Annual Report • Mar 5, 2014
Annual Report
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| 21 | Shareholders' Equity | 45 |
|---|---|---|
| 22 | Share-Based Compensation | 46 |
| 23 | Non-Current Financial Liabilities | 48 |
| 24 | Current Financial Liabilities | 48 |
| 25 | Trade Payables and Other Liabilities | 48 |
| 26 | Current Provisions | 48 |
| 27 | Financial Instruments at Fair Value | 49 |
| 28 | Financial Risk and Capital | |
| Structure Management | 50 | |
| 29 | Other Rental Agreements | 52 |
| 30 | Commitments and Contingent Liabilities | 52 |
| 31 | Subsidiaries | 53 |
| 32 | Related Party Transactions | 53 |
| 3. Financial Statements of the Parent Company, FAS | 56 | |
| Parent Company Income Statement, FAS | 57 | |
| Parent Company Balance Sheet, FAS | 58 | |
| Parent Company Cash Flow Statement, FAS | 59 | |
| Notes to the Parent Company Financial Statements | ||
| 1 | Accounting Principles | 59 |
| 2 | Net Sales | 59 |
| 3 | Other Operating Income | 60 |
| 4 | Material and Services | 60 |
| 5 | Employee Benefits Expense | 60 |
| 6 | Depreciation, Amortization, | |
| and Impairment Losses | 60 | |
| 7 | Auditor Fees | 61 |
| 8 | Financing Income and Expenses | 61 |
| 9 | Intangible Assets | 62 |
| 10 | Tangible Assets | 62 |
| 11 | Investments | 63 |
| 12 | Non-Current Receivables | 64 |
| 13 | Current Receivables | 64 |
| 14 | Shareholders' Equity | 65 |
| 15 | Provisions | 65 |
| 16 | Non-Current Liabilities | 66 |
| 17 | Current Liabilities | 66 |
| 18 | Commitments and Contingent Liabilities | 66 |
| 4. Key Figures and Financial Development 2009–2013 68 | ||
| 5. Shares and Shareholders | 72 | |
| 6. Signature for Financial Statements | 76 | |
| 7. Auditor's Report | 77 | |
| Corporate Governance Statement 2013 | 79 |
| Index | 3 |
|---|---|
| Key Figures 2013 | 4 |
| Dovre Group in Brief | 5 |
| Growth in net sales continued | 6 |
| Dovre Group's Strategy 2013-2017 | 7 |
| CEO's Overview | 8 |
| Consultants to oil and gas industry in 23 countries | 10 |
| Demand for consulting services | |
| remained strong in Norway | 11 |
| Personnel | 12 |
| Stock Exchange Releases in 2013 | 13 |
| Investor Relations | 14 |
The Report of the Board of Directors and Financial Statements 1 January - 31 December 2013
| 1. The Report of the Board of Directors | 16 | |
|---|---|---|
| 2. Group Financial Statements According to | ||
| International Financial Reporting Standards (IFRS) 23 | ||
| Consolidated Statement of Comprehensive Income, IFRS 23 | ||
| Consolidated Statement of Financial Position, IFRS | 24 | |
| Consolidated Statement of Cash Flows, IFRS | 25 | |
| Consolidated Statement of Changes in | ||
| Shareholders' Equity, IFRS | 26 | |
| Notes to the Consolidated Financial | ||
| Statements, IFRS | 27 | |
| 1 | Brief Company Description and | |
| Accounting Principles | 27 | |
| 2 | Operating Segments | 31 |
| 3 | Net Sales | 33 |
| 4 | Other Operating Income | 33 |
| 5 | Material and Services | 33 |
| 6 | Employee Benefits Expense | 34 |
| 7 | Depreciation and Amortization | 34 |
| 8 | Other Operating Expenses | 35 |
| 9 | Financing Income and Expenses | 35 |
| 10 | Income tax | 36 |
| 11 | Discontinued Operations | 37 |
| 12 | Earnings per Share | 38 |
| 13 | Intangible Assets | 39 |
| 14 | Goodwill | 40 |
| 15 | Tangible Assets | 41 |
| 16 | Investments in Associates | 41 |
| 17 | Non-current Trade and Other Receivables | 42 |
| 18 | Defferred Tax Assets and Liabilities | 43 |
| 19 | Trade and Other Receivables | 44 |
| 20 | Cash and Cash Equivalents | 44 |
Dovre Group Plc is a Finnish company that provides professional services to the energy industry worldwide. Dovre Group has two business areas: Project Personnel and Consulting.
Dovre Group's Project Personnel business area has over 30 years of experience as a global provider of energy industry professionals, especially for the oil and gas industry. The Group's Consulting business area, operating in the Nordic countries, provides management and project management expertise for the development and execution of major investment projects.
In 2013, Dovre Group's net sales were EUR 98.5 million. The Group's net sales increased by 4.8% from 2012. In local currencies, growth in net sales was approximately 10%. Project personnel business accounted for 91% and consulting services for 9% of the Group's net sales. In 2013, the Group's operating result was EUR 2.4 million. Dovre Group employs around 470 people working in 24 countries.
Dovre Group aims to become the most advanced international player in its field.
* excluding software business which was sold in May 2013
Software business area is reported under discontinued operations as of the fourth quarter of 2012.
Dovre Group defined a new strategy and updated its long-term financial objectives in January 2013. In accordance with the new strategy, Dovre Group will focus on providing project management services, covering project personnel and consulting, to the energy sector worldwide. Dovre Group aims to become the most advanced player in its field.
Project Personnel seeks to develop its operations further by building up a stateof-the-art recruiting and service platform
based on the latest technology. Consulting Business Group will continue its expansion to renewables, with initial focus on biorenewables. To strengthen and support our expansion interesting partnerships and selective acquisitions will be considered.
The company's longterm financial objective is an operating profit margin on the level of 5-10% with an average annual net sales growth of more than 15%.
development We will become the most advanced provider of specialized project management services in the energy sector globally.
Dovre Group started the year 2013 with a strategy update. In accordance with our new strategy, we will focus on providing professional services to the energy industry, especially the oil and gas sector. In addition to oil and gas, our project personnel is also involved, for example, in hydropower and large-scale infrastructure projects.
As part of our new strategy, we disposed of our software business in Norway, and the sale of our software company Safran Software Solutions was completed in May 2013. However, we still have substantial software expertise, utilized day-to-day in our project management consulting and in developing our project personnel business.
Our net sales developed positively throughout the year. Net sales in euros increased by 4.8%, while net sales in local currencies increased by approximately 10%. Geographically, net sales growth was strongest in Norway. Our net sales in 2013 totalled EUR 98.5 million.
Project Personnel, our largest business area with an approximately 90% share of our net sales, increased its net sales by approximately 6%. In local currencies, the growth in net sales was 11%. Net sales for our Consulting business area decreased by 6% in euros and
by 4% in local currencies. Strengthening of the euro against local currencies in our key markets had a negative impact on our euro net sales, especially in the second half of 2013, as only 2% of Dovre Group's net sales are in euros.
Our operating result in 2013 was EUR 2.4 million, or 2.4% of net sales. Excluding non-recurring items and changes in currency exchange rates, our operating result was EUR 3.3 million. Profitability of our Project Personnel business area was affected by corrective items relating to previous periods and by restructuring costs in Australia, both reported in early 2013. Project Personnel's profitability was also affected by investments in developing the Dovre Club service platform. In the Consulting business area, profitability decreased due to the difficult market situation in Finland and Sweden as well as the business area's challenges in biorenewables consulting in the beginning of the year.
Our most important development project of the year – Dovre Club – was launched to the market in October. As an advanced online service platform for recruitment and sales, Dovre Club is an essential part of our quest to become the most advanced player in the field. Including sophisticated tools for business and market analysis, it will significantly strengthen our internal processes. We will continue developing the service in 2014.
Our long-term work to expand our market in the Middle East bore fruit at the end of 2013, when our first assignments in the area kicked off. One of the highlights of the year took place in the final quarter of 2013 when our associate SaraRasa Bioindo started commercial renewable fuel production in Indonesia.
In recent years, Dovre Group has streamlined its organization and sharpened its strategy. I believe that we are now in a much better position to reach our goal to become the most advanced international provider of project personnel in the energy sector. As a reliable and experienced partner in major investment projects, and especially in project management, in the Nordic countries, we will also work to strengthen our consulting activities.
I expect our business to develop positively also in 2014. Investment levels in the energy sector are expected to remain stable. Energy sector professionals will be in high demand as consumption of energy increases and new energy production methods are being developed.
I want to thank Janne Mielck for his excellent work over the the past year and I wish our new CEO Patrick von Essen welcome to Dovre Group. I also want to extend my thanks to all Dovre Group employees as well as to all our clients, investors, and partners.
Tarja Leikas CFO and acting CEO
Dovre Group's Project Personnel business area specializes in flexible deployment of high quality project professionals in large investment projects. The Group has over 30 years of experience in the oil and gas industry. Project Personnel's main markets are Norway, Canada and the US.
Originally, Dovre Group served the oil and gas industry in the North Sea, but has expanded its business throughout the years. Today the company operates globally from its main hubs in Norway, US, Canada, Abu Dhabi/United Arab Emirates, Russia, and Australia. At the end of 2013 Dovre employed project personnel in 23 countries.
Dovre Group's main customers include some of the world's leading multinational and national oil and gas companies. Dovre Group provides project personnel also for other energy sectors, such as hydropower, and for large infrastructure projects.
Projects in the oil and gas industry typically last for several years or even decades and involve investments worth billions of euros. Clients use experienced project personnel to complement their own staff in different phases of field development and projects. The length of assignments often varies from a couple of months to several years and can involve several project locations. Drilling, engineering, construction, and commissioning are typically split into several contracts and different countries. It is becoming more and more important for companies like Dovre to be able to serve their clients globally and throughout the different phases of a project.
The global project personnel market consists of a small number of international companies and several smaller local players. Positive market situation and low entry level have attracted new service providers in recent years. The main assets in the business are not only the right personnel and the price of services, but also short response times and reliability.
Dovre Group's vision is to become the most advanced project personnel company in the world. What this means is that Dovre wants to develop into a company with the most advanced ways of operating in the project personnel business, including the utilization of latest technologies and the social media. World class technological expertise is based on the Group's strong experience in information technology and its utilization in business processes.
General economic insecurity has not significantly affected investment levels among Project Personnel business area's customers in the oil and gas industry. The net sales of Dovre Group's Project Personnel business area increased by 6 percent in 2013, reaching EUR 89.9 (85.0) million. In local currencies, the growth in net sales was 11 percent. The operating result was EUR 3.8 (3.9) million, or 4.2 (4.6) percent of net sales. Project Personnel's profitability was affected by the investments made in business development as well as by items relating to previous periods and by restructuring costs in Australia.
The average number of personnel employed by the Project Personnel business area was 411 (379). At the end of the year, Project Personnel employed 416 (401) personnel.
In 2013, Dovre Group strengthened its operations in the Midde East by signing new frame agreements with large local oil companies.
Business was developed according to the Group's new strategy released in January 2013. One of the major steps in the technical development was the launch of Dovre Club, the Group's new service platform, in October 2013. Dovre Club is an online service platform that enables oil and gas professionals to keep their professional profiles up-to-date and to carry out administrative tasks relating to their contracts and assignments. Dovre Club features also the first global online loyalty program in the sector, rewarding members for example for referring new colleagues to join the program. One of the aims of the program is to commit the best professionals to Dovre. Modern technology provides opportunities to make personnel business even more personal.
The new service platform also offers modern tools for strengthening business performance and automating business processes, with the aim to improve the quality of operations and customer experience.
Dovre Group's project personnel business follows growth in the energy sector. According to ExxonMobil, global energy demand will be almost 35% higher in 2020 than it was in 2005. As energy consumption increases, the oil and gas industry moves on to exploit ever more challenging oil and gas deposits. What is more, the use of renewable energy sources is likely to increase.
A growing challenge within the oil and gas industry in general is the personnel's increased average age and the diminished interest of younger generations in the profession. As a result, and coupled with increased energy consumption, competition for project professionals is tightening. At the same time, clients and contractors prefer to deal with only a small number of service providers at a time.
Dovre Group's Consulting business area provides management and project management services for the development and execution of major investment projects. Our clients include both private companies and public organizations. We operate in Finland, Sweden, and Norway.
Dovre Group's consulting services cover both strategic and operational expertise in project management and project management practices and tools. The assignments range from implementing changes in IT system work practices to improving processes for annual nuclear power plant maintenance. The assignments typically last for a couple of months.
There is a variety of companies, with different service portfolios and of various sizes, providing management and project management services in the Nordic countries. Some of these focus on project management IT tools while others provide management expertise or sector-specific knowhow.
In this market, Dovre Group's strengths are its project management expertise and its experience in major investment projects, both assets that make its service offering scalable to a variety of sectors. Particularly in Finland and Sweden, Dovre Group's project management consulting often involves the deployment and implementation of project management software. Dovre is known in the field as an expert and reliable partner.
Dovre Group aims to develop its consulting services with a focus on customer intimacy, flexibility, and innovativeness. Selective acquisitions may be considered to support expansion.
Demand for management and project management services is influenced by general economic climate and especially investment levels in the industrial sector.
In Finland and Sweden, general economic insecurity has resulted in lower investment levels, and the demand for consulting services decreased in 2013. At the same time, companies have started to divide large investment projects into smaller individual undertakings.
In Norway, both industry investment and the construction market developed positively. Also Dovre Group's consulting business developed well in Norway. Dovre Group's management consulting has a strong position in Norway as a partner both to companies in the energy industry and to the public administration. For example, Dovre Group is one of the four companies carrying out external independent review of major public investment projects for the Norwegian public sector. As the
As well as utilizing the latest technology in its operations, Dovre Group's competitive edge in the ever more competitive project personnel market is the Group's strong experience and flawless reputation as a trustworthy partner. Being smaller in size than many of its global competitors, Dovre Group is an agile player, able to react to clients' needs in a timely manner and to adapt quickly to changing market situations. Dovre believes that by offering young oil and gas professionals a business and recruitment environment which is familiar to them, we have the best of possibilies to succeed in the competition for the best professionals.
Dovre Group estimates that the demand for project personnel remains steady in the year 2014, but customers are increasingly cost-conscious and prudent in their investment projects. The competition creates pressure on profitability.
| 20 Dec. 2013 | Change in Dovre Group´s Board of Directors |
|---|---|
| 20 Dec. 2013 | Dovre Group financial reporting in 2014 |
| 16 Dec. 2013 | Patrick von Essen appointed as Dovre |
| Group´s new CEO | |
| 23 Oct. 2013 | Dovre Group interim report (IFRS) |
| January 1 – September 30, 2013 | |
| 25 Sept. 2013 | Dovre Group's interim report to be |
| released earlier | |
| 16 Aug. 2013 | Tarja Leikas appointed as Dovre Group's |
| CFO | |
| 25 July 2013 | Dovre Group interim report (IFRS) |
| January 1 – June 30, 2013 | |
| 19 June 2013 | Dovre Group lowers its profit |
| guidance for 2013 | |
| 4 June 2013 | Change in Dovre Group's Executive Team |
| 30 May 2013 | Dovre Group completes the divestment of |
| Safran | |
| 25 Apr. 2013 | Dovre Group interim report (IFRS) |
| January 1 – March 31, 2013 | |
| 12 Apr. 2013 | Increase in number of shares in |
| Dovre Group PLC | |
| 5 Apr. 2013 | Dovre Group PLC's share subscription |
| price with stock options 2013A and | |
| market value of the option series |
| 14 Mar. 2013 | Decisions of the annual generals meeting of Dovre Group PLC |
|---|---|
| 21 Feb. 2013 | Dovre Group's annual report 2012 |
| published | |
| 14 Feb. 2013 | Notice of the annual general meeting |
| 14 Feb. 2013 | Dovre Group financial statements (IFRS) |
| January 1 – December 31, 2012 | |
| 1 Feb. 2013 | Dovre Group's briefing on financial |
| statements 2012 and new strategy | |
| 25 Jan. 2013 | Cancellation of Dovre Group PLC's |
| 2010A and2010B stock options | |
| 25 Jan.2013 | Dovre Group's board decided on |
| new stock option plan 2013 | |
| 25 Jan. 2013 | Dovre Group's new executive team |
| 25 Jan. 2013 | Dovre Group's new strategy for 2013 - 2017 |
All Stock Exchange Releases are available on the company's website at www.dovregroup.com > investors
In 2013, Dovre Group employed on average 469 (434) people. At the end of the year the Group employed 468 (461) people, 5 (5) of whom were employed by the Group's corporate functions, 416 (401) by Project Personnel, and 49 (54) by Consulting.
At the end of the year, 55 employees worked in sales, marketing, or administration and 413 employees in consulting, with the number of consulting employees including also project personnel employed in client projects. 41 (40) % of project personnel were independent contractors.
At the end of 2013, we employed project personnel in 24 countries: Australia, Cameroon, Canada, China, Finland, France, Ghana, Indonesia, Irak, Italy, Liberia, Malesia, Norway, Papua New Guinea, Poland, Romania, Russia, Singapore, South Korea, Spain, the UAE, hte UK and the US. The length of project assignments often varies from a couple of months to several years.
Dovre Group's Project Personnel business area operates from its hubs in Australia, Canada, Finland, Norway, Russia, Abu Dhabi in the UAE, and the US. Dovre Group's Consulting business operates in Finland, Norway, and Sweden.
Dovre Group conducts a monthly review of project personnel's safety at work. In 2013, no incidents were reported to the company.
Dovre Group has a universal code of conduct, applicable to all Group employees, that outlines the Group's basic values and principles. The code covers principles and procedures relating to equality and discrimination, local laws, ethical principles, health care, nondisclosure, privacy protection, customer relations, corruption, and payments. The code of conduct is distributed to all employees representing Dovre Group and is also available for the Group's employees on the Group's intranet and on Dovre Club.
Dovre Club, the Group's new service platform, was launched in the second half of 2013. As one of its main features, Dovre Club enables the Group to maintain and develop an up-to-date and comprehensive database of its project personnel employees, thus also improving the Group's ability to respond to customer requests in more timely and accurate manner.
positive market situation has attracted new players in the sector, one of the challenges Dovre Group has faced in Norway is the availability of expert personnel.
In 2013, the net sales of Dovre Group's Consulting business area were EUR 8.5 (9.2) million. Net sales decreased by 7 percent in euros. In local currencies, net sales decreased by 4 percent. The operating result was EUR 0.7 (1.4) million, or 8.2 (15.2) % of net sales. Profitability decreased due to the difficult market situation in Finland and Sweden and the business area's challenges in biorenewables consulting in the beginning of the year. The average number of personnel employed by the Consulting business area was 49 (50). At the end of the year, Consulting employed 53 (54) personnel.
Dovre Group expects the market for project management services to grow steadily in the long-term. Demand for services is expected to grow due to increased energy consumption, the exploitation of energy deposits in ever more challenging environments, the increasingly global nature of construction and investment projects as well as calls for increased cost-effectiveness of projects and processes.
In 2014, Dovre Group expects the demand for consulting services to increase moderately in Finland and Sweden towards the end of the year. While the rate of growth in the Norwegian economy is expected to level down in 2014, the market outlook for consulting services in 2014 remains positive in Norway.
The objective of Dovre Group's investor relations is to ensure that the market has, at all times, access to correct and sufficient information concerning the company's financial position and operations in order to determine the value of the company's share.
Up-to-date information about Dovre Group as investment is availableon the company's website www.dovregroup.com under Investors.
Dovre Group reports quarterly on its financial performance in accordance with the International Financial Reporting Standards (IFRS).
Dovre Group's Annual General Meeting will be held at Suomalainen Klubi in Helsinki (address: Kansakoulukuja 3) on Thursday, March 27, 2014, at 2.30pm.
To obtain Dovre Group's financial statements and interim reports, please call +358-20-436 2000 or email [email protected]
Tarja Leikas, CFO tel + 358 20 436 2000 [email protected]
Dovre Group Plc is listed on the NASDAQ OMX Helsinki (symbol DOV1V). For more information, please visit: www.nasdaqomxnordic.com.
Dovre Group Plc is an international company providing professional services to the energy industry. Dovre Group has two business areas: Project Personnel and Consulting. Dovre Group consists of the Group's Finnish parent Dovre Group Plc and its fully-owned operational subsidiaries in Australia, Canada, Norway, Russia, Singapore, Sweden, the UK, and the US. Dovre Group Plc also has two associated companies, SaraRasa Biomass Pte. Ltd. and SaraRasa Bioindo Pte.Ltd., in Singapore. The Group's associates' net sales are not included in the Group's net sales. The Group's share of results in associates is included in the Group's result.
In accordance with the Group's strategy, released in January 2013, the Group aims to become the most advanced international player in its field. The company's long-term financial objective is an operating profit margin on the level of 5-10% with an average annual net sales growth of more than 15%.
General global economic insecurity has not significantly affected investment levels among Project Personnel business area's customers in the energy industry. In the Consulting business area, demand for management and project management consulting services in Finland and Sweden has decreased due to low investment levels in the industrial sector. In Norway, demand for consulting services has remained high.
In 2013, the Group's net sales developed positively throughout the year. Net sales grew 4.8% in euros, but in local currencies growth in net sales was approx. 10%. Geographically, net sales growth was strongest in Norway. The strengthening of the euro
in relation to local currencies in the Group's key markets had a negative impact on the Group's euro net sales, especially in the second half of 2013. Only 2% of the Group's net sales were in the Group's reporting currency. The Group's net sales in 2013 were EUR 98.5 million.
The Group's operating result in 2013 was EUR 2.4 million, which is 2.4% of net sales. Excluding extraordinary items, our operating result was EUR 3.0 (3.4) million.
In accordance with the Group's strategy, released in January 2013, the company decided to discontinue its software business in Norway, and the sale of Safran Software Solutions AS was completed according to plan in May 2013.
In 2013, Dovre Group's net sales increased by 4.8%, totaling EUR 98.5 (94.1) million. In local currencies, growth in net sales was approx. 10%. Project Personnel accounted for 91 (90) % and Consulting for 9 (10) % of the Group's net sales.
Net sales for Project Personnel increased by approx. 6% in euros, totaling EUR 89.9 (85.0) million. In local currencies, Project Personnel's net sales increased 11%. Net sales for Consulting decreased by approx. 7%, totaling by 11% EUR 8.5 (9.2) million. In local currencies, net sales for Consulting decreased by 4%.
By market area, EMEA's (Finland, Norway, and Sweden) net sales totaled EUR 54.2 (49.2) million, accounting for 55 (52) % of the Group's net sales in 2013. Net sales for AMERICAS (Canada and the US) were EUR 39.2 (39.4) million, accounting for 40 (42) % the Group's net sales. Net sales for APAC (Sakhalin in Russia and Australia) were EUR 5.2 (5.5) million, accounting for 5 (6) % the Group's net sales. Operations in Australia were cut down in the beginning of the year.
In 2013, the Group's operating result was EUR 2.4 (3.4) million. Project Personnel business area's operating result was EUR 3.8 (3.9) million. Consulting business area's operating result was EUR 0.7 (1.4) million. The operating result of Other functions was EUR -1.8 (-1.6) million. Intra-Group service charges were EUR 0.9 (0.8) million.
The Group's profitability was affected by extraordinary items relating to previous periods and by restructuring costs in Australia in the Project Personnel business area as well as costs relating to the change of the Group's CEO. In the Consulting business area, decrease in the operating result was due to the difficult market situation in Finland and Sweden and challenges in entering the market in biorenewables.
In 2013, the operating result of the Group's discontinued operations, which includes the Group's Software business area, was EUR 0.4 (0.9) million. The Group's Software business area has been reported under discontinued operations as of the fourth quarter of 2012. The disposal of the Software business area was completed on May 30, 2013.
In 2013, result before taxes for the Group's continuing operations was EUR 2.0 (3.2) million including the Group's share, EUR -0.3 (-0.2) million, of the results of its associates SaraRasa Biomass Pte Ltd. and SaraRasa Bioindo Pte Ltd.
In 2013, result after taxes for the Group's continuing operations and including discontinued operations was EUR 5.6 (2.9) million. Taxes for continuing operations totaled EUR -0.8 (-1.0) million. Discontinued operations accounted for EUR 4.3 (0.7) million of the Group's result.
The Group's earnings per share including discontinued operations was EUR 0.09 (0.05). The Group's return on average capital employed before taxes was 10.2 (15.9) %.
On December 31, 2013, the Group balance sheet total was EUR 40.7 (40.5) million.
The Group's cash and cash equivalents totaled EUR 13.7 (9.3) million at the end of the financial year. In addition, the parent company and the subsidiaries have unused credit limits. The Group's cash and cash equivalents increased by EUR 4.4 (1.3) million during January – December 2013, EUR 3.9 million of which was due to the sale of Safran Software Solutions AS in May 2013.
The equity ratio was 62.3 (56.8) %. The debt-equity ratio (gearing) was -50.0 (-27.0) %. On December 31, 2013, the interest-bearing liabilities amounted to EUR 1.0 (1.3) million, accounting for 2.6 (3.2) % of the Group's shareholders' equity and liabilities. Of the interest-bearing liabilities, EUR 0.0 (0.0) million were non-current and EUR 1.0 (1.3) million current.
The net cash flow from operating activities for the Group's continuing operations was EUR 3.7 (1.9) million. The net cash flow from operating activities including discontinued operations was EUR 3.2 (2.8) million, which includes EUR 0.9 (-0.9) million change in working capital. EUR 1.2 (0.9) million were paid in taxes.
| MEUR | 2013 | 2012 | 2011 |
|---|---|---|---|
| Continuing operations | |||
| Net sales | 98.5 | 94.1 | 73.3 |
| Operating result | 2.4 | 3.4 | 4.4 |
| % of net sales | 2.4 % | 3.6 % | 5.9 % |
| Result for the period | 1.2 | 2.2 | 2.8 |
| Continuing and discontinued operations* | |||
| Net cash flow | 3.2 | 2.8 | 2.0 |
| Gearing, % | -50.0 | -27.0 | -34.6 |
| Result for the period | 5.6 | 2.9 | 3.2 |
| % of net sales | 5.5 % | 2.9 % | 4.1 % |
| Earnings per share, EUR | |||
| Basic | 0.09 | 0.05 | 0.05 |
| Diluted | 0.09 | 0.05 | 0.05 |
* The Group's Software business area, which was sold on May 30, 2013, has been reported under discontinued operations as of the fourth quarter of 2012.
The Group's long-term work to expand its market in the Middle East bore fruit at the end of 2013, when first assignments in the area started. The Group's associate SaraRasa Bioindo started commercial renewable fuel production in Indonesia in the final quarter of 2013.
The Group's most important development project of the year, Dovre Club, was launched to the market in October. Dovre Club is an advanced online service platform for recruiting and sales with sophisticated tools for business and market analysis.
Net sales by business area
In 2013, the average number of personnel employed by the Group's continuing operations was 469 (434), 5 (5) of whom were employed by the Group's corporate functions.
On December 31, 2013, Dovre Group employed 468 (461) people, 49 (54) of which were employed by Consulting and 416 (401) by Project Personnel. In the Project Personnel business area, 41 (40) % of all employees were independent contractors.
In 2013, the Group's personnel expenses for continuing operations were EUR 85.9 (80.2) million. The personnel expenses of the Project Personnel business area were EUR 77.6 (72.6) million. The personnel expenses of the Consulting business area were EUR 6.9 (6.7) million. The personnel expenses of Other functions were EUR 1.4 (0.9) million.
On December 31, 2013, members of the Group's Board of Directors owned directly 3,089,540 shares in the company, representing 4.9% of all shares and votes. Including holdings through controlled companies and the ownership of under-aged children and/or family members living in the same household, members of the Board held a total of 4,934,540 shares in the company, representing 7.8% of all shares.
Dovre Group Plc's Annual General Meeting, held on March 14, 2013, adopted the financial statements for 2012, discharged the members of the Board of Directors and the CEO from liability for the financial year ending on December 31, 2012, and decided on other matters falling within its competence in accordance with the Board of Directors' proposal. In addition, the Annual General Meeting resolved that the company's registered office shall be situated in Helsinki, Finland.
The Annual General Meeting held on March 14, 2013, authorized the Board of Directors to decide on the repurchase of a maximum of 6,200,000 of the Company's own shares. The repurchase authorization is valid until June 30, 2014.
In addition, the Annual General Meeting decided to authorize the Board of Directors to decide on the issuance of shares as
On December 31, 2013, the Group's acting CEO Tarja Leikas held, together with her family members and through her controlled companies, a total of 10,422 shares in the company and a total of 100,000 stock options granted under the 2013 stock option plan. Jan-Erik Mielck, the Group's CEO until December 16, 2013, held a total of 50,000 shares in the company and a total of 725,000 stock options on December 16, 2013.
well as the issuance of special rights. By virtue of the authorization, the Board is entitled to decide on the issuing of a maximum of 12,400,000 new shares. Additionally, the Board is authorized to grant special rights entitling to shares should there be weighty financial reasons for doing so. The Board is entitled to decide on the conveying of a maximum 6,200,000 own shares held by the Company. The number of shares to be issued to the Company shall not exceed 6,200,000 including the number of own shares acquired by the Company by virtue of the authorization to repurchase the Company's own shares. The maximum number of shares to be thus issued is 5,000,000 whereby this maximum number is included in the maximum number of shares noted above. The authorization is valid until June 30, 2014.
On December 31, 2013, Dovre Group's share capital was EUR 9,603,084.48 and the total number of shares 62,915,751. Increase in the number of shares during the financial year, 20,000, was due to the registration on April 12, 2013 of new shares subscribed for with the company's 2010A stock option plan. The increase has been recorded in the company's reserve for non-restricted equity.
Dovre Group has two open stock option plans: Stock option plan 2010 and stock option plan 2013. Both option plans are divided into three series, with each series including a maximum of 1,000,000 stock options, and each stock option entitling the holder to subscribe for one share in Dovre Group Plc.
In its meeting on January 24, 2013, the Board of Directors of Dovre Group Plc decided to cancel a total of 345,000 2010A stock options and a total of 380,000 2010B stock options. By the end of the financial year, the Group had granted a total of 555,000 2010A stock options and a total of 395,000 2010B stock options. The share subscription price and subscription period per series are as follows:
In its meeting on January 24, 2013, the Board of Directors of Dovre Group Plc approved a new option plan 2013 based on the authorization granted to the Board by the company's Annual General Meeting held on March 15, 2012. Under this plan, a total of 3,000,000 stock options are offered for subscription to
Patrick von Essen was appointed Dovre Group's new CEO on December 16, 2013. Von Essen, who is currently Vice President, Real Estate, at Fiskars Plc, will assume his position during the spring 2014. Dovre Group's CFO Tarja Leikas has served as the Group's acting CEO since December 17, 2013. Jan-Erik Mielck served as the Group's CEO until December 16, 2013.
At the end of the financial year, the Group's Executive Team was Tarja Leikas (acting CEO and CFO), Arve Jensen (EVP, Project Personnel), and Petri Karlsson (EVP, Consulting). The following changes took place in the Group's Executive Team in 2013: Mikko Marsio and Juha Pennanen were members of the Executive Team until January 25, 2013. Heidi Karlsson served as the Group's CFO and member of the Executive Team until September 3, 2013. Tarja Leikas started as the Group's new CFO and a member of the Executive Team on September 16, 2013. Jan-Erik Mielck served as member and Chairman of the Executive Team until December 16, 2013.
The Group's research and development costs were EUR 0.2 (0.1) million, representing 0.2 (0.1) % of the Group's net sales.
Dovre Group's key employees. By the end of the financial year, the Group had granted a total of 725,000 stock options under the 2013 stock option plan. The share subscription price and subscription period per series are as follows:
In January – December, 2013, 16.1 (9.2) million Dovre Group shares were exchanged on the NASDAQ OMX Helsinki Ltd., corresponding to a trade of EUR 7.7 (3.9) million. The lowest quotation was EUR 0.38 (0.32) and the highest EUR 0.59 (0.58). On December 31, 2013, the closing quotation was EUR 0.48 (0.53).
The period-end market capitalization was approximately EUR 30.2 (33.3) million.
On December 31, 2013, the number of registered shareholders of Dovre Group Plc totaled 3,064 (2,927) including 9 nominee registers. 0.7 (0.9) % of the Group's shares are nominee-registered.
The net cash flow from investing activities was EUR 3.5 (-1.4) million, and including disposal of shares in Group companies, net of disposed cash, EUR 3.9 million. Gross investments totaled EUR 0.4 (1.7) million. Gross investments in 2012 include the Group's investment, EUR 1.5 million, in a project development company based in Singapore and in the company's first development project.
The net cash flow from financing activities was EUR -1.4 (-0.2) million. The Group drew new current loans worth of EUR 0.2 (0.4) million. During the period under review, the Group paid a total of EUR 1.3 (0.6) million in dividends.
The balance sheet goodwill totaled EUR 7.0 (7.8) million on December 31, 2013. No indications of impairment of assets exist.
Dovre Group Plc's Annual General Meeting, held on March 14, 2013, set the number of Board members to five. At the end of the financial year, the Chairman of the Board was Hannu Vaajoensuu, Vice Chairman Rainer Häggblom, and members of the Board Ilari Koskelo, Ossi Pohjola, and Anja Silvennoinen. All members of the Board were independent of the company and its major shareholders. In 2013, the Board convened 16 times, with an attendance rate of 95%.
In December 2013, board member Anja Silvennoinen announced her resignation, effective on January 1, 2014, from the Board of Directors. Ms Silvennoinen resigned in order to avoid any conflict of interest between her membership in Dovre
The success of the Group's Project Personnel business area is influenced by the energy sector market as well as investment levels in the oil and gas industry. The business area expands its business to new geographical market areas. Growth in new market areas requires investments and includes risks. The business area's identified main risks are maintaining its overall competitiveness, profitability, and its key resources in an ever more competitive market environment. Project Personnel business is project-based by nature, thus adding an element of uncertainty to forecasting.
The oil and gas industry in general involves risks, and single projects may experience delays or other unexpected events. Such situations may affect the operating result of the Project Personnel business area. Dovre Group is responsible for the work performed by its consultants. However, the company has no overall responsibility for project deliveries.
In the Consulting business area, current market outlook in Norway remains is positive, while uncertainty in the export industry in Finland and Sweden may continue to influence demand for consulting services. The business area has expanded into the renewable energy market, which involves investments and includes risks. Project delivery also involves minor risks due to both customers and the Group's own personnel such as project delays or loss of key personnel.
Dovre Group has two major customers, each of which accounts for more than 10% of the Group's net sales. The Group has extensive delivery agreements with these clients and is thus dependent on its key customers and the long-term frame agreements signed with them.
Dovre Group has invested in a new company, SaraRasa Bioindo Pte. Ltd., based in Singapore. Risks involved in the start-up phase, such as organizational set-up, construction of production capacity, legal and regulatory issues, commercial agreements, and feedstock purchase and end-product sale agreements have diminished as the company has started operations. As the company's production unit is located in Indonesia, the company is exposed to high political risk.
The Group's reporting currency is euro. The Group's most important functional currencies are the Canadian dollar, the Norwegian crown, and the US dollar. Currency fluctuations can affect the company's net sales. Assets and liabilities in foreign currencies can also result in foreign exchange gains or losses. The Group is hedging its currency positions.
The Group's operations do not involve significant environmental risks relating to the Group. The Group's operations do not have significant direct environmentally detrimental effects.
No material events have taken place after the end of the financial year.
General economic insecurity has not affected investment levels among Project Personnel business area's customers in the oil and gas industry and we expect demand for the business area's services to remain strong in key market areas also in 2014. Market demand supports opportunities for growth, but the competitive market still creates pressure on profitability.
In the Group's Consulting business area, current market outlook in Norway remains positive. However, Norway's strong economic growth is expected to slow down in 2014.
The parent company's distributable funds are EUR 15,816,710.91. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.02 per share to be paid, corresponding to EUR 1,258,215.00 based on the total number of shares (62,915,751). The Board also proposes an extraordinary dividend of EUR 0.05 per share to be paid, corresponding to EUR 3,145,537.55.
The Board of Directors proposes that the dividend and the extraordinary dividend are paid to a shareholder who on the record date of April 1, 2014 is registered as a shareholder in the company's shareholders' register maintained by Euroclear Finland Ltd. The dividend is paid on April 8, 2014.
In Finland and Sweden, demand for consulting services decreased in 2013 due to low investment levels especially in the export industry. The Group expects moderate increase of customer demand in 2014.
In 2014, the Group's net sales are expected to grow and operating result to improve from 2013.
No significant changes have occurred in the company's financial position after the end of the financial year. The company's liquidity is good, and the proposed distribution of dividend poses no risk to the company's financial standing.
Helsinki, Finland, February 13, 2014
DOVRE GROUP PLC BOARD OF DIRECTORS
Group's Board of Directors and her new position at Pöyry Management Consulting Ltd.
Until the Annual General Meeting on March 14, 2013, the Board of Directors consisted of Hannu Vaajoensuu (Chairman), Antti Manninen, Ilari Koskelo, Leena Mäkelä, and Ossi Pohjola.
In accordance with the decision of the Annual General Meeting, the Chairman of the Board is paid an annual compensation of EUR 35,000, the Vice Chairman EUR 25,000, and other members of the Board EUR 22,000.
Authorized public accountants Ernst & Young Oy continued as the Group's auditor, with APA Mikko Järventausta as the auditor in charge.
Dovre Group Plc complies with the Corporate Governance Code of the Finnish Securities Market Association. Dovre Group follows the recommendations of the Finnish Corporate Governance Code with the following exception: There are no separate committees of the Board, because the size of the Group's operations and of the Board do not necessitate the preparation of matters in smaller groups than the composition of the Board.
The Corporate Governance Statement for 2013 has been issued separately from the Report of the Board of Directors. Dovre Group's corporate governance principles are included in the Group's annual report and are available on the company's investor pages at www.dovregroup.com.
.
| EUR THOUSAND | NOTE | JAN. 1 - DEC. 31, 2013 | JAN. 1 - DEC. 31, 2012 |
|---|---|---|---|
| NET SALES | 2, 3 | 98,544 | 94,069 |
| Other operating income | 4 | 132 | 87 |
| Material and services | 5 | -274 | -219 |
| Employee benefits expense | 6 | -85,857 | -80,183 |
| Depreciation and amortization | 7 | -402 | -428 |
| Other operating expenses | 8 | -9,736 | -9,907 |
| OPERATING RESULT | 2,407 | 3,419 | |
| Financing income | 9 | 478 | 351 |
| Financing expenses | 9 | -552 | -374 |
| Share of results in associates | 12 | -294 | -156 |
| RESULT BEFORE TAX | 2,039 | 3,240 | |
| Tax on income from operations | 10 | -825 | -1 033 |
| RESULT FOR THE PERIOD, CONTINUING OPERATIONS | 1,214 | 2,207 | |
| Discontinued operations: | |||
| Result for the period, discontinued operations | 11 | 4 349 | 662 |
| RESULT FOR THE PERIOD | 5,563 | 2,869 | |
| Other comprehensive income: | |||
| Translation differences | -2 014 | 290 | |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 3,549 | 3,159 | |
| Earnings per share calculated from profit attributable to shareholders of the parent company: | |||
| Earnings per share, undiluted (EUR), continuing operations | 0.02 | 0.04 | |
| Earnings per share, diluted (EUR), continuing operations | 0.02 | 0.03 | |
| Earnings per share, undiluted (EUR), discontinued operations | 0.07 | 0.01 | |
| Earnings per share, diluted (EUR), discontinued operations | 0.07 | 0.01 | |
| Earnings per share, undiluted (EUR), result for the period | 12 | 0.09 | 0.05 |
| Earnings per share, diluted (EUR), result for the period | 12 | 0.09 | 0.05 |
| Average number of shares: | |||
| Undiluted | 12 | 62,910,751 | 62,895,751 |
| Diluted | 12 | 63,225,292 | 63,063,235 |
| EUR THOUSAND | NOTE | DEC. 31, 2012 | DEC. 31, 2012 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Intangible assets | 13 | 754 | 856 |
| Goodwill | 14 | 6,972 | 7,803 |
| Tangible assets | 15 | 145 | 123 |
| Investments in associates | 16 | 967 | 1,296 |
| Trade receivables and other receivables | 17 | 26 | 25 |
| Deferred tax asset | 18 | 306 | 121 |
| NON-CURRENT ASSETS | 9,170 | 10,224 | |
| CURRENT ASSETS | |||
| Trade receivables and other receivables | 19 | 16,854 | 19,201 |
| Tax receivable, income tax | 24 | 41 | |
| Cash and cash equivalents | 20 | 13,737 | 7,503 |
| CURRENT ASSETS | 30,615 | 26,745 | |
| Assets held for sale | 11, 16 | 933 | 3,553 |
| TOTAL ASSETS | 40,718 | 40,522 | |
| EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | |||
| Share capital | 21 | 9,603 | 9,603 |
| Reserve for invested non-restricted equity | 21 | 352 | 346 |
| Revaluation reserve | 21 | 21 | 79 |
| Translation differences | -907 | 1,101 | |
| Retained earnings | 16,297 | 11,884 | |
| SHAREHOLDERS' EQUITY | 25,366 | 23,013 | |
| NON-CURRENT LIABILITIES | |||
| Deferred tax liability | 18 | 609 | 799 |
| Other long-term liabilities | 23 | 26 | 25 |
| NON-CURRENT LIABILITIES | 635 | 824 | |
| CURRENT LIABILITIES | |||
| Short-term liabilities, interest-bearing | 24 | 1,048 | 1,286 |
| Trade payables and other liabilities | 25 | 13,077 | 13,010 |
| Tax liability, income tax | 564 | 761 | |
| Current provisions | 26 | 28 | 0 |
| CURRENT LIABILITIES | 14,717 | 15,057 | |
| Liabilities held for sale | 11 | 0 | 1,628 |
| TOTAL EQUITY AND LIABILITIES | 40,718 | 40,522 |
| EUR THOUSAND | NOTE | 2013 | 2012 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Operating result, continuing operations | 2,407 | 3,419 | |
| Operating result, discontinued operations | 4,432 | 883 | |
| Adjustments: | |||
| Gain on disposal of investment | 4, 11 | -4,080 | -5 |
| Depreciation/Amortization | 7, 11 | 404 | 433 |
| Personnel expenses | 4 | 292 | 0 |
| Other non-monetary items | 8 | 65 | |
| Adjustments, total | -3,376 | 493 | |
| Changes in working capital: | |||
| Trade and other receivables, increase (-) / decrease (+) | -1,486 | -3,934 | |
| Trade and other payables, increase (+) / decrease (-) | 2,342 | 2,986 | |
| Changes in working capital, total | 856 | -948 | |
| Interest paid | -26 | -59 | |
| Interest received | 74 | 77 | |
| Other financial expenses paid and received | 38 | -132 | |
| Income taxes paid | -1,167 | -915 | |
| Net cash generated by operating activities | 3,238 | 2,818 | |
| Cash flow from investing activities | |||
| Investments in tangible and intangible assets | -384 | -184 | |
| Disposal of shares in Group companies, net of disposed cash | 3,932 | 0 | |
| Purchase of shares in associates | -11 | -1,485 | |
| Proceeds from available-for-sale financial assets | 0 | 80 | |
| Increase (-) / decrease (+) in loans receivable | 0 | 218 | |
| Net cash generated by investing activities | 3,537 | -1,371 | |
| Cash flow from financing activities | |||
| Stock options exercised | 6 | 0 | |
| Proceeds from short-term loans | 216 | 448 | |
| Repayments of short-term loans | -404 | -16 | |
| Dividends paid | -1,258 | -629 | |
| Net cash generated by financing activities | -1,440 | -197 | |
| Change in cash and cash equivalents | 5,335 | 1,250 | |
| Trnaslation differences | -905 | 116 | |
| Cash and cash equivalents at the beginning of the period | 9,307 | 7,941 | |
| Cash and cash equivalents at the end of the period | 20 | 13,737 | 9,307 |
| RESERVE FOR | ||||||
|---|---|---|---|---|---|---|
| INVESTED NON | ||||||
| SHARE | RESTRICTED | REVALUATION | TRANSLATION | RETAINED | ||
| EUR THOUSAND | CAPITAL | EQUITY | RESERVE | DIFFERENCES | EARNINGS | TOTAL EQUITY |
| SHAREHOLDERS' EQUITY Jan. 1, 2012 | 9,603 | 346 | 127 | 818 | 9,524 | 20,418 |
| Comprehensive income | ||||||
| Result for the period | 2,869 | 2,869 | ||||
| Other comprehensive income | ||||||
| Items that may be reclassified to profit and loss in subsequent periods: | ||||||
| Translation differences | 7 | 283 | 290 | |||
| Transfers between items | -55 | 55 | 0 | |||
| Total comprehensive income | 0 | 0 | -48 | 283 | 2,924 | 3,159 |
| Transactions with shareholders | ||||||
| Share based compensation | 65 | 65 | ||||
| Dividend distribution | -629 | -629 | ||||
| Total transactions with shareholders | 0 | 0 | 0 | 0 | -564 | -564 |
| SHAREHOLDERS' EQUITY Dec. 31, 2012 | 9,603 | 346 | 79 | 1,101 | 11,884 | 23,013 |
| RESERVE FOR INVESTED NON |
||||||
|---|---|---|---|---|---|---|
| SHARE | RESTRICTED | REVALUATION | TRANSLATION | RETAINED | ||
| EUR THOUSAND | CAPITAL | EQUITY | RESERVE | DIFFERENCES | EARNINGS | TOTAL EQUITY |
| SHAREHOLDERS' EQUITY Jan. 1, 2013 | 9,603 | 346 | 79 | 1,101 | 11,884 | 23,013 |
| Comprehensive income | ||||||
| Result for the period | 5,563 | 5,563 | ||||
| Other comprehensive income | ||||||
| Items that may be reclassified to profit and loss in subsequent periods: | ||||||
| Translation differences | -6 | -2,008 | -2,014 | |||
| Transfers between items | -52 | 52 | 0 | |||
| Total comprehensive income | 0 | 0 | -58 | -2,008 | 5,615 | 3,549 |
| Transactions with shareholders | ||||||
| Share based compensation | 56 | 56 | ||||
| Stock options exercised | 6 | 6 | ||||
| Dividend distribution | -1,258 | -1,258 | ||||
| Total transactions with shareholders | 0 | 6 | 0 | 0 | -1,202 | -1,196 |
| SHAREHOLDERS' EQUITY Dec. 31, 2013 | 9,603 | 352 | 21 | -907 | 16,297 | 25,366 |
Dovre Group is a global provider of project management services. The Group's parent, Dovre Group Plc, is a Finnish public company incorporated under Finnish law and domiciled in Helsinki, Finland. The company's registered address is Unioninkatu 20-22, 00130 Helsinki, Finland. Dovre Group Plc's shares are traded in NASDAQ OMX Helsinki Ltd. (symbol DOV1V).
Dovre Group's Board of Directors has approved these financial statements for release in its meeting on February 13, 2014. In accordance with the Finnish Companies Act, the shareholders of the company have the option to approve or to reject the financial statements in the General Meeting to be held following the release of the financial statements. The General Meeting may also decide to alter the financial statements. A copy of the consolidated financial statements of Dovre Group is available at www. dovregroup.com or at the company's office at Unioninkatu 20-22, 00130 Helsinki, Finland.
The consolidated financial statements of Dovre Group have been prepared in accordance with the International Financial Reporting Standards (IFRS). In preparing the financial statements, the IAS and IFRS standards and SIC and IFRIC interpretations effective on December 31, 2013 have been followed. In accordance with the Finnish Accounting Act and the regulations issued by virtue of it, 'IFRS' refers to the standards and interpretations, which have been endorsed by the EU in accordance with the procedure defined in the EU Regulation (EC) No. 1606/2002. The notes to the consolidated financial statements have also been prepared in accordance with the requirements in Finnish accounting legislation and Community law that complement IFRS regulations.
The Group applies the following new or revised standards as appropriate: IAS 1 Presentation of Financial Statements (amendment); IFRS 7 Financial Instruments: Disclosures (amendment); IFRS 13 Fair Value Measurement (new); and annual improvements. As the Group has no defined benefit plans, the amended IAS 19 Employee Benefits has no impact on the Group's result, financial position, or disclosure.
The consolidated financial statements have been prepared under the historical cost convention unless otherwise stated. Monetary figures in the financial statements are expressed in thousands of euros (EUR) unless otherwise stated.
The preparation of consolidated financial statements under IFRS requires management to make certain estimates and use judgment when applying accounting principles. The section 'Critical Accounting Estimates and Judgments' presents the judgments made by management when applying the Group's accounting principles and those items on which judgments have had a significant impact.
The consolidated financial statements include the parent company, Dovre Group Plc, and all its subsidiaries. Subsidiaries are companies in which the Group holds, either directly or indirectly, control. Control arises when the Group either controls more than half of the voting rights or otherwise holds control. Subsidiaries acquired are included in the consolidated financial statements from the date on which the Group has obtained control and subsidiaries sold up to the date that the Group's control has ceased.
Mutual shareholdings are eliminated using the acquisition method. The acquisition consideration and the acquired company's identifiable assets acquired and liabilities assumed are measured at fair value on the date of acquisition.
All intra-Group transactions, receivables, liabilities, and unrealized profit as well as the distribution of profits within the Group have been eliminated in the consolidated financial statements.
The allocation of the result for the period between the shareholders of the parent company and non-controlling interest is disclosed in the income statement. The share of equity of non-controlling interest is presented as a separate line item in the statement of financial position. The share of non-controlling interest is not disclosed in the statement of financial position, if the parent company or its subsidiary has a call option or other agreement, which gives the Group present access to financial benefits associated with the ownership.
For business combinations achieved in stages, previous shareholdings are measured at fair value and any profit or loss derived is recognized through the income statement. Should the Group lose control in a subsidiary, the remaining investment is measured at fair value on the date of expiry of control and the difference recognized through the income statement. Businesses acquired before January 1, 2010 have been treated in accordance with the prevailing standards at that time. The Group made no acquisitions in 2010-2013.
Associated companies are companies in which the Group has significant influence. Significant influence arises when the Group controls more than 20% of a company's voting rights or when the Group otherwise has significant influence but no control. Associated companies are consolidated in the Group's financial statements under the equity method.
The Group's share of results in associates is presented as a separate line item below the Group's operating result in the consolidated statement of income, because the operations of the Group's associated companies are not continuous to the Group's operations. The Group's share of changes in the associates' other comprehensive income is included in the Group's other comprehensive income.
For individual Group companies, items included in the financial statements are recognized in the functional currency of the company in question. Consolidated financial statements are presented in euros, which is the functional and presentation currency of the parent company.
The Group has no finance lease agreements. The Group's other leases include cars and office equipment. Payments under other leases are recognized as expenses in the income statement on a straight-line basis over the lease period.
The carrying values of goodwill and of in-process intangible assets are reviewed annually for impairment. In addition, assets and cash-generating units are tested regularly for indications of possible impairment. Should any such indication arise, the recoverable amount of the asset or cash-generating unit is estimated. An impairment loss is recognized in the income statement, if the book value of the asset or cash-generating unit exceeds the recoverable amount.
In addition to customary employee benefits expense, the Group's employee benefits expense includes also expenses related to independent contractors in the Project Personnel business area. The Group acts as a principal towards its clients and, depending on the situation, the project personnel contracted to the client are either employees of the Group or independent contractors.
The Group operates various pension plans in accordance with local regulations and practices. In accordance with IAS 19, pension plans are classified as either defined contribution plans or defined benefit plans. The Group's current pension plans are defined contribution plans. Contributions to defined contribution plans are charged to the statement of income in the period to which these contributions relate. The defined benefit plan of the Group's Norwegian subsidiary was changed to a defined contribution plan in 2011.
Dovre Group has share-based incentive plans for its key employees. The fair value of option rights is determined at the grant date and recognized as an expense over the vesting period on a straight-line basis. The fair value of the options granted is measured using the Black & Scholes pricing model. When option rights are exercised, the payments received for share subscriptions, as adjusted by possible transaction costs, are recognized in the reserve for invested non-restricted equity in accordance with the terms of the option plan in question.
Provisions are recognized when the Group has, as a result of past events, a current legal or constructive obligation, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
The Group's tax expense in the income statement includes taxes based on taxable income for the financial year and deferred taxes. The tax on taxable income for the financial year is calculated from taxable profit with refernce to a valid tax rate in accordance with the tax legislation of the country of operation. Deferred taxes are calculated based on the tax rate applicable on the balance sheet date.
Transactions in foreign currencies are recorded at the rates of exchange prevailing on the date of transaction. In practice, transactions are often translated at the exchange rate that approximates the rate of the transaction date. At the end of the accounting period, monetary assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date.
Foreign exchange gains and losses relating to business transactions as well as exchange rate gains and losses resulting from translating monetary items have been entered in the income statement and are presented under financial income and expenses. In accordance with IAS21.15, the Group recognizes exchange rate differences arising from receivables, which have been classified as part of the Group's net investment in a foreign subsidiary, as other comprehensive income.
The income statements of the Group's foreign subsidiaries are translated into euros at the weighted average exchange rate of the financial period and the items in the statement of financial position at the exchange rate of the balance sheet date. Using different exchange rates for income statement items and financial position items results in a translation difference, which is recorded in the Group's other comprehensive income. Translation differences arising from the elimination of the acquisition cost of foreign subsidiaries and the translation of the accumulated equity items after the acquisition are also recognized in other comprehensive income.
As of the IFRS effective date of January 1, 2004, the translation differences in equity resulting from exchange rate fluctuations have been entered as a separate item in the Group's statement of changes in equity. Translation differences accumulated prior to the effective date have been entered in the Group's retained earnings as allowed by the exemption in IFRS 1.
Tangible assets are stated at historical cost, less accumulated depreciation and impairment losses.
Tangible assets include machinery and equipment. Depreciation is calculated on a straight-line basis over the expected economic useful lives of the assets. The estimated depreciation period is 3-5 years.
Gains and losses on disposal of tangible assets are included in either other operating income or other operating expenses.
For business combinations after January 1, 2010, goodwill corresponds to that portion of the acquisition cost that consists of the combined amount of consideration, non-controlling interest, and previous ownership interest and that exceeds the Group's share of the fair value of the net assets of the acquired company. Acquisitions of companies between January 1, 2004, and December 31, 2009, are accounted in accordance with previous IFRS standards (IFRS 3 (2004)). For acquisitions prior to 2004, goodwill corresponds to the book value determined in accordance with previous accounting standards. This book value is used as the deemed cost as defined by IFRS.
Goodwill is not amortized but is tested annually for possible impairment for which purpose goodwill has been allocated to groups of cash generating units. Goodwill is stated at the historical acquisition
Deferred taxes are provided for temporary differences arising between the carrying amount of assets and liabilities and their tax bases. Deferred tax liabilities are recognized in the balance sheet in full, and deferred tax assets to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. Deferred tax is recognized neither for temporary differences that arise from goodwill that is not deductible for tax purposes nor for undistributed earnings of subsidiaries to the extent that the reversal of temporary differences is not probable in the foreseeable future. Most significant temporary differences arise from fair value measurements made in connection with acquisitions and from subsidiaries' undistributed earnings.
The Group's sales include the sale of services and licenses, and maintenance. Revenue from sales is recognized in accordance with IAS 18. Revenue from services sold is recognized when the services have been rendered, including all related travel expenses invoiced to the client. Revenue from licenses sold is recognized upon granting of user rights when all the main risks and rewards of license ownership have been transferred to the buyer. Revenue from maintenance is allocated to the contract period.
Other operating income includes proceeds from rental revenue, gains on disposal of fixed and financial assets, and public funding. Public funding is recognized when it is reasonably certain that the terms related to funding are met and that the funding will be received.
In accordance with IAS 39 Financial Instruments: Recognition and Measurement, the Group classifies its financial assets into the following categories: financial assets at fair value through profit or loss; held-to-maturity investments; loans and receivables; and available-for-sale financial assets. The Group has no held-to-maturity investments.
Loans and receivables are recognized at amortized cost. They are presented in the balance sheet as either current or non-current assets, with the latter including assets the maturity of which exceeds 12 months. An impairment loss for doubtful receivables is recognized, if there is objective evidence that the receivable is unrecoverable in full. Allowances for trade receivables are recorded in a separate account. An impairment loss for loans and other receivables is recorded against their carrying value.
The Group's available-for-sale financial assets include unquoted shares, which are measured at fair value or, when fair value cannot be reliably determined, at acquisition cost. Changes in fair value of the Group's available-for-sale financial assets are recognized through other comprehensive income and presented, as adjusted for tax effect, in the fair value reserve of equity. Cumulative gain or loss for available-for-sale financial assets previously recognized in other comprehensive income is included in the profit or loss for the period when the asset is sold or impaired. When there is no quoted market price for available-for-sale financial assets, their fair value is determined by other means. The Group does not seek to determine the fair value of the Group's available-for-sale financial assets if dif-
cost less any impairment. Goodwill arising in connection with the acquisition of foreign subsidiaries has been translated into euros at the rate of exchange on the balance sheet date.
Research and development is expensed as incurred in the income statement. Development costs for new products and product versions with significant improvements are recognized as an asset after the product is technically and commercially feasible and future economic gain can be expected. Capitalized development costs include those development, testing, and material costs that are the immediate consequence of finalizing the product for its intended use. The useful life of capitalized development costs is 2-4 years, during which the capitalized costs are recognized as an expense using the straightline method. Amortization begins at the release of a product version. In-process development projects are tested for impairment at the end of the financial period.
Other intangible assets include customer contracts and customer relations as well as software and capitalized expenditure related to software. Intangible assets are recognized in the statement of financial position when the recognition criteria specified in IAS 38 are met.
Intangible assets with limited useful economic lives are initially recognized at historical acquisition cost in the statement of financial position and entered as an expense in the income statement during their estimated useful economic lives using the straight-line method. No amortization is recognized for intangible assets with indefinite useful economic lives, but they are tested annually for impairment. The Group does not presently have intangible assets with indefinite useful economic lives.
The Group's share of the Norwegian Dovre Group AS grew to 100% after the Group acquired the remaining 60% of the company's shares in 2004. A portion of the acquisition cost was allocated to customer agreements and relations in accordance with the definition of intangible assets in IAS 38. The Group had acquired 40% of the company prior to the effective date of IFRS standards, January 1, 2004. In accordance with the exemption allowed by IFRS 1, the Group did not apply IFRS 3 retrospectively to acquisitions that were made prior to the effective date of January 1, 2004. Since the Group had applied, as appropriate, the provisions included in IFRS 3 concerning the acquisition of companies in stages, the fair values of customer agreements and customer relations in intangible assets related to the previous 40% ownership by the Group were adjusted in accordance with IFRS 3 according to the fair values on the date of acquisition of the remaining shares (60%). Adjustments to the fair values related to the previously acquired share (40%) were treated as revaluations in accordance with IFRS 3.
The useful economic life of customer agreements and customer relations is estimated at 10 years. The useful economic life of other intangible assets is estimated at 3-5 years.
Lease agreements have been classified as finance leases and other leases in accordance with IAS 17. Lease agreements where the lessee bears a substantial portion of the risks and benefits of ownership are classified as finance leases. Lease agreements where the lessor retains a significant portion of the risks and benefits of ownership are classified as other leases.
ferences in valuations of the fair values of unquoted financial assets are significant and the probability of different valuations cannot be reasonably estimated.
Cash and cash equivalents include cash in bank and other liquid investments with maturity of three months or less.
The Group hedges receivables and liabilities denominated in foreign currency with different currency forward and option contracts. Derivatives are initially recognized under other receivables or payables at fair value on the date of trade. Outstanding derivatives are subsequently remeasured at their fair value at each balance sheet date and the resulting gain or loss is immediately recognized in the income statement under financial items. In determining the fair value of a derivative, the appropriate quoted market price is used if available. Alternatively, fair value is determined using commonly used valuation methods. Dovre Group does not apply hedge accounting.
In accordance with IAS 39, financial liabilities are initially recognized on the basis of the original consideration received, less transaction costs, and subsequently measured at amortized cost using the effective interest rate method. The Group's financial liabilities are non-current and current, and they can be interest-bearing or noninterest-bearing. Interest expenses are recognized in the income statement as incurred. Financial liabilities are recognized as current unless the Group retains the right to reschedule the date of payment to a date that is at least 12 months from the end of the financial period.
The Group has two reportable segments that are also the Group's strategic business areas:
The Group's segment information is based on internal management reporting prepared in accordance with IFRS standards. The Group does not allocate the parent company's intra-Group charges to segments for the purposes of segment reporting. Unallocated ex-
The preparation of consolidated financial statements requires the Group management to make estimates and assumptions that may differ from actual results. Also, the management is required to use judgment when applying accounting principles. The estimates are based on the best information available at the balance sheet date.
The Group's estimates and assumptions relate to the valuation of assets, impairment of trade receivables, deferred taxes, and provisions. The Group annually tests goodwill and in-process intangible assets for impairment and monitors indications of impairment in accordance with the accounting principles presented above. The recoverable amounts of cash-generating units are determined using calculations based on value-in-use. The preparation of these calculations requires the use of estimates. The Group recognizes an impairment loss on trade receivables if payment is delayed more than 360 days or on a case-by-case basis if there is objective evidence that the receivable is irrecoverable.
The Group applies new or revised standards and interpretations as of the effective date of each standard or interpretation or, when the effective date is other than the first day of the financial year, as of the first day of the financial year following the effective date of the standard.
On January 1, 2014, the Group will adopt the following new, revised, and amended standards: IFRS 10 Consolidated Financial Statements (new); IFRS 11 Joint Arrangements (new); IFRS 12 Disclosure of Interests in Other Entities (new); IAS 27 Consolidated and Separate Financial Statements (amended); IAS 28 Investments in Associates (amended); IAS 32 Financial Instruments: Presentation (revised); IAS 36 Impairment of Assets (revised); and IAS 39 Financial Instruments: Recognition and Measurement (revised). The revisions are estimated to have no significant impact on the Group's consolidated financial statements.
penses include amortization of customer agreements and relations, share-based compensation recognized as expense in the income statement, financial items, and income taxes.
The assets and liabilities of a segment are business items that a segment uses in its business or that can be allocated to a segment. Unallocated assets include customer agreements and relations, capitalized research and development expenses, cash and cash equivalents, available-for-sale investments, and tax assets.
Pricing between segments is based on fair market price.
The Group has two major customers, each of which accounts for more than 10% of the Group's net sales. In 2013, the Group's income from these customers was approximately EUR 48 million (approx. EUR 45 million in 2012) and is mainly included in the Project Personnel business area.
| 2013 EUR THOUSAND |
PROJECT PERSONNEL |
CONSULTING | OTHER FUNCTIONS |
ELIMINATIONS | UNALLOCATED | GROUP TOTAL |
|---|---|---|---|---|---|---|
| INCOME STATEMENT | ||||||
| External net sales | 89,926 | 8,539 | 79 | 0 | 0 | 98,544 |
| Intra-Group net sales | 0 | 0 | 0 | 0 | 0 | |
| Net sales | 89,926 | 8,539 | 79 | 0 | 0 | 98,544 |
| Operating result | 3,813 | 666 | -1 796 | 19 | -295 | 2,407 |
| Financing income and expenses | -74 | -74 | ||||
| Income taxes | -825 | -825 | ||||
| Share of results in associates | -294 | -294 | ||||
| Discontinued operations | 4,349 | 4,349 | ||||
| Result for the period | 3,813 | 666 | 2,259 | 19 | -1,194 | 5,563 |
| BALANCE SHEET | ||||||
| Assets | 21,222 | 2,548 | 611 | -40 | 14,477 | 38,818 |
| Investments in associates | 967 | 967 | ||||
| Assets held for sale | 933 | 933 | ||||
| Assets total | 21,222 | 2,548 | 1,578 | -40 | 15,410 | 40,718 |
| OTHER INFORMATION | ||||||
| Net sales, goods | 0 | 309 | 0 | 0 | 0 | 309 |
| Net sales, services | 89,926 | 8,230 | 79 | 0 | 0 | 98,235 |
| Investments | 56 | 0 | 328 | 0 | 0 | 384 |
| Depreciation/amortization | -295 | -87 | -39 | 19 | 0 | -402 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Finland | 2,018 | 2,642 |
| Norway | 51,476 | 45,704 |
| Canada | 28,629 | 29,185 |
| Other | 16,422 | 16,538 |
| Total | 98,544 | 94,069 |
| Total | 8,838 | 10,078 |
|---|---|---|
| Goodwill | 6,972 | 7,803 |
| Other | 129 | 171 |
| Canada | 125 | 148 |
| Norway | 223 | 508 |
| Finland | 1,389 | 1,448 |
| EUR THOUSAND | 2013 | 2012 |
*) Non-current assets excluding financial instruments and deferred tax assets by the location of assets. Goodwill has not been allocated geographically.
| 2013 EUR THOUSAND |
PROJECT PERSONNEL |
CONSULTING | OTHER FUNCTIONS |
ELIMINATIONS | UNALLOCATED | GROUP TOTAL |
|---|---|---|---|---|---|---|
| INCOME STATEMENT | ||||||
| External net sales | 84,905 | 9,164 | 94,069 | |||
| Intra-Group net sales | 62 | 0 | 0 | -62 | 0 | |
| Net sales | 84,967 | 9,164 | 0 | -62 | 0 | 94,069 |
| Operating result | 3,883 | 1,379 | -1,582 | 22 | -283 | 3,419 |
| Financing income and expenses | -23 | -23 | ||||
| Income taxes | -1,033 | -1,033 | ||||
| Share of results in associates | -156 | -156 | ||||
| Discontinued operations | 662 | 662 | ||||
| Result for the period | 3,883 | 1,379 | -1,076 | 22 | -1,339 | 2,869 |
| BALANCE SHEET | ||||||
| Assets | 24,058 | 3,070 | 156 | -58 | 8,447 | 35,673 |
| Investments in associates | 1,296 | 1,296 | ||||
| Assets held for sale | 3,553 | 3,553 | ||||
| Assets total | 24,058 | 3,070 | 1,452 | -58 | 8,447 | 40,522 |
| OTHER INFORMATION | ||||||
| Net sales, goods | 0 | 564 | 0 | 0 | 0 | 564 |
| Net sales, services | 84,916 | 8,590 | 0 | 0 | 0 | 93,506 |
| Investments | 83 | 11 | 90 | 0 | 0 | 184 |
| Depreciation/amortization | -304 | -121 | -22 | 19 | 0 | -428 |
| Total | 98,544 | 100.0 % | 94,069 | 100.0 % |
|---|---|---|---|---|
| Recurring license revenue | 256 | 0.3 % | 334 | 0.4 % |
| One-time license revenue | 309 | 0.3 % | 564 | 0.6 % |
| Services | 97,979 | 99.4 % | 93,171 | 99.0 % |
| DISTRIBUTION OF NET SALES BY REVENUE TYPE EUR THOUSAND |
2013 | % | 2012 | % |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Rents | 131 | 39 |
| Gain on disposal of non-current assets, investments | 0 | 5 |
| Other operating income | 1 | 43 |
| Total | 132 | 87 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Material | 0 | -7 |
| External services | -274 | -212 |
| Total | -274 | -219 |
| Total | 98,544 | 99.9 % | 94,069 | 100.0 % |
|---|---|---|---|---|
| Other functions | 79 | 0.1 % | 0 | 0.0 % |
| Consulting | 8,539 | 8.7 % | 9,164 | 9.7 % |
| Project Personnel | 89,926 | 91.3 % | 84,905 | 90.3 % |
| EUR THOUSAND | 2013 | % | 2012 | % |
| EUR THOUSAND | 2013 | % | 2012 | % |
|---|---|---|---|---|
| Project Personnel | 89,926 | 91.3 % | 84,967 | 90.3 % |
| Consulting | 8,539 | 8.7 % | 9,164 | 9.7 % |
| Other functions | 79 | 0.1 % | 0 | 0.0 % |
| Intra-Group eliminations | 0 | 0.0 % | -62 | -0.1 % |
| Total | 98,544 | 100.0 % | 94,069 | 100.0 % |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Salaries and fees | -79,368 | -73,990 |
| Pension expenses, defined contribution plans | -1,382 | -1,539 |
| Share options granted to employees *) | -56 | -65 |
| Other employee benefits | -5,051 | -4,589 |
| Total | -85,857 | -80,183 |
*) Notes information on share-based payments is presented in note 22 Share-based Payments.
| -2,297 | |
|---|---|
| -2,261 | |
| -6,228 | -6,341 |
| -256 | -215 |
| -955 | -1,090 |
| 2013 | 2012 |
| 351 |
|---|
| 77 |
| 274 |
| 0 |
| 2012 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Loss on assets at fair value through profit and loss of financial assets, non-hedge accounting | 0 | -28 |
| Foreign exchange losses | -422 | -243 |
| Other interest and financing expenses | -130 | -103 |
| Financing expenses, total | -552 | -374 |
| Financing income and expenses, total | -74 | -23 |
| K IHOUSAND | ||
|---|---|---|
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Research and development expenses on the balance sheet | -171 | -57 |
| Capitalized research and development expenditure | -26 | -58 |
| Total | -197 | -115 |
| EUR THOUSAND | 2013 | 2012*) |
|---|---|---|
| External audit | -162 | -184 |
| Other services referred to in the Finnish Auditing Act | -1 | -8 |
| Tax consultancy | -63 | -16 |
| Other professional services | -64 | -80 |
| Total | -290 | -288 |
In accordance with the Finnish Accounting Ordinance, auditor fees includes also the Group's discontinued operations.
*) Classification of comparatives changed
| Total | -402 | -428 |
|---|---|---|
| Depreciation according to plan, tangible assets | -70 | -54 |
| Amortization according to plan, intangible assets | -332 | -374 |
| EUR THOUSAND | 2013 | 2012 |
| AVERAGE NUMBER OF EMPLOYEES | 2013 | 2012 |
|---|---|---|
| Project Personnel | 411 | 379 |
| Consulting | 53 | 50 |
| Other fucntions | 5 | 5 |
| Total | 469 | 434 |
Average number of employees does not include the average number of employees in the Software business area, which was 29 (27). The business area has been reported under discontinued operations as of the fourth quarter of 2012. The disposal of the business area was completed on May 30, 2013.
| NUMBER OF PERSONNEL AT THE END OF THE FINANCIAL YEAR | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Total, continuing operations | 468 | 461 |
In the Project Personnel business area, 41 (40) % of the employees were independent contractors.
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Tax on income from operations | -1,154 | -1,305 |
| Income tax for previous years | 2 | 37 |
| Change in deferred tax assets (Note 18) | 191 | 22 |
| Change in deferred tax liability (Note 18) | 136 | 256 |
| Change in previous year's deferred tax liability | 0 | -43 |
| Total | -825 | -1,033 |
| 2013*) | 2012 |
|---|---|
| 2,244 | 4,854 |
| 0 | 1 |
| -1,595 | -3,485 |
| -2 | -5 |
| -295 | -482 |
| 352 | 883 |
| 4 | 27 |
| -2 | -44 |
| 354 | 866 |
| -85 | -204 |
| 269 | 662 |
| 4,080 | |
| 4,349 | 662 |
The total consideration received for the shares in Safran Software Solutions AS was EUR 4.4 million (NOK 33.9 million), which was all received as cash. Assets and liabilities over which control was lost were as follows, with comparatives for 2012:
| EUR THOUSAND | MAY 30, 2013 | DEC. 31, 2012 |
|---|---|---|
| Tangible assets | 13 | 16 |
| Deferred tax asset | 1 | 1 |
| Trade receivables and other receivables | 2,439 | 798 |
| Cash and cash equivalents | 516 | 1,805 |
| Total assets, discontinued operations | 2,969 | 2,620 |
| Trade payables and other liabilities | 2,506 | 1,420 |
| Tax liability, income tax | 129 | 208 |
| Total liabilities, discontinued operations | 2,635 | 1,628 |
Cash flow from discontinued operations:
| EUR THOUSAND | 2013*) | 2012 |
|---|---|---|
| Net cash generated by operating activities | -438 | 896 |
| Net cash generated by investing activities | 0 | 198 |
| Net cash generated by financing activities | -788 | 0 |
| Change in cash and cash equivalents | -1,226 | 1,094 |
*) Includes discontinued operations from January 1, 2013, until May 30, 2013, on which date the control of the operations passed to the acquirer.
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Result before tax, continuing operations | 2,039 | 3,240 |
| Result before tax, discontinued operations | 4,434 | 867 |
| Total | 6,473 | 4,107 |
| Income tax expense at Finnish statutory rate | -1,586 | -1,006 |
| Effect of tax rates in foreign subsidiaries | -129 | -113 |
| Tax-free income and non-deductible expenses | -103 | -60 |
| Tax-ree gains on disposal of shares in subsidiaries | 1,000 | 0 |
| Changes in tax rate | 16 | 95 |
| Unrecognized tax asset for the losses of the financial year | -89 | -143 |
| Use of carry-forward losses | 0 | 30 |
| Income tax for previous years | 3 | -6 |
| Impairment loss on deferred tax assets | -7 | 0 |
| Other items | -15 | -35 |
| Income tax in the consolidated income statement | -910 | -1,238 |
| Income tax, continuing operations | -825 | -1,033 |
| Income tax, discontinued operations | -85 | -205 |
| Income tax in the consolidated income statement | -910 | -1,238 |
On December 28, 2012, Dovre Group Plc received a notice for a call of option to acquire the Group's Norwegian subsidiary Safran Software Solutions AS. The disposal was completed on May 30, 2013. The following table presents the subsidiary's statement of income excluding certain intra-Group items:
Undiluted earnings per share is calculated by dividing the result attributable to the shareholders of the parent by the weighted average number of shares during the financial year.
The potential increase in the number of shares caused by all instruments entitling to shares is taken into account when calculating the diluted earnings per share. The Group has instruments, share options, with the potential to increase the number of shares. An instrument has a dilutive effect when its subscription price is lower than the market value of the share. The weighted average number of shares and the dilutive effect are calcualted per quarter taking into account those instruments that have an exercise price lower than the weighted average share price during that quarter. The dilutive effect is relative to the difference between the exercise price and the weighted average share price. The total dilutive effect for the financial year or several quarters is calculated as a weighted average for the period in question.
*) Includes prepayments of EUR 70 thousand for other capitalized expenditure.
| DILUTED EARNINGS PER SHARE | 2013 | 2012 |
|---|---|---|
| Result attributable to the shareholders of the parent (EUR thousand) | 5,563 | 2,869 |
| Weighted average number of shares during the financial year (1,000) | 62,911 | 62,896 |
| Stock option adjustment (1,000) | 314 | 167 |
| Weighted average number of shares for calculating the diluted earnings per share (1,000) | 63,225 | 63,063 |
| Diluted earnings per share (EUR / share) | 0.09 | 0.05 |
| UNDILUTED EARNINGS PER SHARE | 2013 | 2012 |
|---|---|---|
| Result attributable to the shareholders of the parent (EUR thousand) | 5,563 | 2,869 |
| Weighted average number of shares during the financial year (1,000) | 62,911 | 62,896 |
| Undiluted earnings per share (EUR / share) | 0.09 | 0.05 |
| UNDILUTED COMPREHENSIVE EARNINGS PER SHARE | 2013 | 2012 |
| Comprehensive result attributable to the shareholders of the parent (EUR thousand) | 3,549 | 3,159 |
| Weighted average number of shares during the financial year (1,000) | 62,911 | 62,896 |
| Undiluted comprehensive earnings per share (EUR / share) | 0.06 | 0.05 |
| Diluted comprehensive earnings per share (EUR / share) | 0.06 | 0.05 |
|---|---|---|
| Weighted average number of shares for calculating the diluted earnings per share (1,000) | 63,225 | 63,063 |
| Stock option adjustment (1,000) | 314 | 167 |
| Weighted average number of shares during the financial year (1,000) | 62,911 | 62,896 |
| Comprehensive result attributable to the shareholders of the parent (EUR thousand) | 3,549 | 3,159 |
| DILUTED COMPREHENSIVE EARNINGS PER SHARE | 2013 | 2012 |
| EUR THOUSAND | CUSTOMER AGREEMENTS AND RELATIONS |
DEVELOPMENT COSTS |
OTHER INTANGIBLE ASSETS |
TOTAL |
|---|---|---|---|---|
| Acquisition cost, Jan. 1 | 3,082 | 167 | 208 | 3,457 |
| Translation differences (+/-) | -336 | 0 | -6 | -342 |
| Additions | 0 | 0 | 285 | 285 |
| Disposals | 0 | -74 | 0 | -74 |
| Acquisition cost, Dec. 31 | 2,746 | 93 | 487 | 3,326 |
| Accumulated amortization and value adjustments, Jan. 1 | -2,331 | -136 | -134 | -2,602 |
| Translation differences (+/-) | 282 | 0 | 5 | 287 |
| Accumulated amortization from disposals | 0 | 74 | 0 | 74 |
| Amortization charges for the year | -293 | -26 | -13 | -332 |
| Accumulated amortization and value adjustments, Dec. 31 | -2,342 | -88 | -142 | -2,573 |
| Book value Dec. 31, 2013 | 404 | 5 | 345 | 754 |
| EUR THOUSAND | CUSTOMER AGREEMENTS AND RELATIONS |
DEVELOPMENT COSTS |
OTHER INTANGIBLE ASSETS* |
TOTAL |
|---|---|---|---|---|
| Acquisition cost, Jan. 1 | 2,939 | 196 | 241 | 3,376 |
| Translation differences (+/-) | 143 | 0 | 1 | 144 |
| Additions | 0 | 0 | 70 | 70 |
| Disposals | 0 | -29 | -104 | -133 |
| Acquisition cost, Dec. 31 | 3,082 | 167 | 208 | 3,457 |
| Accumulated amortization and value adjustments, Jan. 1 | -1,925 | -107 | -225 | -2,258 |
| Translation differences (+/-) | -102 | 0 | -1 | -103 |
| Accumulated amortization from disposals | 0 | 29 | 104 | 133 |
| Amortization charges for the year | -304 | -58 | -12 | -374 |
| Accumulated amortization and value adjustments, Dec. 31 | -2,331 | -136 | -134 | -2,602 |
| Book value Dec. 31, 2012 | 751 | 31 | 74 | 856 |
| Total | 751 | -54 | -293 | 404 |
|---|---|---|---|---|
| Project Personnel, other | 301 | -30 | -75 | 196 |
| Dovre Group AS | 273 | -20 | -182 | 71 |
| Consulting, Finland and Sweden | 177 | -4 | -36 | 137 |
| EUR THOUSAND | JAN. 1, 2013 | TRANSLATION | AMORTIZATION DIFFERENCES FOR THE PERIOD |
JAN. 31, 2013 |
Acquisitions in the Consulting business area took place in 2007 and 2008. Of the acquisition costs, a total of EUR 0.4 million was allocated to customer agreements and relations. The average remaining amortization period for the customer agreements and relations was 4 years on December 31, 2013.
The acquisition of Dovre Group AS was finalised in 2004 with the acquisition of the remaining 60% of the company's shares. Of the acquisition cost, EUR 1.0 million was allocated to customer agreements and relations. The fair values of customer agreements and relations for the 40% ownership by Dovre Group Plc before January 1, 2004, were As a result of testing, no impairment losses were recognized in 2013. The sensitivity of the standard calculations has been tested by calculations using a higher discount rate, lower net sales growth, and lower profitability. The management has estimated that no reasonably possible change of the key assumptions used would cause the carrying
Goodwill is allocated to the Group's Project Personnel and Consulting business areas. The testing has been performed at the year end, with December 31, 2013 as the testing date. The recoverable amount of a cash generating unit is based on value-in-use calculations. A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The Group's Project Personnel business area consists of one and the Consulting business area of two cash generating units. In the Consulting business area, the business area's operations in Finland and Sweden form one cash generating unit. The other cash generating unit consists of the business area's operations in Norway.
The value-in-use calculations are based on the discounted cash flow method. The discount rate used in testing is based on the weighted average cost of capital (WACC) after tax, which is based on risk-free adjusted to represent the fair values for the remaining 60% on the date of their acquisition on June 1, 2004. Following the revaluation, the book value of these customer agreements and relations (40%) was EUR 0.7 million. The remaining amortization period for the customer agreements and relations was 5 months on December 31, 2013.
Project Personnel, other acquisitions
Other acquisitions in the Project Personnel business area took place in 2006 and 2007. Of the acquisition costs, a total of EUR 0.7 million was allocated to customer agreements and relations. The average remaining amortization period for the customer agreements and re-
lations was 3 years on December 31, 2013.
value of the cash generating unit to exceed its recovarable amount. For Consulting, Finland and Sweden, should the unit's net sales not increase and should the unit's EBIT % remain at approx. 3%, a case for impairment loss would arise.
rate of return, operational risks, market risk premium, comparable peer industry beta coefficient, cost of debt, and target capital structure. In 2013, the discount rate used was 10.63% (9.00% in 2012). The decrease in the discount rate was due to the lowering of the risk-free interest rate. The discount rate before tax was between 13.11% and 15.56%.
Key variables used in testing are the rate of growth of net sales and EBIT %, which are based on the Group's budget for 2014 and the Group's strategic rates of growth for 2015-2018 approved by the Board of Directors. For the purposes of impairment testing, a portion of the expenses of the Group's Other functions and a portion of the Group's unallocated items have been allocated to the Group's cash generating units. The variables are based on current business performance, the business area's position in the market, and the business area's potential for growth. The rates of growth used in testing are presented in the table below.
| Book value Dec. 31 | 6,972 | 7,803 |
|---|---|---|
| Translation differences (+/-) | -831 | 312 |
| Acquisition cost, Jan. 1 | 7,803 | 7,491 |
| EUR THOUSAND | 2013 | 2012 |
| MACHINERY AND EQUIPMENT | ||
|---|---|---|
| EUR THOUSAND | 2013 | 2012 |
| Acquisition cost, Jan. 1 | 582 | 518 |
| Translation differences (+/-) | -48 | 14 |
| Additions | 100 | 114 |
| Disposals | -9 | -11 |
| Transfer to assets held for sale, discontinued operations | 0 | -53 |
| Acquisition cost, Dec. 31 | 625 | 582 |
| Accumulated depreciation and value adjustments, Jan. 1 | -460 | -436 |
| Translation differences (+/-) | 40 | -12 |
| Accumulated depreciation from disposals | 9 | 11 |
| Transfer to assets held for sale, discontinued operations | 0 | 31 |
| Depreciation charges for the year | -70 | -54 |
| Accumulated depreciation and value adjustments, Dec. 31 | -481 | -460 |
| Book value Dec. 31 | 145 | 123 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| At the beginning of the financial year | 1,296 | 933 |
| Additions | 11 | 1,485 |
| Share of profit and loss in associates | -294 | -156 |
| Translation differences | -46 | -33 |
| Transfer to assets held for sale | 0 | -933 |
| At the end of the financial year | 967 | 1,296 |
In 2012, additions includes the Group's investments in a project development company based in Singapore and in the company's first development project. Both investments are treated as associates, because the Group has significant influence in the companies due to Board memberships. In 2013, the Group participated in an issuance of shares by one of the companies in a number proportional to the Group's ownership of the company. Transfer to assets held for sale includes the parent company Dovre Group Plc's shares in Kiinteistö Oy Kuukoti in accordance with IFRS 5. The company's management has not ceased actively marketing the shares and deems that the requirements of IFRS 5 are fulfilled. The companies are not publicly listed.
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Project Personnel | 5,808 | 6,583 |
| Consulting, Finland and Sweden | 884 | 903 |
| Consulting, Norway | 280 | 317 |
| Total | 6,972 | 7,803 |
| PROJECT PERSONNEL | CONSULTING, FINLAND AND SWEDEN CONSULTING, NORWAY | ||
|---|---|---|---|
| Growth in net sales | 15% | 10% | 15% |
| EBIT % | 5% | 9% | 10% |
| Terminal growth rate | 1% | 1% | 1% |
| ASSOCIATES IN 2013 | DOMICILE | ASSETS | LIABILITIES | NET SALES | PROFIT/LOSS | OWNERSHIP |
|---|---|---|---|---|---|---|
| Kiinteistö Oy Kuukoti | Espoo, Finland | 5,135 | 26 | 176 | -11 | 43.50 % |
| Sararasa Biomass Pte. Ltd. | Singapore | 417 | 1 | 0 | -69 | 11.11 % |
| Sararasa Bioindo Pte. Ltd. | Singapore | 4,154 | 2,538 | 0 | -1,132 | 25.25 % |
| RECONCILIATION OF DEFERRED TAX ASSETS 2013 EUR THOUSAND |
JAN. 1 | TRANSLATION DIFFERENCES |
CHARGED TO INCOME STATEMENT |
DEC. 31 |
|---|---|---|---|---|
| Tax losses carried forward | 101 | -4 | 186 | 283 |
| Other temporary differences for assets | 20 | -2 | 5 | 23 |
| Total, continuing operations | 121 | -6 | 191 | 306 |
| RECONCILIATION OF DEFERRED TAX LIABILITIES 2013 EUR THOUSAND |
JAN. 1 | TRANSLATION DIFFERENCES |
CHARGED TO INCOME STATEMENT |
DEC. 31 |
|---|---|---|---|---|
| Allocation of fair value on acquisitions | -208 | 14 | 92 | -102 |
| Capitalized and amortized R&D costs | -8 | 0 | 7 | -1 |
| Withholding tax on undistributed earnings | -227 | 0 | 37 | -190 |
| Other temporary differences for liabilities | -355 | 39 | 1 | -315 |
| Total | -799 | 53 | 137 | -609 |
| RECONCILIATION OF DEFERRED TAX ASSETS 2012 EUR THOUSAND |
JAN. 1 | TRANSLATION DIFFERENCES |
CHARGED TO INCOME STATEMENT |
DEC. 31 |
|---|---|---|---|---|
| Tax losses carried forward | 74 | -2 | 29 | 101 |
| Other temporary differences for assets | 26 | 1 | -7 | 20 |
| Total, continuing operations | 100 | -1 | 22 | 121 |
| Discontinued operations | 2 | 0 | -1 | 1 |
| Total | 102 | -1 | 21 | 122 |
| RECONCILIATION OF DEFERRED TAX LIABILITIES 2012 EUR THOUSAND |
JAN. 1 | TRANSLATION DIFFERENCES |
CHARGED TO INCOME STATEMENT |
DEC. 31 |
|---|---|---|---|---|
| Allocation of fair value on acquisitions | -294 | -12 | 98 | -208 |
| Capitalized and amortized R&D costs | -22 | 0 | 14 | -8 |
| Withholding tax on undistributed earnings | -227 | 0 | 0 | -227 |
| Other temporary differences for liabilities | -445 | -11 | 101 | -355 |
| Total | -989 | -23 | 213 | -799 |
On December 31, 2013, the Group carried forward losses worth of EUR 11 million (EUR 14 million on Dec. 31, 2012), for which no deferred tax assets were recognized. A total of EUR 10 million of the Group's losses expires between 2014 and 2023. The remaining losses of the Group have no definite expiration date.
| ASSOCIATES IN 2012 | DOMICILE | ASSETS | LIABILITIES | NET SALES | PROFIT/LOSS | OWNERSHIP |
|---|---|---|---|---|---|---|
| Kiinteistö Oy Kuukoti | Espoo, Finland | 5,135 | 7 | 177 | 7 | 43.50 % |
| Sararasa Biomass Pte. Ltd. | Singapore | 413 | 15 | 0 | -43 | 11.11 % |
| Sararasa Bioindo Pte. Ltd. | Singapore | 3,491 | 662 | 0 | -550 | 25.25 % |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Trade receivables | 9 | 16 |
| EUR THOUSAND 2013 |
2012 |
|---|---|
| Sales of services 18 |
35 |
| Payments to associates -65 |
-64 |
The terms of related party transactions correspond to the terms of non-related party transactions.
| EUR THOUSAND | DEC. 31 2013 | DEC. 31 2012 |
|---|---|---|
| Non-current loan receivables | 26 | 25 |
| Total | 26 | 25 |
The Group's receivables have been recognized at amortized cost.
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Trade receivables | 15,349 | 16,854 |
| Impairment loss on trade receivables | -62 | 0 |
| Currency derivatives | 6 | 0 |
| Other receivables | 131 | 380 |
| Prepayments and accrued income on sales | 955 | 1,342 |
| Other prepayments and accrued income | 475 | 626 |
| Total | 16,854 | 19,201 |
The book values of the receivables are based on a reasonable estimate of their fair values. No significant concentrations of credit risk are associated with the receivables. Other prepayments and accrued income include interest receivables and accrued expenses.
Dovre Group Plc has one class of shares. The book value of the shares is EUR 0.15 per share. Each share entitles the shareholder to one vote. Dovre Group Plc's shares are listed in NASDAQ OMX Helsinki Ltd.
The maximum number of Dovre Group Plc's shares is 160 million shares (160 million in 2012). The shares do not carry a nominal value. The Group's maximum share capital is EUR 41.6 million (EUR 41.6 million in 2012). All shares issued have been fully paid for.
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Cash and bank | 8,737 | 7,052 |
| Short-term deposits | 5,000 | 450 |
| Total, continuing operations | 13,737 | 7,502 |
| Cash and cash equivalents, discontinued operations | 0 | 1,805 |
| Total | 13,737 | 9,307 |
In 2013, the fixed annual interest rate for short-term deposits was 0.5% (0.3% in 2012). The maturity of the deposits varies between 90 and 365 days (maturity 90 days in 2012). Deposits with a maturity of 365 days can be withdrawn at any time.
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Not due | 9,523 | 10,072 |
| Overdue | ||
| 1 - 30 days | 5,035 | 5,464 |
| 31 - 60 days | 663 | 495 |
| 61 - 90 days | 1 | 420 |
| Over 90 days | 66 | 403 |
| Total | 15,288 | 16,854 |
Changes in provision for the impairment of trade receivables:
| RESERVE FOR | |||||
|---|---|---|---|---|---|
| NUMBER OF | SHARE NON-RESTRICTED | REVALUATION | |||
| EUR THOUSAND | SHARES | CAPITAL | EQUITY | RESERVE | TOTAL |
| Dec. 31, 2011 | 62,895,751 | 9,603 | 346 | 127 | 10,076 |
| Translation differences | 0 | 0 | 0 | 7 | 7 |
| Transfer to retained earnings | 0 | 0 | 0 | -55 | -55 |
| Dec. 31, 2012 | 62,895,751 | 9,603 | 346 | 79 | 10,028 |
| Translation differences | 0 | 0 | 0 | -6 | -6 |
| Transfer to retained earnings | 0 | 0 | 0 | -52 | -52 |
| Stock options exercised | 20,000 | 0 | 6 | 0 | 6 |
| Dec. 31, 2013 | 62,915,751 | 9,603 | 352 | 21 | 9,976 |
In 2013, a total of 20,000 shares were subscribed under the Group's 2010A option plan. The subscription period of the plan is March 1, 2012 - February 28, 2015. The exercise price is EUR 0.33.
The fair value adjustments to the customer agreements and relations of Dovre Group AS have been entered in the revaluation reserve. See Note 13 Intangible Assets.
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Impairment loss, Jan. 1 | 0 | 37 |
| Additions | 62 | 0 |
| Reversal of provisions | 0 | -37 |
| Impairment loss, Dec. 31 | 62 | 0 |
In 2013, Dovre Group Plc had two open option plans. Dovre Group calculates the fair value of stock options at grant date using the Black & Scholes model. The fair value is recognized as personnel expense over the vesting period (see Note 6). The key terms of the option plan as well as the key variables used for determining the fair value of the options are presented in the table below.
In its meeting on May 27, 2010, the Board of Directors approved the 2010 option plan based on the authorization given by the Annual General Meeting held on April 18, 2007. The plan is divided into three series and it is directed at the Group's management and key employees. Should the subscriber's employment in Dovre Group end for some other reason than retirement or death, the company has, by Board decision, the right to redeem at no cost the subscriber's option rights the subscription period of which has not yet started.
In its meeting on January 24, 2013, the Board of Directors of Dovre Group Plc approved a new option plan 2013 based on the authorization granted to the Board by the company's Annual General Meeting held on March 15, 2012. Under this plan, a total of 3,000,000 stock options are offered for subscription to Dovre Group's key personnel. The stock options entitle holders to subscribe for a corresponding amount of either new shares issued or own shares held by the company. The stock options are divided into options 2013A, 2013B, and 2013C. Each option series includes a maximum of 1,000,000 stock options.
Should the subscriber's employment in Dovre Group end for some other reason than retirement or death, the company has, by Board decision, the right to redeem at no cost the subscriber's option rights the subscription period of which has not yet started. Should the subscriber's employment in Dovre Group end for some other reason than those mentioned above after the start of the subscription period, the subscriber is entitled and liable to subscribe for the stock options within 30 days after the end of the term of employment. The company's Board reserves the right to grant stock option holders the entitlement to stock options held or to a part of them.
| 2010A | 2010B | 2010C | |
|---|---|---|---|
| Grant date | May 27, 2010 | April 27, 2011 | February 14, 2012 |
| Option life in years | 5 | 5 | 5 |
| Subscription period | March 1, 2012-Feb. 28, 2015 March 1, 2013-Feb. 28, 2016 March 1, 2014-Feb. 28, 2017 | ||
| Period for determining subscription price | Jan. 1-March 31, 2010 | Jan. 1-March 31, 2011 | Jan. 1-March 31, 2012 |
| Variables used: | |||
| Share price at grant date | EUR 0.33 | EUR 0.50 | EUR 0.41 |
| Exercise price | EUR 0.33 | EUR 0.47 | EUR 0.38 |
| Expected volatility | 27% | 30% | 30% |
| Expected option life in years (at grant date) | 5 | 5 | 5 |
| Expected dividend yield | 0 | 0 | 2% |
| Risk-free rate | 1.40% | 2.80% | 1.50% |
| Anticipated cuts in personnel % | N/A | N/A | N/A |
| Fair value of option at grant date | EUR 0.09 | EUR 0.17 | EUR 0.11 |
| Granted options | 900,000 | 775,000 | 775,000 |
| Fair value of option plan at grant date (EUR 1,000) | 77 | 130 | 82 |
| CHANGES IN THE NUMBER OF OPTIONS AND THE WEIGHTED AVERAGE EXERCISE PRICE IN 2013 |
NUMBER OF OPTIONS |
WEIGHTED AVERAGE EXERCISE PRICE (EUR / SHARE) |
|---|---|---|
| Outstanding at the beginning of the year | 1,700,000 | 0.38 |
| Granted | 725,000 | 0.54 |
| Returned | -150,000 | 0.38 |
| Exercised | -20,000 | 0.33 |
| Outstanding at the end of the year | 2,255,000 | 0.44 |
| Exercisable at the end of the year | 930,000 | 0.39 |
| CHANGES IN THE NUMBER OF OPTIONS AND THE WEIGHTED AVERAGE EXERCISE PRICE IN 2012 |
NUMBER OF OPTIONS |
WEIGHTED AVERAGE EXERCISE PRICE (EUR / SHARE) |
|---|---|---|
| Outstanding at the beginning of the year | 1,100,000 | 0.40 |
| Granted | 750,000 | 0.38 |
| Returned | -150,000 | 0.47 |
| Outstanding at the end of the year | 1,700,000 | 0.38 |
| Exercisable at the end of the year | 555,000 | 0.33 |
| 2013A | 2013A | ||
|---|---|---|---|
| Grant date | Jan. 24, 2013 | Expected volatility | 30% |
| Option life in years | 5 | Expected option life in years (at grant date) | 5 |
| Subscription period | March 1, 2015- | Risk-free rate | 0.60% |
| Feb. 29, 2018 | Anticipated cuts in personnel % | N/A | |
| Period for determining subscription price | Feb. 1-March 31, 2013 | Fair value of option at grant date | 0.17 |
| Variables used: | Granted options | 1,000,000 | |
| Share price at grant date | EUR 0.57 | Fair value of option plan at | |
| Exercise price 1) | EUR 0.54 | grant date (EUR 1,000) | 169 |
1) Should the company distribute assets as dividends or as equity return from non-restricted equity, the per-share amounts of dividends and/or equity returns distributed from non-restricted equity shall be deducted from the share subscription price of the stock options if this distribution is decided after the period for determination of the share subscription price but before the share subscription period has begun, provided that the shares subscribed for do not entitle to such dividends or equity return. The share subscription price shall, nevertheless, always amount to at least EUR 0.01.
| OUTSTANDING OPTIONS ON DEC. 31, 2012; EXERCISE PRICE AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE |
NUMBER OF SHARES |
EXERCISE PRICE (EUR / SHARE) |
WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) |
|---|---|---|---|
| Options 2010A | 555,000 | 0.33 | 2.2 |
| Options 2010B | 395,000 | 0.47 | 3.2 |
| Options 2010C | 750,000 | 0.38 | 4.2 |
| Outstanding on Dec. 31, 2012 | 1,700,000 | 0.38 | 3.3 |
| Outstanding on Dec. 31, 2013 | 2,255,000 | 0.44 | 2.9 |
|---|---|---|---|
| Options 2013A | 725,000 | 0.54 | 4.2 |
| Options 2010C | 600,000 | 0.38 | 3.2 |
| Options 2010B | 395,000 | 0.47 | 2.2 |
| Options 2010A | 535,000 | 0.33 | 1.2 |
| OUTSTANDING OPTIONS ON DEC. 31, 2013; EXERCISE PRICE AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE |
NUMBER OF SHARES |
EXERCISE PRICE (EUR / SHARE) |
WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) |
| Options 2013A | 725,000 | 0.54 | 4.2 |
|---|---|---|---|
| Options 2010C | 600,000 | 0.38 | 3.2 |
| Options 2010B | 395,000 | 0.47 | 2.2 |
| Options 2010A | 535,000 | 0.33 | 1.2 |
| PRICE AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE | SHARES | (EUR / SHARE) | CONTRACTUAL LIFE (YEARS) |
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 | |
|---|---|---|---|
| Trade payables | 5,605 | 3,926 | |
| Other current liabilities | 4,025 | 4,940 | |
| Total | 9,630 | 8,865 |
| CHANGES IN PROVISIONS, 2013 EUR THOUSAND |
JAN 1, 2013 | INCREASE | REVERSAL OF PROVISIONS |
PROVISIONS USED |
DEC. 31, 2013 |
|---|---|---|---|---|---|
| Litigation provisions | 0 | 20 | 0 | 0 | 20 |
| Other provisions | 0 | 8 | 0 | 0 | 8 |
| Total | 0 | 28 | 0 | 0 | 28 |
| CHANGES IN PROVISIONS, 2012 EUR THOUSAND |
JAN 1, 2012 | INCREASE | REVERSAL OF PROVISIONS |
PROVISIONS USED |
DEC. 31, 2012 |
|---|---|---|---|---|---|
| Litigation provisions | 39 | 0 | 0 | -39 | 0 |
| Total | 39 | 0 | 0 | -39 | 0 |
| Total | 3,447 | 4,145 |
|---|---|---|
| Other current accrued liabilities on income and expenses | 969 | 871 |
| Currency derivatives | 0 | 1 |
| Accrued employee expenses | 2,478 | 3,273 |
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
The fair values of the liabilities correspond to their book values.
In 2012, the date of expiration of currency derivates was January 7, 2013. Underlying instruments: Currency option NOK 4.5 million (sold put and bought call).
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Non-current liabilities to others | 26 | 25 |
| Total | 26 | 25 |
The Group's long-term financial liabilities are measured at amortized cost. The fair value of the liabilities is based on a reasonable estimate of their book value. The liabilities relate to the parent company's option to acquire the shares of Project Completion Management Ltd.
| 2013 EUR THOUSAND |
LOANS AND RECEIVABLES MEASURED AT THE EFFECTIVE INTEREST RATE METHOD |
FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS |
FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST |
BALANCE SHEET ITEMS AT BOOK VALUE |
BALANCE SHEET ITEMS AT FAIR VALUE |
|---|---|---|---|---|---|
| Non-current financial assets | |||||
| Receivables | 26 | 26 | 26 | ||
| Current financial assets | |||||
| Derivatives - receivables | 6 | 6 | 6 | ||
| Trade receivables | 15,287 | 15,287 | 15,287 | ||
| 15,313 | 6 | 15,319 | 15,319 | ||
| Non-current financial liabilities | |||||
| Other liabilities | 26 | 26 | 26 | ||
| Current financial liabilities | |||||
| Interest-bearing liabilities | 1,048 | 1,048 | 1,048 | ||
| Trade payables | 5,605 | 5,605 | 5,605 | ||
| 6,679 | 6,679 | 6,679 | |||
| 2012 EUR THOUSAND |
LOANS AND RECEIVABLES MEASURED AT THE EFFECTIVE INTEREST RATE METHOD |
ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS |
FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST |
BALANCE SHEET ITEMS AT BOOK VALUE |
BALANCE SHEET ITEMS AT FAIR VALUE |
| Non-current financial assets | |||||
| Receivables | 25 | 25 | 25 | ||
| Current financial assets | |||||
| Trade receivables | 16,854 | 16,854 | 16,854 | ||
The Group's financial assets and liabilities at fair value through profit or loss consist of currency derivatives. The fair value of derivatives is determined using the appropriate quoted market price and commonly used option valuation methods. This corresponds to level 2 in the hierarchy required by IFRS 13 Fair Value Measurement.
In 2012, the date of expiration of currency derivates was January 2, 2014. Underlying instruments:
In 2012, the company disposed of an investment in shares, presented previously in available-for-sale investments.
| 2012 EUR THOUSAND |
LOANS AND RECEIVABLES MEASURED AT THE EFFECTIVE INTEREST RATE METHOD |
ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS |
FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST |
BALANCE SHEET ITEMS AT BOOK VALUE |
BALANCE SHEET ITEMS AT FAIR VALUE |
|---|---|---|---|---|---|
| Non-current financial assets | |||||
| Receivables | 25 | 25 | 25 | ||
| Current financial assets | |||||
| Trade receivables | 16,854 | 16,854 | 16,854 | ||
| 16,879 | 16,879 | 16,879 | |||
| Non-current financial iiabilities | |||||
| Other liabilities | 25 | 25 | 25 | ||
| Current financial liabilities | |||||
| Interest-bearing liabilities | 1,286 | 1,286 | 1,286 | ||
| Derivatives - liabilities | 1 | 1 | 1 | ||
| Trade payables | 3,926 | 3,926 | 3,926 | ||
| 1 | 5,237 | 5,238 | 5,238 |
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Current loans from financial institutions | 1,015 | 1,139 |
| Lines of credit in use | 33 | 147 |
| Total | 1,048 | 1,286 |
The average interest rate for loans was 1.7% in 2013 (1.35% in 2012). The fair values of the liabilities correspond, in material aspects, to their book values.
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Acquisition cost, Jan. 1 | 0 | 75 |
| Disposals | 0 | -75 |
| Book value Dec. 31 | 0 | 0 |
Operating internationally, Dovre Group is exposed to common financial risks, most importantly to foreign exchange risk. The purpose of financial risk management is to ensure that the Group has access to sufficient and cost-effective funding and to monitor and minimize any potentially adverse effects on the Group's financial performance. Financial risks are managed centrally by the Group's Treasury. Financial risk management is part of the Group's operational management.
The Group operates internationally and is thus exposed to a variety of risks arising from foreign currency exchange rate fluctuations relating to foreign currency denominated assets, liabilities, and planned business transactions (transaction risk), and from the translation of income statement items and the items of the statement of financial position of the Group's foreign subsidiaries into euros (translation risk). The Group manages its foreign exchange risks in accordance with the Group's currency hedging policy, approved by the Board of Directors in 2013. The purpose of the policy is to reduce the Group's exposure to currency exchange rate fluctuations and to minimize the impact
Changes in consolidation exchange rates affect the Group's income statement, cash flow statement, and the statement of financial position, which are presented in euros, thus giving rise to translation risk. As the majority of the Group's net sales occur in functional currencies other than the euro, the translation risk related to the Group's net sales and operating result is significant for the Group. In comparison to previous year's average annual exchange rates, in 2013 currency
The Group had no non-current debt or interest-bearing receivables on the balance sheet date.
The purpose of liquidity risk management is to ensure that the Group has access to sufficient liquid assets and credit facilities in order to
A substantive part of the Group's receivables are from a small number of customers. However, the Group does not consider there to be any significant concentrations of customer credit risk because the majority of its customers are large and financially solid companies. Customers' creditworthiness is secured through credit checks. Trade receivables are monitored centrally by Group functions. The Group does not provide customer financing.
Ageing structure of the Group's receivables and impairment losses recognized during the financial year are presented in Note 19 Trade and Other Receivables.
of movements in currency exchange rates on the Group's result and cash flows. Such currency exchange risks that cannot be hedged internally within the Group will be managed through the use of foreign currency derivatives. The purpose is to minimize subsidiaries' currency exchange risks and to centrally hedge the Group's transaction risks at the parent company.
A substantial part of the Group's operations is local service business, is denominated in local functional currencies and does not therefore involve transaction risks. The Group's internal loans and deposits are primarily initiated in the local currencies of the subsidiaries in which case the possible foreign exchange risks are hedged using foreign currency derivatives at the parent company.
The foreign exchange risk sensitivity analysis for the most important currency pairs, disclosed in accordance with IFRS 7, has been calculated for the Group's foreign currency nominated financial assets and liabilities including foreign currency derivatives outstanding on the balance sheet date. The exposures in the most important currency pairs are disclosed in the table below.
exchange rates had an impact of -4.9 (5.4) % on the Group's consolidated net sales in euros and of -11.4 (8.1) % on the Group's consolidated operating result in euros.
The impact of a change of 10% in average annual exchange rates of the Group's main currencies on the Group's net sales and operating result is disclosed in the table below.
guarantee sufficient funding of the Group's business operations. The Group's liquidity is controlled through cash and liquidity management. The Group's liquidity remained strong in 2013.
On December 31, 2013, the Group's cash and cash equivalents amounted to EUR 13.7 million (EUR 7.5 million in 2012). In addition, the parent company and subsidiaries have unused credit limits.
The purpose of the Group's capital structure management is to ensure the Group's liquidity in all market situations, to secure funding for the Group's strategic investments, and to maintain the Group's shareholder value. Capital structure management comprises the management of the Group's solidity and liquidity. Capital structure is monitored by using the debt to equity ratio (gearing).
On December 31, 2013, the Group's interest-bearing net liabilities were EUR -12.7 million (EUR -6.2 million in 2012). The Group's debt to equity ratio (gearing) is calculated by dividing total interest-bearing net liabilities by total assets. Net liabilities include interest-bearing liabilities less cash and cash equivalents.
| EXPOSURE AGAINST EUR | ||||||
|---|---|---|---|---|---|---|
| EUR MILLION | NOK | CAD | USD | AUD | TOTAL | |
| Exposure Dec. 31, 2013 | 0.4 | 0.1 | 0.6 | 0.7 | 1.8 | |
| Exposure Dec. 31, 2012 | 0.4 | -0.3 | 0.7 | 1.0 | 1.8 | |
| EXPOSURE AGAINST NOK | EXPOSURE AGAINST CAD | |||||
| EUR MILLION | USD | GBP | TOTAL | USD | AUD | TOTAL |
| Exposure Dec. 31, 2013 | 0.2 | 0.1 | 0.3 | 0.4 | 0.1 | 0.5 |
| Exposure Dec. 31, 2012 | 0.6 | 0.1 | 0.7 | 0.6 | 0.2 | 0.8 |
The foreign exchange risk sensitivity analysis presents the impact of a change in the foreign exchange rates of 20% and has been calculated before taxes. An estimated 20% change in the foreign exchange rates on the balance sheet date would have resulted in an impact of EUR 0.5 (0.7) million with the exchange rates strengthening and EUR -0.5 (-0.7) million with the exchange rates weakening.
| EUR MILLION | CHANGE EUR/NOK EXCHANGE RATE |
IMPACT ON NET SALES (EUR MILLION) |
IMPACT ON OPERATING RESULT (EUR MILLION) |
|---|---|---|---|
| 2013 | 10 % | -4.7 | -0.3 |
| -10 % | 5.7 | 0.3 | |
| 2012 | 10 % | -4.2 | -0.3 |
| -10 % | 5.1 | 0.2 |
| EUR MILLION | CHANGE EUR/CAD EXCHANGE RATE |
IMPACT ON NET SALES (EUR MILLION) |
IMPACT ON OPERATING RESULT (EUR MILLION) |
|---|---|---|---|
| 2013 | 10 % | -2.6 | -0.2 |
| -10 % | 3.2 | 0.3 | |
| 2012 | 10 % | -2.7 | -0.2 |
| -10 % | 3.2 | 0.3 | |
The translation of the Group's subsidiaries' balance sheets into euros caused a translation difference of EUR 2.0 (0.3) million in 2013. The translation difference was affected mainly by the Norwegian crown, which weakened 13.8% against the euro, and the Canadian dollar, which weakened 11.7% against the euro. The translation risk was not hedged during the financial year.
| EUR MILLION | 2013 | 2012 |
|---|---|---|
| Cash and cash equivalents, continuing operations | 13.7 | 7.5 |
| Cash and cash equivalents, discontinued operations | 0 | 1.8 |
| Credit facilities | 1.6 | 1.7 |
| Total | 15.3 | 11.0 |
| THE GEARING RATIO | 2013 | 2012 |
|---|---|---|
| Interest-bearing liabilities | 1.0 | 1.3 |
| Cash and cash equivalents | 13.7 | 7.5 |
| Net liabilities | -12.7 | -6.2 |
| Shareholder's equity | 25.4 | 23.0 |
| Gearing | -50.0 % | -27.0 % |
Change in gearing in 2013 is due to decreased interest-bearing liabilities and increased cash and cash equivalents.
| DOMICILE | COUNTRY | %, PARENT | SHAREHOLDING SHAREHOLDING %, GROUP |
|
|---|---|---|---|---|
| Dovre Asia Pte Ltd. | Singapore | Singapore | 100,00 | 100,00 |
| Dovre Australia Pty Ltd. | Brisbane | Australia | 100.00 | 100.00 |
| Dovre Canada Ltd. | St. John's | Canada | 100.00 | 100.00 |
| Dovre Group AB | Stockholm | Sweden | 100.00 | 100.00 |
| Dovre Group AS | Stavanger | Norway | 100.00 | 100.00 |
| Dovre Group Inc. | Houston | USA | 100.00 | 100.00 |
| Dovre Group LLC | Moscow | Russia | 100.00 | 100.00 |
| Dovre Services AS | Stavanger | Norway | 100.00 | 100.00 |
| Dovre UK Ltd. | London | UK | 100.00 | 100.00 |
| Project Completion Management Inc. | Houston | USA | 0.00 | 48.00 |
| Project Completion Management Ltd. | Hampshire | UK | 48.00 | 48.00 |
The Group consolidates Project Completion Management because the company has a call option to purchase all issued shares at any time.
| Total | 527 | 1,259 |
|---|---|---|
| Later than one year and not later than five years | 107 | 549 |
| Not later than one year | 420 | 710 |
| EUR THOUSAND | 2013 | 2012 |
The Group's operating leases include business premises and warehouse space and cars. The leases have varying lenghts, index clauses, renewal rights, and other terms.
In 2013, EUR 893 thousand in lease payments for business premises were recognized as expense in the income statement (EUR 991 thousand in 2012) and EUR 28 thousand for cars (EUR 27 thousand in 2012).
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Not later than one year | 81 | 6 |
| Total | 81 | 6 |
The Group has leased out unused office space. The lease agreements are valid until further notice on a six-month notice.
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Collateral for own commitments | ||
| Trade receivables pledged as collateral | 2,989 | 3,402 |
| Pledged shares | 933 | 933 |
The Group's parent company is involved in court proceedings with a former employee who has demanded the company to pay a compensation of approx. EUR 100 thousand for allegedly having unlawfully ended the employee's contract of employment. The company has denied the claims in full. The case awaits court resolution. The date of court resolution is not currently known.
| 2013 | 2012 |
|---|---|
| -284 | -304 |
| -123 | -111 |
| -407 | -415 |
| DOVRE GROUP PLC | 2013 | 2012 |
|---|---|---|
| Hannu Vaajoensuu - Chairman of the Board | -35 | -35 |
| Rainer Häggblom - Vice Chairman of the Board since March 14, 2013 | -19 | 0 |
| Antti Manninen - Vice Chairman of the Board until March 14, 2013 | -6 | -25 |
| Ilari Koskelo - Board member | -22 | -22 |
| Leena Mäkelä - Board member until March 14, 2013 | -3 | -11 |
| Ossi Pohjola - Board member | -22 | -17 |
| Anja Silvennoinen - Board member March 14 - Dec. 31, 2013 | -16 | 0 |
| Janne Mielck - CEO until Dec. 16, 2013 | -284 | -304 |
| Total | -407 | -415 |
A related party is an entity, in which a member of the management of the Group or of its parent company holds either direct or indirect control, holds control together with another party, or has significant influence.
Transactions with associated companies are presented in Note 16 Investments in Associates. Dovre Group did not have any material transactions with other related parties in either 2013 or 2012. There were no loans given to management in the Group balance sheet on December 31, 2013, or on December 31, 2012.
Management Renumeration and Fringe Benefits
Information on management renumeration and fringe benefits includes the renumeration and fringe benefits of the CEOs of the parent company and the members of the Board of Directors of Dovre Group Plc.
Information on key management compensation includes the renumeration and fringe benefits of the members of the Board of Directors of Dovre Group Plc and the members of the Group's executive team.
| Total | -1,168 | -1,375 |
|---|---|---|
| Share-based compensation *) | -43 | -59 |
| Severance pay in connection with termination of employment | -216 | 0 |
| Salaries and other short-term employee benefits | -909 | -1,316 |
| GROUP TOTAL TOTAL | 2013 | 2012 |
*) Comparatives for 2012 corrected
In 2013, the CEO's share of share-based compensation was EUR 17 thousand (EUR 24 thousand in 2012).
| DOVRE GROUP | OPTIONS 2010A |
OPTIONS 2010B |
OPTIONS 2010C |
OPTIONS 2013A |
EXERCISABLE DEC. 31, 2013 |
|---|---|---|---|---|---|
| Arve Jensen | 100,000 | 70,000 | 75,000 | 100,000 | 170,000 |
| Petri Karlsson | 20,000 | 60,000 | 75,000 | 100,000 | 80,000 |
| Tarja Leikas | 0 | 0 | 0 | 100,000 | 0 |
| Total | 120,000 | 130,000 | 150,000 | 300,000 | 250,000 |
| DOVRE GROUP | OPTIONS 2010A |
OPTIONS 2010B |
OPTIONS 2010C |
EXERCISABLE DEC. 31, 2012 |
|---|---|---|---|---|
| Arve Jensen | 100,000 | 70,000 | 75,000 | 100,000 |
| Heidi Karlsson | 100,000 | 70,000 | 75,000 | 100,000 |
| Petri Karlsson | 20,000 | 60,000 | 75,000 | 20,000 |
| Mikko Marsio | 0 | 0 | 75,000 | 0 |
| Janne Mielck | 75,000 | 75,000 | 300,000 | 75,000 |
| Juha Pennanen | 20,000 | 40,000 | 75,000 | 20,000 |
| EUR THOUSAND | NOTE | JAN. 1 - DEC. 31, 2013 | JAN. 1 - DEC. 31, 2012 |
|---|---|---|---|
| NET SALES | 2 | 4,051 | 3,271 |
| Other operating income | 3 | 3,880 | 8,939 |
| Material and services | 4 | -240 | -121 |
| Employee benefit expense | 5 | -2,841 | -2,255 |
| Depreciation and amortization | 6 | -635 | -567 |
| Other operating expenses | -1,467 | -1,144 | |
| OPERATING RESULT | 2,748 | 8,123 | |
| Financing income and expenses | 8 | 2,087 | 219 |
| RESULT BEFORE TAXES | 4,835 | 8,342 | |
| Tax | -70 | -17 | |
| Deferred tax assets | 183 | 0 | |
| RESULT FOR THE PERIOD | 4,948 | 8,325 |
| EUR THOUSAND | NOTE | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Intangible assets | 9 | 652 | 476 |
| Tangible assets | 10 | 45 | 17 |
| Investments | |||
| Investments in subsidiaries | 11 | 14,960 | 15,762 |
| Receivables from Group Companies | 11 | 72 | 2,418 |
| Investments in associates | 11 | 2,429 | 0 |
| NON-CURRENT ASSETS | 18,158 | 18,673 | |
| CURRENT ASSETS | |||
| Non-current assets | |||
| Loan receivables | 12 | 831 | 1,514 |
| Deferred tax assets | 12 | 183 | 0 |
| Current assets | 13 | 1,280 | 1,490 |
| Cash and cash equivalents | 5,895 | 1,503 | |
| CURRENT ASSETS | 8,189 | 4,507 | |
| TOTAL ASSETS | 26,347 | 23,180 |
| TOTAL EQUITY AND LIABILITIES | 26,347 | 23,180 | |
|---|---|---|---|
| LIABILITIES | 899 | 1,457 | |
| Current liabilities | 16 | 899 | 955 |
| Non-current liabilities | 15 | 0 | 502 |
| LIABILITIES | |||
| Provisions | 15 | 28 | 0 |
| SHAREHOLDERS' EQUITY | 25,420 | 21,723 | |
| Profit/loss for the period | 14 | 4,948 | 8,325 |
| Retained earnings | 14 | 10,517 | 3,449 |
| Reserve for invested non-restricted equity | 14 | 352 | 346 |
| Share capital | 14 | 9,603 | 9,603 |
| SHAREHOLDERS' EQUITY |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Cash flow from operating activities | ||
| Operating result | 2,748 | 8,123 |
| Depreciation and amortization | 635 | 566 |
| Gain on disposal of investment | -3,854 | -8,844 |
| Change in provisions on the balance sheet | 28 | 0 |
| Other income statement adjustments | 215 | 0 |
| Changes in working capital | 88 | -243 |
| Interest received | 88 | 203 |
| Interest paid | -6 | -1 |
| Other financial items | -68 | -73 |
| Income taxes paid | -70 | -17 |
| Net cash generated by operating activities | -196 | -286 |
| Cash flow from investing activities | ||
| Investments in tangible and intangible assets | -329 | -70 |
| Proceeds from available-for-sale financial assets | 0 | 80 |
| Investments in Group companies | -153 | 0 |
| Disposal of shares in subsidiaries | 4,448 | 0 |
| Purchase of shares in associates | -11 | -1,485 |
| Dividends received from investments *) | 1,530 | 0 |
| Increase (-) / decrease (+) in loan receivables | 984 | 1,188 |
| Net cash generated by investing activities | 6,469 | -287 |
| Cash flow from financing activities | ||
| Stock options exercised | 6 | 0 |
| Repayments of long-term loans | -483 | 0 |
| Repayments of short-term loans | -182 | 0 |
| Dividends paid | -1,258 | -629 |
| Net cash generated by financing activities | -1,917 | -629 |
| Change in cash and cash equivalents | 4,356 | -1,202 |
| Translation differences | 36 | -5 |
| Transfer of cash and cash equivalents, company reorganizations | 0 | 457 |
| Cash and cash equivalents at the beginning of the period | 1,503 | 2,253 |
| Cash and cash equivalents at the end of the period | 5,895 | 1,503 |
*) A total of EUR 1.3 million of dividends received in 2013 were recorded as loan receivables without cash flow.
The financial statements of the parent company have been prepared in accordance with the Finnish Accounting Act and corporate legislation.
Dovre Group Plc's subsidiary Camako Oy was merged with the parent company in May 2012.
Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. At the end of the financial period, foreign currency assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Foreign exchange gains and losses are presented under financing income and expense in the income statement.
Revenue from services is recognized upon delivery to the customer. Revenue from licenses is recognized upon the granting of user rights when all the main risks and rewards of license ownership have been transferred to the buyer. Revenue from maintenance is allocated to the contract period. Net sales include royalty fee charged from Group companies for intangible marketing property and for using the Dovre Group trademark. Royalties are recognized on an accrual basis and in accordance with the respective licensing agreement.
The parent company's pension schemes are funded through payments to an insurance company. Statutory pension expenses are recognized as expense in the year they are incurred.
Fixed assets are stated at acquisition cost less accumulated depreciation and amortization. Depreciation and amortization are recorded on a straight-line basis over the expected economic useful lives of the assets as follows:
| • Intangible assets (software) | 3 years |
|---|---|
| • Intangible assets (trademarks) | 5 years |
| • Merger assets | 5 years |
| • Other capitalized expenditure | 3-5 years |
| • Machinery and equipment | 4 years |
Trade receivables are stated at the original invoiced amount to customers less doubtful receivables.
The company hedges receivables and liabilities denominated in foreign currency with different currency forward and option contracts. Derivatives are recognized under other receivables or payables at fair value on the date of trade. Outstanding derivatives are remeasured at their fair value at each balance sheet date and the resulting gain or loss is immediately recognized in the income statement under financial items. In determining the fair value of a derivative, the appropriate quoted market price is used, if available. Alternatively, fair value is determined using commonly used valuation methods.
Income tax is recognized in accordance with Finnish tax legislation. Taxes withheld in foreign jurisdictions are recognized as cost in the income statement if they cannot be utilized in taxation. Deferred tax assets are recognized with utmost prudence. In 2013, a total of EUR 183 thousand was recognized as deferred tax assets.
| Total | 4,051 | 3,271 |
|---|---|---|
| Other countries | 183 | 195 |
| Norway | 783 | 870 |
| Canada | 1,274 | 552 |
| Finland | 1,811 | 1,654 |
| EUR THOUSAND | 2013 | 2012 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Materials | 0 | -7 |
| Outside services | -240 | -114 |
| Total | -240 | -121 |
| Total | -2,841 | -2,255 |
|---|---|---|
| Other employee benefits | -86 | -65 |
| Pension expenses | -363 | -315 |
| Salaries and fees | -2,392 | -1,875 |
| EUR THOUSAND | 2013 | 2012 |
| Total | -407 | -415 |
|---|---|---|
| Members of the Board of Directors | -123 | -111 |
| CEO | -284 | -304 |
| EUR THOUSAND | 2013 | 2012 |
The agreements do not contain any special provisions concerning retirement age or pension. In 2013, a total of EUR 49 thousand of the CEO's statutory pension expenses was expensed to the income statement (EUR 55 thousand in 2012).
| NUMBER OF EMPLOYEES | 2013 | 2012 |
|---|---|---|
| Average | 27 | 21 |
| At the end of the financial year | 22 | 30 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Amortization according to plan, intangible assets | -109 | -75 |
| Depreciation according to plan, tangible assets | -16 | -6 |
| Impairment, investments | -510 | -486 |
| Total | -635 | -567 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Rents | 25 | 51 |
| Gain on disposal of non-current assets, investments | 3,854 | 8,844 |
| Other operating income | 1 | 44 |
| Total | 3 880 | 8 939 |
In 2013, gain on disposal of non-current assets, investments includes the gain on disposal of Safran Software Solutions AS as recognized in the parent company. In 2012, gain on disposal of non-current assets, investments includes the company's gains on liquidation resulting from the Group's internal reorganizations as part of which a number of Group companies that were transferred under parent company ownership were recognized at fair value.
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| External audit | -78 | -86 |
| Other services referred to in the Finnish Auditing Act | -1 | -8 |
| Tax consultancy | -36 | 0 |
| Other professional services | -2 | -17 |
| Total | -117 | -111 |
| DIVIDEND INCOME | ||
|---|---|---|
| EUR THOUSAND | 2013 | 2012 |
| Dividend income from Group companies | 2,861 | 0 |
| Total | 2,861 | 0 |
| OTHER INTEREST AND FINANCING INCOME EUR THOUSAND |
2013 | 2012 |
| Interest income from Group companies | 71 | 181 |
| Interest income from others | 21 | 11 |
| Other financing income from others | 247 | 150 |
| Total | 339 | 342 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Impairment of current assets | -500 | 0 |
| Total | -500 | 0 |
| FINANCING EXPENSES | 2013 | 2012 |
|---|---|---|
| Interest expenses to Group companies | -6 | -19 |
| Other interest and financing expenses | -607 | -104 |
| Total | -613 | -123 |
| Financing income and expenses, total | 2,087 | 219 |
| Foreign exchange gains included in financing income | 19 | 150 |
| Foreign exchange losses included in financing expenses | -607 | -67 |
| Book value Dec. 31 | 385 | 129 |
|---|---|---|
| Accumulated amortization and value adjustments, Dec. 31 | -71 | -42 |
| Amortization charges for the year | -29 | -21 |
| Accumulated amortization and value adjustments, Jan. 1 | -42 | -21 |
| Acquisition cost, Dec. 31 | 456 | 171 |
| Additions | 285 | 70 |
| Acquisition cost, Jan. 1 | 171 | 101 |
| EUR THOUSAND | 2013 | 2012 |
In 2012, additions includes prepayments of EUR 70 thousand for other capitalized expenditure.
| INVESTMENTS IN SUBSIDIARIES | ||
|---|---|---|
| EUR THOUSAND | 2013 | 2012 |
| Acquisition cost, Jan. 1 | 16,248 | 5,537 |
| Additions | 301 | 16,892 |
| Disposals | -593 | -6,181 |
| Acquisition cost, Dec. 31 | 15,956 | 16,248 |
| Accumulated value adjustments, Jan. 1 | -486 | 0 |
| Accumulated impairment on disposals | -510 | -486 |
| Accumulated impairment and value adjustments, Dec. 31 | -996 | -486 |
| Book value Dec. 31 | 14,960 | 15,762 |
Additions in 2012 relate to the Group's internal reorganizations as part of which a number of Group companies were transferred under parent company ownership and were recognized at fair value at liqudation (see Note 3).
| RECEIVABLES FROM GROUP COMPANIES | ||
|---|---|---|
| EUR THOUSAND | 2013 | 2012 |
| Acquisition cost, Jan. 1 | 0 | 0 |
| Additions | 76 | 0 |
| Foreign currency difference | -4 | 0 |
| Acquisition cost, Dec. 31 | 72 | 0 |
| Book value Dec. 31 | 72 | 0 |
| Book value Dec. 31 | 2,429 | 2,418 |
|---|---|---|
| Acquisition cost, Dec. 31 | 2,429 | 2,418 |
| Additions | 11 | 1,485 |
| Acquisition cost, Jan. 1 | 2,418 | 933 |
| INVESTMENTS IN ASSOCIATES EUR THOUSAND |
2013 | 2012 |
| OTHER INVESTMENTS EUR THOUSAND |
2013 | 2012 |
|---|---|---|
| Acquisition cost, Jan. 1 | 0 | 75 |
| Disposals | 0 | -75 |
| Acquisition cost, Dec. 31 | 0 | 0 |
| Book value Dec. 31 | 0 | 0 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Acquisition cost, Jan. 1 | 87 | 26 |
| Additions | 44 | 0 |
| Transferred in company reorganizations | 0 | 70 |
| Disposals | 0 | -9 |
| Acquisition cost, Dec. 31 | 131 | 87 |
| Accumulated depreciation and value adjustments, Jan. 1 | -70 | -23 |
| Accumulated depreciation from disposals | 0 | 9 |
| Transferred in company reorganizations | 0 | -50 |
| Depreciation charges for the year | -16 | -6 |
| Accumulated depreciation and value adjustments, Dec. 31 | -86 | -70 |
| Book value Dec. 31 | 45 | 17 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Acquisition cost, Jan. 1 | 401 | 0 |
| Additions | 0 | 401 |
| Acquisition cost, Dec. 31 | 401 | 401 |
| Accumulated amortization and value adjustments, Jan. 1 | -54 | 0 |
| Amortization charges for the year | -80 | -54 |
| Accumulated amortization and value adjustments, Dec. 31 | -134 | -54 |
| Book value Dec. 31 | 267 | 347 |
| INVESTMENTS IN SUBSIDIARIES ON DEC. 31, 2013 | DOMICILE | COUNTRY | PARENT COMPANY OWNERSHIP % |
|---|---|---|---|
| Dovre Asia Pte Ltd. | Singapore | Singapore | 100,00 |
| Dovre Australia Pty Ltd. | Sydney | Australia | 100.00 |
| Dovre Canada Ltd. | St. John's | Canada | 100.00 |
| Dovre Group AB | Stockholm | Sweden | 100.00 |
| Dovre Group AS | Stavanger | Norway | 100.00 |
| Dovre Group Inc. | Houston | USA | 100.00 |
| Dovre Group LLC | Moscow | Russia | 100.00 |
| Dovre Services AS | Stavanger | Norway | 100.00 |
| Dovre UK Ltd. | London | UK | 100.00 |
| Project Completion Management Ltd. | Hampshire | UK | 48.00 |
| INVESTMENTS IN ASSOCIATES ON DEC. 31, 2013 | DOMICILE | COUNTRY | PARENT COMPANY OWNERSHIP % |
|---|---|---|---|
| Kiinteistö Oy Kuukoti | Espoo | Finland | 43.50 |
| Sararasa Biomass Pte Ltd | Singapore | Singapore | 11,.11 |
| Sararasa Bioindo Pte Ltd | Singapore | Singapore | 20.19 |
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Loan receivables | ||
| Non-current loan receivables from Group companies | 794 | 1,476 |
| Non-current loan receivables from others | 37 | 38 |
| Total | 831 | 1,514 |
| Deferred tax assets | 183 | 0 |
| Non-current receivables, total | 1,014 | 1,514 |
The company has a total of EUR 1.8 million unrecognized deferred tax assets for previous years' losses.
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Current receivables from Group companies | ||
| Trade receivables | 173 | 279 |
| Loan receivables | 722 | 704 |
| Prepayments and accrued income | 1 | 0 |
| 896 | 983 | |
| Current receivables from others | ||
| Trade receivables | 271 | 419 |
| Other receivables | 32 | 71 |
| Prepayments and accrued income | 81 | 17 |
| 384 | 507 | |
| Total | 1,280 | 1,490 |
| SHARE CAPITAL EUR THOUSAND |
2013 | 2012 |
|---|---|---|
| Share capital, Jan. 1 | 9,603 | 9,603 |
| Share capital, Dec. 31 | 9,603 | 9,603 |
| RESERVE FOR INVESTED NON-RESTRICTED EQUITY EUR THOUSAND |
2013 | 2012 |
|---|---|---|
| Reserve for invested non-restricted equity, Jan. 1 | 346 | 346 |
| Stock options exercised | 6 | 0 |
| Reserve for invested non-restricted equity, Dec. 31 | 352 | 346 |
| RETAINED EARNINGS | 2013 | 2012 |
|---|---|---|
| Retained earnings, Jan. 1 | 11,774 | 4,078 |
| Dividend distribution | -1,258 | -629 |
| Result for the period | 4,948 | 8,325 |
| Retained earnings, Dec. 31 | 15,465 | 11,774 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Retained earnings from prior years | 10,517 | 3,449 |
| Reserve for invested non-restricted equity | 352 | 346 |
| Result for the period | 4,948 | 8,325 |
| Total | 15,817 | 12,120 |
| CHANGES IN PROVISIONS, 2013 | REVERSAL OF | PROVISIONS | |||
|---|---|---|---|---|---|
| EUR THOUSAND | JAN 1, 2013 | INCREASE | PROVISION | USED | DEC. 31, 2013 |
| Litigation provisions | 0 | 20 | 0 | 0 | 20 |
| Other provisions | 0 | 8 | 0 | 0 | 8 |
| Total | 0 | 28 | 0 | 0 | 28 |
| 2012 | 2013 |
|---|---|
| 20 | |
| . | |
| ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, | |
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Non-current liabilities to Group companies | 0 | 502 |
| Total | 0 | 502 |
| COLLATERAL FOR OWN COMMITMENTS | ||
|---|---|---|
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
| Collateral for own commitments | ||
| Pledged shares | 933 | 933 |
| Credit lines used | 0 | 0 |
| Guarantees given for others | ||
| Loan guarantee | 1,089 | 0 |
| Other guarantees | 1,794 | 0 |
| Total | 2,883 | 0 |
| Total | 100 | 158 |
|---|---|---|
| Later than one year and not later than five years | 1 | 66 |
| Not later than one year | 99 | 92 |
| FUTURE MINIMUM LEASE PAYMENTS FOR NON-CANCELLABLE OPERATING LEASES |
2013 | 2012 |
See Group Financial Statements Note 30.
| EUR THOUSAND | DEC. 31, 2013 | DEC. 31, 2012 |
|---|---|---|
| Current liabilities to Group companies | ||
| Other liabilities | 56 | 267 |
| 56 | 267 | |
| Liabilities to others | ||
| Trade payables | 140 | 96 |
| Other liabilities | 62 | 115 |
| Accruals and deferred income | 641 | 477 |
| 843 | 688 | |
| Total | 899 | 955 |
| EUR THOUSAND | 2013 | 2012 |
|---|---|---|
| Accrued employee expenses | 611 | 431 |
| Currency derivatives | 0 | 1 |
| Accrued rent expenses | 2 | 1 |
| Other accrued expenses | 28 | 44 |
| Total | 641 | 477 |
| EUR | IFRS 2013 |
IFRS 2012 |
IFRS 2011 |
IFRS 2010 |
IFRS 2009 |
|---|---|---|---|---|---|
| Undiluted earnings per share (EUR), Group | 0.088 | 0.046 | 0.051 | 0.038 | -0.014 |
| Diluted earnings per share (EUR), Group | 0.088 | 0.045 | 0.051 | 0.038 | -0.014 |
| Undiluted earnings per share (EUR), continuing operations | 0.019 | 0.035 | 0.051 | 0.038 | -0.014 |
| Diluted earnings per share (EUR), continuing operations | 0.019 | 0.035 | 0.051 | 0.038 | -0.014 |
| Equity per share (EUR) | 0.40 | 0.37 | 0.32 | 0.27 | 0.22 |
| Dividends EUR (1,000) | 1,258 | 1,258 | 629 | 0 | 0 |
| Dividend per share, EUR | 0.020 | 0,020 | 0.010 | 0.000 | 0.000 |
| Dividend per earnings, % | 22.6 % | 43.8 % | 19.6 % | 0.0 % | 0.0 % |
| Effective dividend yield, % | 4.2 % | 3.8 % | 2.9 % | 0.0 % | 0.0 % |
| P/E ratio (EUR) | 5.43 | 11.62 | 6.68 | 11.49 | -23.48 |
| Highest share price (EUR) | 0.59 | 0.58 | 0.51 | 0.44 | 0.36 |
| Lowest share price (EUR) | 0.38 | 0.32 | 0.28 | 0.29 | 0.23 |
| Average share price (EUR) | 0.48 | 0.43 | 0.43 | 0.36 | 0.28 |
| Market capitalization (EUR million) | 30.2 | 33.3 | 21.4 | 27.3 | 20.4 |
| Value of traded shares (EUR million) | 7.7 | 3.9 | 4.3 | 11.9 | 6.5 |
| Shares traded, % | 25.5 % | 14.4 % | 16.0 % | 53.3 % | 37.3 % |
| Average number of shares: | |||||
| – Undiluted (1,000) | 62,911 | 62,896 | 62,429 | 61,962 | 61,962 |
| – Diluted (1,000) | 63,225 | 63,063 | 62,860 | 62,004 | 61,962 |
| Number of shares at end of period (1,000) | 62,916 | 62,896 | 62,896 | 61,962 | 61,962 |
| IFRS | IFRS | IFRS | IFRS | IFRS | |
|---|---|---|---|---|---|
| EUR THOUSAND Net sales, Group *) |
2013 100,788 |
2012 98,923 |
2011 77,183 |
2010 70,776 |
2009 60,738 |
| Change, % *) | 1.9 % | 28.2 % | 9.1 % | 16.5 % | -2.7 % |
| Net sales, continuing operations | 98,544 | 94,069 | 73,273 | ||
| Change, % | 4.8 % | 28.4 % | |||
| Operating result, Group | 2,759 | 4,302 | 4,902 | 3,370 | 263 |
| % of net sales *) | 2.7 % | 4.3 % | 6.4 % | 4.8 % | 0.4 % |
| Operating result, continuing operations | 2,407 | 3,419 | 4,357 | ||
| % of net sales | 2.4 % | 3.6 % | 5.9 % | ||
| Result before tax, Group | 2,393 | 4,106 | 4,788 | 3,389 | -90 |
| % of net sales *) | 2.4 % | 4.2 % | 6.2 % | 4.8 % | -0.1 % |
| Result before tax, continuing operations | 2,039 | 3,240 | 4,243 | ||
| % of net sales | 2.1 % | 3.4 % | 5.8 % | ||
| Result for the period | 5,563 | 2,869 | 3,202 | 2,373 | -871 |
| % of net sales *) | 5.5 % | 2.9 % | 4.1 % | 3.4 % | -1.4 % |
| Return on equity, % | 23.0 % | 13.2 % | 17.2 % | 15.3 % | -5.6 % |
| Return on investment, % **) | 10.2 % | 15.9 % | 26.3 % | 22.9 % | 6.7 % |
| Equity-ratio, % | 62.3 % | 56.8 % | 61.3 % | 55.4 % | 46.5 % |
| Gearing, % ***) | -50.0 % | -27.0 % | -34.6 % | -27.2 % | -2.0 % |
| Balance sheet total | 40,718 | 40,522 | 33,729 | 30,774 | 29,911 |
| Gross capital expenditure | 395 | 1,669 | 57 | 229 | 522 |
| % of net sales (Group) | 0.4 % | 1.7 % | 0.1 % | 0.3 % | 0.9 % |
| Research and development ****) | 197 | 114 | 94 | 665 | 763 |
| % of net sales (continuing operations) | 0.2 % | 0.1 % | 0.1 % | 0.9 % | 1.3 % |
| Average number of personnel, Group | 481 | 459 | 406 | 414 | 404 |
| Personnel at end of period, Group | 468 | 488 | 407 | 418 | 408 |
| Average number of personnel, continuing operations | 469 | 434 | 382 | ||
| Personnel at end of period, continuing operations | 468 | 461 | 381 | ||
*) Comparative for 2011 changed due to reclassification.
**) In 2012 and 2013, return on investment calculated for continuing operations.
***) In 2012, key indicator calculation does not include cash and cash equivalents of discontinued operations.
****) Discontinued operations not included in 2011-2013.
The Group's key financial performance indicators have been calculated for the Group's continuing operations excluding result for the period, return on equity, and earnings per share, which include both continuing and discontinued operations.
*) Divisor calculated as the average of shareholders' equity in the balance sheet at the end of the current and the directly preceeding financial year.
| Result for the period | |||
|---|---|---|---|
| Return on shareholders' equity (ROE), % *) | Shareholders' equity (average) | ||
| (Result before taxes + interest and other financial expenses) | |||
| Return on investment (ROI), % *) | Balance sheet total - interest free liabilities (average) | x 100 | |
| Shareholders' equity | |||
| Equity-ratio, % | Balance sheet total - advances received | x 100 | |
| (Interest-bearing liabilities - cash and cash equivalents) | |||
| Gearing, % | Shareholders' equity | x 100 | |
| Result for the period | |||
| Earnings per share, EUR | Adjusted number of shares (average) | ||
| Shareholders' equity | |||
| Equity per share, EUR | Adjusted number of shares at end of period | ||
| Dividend payable for the financial year | |||
| Dividend per share, EUR | Adjusted number of shares at end of period | ||
| Adjusted dividend per share | x 100 | ||
| Dividend per earnings, % | Earnings per share | ||
| Adjusted dividend per share | |||
| Effective dividend yield, % | Adjusted share price at end of period | x 100 | |
| Adjusted share price at end of period | |||
| Price-earnings ratio (P/E), EUR | Earnings per share |
Dovre Group Plc has one class of shares. Each share entitles the shareholder to one vote. Dovre Group Plc shares are traded in NASDAQ OMX Helsinki Ltd.
On January 1, 2013 and December 31, 2013, Dovre Group Plc's share capital was EUR 9,603,084.48. The total number of shares was 62,895,751 on January 1, 2013, and 62,915,751 on December 31, 2013. During the financial, 20,000 new shares were subscribed for with the company's stock options.
In January – December, 2013, approximately 16.1 (9.2) million Dovre Group shares were traded on the NASDAQ OMX Helsinki Ltd., corresponding to an exchange of approximately EUR 7.7 (3.9) million.
From January 1 to December 31, 2013, the lowest quotation was EUR 0.38 (0.32) and the highest quotation was EUR 0.59 (0.58). On December 31, 2013, the closing quotation was EUR 0.48 (0.53).
The period-end market capitalization was approximately EUR 30.2 (33.3) million.
On December 31, 2013, the number of registered shareholders of Dovre Group Plc totaled 3,064 (2,927) including 9 nominee registers. 0.7 (0.9) % of the Group's shares are nominee-registered.
Based on the authorization granted to the Board of Directors by the Annual General Meeting held on March 15, 2012, and the Board's decision in its meeting on January 24, 2013, the Board granted stock options under the Company's 2013A stock option plan in the first quarter of 2013.
The Annual General Meeting held on March 14, 2013, authorized the Board of Directors to decide on the repurchase of a maximum of 6,200,000 of the Company's own shares, corresponding to approx. 9.9% of the Company's total number of shares. The repurchase authorization is valid until June 30, 2014.
In addition, the Annual General Meeting held on March 14, 2013, authorized the Board of Directors to decide on the issuance of shares as well as the issuance of special rights. By virtue of the authorization, the Board is entitled to decide on the issuing of a maximum of 12,400,000 new shares, corresponding to approximately 20% of the Company's total number of shares. The Board is entitled to decide on the conveying of a maximum 6,200,000 own shares held by the Company. The number of shares to be issued to the Company shall not exceed 6,200,000 including the number of own shares acquired by the Company by virtue of the authorization to repurchase the Company's own shares. Additionally, the Board is authorized to grant special rights entitling to shares. The maximum number of shares to be thus issued is 5,000,000 whereby this maximum number is included in the maximum number of shares noted above. The authorization is valid until June 30, 2014, and replaces the authorization granted by the Annual General Meeting held on March 15, 2012.
The Board did not exercise the authorizations granted by the Annual General Meeting held on March 14, 2013 during the financial year.
Dovre Group Plc's option plan 2010 is divided into three series. The share subscription period of the 2010 stock option plan per series is as follows:
In its meeting on January 24, 2013, the Board of Directors of Dovre Group Plc approved a new option plan 2013. Under this plan, a total of 3,000,000 stock options are offered for subscription to Dovre Group's key employees. The dilution effect of the stock option plan is less than 5% of the total number of shares in the Company. Each stock option entitles the holder to subscribe for one share in the Company.
The share subscription period of the 2013 stock option plan per series is as follows:
The terms and conditions of the 2013 stock option plan are available on the Company's investor pages at www.dovregroup.com.
In its meeting on January 24, 2013, the Board of Directors of Dovre Group Plc decided to cancel a total of 345,000 2010A stock options and a total of 380,000 2010B stock options. The remaining 555,000 2010A stock options entitle holders to subscribe for a total of 555,000 shares in Dovre Group Plc. The remaining 395,000 2010B stock options entitle holders to subscribe for a total of 395,000 shares in Dovre Group Plc.
The subscription period for Dovre Group Plc's 2010A option plan begun on March 1, 2012. During the financial year, a total of 20,000 shares were subscribed for with the option rights. The increase in the Company's number of shares has been entered in the Finnish trade register on April 12, 2013.
The subscription period for Dovre Group Plc's 2010B option plan begun on March 1, 2013. No shares were subscribed for with the option rights during the financial year.
During the financial year, the Group granted the Group's key employees a total 725,000 options under the 2013A option plan (share subscription price EUR 0.54). A total of 150,000 options granted under the 2010C option plan and 75,000 options granted under the 2013A option plan were returned to the company.
At the end of the financial year, a total of 1,705,000 options were outstanding under the 2010 option plan. The company has in reserve 175,000 of these. A total of 3,000,000 options were outstanding under the 2013 option plan. The company has in reserve 2,275,000 of these.
| SUBSCRIPTION PERIOD 2010 |
SUBSCRIPTION PRICE EUR |
NUMBER OF OPTIONS |
NUMBER OF SHARES |
|---|---|---|---|
| A March 1, 2012 – February 28, 2015 | 0.33 | 900,000 | 900,000 |
| B March 1, 2013 – February 28, 2016 | 0.47 | 775,000 | 775,000 |
| C March 1, 2014 – February 28, 2017 | 0.38 | 775,000 | 775,000 |
| Total | 2,450,000 | 2,450,000 | |
| Cancelled | 725,000 | 725,000 | |
| Share subscriptions | 20,000 | 20,000 | |
| Remaining December 31, 2013 | 1,705,000 | 1,705,000 | |
| Of which in reserve | 175,000 | 175,000 |
| SUBSCRIPTION PERIOD 2013 |
SUBSCRIPTION PRICE EUR |
NUMBER OF OPTIONS |
NUMBER OF SHARES |
|---|---|---|---|
| A March 1, 2015 – February 29, 2018 | 0.54 | 1,000,000 | 1,000,000 |
| B March 1, 2016 – February 29, 2019 | 1,000,000 | 1,000,000 | |
| C March 1, 2017 – February 29, 2020 | 1,000,000 | 1,000,000 | |
| Total | 3,000,000 | 3,000,000 | |
| Remaining December 31, 2013 | 3,000,000 | 3,000,000 | |
| Of which in reserve | 2,275,000 | 2,275,000 |
On December 31, 2013, the members of the Board of Directors owned a total of 3,089,540 shares, representing approximately 4.9% of all shares and votes. Taking into account ownership through controlled companies and the ownership of under-aged children or family members living in the same household with Board members, the members of
| 1 Etola Erkki 16,900,000 26.9 % Etra Capital Oy ) 15,000,000 23.8 % Etola Erkki 1,900,000 3.0 % 2 Koskelo Ilari 4,389,540 7.0 % Koskelo Ilari 3,089,540 4.9 % Navdata Oy ) 1,300,000 2.1 % 3 Sijoitusrahasto Evli Suomi 3,098,320 4.9 % 4 Mäkelä Pekka 1,882,375 3.0 % 5 Siik Rauni 1,477,808 2.3 % 6 Siik Seppo Sakari 1,211,629 1.9 % 7 Hinkka Petri 1,000,000 1.6 % 8 Kefura Ab 1,000,000 1.6 % 9 Paasi Kari 806,000 1.3 % 10 Keep it simple KIS OY AB 800,000 1.3 % 11 Schütt Christian 700,000 1.1 % 12 Ruokostenpohja Ismo 652,967 1.0 % 13 Nordea Henkivakuutus Suomi Oy 650,351 1.0 % 14 Hinkka Invest Oy 583,390 0.9 % 15 Vaajoensuu Hannu 545,000 0.9 % Havacment Oy ) 215,000 0.3 % Vaajoensuu Henri ) 165,000 0.3 % Vaajoensuu Sara **) 165,000 0.3 % 16 Toivanen Kari 500,000 0.8 % 17 Suonpää Altti 444,444 0.7 % 18 Olsson Vesa 433,000 0.7 % 19 Karppinen Sakari 423,295 0.7 % 20 Sandström Yngve 370,000 0.6 % 20 largest shareholders (total) 37,868,119 60.2 % Nominee registered shares (total) 414,839 0.7 % Total remaining 24,632,793 39.2 % Total 62,915,751 100.0 % |
SHAREHOLDER | SHARES | % HOLDING |
|---|---|---|---|
*) Erkki Etola holds control in Etra Capital Oy.
**) Ilari Koskelo, member of Dovre Group's Board of Directors, holds control in Navdata Oy.
***) Hannu Vaajoensuu, Chairman of Dovre Group's Board of Directors, holds control in Havacment Oy. Henri and Petra Vaajoensuu are Hannu Vaajoensuu's family members living in the same household with him.
| SHARES | NUMBER OF SHAREHOLDERS |
% OF ALL SHAREHOLDERS |
TOTAL NUMBER OF SHARES |
% OF ALL SHARES |
|---|---|---|---|---|
| 1–100 | 211 | 6.9 | 13,938 | 0.0 |
| 101–500 | 606 | 19.8 | 221,251 | 0.4 |
| 501–1,000 | 491 | 16.0 | 446,659 | 0.7 |
| 1,001–5,000 | 995 | 32.5 | 2,729,605 | 4.3 |
| 5,001–10,000 | 321 | 10.5 | 2,571,205 | 4.1 |
| 10,001–50,000 | 326 | 10.6 | 7,805,346 | 12.4 |
| 50,001–100,000 | 47 | 1.5 | 3,462,616 | 5.5 |
| 100,001–500,000 | 51 | 1.7 | 10,512,751 | 16.7 |
| 500,001– | 16 | 0.5 | 35,152,380 | 55.9 |
| Total | 3,064 | 100.0 | 62,915,751 | 100.0 |
| NUMBER OF SHAREHOLDERS |
% OF ALL SHAREHOLDERS |
TOTAL NUMBER OF SHARES |
% OF ALL SHARES | |
|---|---|---|---|---|
| Private companies | 144 | 4.7 | 22,724,203 | 36.1 |
| Financial and insurance institutions | 13 | 0.4 | 4,578,534 | 7.3 |
| Public bodies | 1 | 0.0 | 800 | 0.0 |
| Non-profit organizations | 6 | 0.2 | 8,080 | 0.0 |
| Households | 2,852 | 93.1 | 33,757,600 | 53.7 |
| Foreign shareholders | 48 | 1.6 | 1,846,534 | 2.9 |
| Total | 3,064 | 100.0 | 62,915,751 | 100.0 |
| Nominee registered | 9 | 414,839 | 0.7 | |
| NAME | NUMBER OF SHARES | % OF SHARES | NUMBER OF STOCK OPTIONS 1) |
|---|---|---|---|
| Hannu Vaajoensuu 2) | 545,000 | 0.9 % | 0 |
| Ilari Koskelo 3) | 4,389,540 | 7.0 % | 0 |
| Rainer Häggblom | 0 | 0.0 % | 0 |
| Ossi Pohjola | 0 | 0.0 % | 0 |
| Anja Silvennoinen | 0 | 0.0 % | 0 |
| Board total | 4,934,540 | 7.8 % | 0 |
| Tarja Leikas (CEO) | 10,422 | 0.0 % | 100,000 |
1) Each stock option entitles the holder to subscribe one share. The marking price varies between EUR 0.37 and EUR 0.50 per share. 2) Hannu Vaajoensuu holds control in Havacment Oy, which owns a total of 215,000 shares. Hannu Vaajoensuu's under-aged child and a family mem-
ber living in the same household own a total of 330,000 shares.
3) Ilari Koskelo holds control in Navdata Oy, which owns a total of 1,300,000 shares.
the Board of Directors owned a total of 4,934,540 shares, representing approximately 7.8% of all shares and votes.
The Board members did not own options rights on December 31, 2013. On December 31, 2013, the acting CEO of Dovre Group Plc owned a total of 10,422 shares, representing approximately 0.0% of all shares and votes.
Hannu Vaajoensuu Chairman of the Board of Directors
Ilari Koskelo Member of the Board of Directors
Tarja Leikas CEO
Based on an audit, an opinion is expressed on these financial statements and on corporate governance on this date.
Helsinki, February 13, 2014
ERNST & YOUNG OY Authorized Public Accountants
Mikko Järventausta Authorized Public Accountant Rainer Häggblom Vice Chairman of the Board of Directors
Ossi Pohjola Member of the Board of Directors
We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Dovre Group Plc for the year ended 31 December 2013. The financial statements comprise the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
Helsinki, 13 February 2014
Ernst & Young Oy Authorized Public Accountant Firm
Mikko Järventausta Authorized Public Accountant
Ernst & Young Oy, Elielinaukio 5 B, 00100 Helsinki
This Corporate Governance Statement has been composed in accordance with Recommendation 54 of the Finnish Corporate Governance Code of the Finnish Securities Market Association, and Chapter 7, Section 7 of the Finnish Securities Market Act. The Finnish Corporate Governance Code can be found on the Association's website, www.cgfinland.fi. The Corporate Governance Statement is issued separately from the company's annual report.
Dovre Group's parent company, Dovre Group Plc, is a public limited company registered in Finland and domiciled in Helsinki, Finland. In its decision-making and governance, Dovre Group complies with the company's Articles of Association, the Finnish Companies Act, and other applicable legislation. In addition, and with the exceptions covered in these principles, the company complies with the recommendations of NASDAQ OMX Helsinki Ltd, the Central Chamber of Commerce of Finland, and the Confederation of Finnish Industries EK concerning corporate governance as well as NASDAQ OMX Helsinki Ltd's Guidelines for Insiders. Dovre Group's subsidiaries comply with local legislation.
Dovre Group complies with the Finnish Corporate Governance Code issued by the Finnish Securities Market Association with the following exception:
The Board of Directors of the company does not have any designated Board committees. The establishment of committees has not been deemed necessary due to the size of the company and the Board.
Dovre Group's Corporate Governance Statement is also available on the company's website at www.dovregroup.com.
The General Meeting of Shareholders, the Board of Directors, and the CEO are responsible for the management of Dovre Group. Their tasks and responsibilities are determined in accordance with the Finnish Companies Act. The CEO, assisted by the Group's Executive Team, is responsible for the Group's operational management.
Dovre Group's supreme decision-making body is the General Meeting of Shareholders. The Annual General Meeting of Shareholders is organized once a year on a date set by the Board of Directors and must be held within six months of the end of the financial period. The Board of Directors may convene an Extraordinary General Meeting when necessary. In accordance with the Articles of Association, the General Meeting is to be held in Espoo, Helsinki, or Vantaa. Notice of the Annual General Meeting and a proposal of the agenda are released as a stock exchange bulletin and published on the company's website.
• Discharging from liability the members of the Board and the CEO
• Number of Board members and their election
Dovre Group's Board of Directors is responsible for the administration and the proper organization of the company's operations. The Board supervises the company's operations and management, and decides on significant matters concerning the company's strategy, organization, financing, and investments. The duties and responsibilities of the Board are determined in accordance with the company's Articles of Association and the Finnish Companies Act. The Board prepares an annual charter that specifies the Board's meeting procedures and duties. The Board's main duties include the following:
In accordance with the Articles of Association, the Board has a minimum of three (3) and a maximum of eight (8) members. The Board members are elected by the Annual General Meeting for one term of office at a time. The term of office of a member of the Board begins at the end of the General Meeting that elected the member and expires at the end of the first Annual General Meeting following the
The Group's bad debt provision is reviewed quarterly. Bad debt calculations are based on the ageing of trade receivables per sales company.
The Group's goodwill is tested for impairment at the end of each financial year on the balance sheet date. Key variables used in the calculations are the estimated change rates of net sales and costs. In addition, indications of impairment are continuously monitored. If indications of impairment are detected, a separate testing is performed. In calculating the company-specific deferred tax assets, the effective tax rate of each country is applied. Deferred tax assets have not been recognized for the Group's losses as it has been estimated that a future use of the losses is not probable in near future.
The performance of business operations and attainment of annual goals is assessed monthly in Executive Team and Board meetings. Monthly management and Board reporting includes both the actual and the estimated results compared to the targeted and the actual results of previous periods. Financial reports generated for the management are used for monitoring certain key indicators associated with the development of sales, profitability, and trade receivables on a monthly basis.
In accordance with its business strategy, Dovre Group may complement its organic growth with business acquisitions. In making acquisitions, the Group follows due diligence and utilizes its internal and external competence in the planning phase), takeover phase, and when integrating acquired functions into the Group's operations.
The goal of management reporting is to produce up-to-date, relevant information for decision-making. The CFO provides the Group's business units with monthly reporting guidelines and is in charge of any special reporting instructions related to budgeting and forecasting. The Group's financial administration distributes, on a regular basis, information on processes and procedures pertaining to financial reporting. Internal control tasks are carried out in accordance with this information. Financial administration also arranges targeted training for the organization's personnel on the procedures associated with financial reporting and changes in them, if necessary. The Group's investor relations maintains, in cooperation with the Group's financial administration, the guidelines on the disclosure of financial information, including, for example, the communication responsibilities of a publicly listed company.
Monitoring refers to the process of assessing Dovre Group's internal control system and its performance in the long term. The Group continuously monitors its operations also through various separate assessments, such as internal and external audits, and supplier audits carried out by customers. The Group's management monitors internal control as part of its day-to-day management. The Executive Team is responsible for ensuring that all operations comply with applicable laws and regulations. The Group's financial administration monitors compliance with the financial reporting processes and control. The financial administration also monitors the correctness of external and internal financial reporting. The Board of Directors assesses and ensures the appropriateness and effectiveness of the Group's internal control and risk management.
The Group's internal control is also assessed by the Group's external auditor. The auditor verifies the correctness of external annual financial reporting. The most significant observations and recommendations of the audit are reported to the Board of Directors.
Dovre Group's insider guidelines comply with the NASDAQ OMX Helsinki Guidelines for Insiders, effective July 1, 2013. The Group's insider guidelines forbid insiders, including persons under their guardianship and companies where they exercise control, to trade in shares or option rights issued by the company during the period from the closing date of an interim or annual accounting period to the date of publication of the interim report or financial statements release for that period. The minimum period concerned (so-called "closed window") is always four (4) weeks prior to the date of publication of an interim report or financial statements release.
The Group's public insider register includes the members of the Board of Directors, the CEO, the members of the Executive Team, the secretary of the Board of Directors, and the auditor in charge of external audit. In addition, the Group maintains a company-specific insider register that includes those employees who regularly receive insider information through their work. Persons, who are involved in acquisitions or other projects that have an effect on the valuation of the Group's shares, are considered project-specific insiders and are subject to a temporary trading suspension.
The Board of Directors is responsible for the guidance and supervision of insider issues and for establishing project-specific insider registers, if necessary. The CFO is responsible for the company's permanent insider register. The insider register of Dovre Group Plc is maintained by Euroclear Finland Ltd. The up-to-date shareholdings of the insiders are available at Euroclear Finland Ltd.'s customer service point in Helsinki, Finland (Urho Kekkosen katu 5 C). The company also maintains a list of insiders on its website.
The Annual General Meeting decides on the compensation of the Board of Directors. The Board decides on the terms and conditions of the employment of the CEO, specified in writing. The compensation principles of the key management are set by the Board. The Board annually approves the incentive scheme for employees. Management compensation is based primarily on the operating result and the net sales of the unit in question.
The Board decides on the compensation paid to the CEO and the Executive Team. The compensation of the management of the Group's business areas is based on the so-called one-over-one principle whereby the compensation decision must be approved by the supervisor of the employee's direct supervisor.
The Annual General Meeting was held in Helsinki on March 14, 2013.
The Annual General Meeting elected five (5) members to the Board of Directors. At the end of the financial year the Chairman of the Board was Hannu Vaajoensuu and the Vice Chairman Rainer Häggblom. The other members of the Board were Ilari Koskelo, Ossi Pohjola and Anja Silvennoinen. All members were independent of the company and its significant shareholders. Until the Annual General Meeting held on 14 March 2013 the Board of Directors consisted of Hannu Vaajoensuu (Chairman), Antti Manninen (Vice Chairman), Ilari Koskelo, Leena Mäkelä, and Ossi Pohjola. In 2013, the Board convened 16 times, with an attendance rate of 95%. The secretary of the Board of Directors was Attorney at Law Janne Haapakari.
election. The Articles of Association do not specify an upper age limit for or the maximum number of terms of office of Board members, or place any other restrictions on the authority of the General Meeting to elect members to the Board. The Board selects a Chairman and a Vice-Chairman from among its members, and the Board is deemed to have a quorum present when more than half of its members are present.
In addition to matters to be resolved, the Board, in its meetings, is provided with current information on the Group's operations, financial situation, and risks.
The Board convenes once a month according to an agreed schedule. The Board may convene more often if necessary. Minutes are kept for all meetings.
The Board of Directors appoints the CEO. The CEO is responsible for the management of the company's business operations and governance in accordance with the Articles of Association, the Finnish Companies Act, and the instructions given by the Board. The CEO is assisted by the Executive Team.
The Group's Executive Team is appointed by the Board of Directors. The Executive Team assists the CEO in the operative management of the company, prepares items for the Board and the CEO, and plans and monitors the operations of the business units. The Executive Team convenes at least once a month. The CEO acts as Chairman of the Executive Team.
The Group's internal audit assesses and ensures the sufficiency and effectiveness of the Group's internal control. It also assesses the efficiency of the Group's various business processes, the sufficiency of the Group's risk management procedures, and compliance with internal guidelines. The Board of Directors is responsible for internal audit. The Group's CFO coordinates the Group's internal audit.
According to the Articles of Association, Dovre Group has a minimum of one (1) and a maximum of two (2) auditors certified by the Finnish Central Chamber of Commerce (Authorized Public Accountants). Should the General Meeting appoint only one principal auditor and should this auditor not be an audit corporation, or should the General Meeting deem it otherwise necessary, the General Meeting may choose to appoint a minimum of one and a maximum of two deputy auditors. The term of the auditors expires at the end of the first Annual General Meeting following their selection. The Board's proposal for the auditor is disclosed in the notice of the General Meeting.
The primary purpose of an audit is to verify that the financial statements give accurate and adequate information concerning the Group's result and financial position for the financial period. In addition, the auditors report to the Board of Directors on the ongoing auditing of administration and operations.
The purpose of internal control is to support the implementation of the Group's strategy and to ensure that the Group complies with all relevant official regulations. The Group's internal control framework is based on the Dovre Group Authorization Matrix. The matrix specifies the authority and the responsibilities of the management and is
approved by the Board. The highest supervisory body of the Group's internal control is the Board. The implementation of internal control measures is primarily supervised by the CEO and CFO, who report to the Board.
The ultimate responsibility for accounting and financial administration lies with Dovre Group's Board of Directors. The Board is responsible for internal control, and the CEO is responsible for the day-to-day organization and monitoring of the control system. The steering and monitoring of business operations is based on the reporting and business planning system that covers the entire Group. The CEO and CFO report monthly to the Board and the Executive Team on the Group's financial situation and development.
The goal of financial reporting is to ensure that all assets and liabilities in the financial statements belong to the company; that all rights and liabilities of the company are presented in the financial statements; that items in the financial statements have been classified, disclosed, and described correctly; that assets, liabilities, income, and expenditure are entered in the financial statements at the correct amounts; that all transactions during the reporting period are included in the accounts; that transactions entered in the accounts are factual transactions; and that assets have been secured.
The Group's risk management is guided by legal requirements, business requirements set by shareholders of the company, and the expectations of customers, personnel, and other important stakeholders. The goal of risk management is to acknowledge and identify systematically and comprehensibly risks involved in the company's operations and to make sure that these risks are appropriately accounted for when making business decisions.
Risk management supports the achievement of strategic goals and seeks to ensure the continuity of business operations. The Group takes risks that are a natural part of its strategy and objectives. The Group is not ready to take risks that might endanger the continuity of its operations, risks that are uncontrollable, or risks that may significantly harm the Group's operations.
In accordance with the Group's risk management procedures, the Board of Directors receives an annual report of the most significant risks facing the Group. The Board analyses the risks from the point of view of shareholder value.
The company's risk management process includes an annual identification and analysis of risks pertaining to financial reporting. In addition, risk assessment aims analyze and report all new risks immediately as soon as they have been identified. Taking into account the quality and extent of the Group's business operations, the most significant risks pertaining to the reliability of financial reporting relate to revenue recognition, bad debt provision, impairment testing (including goodwill), and tax reporting.
The correctness and reliability of financial reporting are ensured through compliance with Group policies and guidelines. Control functions that ensure the correctness of financial reporting include controls related to accounting transactions, the selection of and compliance with the accounting principles, information systems, and fraud controls.
Revenue recognition is supervised by the CFO and is based on the required sale and delivery documents.
b. 1961, Finnish citizen
Basware Plc: CEO 1999–2004, Director 1990-1999, Consultant 1987-1990
Key positions of trust Chairman of the Board: Basware Oyj 2000-, Havactment Oy, Nervogrid Oy, Solita Group Oy Member of the Board: Comptel Plc, Movenium Oy, Nordic Telecom, Profit Software Oy, XMLdation Oy, The Federation of Finnish Technology Industries
In 2013, the Group's auditor was Ernst & Young Ltd., Authorized Public Accountants, with Mikko Järventausta, A.P.A., as the principal auditor.
| PUBLIC INSIDER | SHARES | OPTIONS |
|---|---|---|
| Haapakari Janne | 0 | 0 |
| Häggblom Rainer | 0 | 0 |
| Jensen Arve | 0 | 345,000 |
| Järventausta Mikko | 0 | 0 |
| Karlsson Heidi (public insider until September 3, 2013) *) | 30,000 | 170,000 |
| Karlsson Petri | 0 | 255,000 |
| Koskelo Ilari | 4,389,540 | 0 |
| Leikas Tarja | 10,422 | 100,000 |
| Manninen Antti (public insider until March 14, 2013) *) | 601,500 | 0 |
| Marsio Mikko (public insider until January 25, 2013) *) | 0 | 75,000 |
| Mielck Jan-Erik | 50,000 | 725,000 |
| Mäkelä Leena (public insider until March 14, 2013) *) | 8,435 | 20,000 |
| Pennanen Juha (public insider until January 25, 2013) *) | 29,500 | 135,000 |
| Pohjola Ossi | 0 | 0 |
| Silvennoinen Anja (public insider until December 31, 2013) | 0 | 0 |
| Vaajoensuu Hannu | 545,000 | 0 |
Information includes also ownership through controlled companies and the ownership of under-aged children and/or family members living in the same household with public insiders. Patrick von Essen is included in the company specific insider register since December 18, 2013.
| IONS | ||
|---|---|---|
| Ω | ||
| Ω | ||
| 345,000 | ||
| 0 | ||
| 170,000 | ||
| 255,000 | ||
| 0 | ||
| 100,000 | ||
| 0 | ||
| 75,000 | ||
| 725,000 | ||
| 20,000 | ||
| 135,000 | ||
| Ω | ||
| 0 | ||
| Ω | ||
* Includes pay in lieu of notice, EUR 215 820
The Annual General Meeting held on March 14, 2013, decided that the Chairman of the Board be paid EUR 35,000, Vice Chairman EUR 25,000, and other members of the Board EUR 22,000 for the term which will last to the next annual general meeting in 2014. The compensation is paid quarterly. Actual travelling expenses are remunerated. In 2013, the total remuneration of members of the Board was EUR 213,123.
On December 31, 2013, according to the register maintained by Euroclear Finland Ltd, members of the Board held, either in person and/ or through a company or a family member, the following number of shares in Dovre Group Plc: Hannu Vaajoensuu 545,000, and Ilari Koskelo 4,934,540. Rainer Häggblom, Ossi Pohjola, and Anja Silvennoinen held no shares in Dovre Group Plc. On December 31, 2013, the Board members held, either in person and/or through a company or a family member, a total of 4,934,540 Dovre Group Plc shares, which represents 7.8% of the company's shares and votes.
Jan-Erik Mielck served as Dovre Group's CEO until December 16, 2013. Patrick von Essen was appointed as a new CEO on December 16, 2013. He will assume his duties during the spring 2014. Currently Von Essen is Vice President, Real Estate, at Fiskars Plc. The CFO of Dovre Group Tarja Leikas was appointed acting CEO December 17, 2013 onwards.
Based on the terms and conditions of employment of the CEO, Jan-Erik Mielck's compensation consists of an annual salary of EUR 215,820 (including holiday pay, and car and phone benefits), a performance-based bonus decided by the Board, and a life insurance. The contract includes pension benefits pursuant to the Employees' Pensions Act (TyEL). The contract does not specify the CEO's retirement age. Should the company decide to terminate the employment contract, in addition to the salary for the period of notice, the CEO is entitled to a severance pay equivalent of 12 months' salary including fringe benefits.
The terms and conditions of Patrick von Essen's contract as the CEO of the Group do not materially differ from those of Jan-Erik Mielck.
The CEO's bonus is based on the company's, or its individual units', performance and profitability or on the successful completion of organizational measures. These objectives are specified annually. The CEO's bonus may not exceed EUR 122,625 over 12 months.
In accordance with the CEO's terms of contract, the CEO has been granted:
Based on the information obtained from Euroclear Finland Ltd., on December 31, 2013, Jan-Erik Mielck held 50,000 shares and 725,000 options in Dovre Group Plc. Patrick von Essen had no shares in Dovre
Group Plc on December 31, 2013. The company's acting CEO Tarja Leikas held, either in person and/or through a company or a family member, 10,422 shares and 100,000 option rights under 2013A option plan.
Executive Team's remuneration consists of total salary (including salary in money and fringe benefits, i.e. car and phone) as well as long- and short-term incentives. Short-term incentives include a yearly performance-based bonus decided by the Board. Long-term incentives include option plans, to which all members of the Executive Team are entitled. The Board decides on option plans. In 2013, the Group granted 575,000 option rights under its 2013A option plan to members of the Executive Team. The Group has not taken out any additional pension insurance for the members of the Executive Team.
The Board approves the terms and criteria of the Executive Team's short-term incentives (or bonuses). The bonus is based on the achievement of financial targets, such as operating result and net sales and other related targets, on either Group and/or business unit level. In addition, members of the Executive Team may have either individual or team objectives. Excluding the CEO, the annual bonus of a member of the Executive Team is maximum 54% of the member's annual base salary.
At the end of 2013, the members of the Executive Team were Tarja Leikas (acting CEO and CFO), Arve Jensen (Executive Vice President, Project Personnel), and Petri Karlsson (Executive Vice President, Consulting). In 2013 the following changes took place in the Executive Team: Mikko Marsio and Juha Penannen were members of the Executive Team until January 25, 2013. Heidi Karlsson, the company's CFO until September 3, 2013, was member of the Executive Team until her resignation on September 3, 2013. Tarja Leikas was appointed as the company's new CFO and member of the Executive Team as of September 16, 2013. Jan-Erik Mielck, the company's CEO until December 16, 2013, was member and the Chairman of the Executive Team until December 16, 2013.
In 2013, the total salaries and benefits of the Executive Team, including the salaries and benefits of the CEO Jan-Erik Mielck, were EUR 948,924. Performance-based bonuses including those of Janne Mieck, totaled EUR 120,512.
Based on the information obtained from Euroclear Finland Ltd., on December 31, 2013, members of the Executive Team held a total of 10,422 shares in Dovre Group Plc and a total of 700,000 stock options, excluding the shares and options held by Jan-Erik Mieck.
| Hannu Vaajoensuu | 16/16 |
|---|---|
| Antti Manninen | 4/4 |
| Ilari Koskelo | 16/16 |
| Leena Mäkelä | 3/4 |
| Olli Pohjola | 16/16 |
| Rainer Häggblom | 11/12 |
| Anja Silvennoinen | 11/12 |
| BOARD OF DIRECTORS | COMPENSATION 2013 EUR |
|---|---|
| Häggblom, Rainer | 18 750 |
| Koskelo, Ilari | 22 000 |
| Manninen, Antti | 6 250 |
| Mäkelä, Leena | 2 750 |
| Pohjola, Ossi | 22 000 |
| Silvennoinen, Anja | 16 500 |
| Vaajoensuu, Hannu | 35 000 |
| Total | 123 250 |
| CUTIVE TEAM | |
|---|---|
| . |
*) The ownership information is frozen to the last date of public insider status and does not include changes in ownership after the last date of public insider status.
Rio Group Oy: Chairman of the Board 1998-present; Megavision S.A. Ltd.: Investment Manager 1993-1998;
Member of the Board: Fenno Kvantum Oy,
Nordic Restructuring Oy, Senior Director 2013 Divest Group Oy, Vice President and Head of Consulting, Financial Advisory Services,
TeliaSonera Corporation: CFO, TeliaSonera Finland Oyj, 2010-2012; CFO, TeliaSonera Group, Broadband Services Finland, 2007 – 2010; Director, TeliaSonera Finland Plc, Customer Services and Systems Division 2005 - 2007 ; Financial Director, TeliaSonera International Carrier Group, 2003- 2005; Head of Strategy and Business Control, Sonera International Carrier Group 2000- 2003; Business Controller, Sonera Plc, International Carrier Operations 1998-2000.
| Hannu Vaajoensuu and Ilari Koskelo, see Board of Directors on December 31, 2013 Antti Manninen M.Sc. (Econ.) Member of the Board February 26, 2008 – March 14, 2013 Investor and board professional b. 1961, Finnish citizen Leena Mäkelä M.Sc (Eng.) |
Key employment Basware Oy: Researcher 1991-1992 Key positions of trust Chairman of the Board: Rio Group Oy Member of the Board: Fenno Kvantum Oy, Event Management Group Oy Key employment |
|
|---|---|---|
| Artemis Finland Oy / Proha Oyj: Product | ||
| Member of the Board March 31, 2009 - March 14, 2013 Dovre Group Oyj: Consultant b. 1973, Finnish citizen |
Manager, Project Manager, Consultant 1997-2008 |
|
| Executive Team | ||
| Tarja Leikas M.Sc. (Econ.) Acting CEO since December 17, 2013 and Chief |
Key employment Nordic Restructuring Oy, Senior Director 2013 Divest Group Oy, Vice President and Head |
|
| Financial Officer since September 16, 2013 b. 1967, Finnish citizen |
of Consulting, Financial Advisory Services, 2012 – 2013 TeliaSonera Corporation: CFO, TeliaSonera Finland Oyj, 2010-2012; CFO, TeliaSonera Group, Broadband Services Finland, 2007 – 2010; Director, TeliaSonera Finland Plc, Customer Services and Systems Division 2005 - 2007 ; Financial Director, TeliaSonera International Carrier Group, 2003- 2005; Head of Strategy and Business Control, Sonera International Carrier Group 2000- |
|
M. Sc (Mech.) Executive Vice President, Project Personnel, since June 2012 b. 1959, Norwegian citizen
Dovre Group AS: EVP Norway, 2009 - May 2012; CEO, Dovre International, 2001-2008; Regional Manager, Oslo office, 1995-2001; Consultant 1997-1999 ABB Global Engineering AS, Senior Project Engineer 1990-1993
Executive Vice President, Consulting, since August 2009 Officer b. 1956, Finnish citizen
Key employment
Clemens Oy: Managing director and management consultant 2007-2009 Itella Finland Oy/Atkos Oy: Business Area Director, Director of Business Development, 2002 - 2007 Basware Oy:, Managing Director of subsidiary (Nextware Oy), Senior Vice President, eInvoicing services, strategy and business development, 1999 - 2002
| Jan-Erik Mielck | Key employment | |
|---|---|---|
| M. Sc. (Eng.) | Neste Oil Corporation: Vice President, | |
| Chief Executive Officer, October 2011 – | Business Development, 2011; Vice President, | |
| December 16, 2013 | New Ventures, 2009-2010; Vice President, | |
| b. 1965, Finnish citizen | M&A and Joint Ventures, 2007-2009 | |
| Orienteq Capital Oy, Senior Partner and | ||
| Chairman, 2005-2007 | ||
| 3i Group Plc, Investment Director 2001-2005 | ||
| TeliaSonera Corporation: SVP, Corporate | ||
| Development at Sonera Smartrust, 1999- | ||
| 2001; Director, Corporate Development | ||
| at Sonera Capital, London, 1998-1999; | ||
| Managing Director of Sonera (Hong Kong) | ||
| Ltd, 1996-1998; Head of International | ||
| Business Controller operations, Helsinki 1996 | ||
This Dovre Group's Corporate Governance Statement 2013 has been approved by the Board of Directors in its meeting on 24 January 2014 and has been issued separately of the Report of the Board of Directors.
88 Key Figures and Financial Development 2009 - 2013 Key Figures and Financial Development 2009 - 2013 89
Editing: Dovre Group Plc and Viestintä Isotalo Oy Graphic design: Embassy Creative Oy and Design Jyri K Photos of the management: Pentti Hokkanen/Flaming Star Oy Printing: Erweko Oy
Dovre Group Oyj Unioninkatu 20-22 00130 Helsinki Finland tel. 020–436 2000
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Oslo Inkognitogaten 36, 4. etg. 0256 Oslo tel +47-40-005 900
Stavanger Løkkeveien 99 4001 Stavanger tel +47-40-005 900
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