
48 553 794
220
29 671 763
360
48 500 516
DIVIDENDS
The Board of Directors propose to distribute a dividend of NOK 1.00 per share for 2014, in total NOK 48.6 million. Following the resolution by
the annual general meeting on Thursday April 16, 2015 the DAT share will be traded ex-dividend on April 17, 2015.
DATA RESPONS ASA | ANNUAL REPORT 2014 39
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 10 - 11
NOTE 10 PENSIONS
The parent company is required to operate a company pension scheme pursuant to the Mandatory Occupational Pension Act, and operates a pension
scheme that meets this requirement. This scheme covered a total of 5 people in 2014.
The group’s employees in Norway were members of a defined benefit pension scheme in 2013 that covered a disability pension. The pension liabilities
were covered through an insurance company. This scheme was in December 2013 replaced by a defined contribution arrangement. The group does
not have any significant defined benefit pension schemes as of December 31, 2014. The group’s net pension assets at December 31, 2014 consists
of a pension premium fund that will be utilised to cover payments to the group’s defined contribution pension schemes.
The group’s foreign subsidiaries have defined contribution pension schemes, and the expenses associated with these schemes are included under
payroll expenses in the income statement. Payroll expense details are provided in Note 15.
NOTE 11 INCOME TAX
NOK 1000
NOK 1000
GROUP
2014
2013
DATA RESPONS ASA
2012
2014
2013
2012
summary of temporary differences
Receivables
78
-14
-515
-
-
-
-618
-222
-2 354
-
-
-
Non-current assets
-8 264
-8 249
-8 163
-1 574
-1 465
-1 438
Receivables in foreign currency
-1 957
-
-
-1 957
-1 207
-
Other current assets
Pensions
74
803
-4 570
-
-41
-9
Effect of change in accounting principle
-
-
2 762
-
-
529
Provisions for contingent liabilities
-
-
-
-
-
-
Group contributions*
Total
-
-
-
-40 752
-34 534
-43 904
-10 687
-7 683
-12 840
-44 284
-37 247
-44 822
Tax loss carryforward
-38 730
-50 515
-79 080
-
-2 823
-30 053
Total positive /(negative) temporary differences
-49 417
-58 198
-91 920
-44 284
-40 070
-74 875
Deferred tax asset at current tax rate
14 697
16 208
26 496
11 957
10 819
21 113
Of which, deferred tax assets not recognised
11 938
14 644
15 127
-
-
-
Deferred tax assets in the balance sheet
2 759
1 564
11 369
11 957
10 819
21 113
Deferred tax liability at current tax rate
2 292
1 623
1 522
-
-
-
Deferred tax liability in the balance sheet
2 292
1 623
1 522
-
-
-
* In accordance with IFRS, group contributions are entered as income in the parent company the year after the allocation for tax purposes in the subsidiaries.
The deferred tax assets in the balance sheet relate primarily to the tax loss carryforward in Data Respons AB and other temporary differences in the
Norwegian group companies. These companies have shown healthy profits, and it is expected that it will be possible to utilise the deferred tax assets
within a reasonable timeframe. Unrecognised deferred tax assets relate to the tax losses carryforward in Denmark and Germany. The tax losses can be
carried forward indefinitely.
40 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 11 - 12
NOK 1000
NOK 1000
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
6 627
-
-
6 627
-
-
income tax expence comprises
Income tax payable in Norway
Income tax payable outside Norway
3 514
3 452
3 065
-
-
-
10 141
3 452
3 065
6 627
-
-
Change in deferred tax in Norway
-77
9 284
8 765
-1 138
10 354
7 114
Change in deferred tax outside Norway
165
-265
-691
-
-
-
Total income tax payable
Total change in deferred tax
88
9 019
8 074
-1 138
10 354
7 114
Unrecognised change in deferred tax
-654
-94
1 214
-
-
-
Total income tax expense/(revenue)
9 575
12 377
12 353
5 490
10 354
7 114
NOK 1000
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
Profit/loss before tax
50 376
44 062
25 157
34 309
42 543
22 438
27 % tax (28 %)
13 602
12 337
7 044
9 263
11 912
6 283
507
933
994
-3 774
-1 958
832
-3 460
-707
3 997
-
-
-
NOK 1000
calculations of tax base for the year
tax effect of:
Permanent differences
Change in not-recognised deferred tax
Adjustment from previous years
Differences in tax rates
Changes in tax rates
-
-1
107
-
-
-1 074
-798
213
-
-
-
-
613
-
-
401
-
Income tax expense (revenue) for the year
9 575
12 377
12 353
5 490
10 354
7 114
Effective tax rate
19 %
28 %
49 %
16 %
24 %
32 %
NOTE 12 OTHER CURRENT LIABILITIES
NOK 1000
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
60
621
945
-
-
-
Accrued wages/bonuses/holiday pay
31 217
29 221
27 014
1 519
1 322
1 506
Accrued expenses
20 303
27 966
23 145
1 273
7 880
2 632
1 985
1 833
-
-
-
-
53 565
59 642
51 104
2 792
9 202
4 138
NOK 1000
Prepayments from customers
Other current liabilities*
Total other current liabilities
* Other current liabilities consists of additional payments according to earn-out agreements that are due within a year.
DATA RESPONS ASA | ANNUAL REPORT 2014 41
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 13
NOTE 13 OTHER PROVISIONS FOR LIABILITIES
NOK 1000
GROUP
NOK 1000
2014
2013
2012
Provisions as of January 1
8 654
-
-
344
-
-
-1 087
-
-
-1 800
-
-
-
8 654
53
-
-
Recognised in the income statement during the year
- Interest cost
- Re-estimation of earn-out liability
Recognised in the balance sheet during the year
- Paid during the year
- Additions from acquired companies
- Translation differences
Provisions as of December 31
6 164
8 654
-
Classified as current liability in the balance sheet
1 985
1 833
-
Classified as non-current liability in the balance sheet
4 179
6 821
-
OTHER PROVISIONS
In connection with acquisition of companies, an earn-out agreement is often entered into, where the previous owners receive additional payments
based on the performance of the acquired company in a specified time period after the acquisition. All Earn-out obligations relate to the acquisition of
iWise AB, see Note 5 for further details. The additional payments will be made in cash by the acquiring company Sylog Sverige AB. Remaining earn-out
obligations from the acquisition will be settled in the period 2015 - 2017.
The parent company does not have any earn-out obligations as of December 31, 2014.
ESTIMATED EARN-OUT PAYMENTS
NET PRESENT VALUE (NOK 1 000)
2015
2016
2017
Total
Provision as of December 31, 2014
1 985
2 093
2 086
6 164
42 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 13 - 14
GUARANTEES
Guarantees of NOK 5.0 million have been provided in connection with lease agreements and a guarantee of SEK 0.5 million has been provided to
Swedish customs.
Guarantees and overdraft facilities are secured by a lien on inventory, machinery and equipment and trade receivables in Data Respons Norge AS.
A total lien of NOK 40 million has been placed on inventories, and a total lien of NOK 70 million has been placed on trade receivables.
NOK 1000
NOK 1000
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
5 511
4 740
9 285
435
435
255
57 336
63 518
65 365
-
-
-
guarantees
Guarantees
book value of secured assets used as collateral
Trade receivables
Inventories
30 655
46 324
45 959
-
-
-
Total
87 991
109 842
111 324
-
-
-
NOTE 14 RELATED PARTY TRANSACTIONS
The Board of directors, group management and other key employees are required to report any potential related party transactions. Other than ordinary business transactions between group companies there have been no related party transactions in 2014. All transactions within the group are
based on ordinary commercial terms using the arm’s length principle.
For the parent company, transactions with group companies consist mainly of fees for group management services.
See Note 15 for information on the remuneration of group management and Board of Directors, as well as Note 8 for balances between Data Respons
ASA and other group companies.
DATA RESPONS ASA | ANNUAL REPORT 2014 43
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 15
NOTE 15 PAYROLL EXPENSES, EMPLOYEES, REMUNERATION AND LOANS
NOK 1000
GROUP
payroll expences
2014
2013
2012
2014
2013
2012
205 739
202 221
226 354
6 953
6 388
8 701
46 760
45 379
50 825
1 729
1 151
1 287
-51
-2 570
534
-41
-132
-457
NOK 1000
Wages and salaries
DATA RESPONS ASA
Social security tax
Pension expenses, defined benefit scheme
Pension expenses, defined contribution scheme
16 187
13 494
14 554
280
179
277
Other benefits
14 351
13 717
18 886
675
1 105
772
282 116
272 241
311 153
9 595
8 691
10 580
Total
The average number of employees during the financial year was 5 in the parent company. The average number of employees in the group was 362, and
there were 369 employees at the end of the year. There were 64 female employees in the group, 13 of whom were top or middle managers.
SHARES, OPTIONS AND REMUNERATION TO THE CEO, KEY EMPLOYEES, BOARD OF DIRECTORS AND NOMINATION COMMITTEE
Kenneth Ragnvaldsen, CEO
Salaries
and fees
Pensions
Other benefits
in kind
Total
remuneration
No. of
shares
No. of
options
2 634 149
70 788
185 979
2 890 916
252 000
150 000
Jørn Toppe, COO
1 750 369
69 804
10 274
1 830 447
194 937
75 000
Rune Wahl, CFO
2 032 741
70 728
155 879
2 259 348
52 000
75 000
225 544
-
Ole Jørgen Fredriksen, Chairman of the Board
330 000
330 000
Kathryn Moore Baker, Board member*
200 000
200 000
-
-
Ulla-Britt Fräjdin Hellqvist, Board member
160 000
160 000
10 000
-
Erik Langaker, Board member
180 000
180 000
350 000
Åsa Grübb Weinberg, Board member, employee representative
25 000
25 000
-
-
Jarl Guntveit, Board member, employee representative
25 000
25 000
7 000
-
Haakon Sæter, Nomination committee member
20 000
20 000
1 134 516
-
Narve Reiten, Nomination committee member
15 000
15 000
-
-
Andreas Berdal Lorentzen, Nomination committee member
15 000
15 000
14 655
-
* Kathryn Moore Baker is Chairman of the Board at Custom Holding AS.
REMUNERATION OF THE BOARD OF DIRECTORS
On April 24, 2014 the annual general meeting decided that the remuneration of the Board of Directors should be a fixed salary of NOK 400 000,
NOK 190 000 and NOK 30 000 for respectively the chairman of the board, shareholder elected board members, and employee representatives.
Based on the current composition of the Board of Directors this amounts to a total of NOK 1 030 000 in remuneration. In addition, a compensation
per meeting shall be paid to members of the Audit Committe and Compensation Committee of NOK 10 000, NOK 5 000 and NOK 2 500 for respectively the committee leaders, members or employee representatives . For the Nomination Committee, NOK 20 000 shall be paid to the leader and
NOK 15 000 shall be paid to other members. No loans or guarantees have been provided to the Board of Directors, key employees, other employees
or their related parties. There are no shareholder agreements in Data Respons ASA.
BOARD’S GUIDELINES AND MAIN PRINCIPLES FOR THE STIPULATION OF SALARIES AND OTHER REMUNERATION
TO KEY EMPLOYEES
The objective of the remuneration policy for the CEO and other senior management is to provide a competitive compensation that contains incentives to work for profitable growth and long term value creation for the shareholders within the scope of the company’s adopted values and strategies.
The Board of Directors is in general positive to compensation that ensures convergence of the financial interests of the executive personnel and the
shareholders.
44 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 15
The CEO and other senior management shall be paid a competitive fixed basic salary and other administrative benefits in line with similar positions
in comparable companies in Norway. In addition to the fixed salary, the CEO and other senior management have variable salaries dependent on
achieving profitability improvement, growth and cash flow targets for the company. For the CEO and other senior management the variable salary
shall be a maximum of 40 % of the fixed base salary.
The company has established a share savings programme directed at all employees in Norway in order to create dedication for value creation and
ensure convergence of the financial interests of the employees and the shareholders. The CEO and other senior management are invited to participate
in the programme on equal terms as other employees. Employees subscribe to shares at a maximum of 25 % discount to market value at the time
of share subscription. The Board of Directors decide annually on the discount and maximum amount of shares that can be subscribed by employees.
137 000 shares were issued in this programme in 2014, see Note 9 for further details.
The company has a share option scheme for the CEO and other senior management in accordance with the approved framework at the annual general meeting held in 2013. The share option scheme with a duration of three years was established to give the company’s management incentives
to create value for the shareholders.
The CEO and other senior management are covered by the prevailing defined contribution pension schemes on the same terms as other employees.
The company does not have any defined benefit pension or insurance schemes.
The CEO is entitled to 12 months’ salary after termination or amendment of his position/employment. Other senior management have a mutual
notice period of up to six months and no special arrangements.
EMPLOYEE SHARE OPTION SCHEME FOR SENIOR MANAGEMENT
On April 25, 2013 the annual general meeting of Data Respons ASA approved a share option programme for the CEO and 5 other senior managers
with a total scope of 1 200 000 options. The options will be issued in 3 equal parts over a 3 year period. The share options can only be exercised in
the 10 business days following the annual general meeting in 2016, alternatively in the 10 business days following May 1, 2016 if the annual general
meeting in 2016 has not yet taken place on May 1. The strike price will be set at market price the start of each vesting period for the 1/3 issued. In
May 2013 the strike price for the first vesting period was set to NOK 6.92. In May 2014, the strike price for the second vesting period was set to
9.11. On May 2015, the strike price for the third vesting period will be set. Strike prices for options granted are adjusted for subsequent dividend
payments. The first 400 000 options was issued in May 2014. 400 000 more options will be issued in May 2015, and the last 400 000 options under
this agreement will be issued in May 2016, totalling 1 200 000 options.
MOVEMENTS IN THE NUMBER OF OUTSTANDING SHARE OPTIONS AND THE ASSOCIATED WEIGHTED AVERAGE EXERCISE PRICES ARE
AS FOLLOWS:
NOK 1000
NOK 1000
2014
Average
Exercise price
As of January 1
Granted
2013
Options
2012
Average
Exercise price
Options
Average
Exercise price
Options
NOK
1 000
NOK
1 000
-
-
8.26
1 450
8.27
725
6.92
400
7.11
725
8.24
725
Forfeited
-
-
-
-
-
-
Exercised
-
-
-
-
-
-
Expired
-
-
- 7.87
-2 175
-
-
Dividend adjustment
-1.00
-
-
-
-
-
As of December 31
5.92
400
-
-
8.26
1 450
The fair value of the options granted to employees has been calculated using the Black & Scholes’ valuation model for options. The most important input
data included the share price of NOK 7.00 when granted, estimated exercise price of NOK 6.92 for all 3 years, estimated volatility of 43.15 % based on the
share prices over a period of one year leading up to the issue date, risk-free interest rate of 1.26-1.51 %, and a term of 1, 2 and 3 years, respectively. The cost
is calculated based on the total of 1 200 000 options to be issued and will be accrued over the vesting period with deductions for the estimated number of
forfeited options. In accordance with IFRS 2, the fair value of options granted to employees is accrued over the vesting period and in 2014 a total of NOK
0.4 million was expensed related to options granted to the CEO and key employees. The cost for the option scheme amounted to NOK 0.316 per option.
NOK 1000
GROUP
REMUNERATION TO THE AUDITOR
NOK 1000 net of VAT
Auditing services
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
878
983
978
190
290
290
Other certification services
35
22
94
20
9
15
Tax advice
24
22
20
-
-
-
-
-
3
-
-
3
Other non-auditing services
DATA RESPONS ASA | ANNUAL REPORT 2014 45
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 16 - 18
NOTE 16 FINANCIAL ITEMS
NOK 1000
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
-
-
-
34
49
305
Interest income
1 186
2 013
1 107
725
1 564
467
Other financial income
5 371
4 904
1 612
889
3 670
168
Total other financial income
6 557
6 917
2 719
1 647
5 284
940
Interest expenses
1 305
2 549
2 662
699
1 528
1 627
Other financial expenses
9 352
6 837
5 696
4 904
2 287
1 793
10 657
9 386
8 358
5 603
3 816
3 420
NOK 1000
financial income
Interest received from group companies
financial expences
Total other financial expenses
NOTE 17 CASH AND CASH EQUIVALENTS
NOK 1000
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
Cash and bank deposits
42 833
44 143
7 010
-17 303
19 773
371
– of which restricted
-4 612
-13 250
-5 077
-360
-349
-371
NOK 1000
Unrestricted cash and cash equivalents
38 221
30 893
1 934
-17 663
19 424
-
Unutilised overdraft facilities
40 000
40 000
38 516
40 000
40 000
38 516
Unutilised other credit facilities
Cash reserve
40 000
40 000
40 000
40 000
40 000
40 000
118 221
110 893
80 450
62 337
99 424
78 516
The Data Respons group has established a corporate account system in which Data Respons ASA is the corporate account holder, while the other
group companies are subaccount holders. The bank can set off any withdrawals or deposits against each other, so that the net position represents
the balance between the bank and Data Respons ASA. As of December 31, 2014 there was a net positive balance in the corporate account system
of NOK 35.1 million. The overdraft limit for the corporate cash pool system is NOK 40 million, and the group had unrestricted cash outside the cash
pool of NOK 3.1 million. A total of NOK 78.2 million in cash and overdraft facilities was immediately available for the group as of December 31, 2014.
In addition to the NOK 40 million overdraft limit, Data Respons also has available unutilised credit facilities of NOK 40 million as of December 31,
2014. The NOK 40 million credit facility is available to the company until March 10, 2016. The total unutilised cash reserve for the group at December
31, 2014 is NOK 118.2 million. Restricted cash consists of employee’s tax deductions of NOK 4.6 million.
There are financial covenants which may restrict the use of the credit facilities. The equity-to-asset ratio should be minimum 40 % for the group. As of
December 31, 2014 the ratio was 63 %. Furthermore, there is a covenant requirement linked to EBITDA where the net interest bearing debt divided
by a 12 months rolling consolidated EBITDA should not exceed 3.0. As of December 31, 2014 there was no net interest bearing debt.
NOTE 18 OTHER OPERATING EXPENCES
NOK 1000
NOK 1000
Expenses related to premises and equipment
External services
Marketing expenses
GROUP
DATA RESPONS ASA
2014
2013
2012
2014
2013
2012
19 515
20 672
21 655
652
616
851
6 249
5 615
6 893
3 216
2 825
2 525
8 166
6 351
5 402
746
860
829
Other operating expenses
24 751
24 072
28 240
3 861
3 897
5 210
Total
58 682
56 710
62 189
8 475
8 199
9 414
46 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 19
NOTE 19 FINANCIAL RISK MANAGEMENT
The group’s activities expose it to a variety of financial risks, including price risk, interest rate risk, currency risk, credit risk and liquidity risk. Overall
these risks are regarded as low. Risk management is performed by the group’s central finance department under the guidelines set out by the Board
of Directors. The main principle is to minimise exposure to financial risk, and the group holds no financial assets or liabilities for speculative purposes.
There have been no significant changes in the group’s objectives, policies or processes for managing capital during the reporting period.
MARKET PRICE RISK
As of December 31, 2014 all significant financial assets and liabilities are classified as loans or receivables under IAS 39, and their value is not
subject to any market price risk.
CREDIT RISK
The group’s exposure to non-payment of contractual obligations is reflected by outstanding trade receivables and accrued revenue specified in Note
7. Identified default risks for individual customers are reflected in bad debt allowances. The group’s customers largely consist of large and mediumsized companies with good solvency, and the customer base is diversified into different vertical market segment. Neither of the group’s operating
segments had any significant concentration of credit risk. Credit checks are performed on new customers. Historically, bad debt losses have been
low, and the group does not expect to see any major increase in losses.
LIQUIDITY RISK AND CAPITAL MANAGEMENT
The primary objective of the group’s capital management is to maintain a healthy capital ratio to support the group’s continued operations, dividend
payments according to the newly established dividend policy and for potential expansion.
Dividend policy:
- Data Respons objective is to pay out a minimum of 50 % of net income in the form of dividends.
- The payout should reflect Data Respons aim to give its shareholders competitive returns benchmarked against alternative investments in comparable companies.
- The dividend pertaining to a fiscal year will be declared at Data Respons Annual General Meeting in the following year.
- Data Respons may consider buying back shares in addition to ordinary dividend payments. Such considerations will be made in the light of the
financial situation of the company.
The group will primarily finance dividends and potential expansions through cash generated by the operational activities. To cover temporary funding
needs, the group has secured a credit facility of NOK 80 million. There are financial covenants which may restrict the use of the credit facilities, see
Note 17 for specifications regarding cash and credit facilities. The group has 45-90 days in credit terms from the main suppliers. Surplus cash holdings will be kept in interest-bearing bank accounts with reputable banks. As of December 31, 2014 the group has NOK 42.8 million in cash and no
interest-bearing debt and consider the debt ratio as appropriate .
CURRENCY RISK
The group has operations in five different countries with five different currencies and is as such exposed to currency fluctuations when translating
into the group currency NOK. Exposure from individual subsidiaries varies according to the nature of their business. The Services segment abroad
generate a currency exposure for the group on the net profit only, as both revenue and expenses are in the same local currency. Hedging has been
deemed unnecessary. For the Products & Solutions segment the exposure is higher, as parts are purchased from different suppliers across the globe
and predominately invoiced in USD or EUR. With most of our major customers, the group has entered into an agreement whereby material fluctuations in price of components due to currency, lead to a corresponding adjustment of the selling price. The group then achieves a natural hedge on
a significant part of its embedded products and solutions sales. In instances where it is not possible to enter such an agreement with the customer,
currency hedges on large deliveries of components will be considered.
INTEREST RATE RISK
The group primarily finances its operations and acquisitions through equity and cash generated from operational activities, and has no investments in
long-term interest-bearing financial assets or interest bearing debt. Consequently the exposure to interest rate fluctuation is low and hedging is deemed
unnecessary.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant:
NOK 1000
2014
2013
Increase/ decrease in basic points
Effect on profit before tax
+100
298
-100
-298
+100
236
-100
-236
DATA RESPONS ASA | ANNUAL REPORT 2014 47
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Notes | Note 20 - 23
NOTE 20 RESEARCH AND DEVELOPMENT
The group does not have significant costs related to R&D activities. Intangible assets of NOK 1.2 million have been recognized in the balance sheet
related to product development in 2014, see Note 3 for further information.
NOTE 21 GOVERNMENT GRANTS
Data Respons has two research projects that is approved as R&D projects covered by the SkatteFUNN scheme in accordance with Section 16-40 of
the Taxation Act. NOK 86 637 has been recognised in the income statement as a reduction in payroll expenses and included in the balance sheet
under other receivables.
No other government grants have been awarded in 2014.
NOTE 22 EVENTS AFTER THE BALANCE SHEET DATE
There have been no material events subsequent to the reporting period that might have a significant effect on the financial statements for 2014.
NOTE 23 FINANCIAL ASSETS AND LIABILITIES
All significant financial assets are classified as loans and receivables and all significant financial liabilities are measured at amortised cost. The group
does not hold significant financial assets or liabilities measured at fair value through profit or loss, held-to-maturity investments or available-for-sale
financial assets.
48 DATA RESPONS ASA | ANNUAL REPORT 2014
CHAPTER 3: FINANCIAL STATEMENTS AND NOTES
Auditor’s report
AUDITOR’S REPORT
DATA RESPONS ASA | ANNUAL REPORT 2014 49
A SMARTER
50 DATA RESPONS ASA | ANNUAL REPORT 2014
R SOLUTION
STARTS FROM INSIDE
DATA RESPONS ASA | ANNUAL REPORT 2014 51
MAIN OFFICES
GROUP HQ
Data Respons ASA
Sandviksveien 26
NO-1363 Høvik, Norway
Tel.: +47 67 11 20 00
info@datarespons.com
DENMARK
Data Respons A/S
Smedeholm 10
DK-2730 Herlev
Tel.: +45 88 32 75 00
info@datarespons.dk
GERMANY
Data Respons GmbH
Amalienbadstr. 41, Bau 53
DE-76227 Karlsruhe
Tel.: +49 721 480 887 10
info@datarespons.de
NORWAY
Data Respons Norge AS
Sandviksveien 26
NO-1363 Høvik
Tel.: +47 67 11 20 00
info@datarespons.no
SWEDEN
Data Respons AB
Jan Stenbecks Torg 17, III
SE-164 40 Kista
Tel.: +46 8 501 688 00
info@datarespons.se
TAIWAN
Data Respons ASA
18F-6 NO. 738,
Chung-Cheng Road,
Chung-Ho, New Taipei
Tel.: +886 2 8226 2150
www.datarespons.com