Annual Report • Mar 23, 2017
Annual Report
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TREASURE ASA
034 — Corporate governance report
042 — Treasure Group
Treasure ASA was incorporated in 2016, following a demerger from Wilh. Wilhelmsen ASA (WWASA), and listed on the Oslo Stock Exchange 8 June.
The company has no own operations nor employees. The group purchases corporate services – including management - based on Service Level Agreements (SLAs) from Wilh. Wilhelmsen Holding ASA (WWH).
Through Den Norske Amerikalinje AS (NAL), a 100%-owned subsidiary of Treasure ASA, the company owns 12.04% of the shares in Hyundai Glovis, a global transportation and logistics provider based in Seoul, Korea.
The group's fundamental objective is to generate significant total shareholder returns from investments within the maritime and logistics industries. The group can generate significant shareholder returns by growth in the market value of its shares, through dividends or other distributions to shareholders.
Whereas the primary focus is on managing the shareholding in Hyundai Glovis, the financial capabilities of the group are strong. The board and management will continue to
A shareholder agreement (SHA) exists between Treasure ASA group and the controlling shareholders of Hyundai Glovis, M.K. Chung and E.S. Chung. The SHA contains a set of provisions regarding ownership and governance, details of which were disclosed in the Listing Prospectus of Treasure ASA.
Since the listing on 8 June 2016 the share price of Treasure ASA moved from 16.00 to 16.70. No dividend was paid during 2016.
Pursuant to section 4, sub-section 5, confer section 3, sub-section 3a of the Norwegian Accounting Act, it is confirmed that the annual accounts have been prepared under the assumption that the enterprise is a going concern and that the conditions are present.
The group's main source of income is the dividend paid to the shareholders of Hyundai Glovis (historically paid in the the second quarter of each year). Given the group's limited financial history, no relevant comparable annual figures are available.
The Treasure ASA group's financial accounts for 2016 showed a total income of USD 201 thousand.
Operating loss was USD 394 thousand in 2016, reflecting management costs since no dividends was received post listing.
Net financials was an expense of USD 749 thousand in 2016, mainly related to the listing on Oslo Stock Exchange. Tax was included with an income of USD 440 thousand in 2016.
Net loss after tax was USD 704 thousand in 2016.
The shareholding in Hyundai Glovis is classified as "Available-for-sale financial assets" under Non-current assets. Consequently, the group records the changes in the market value of the shares and the Korean Won as gains or losses under "Other Comprehensive income".
Total comprehensive income for the year was a loss of USD 133 million. This mainly reflected the share price performance of Hyundai Glovis and currency translation differences since listing.
Total assets for Treasure ASA group at the end of 2016 was USD 597 million, of which USD 16 million in cash and cash equivalents. The group has no interest bearing debt
Hyundai Glovis reported a net profit of KRW 508 billion in 2016, up 34% compared with the previous year, but down 5% compared to 2014. The revenues and profitability is closely linked to the performance of the Hyundai Motor Group.
The Hyundai Glovis share price was subject to a general repricing during 2016, where the overall lower growth expectations reflects the negative performance. In addition, both the domestic political sentiment in Korea and globally has led to foreign investors allocating less capital to Emerging Markets, including Korea.
The market value of Treasure ASA's shareholding in Hyundai Glovis was USD 580 million at the end of the year, representing a Net Asset Value (including cash) of 23 NOK per outstanding share in Treasure ASA.
The Treasure ASA group had a net increase in cash and cash equivalents of USD 16 million for the year, reflecting the de-merger, where cash balances were transferred from WWASA group to Treasure ASA group.
Cash flow from operating activities was negative with USD 829 thousand, mainly due to operating costs in 2016. Cash flow from investing activities was positive with USD 33 thousand, due to interest received.
Cash flow from financing activities was positive with USD 17 million, due to transfer of cash in the de-merger from WWASA.
Global light vehicle car sales increased 4.6% in 2016 and totalled 92 million units. In key markets (North America, Europe, Oceania and the BRIC countries), sales were up 6% to 74 million units. A stronger US economy continued to contribute to healthy sales in North America. Sales in Western Europe continued the positive trend and were up a strong 6% from last year. Chinese car sales continued to grow due to significant government subsidies. Sales in Brazil and Russia continued to decline from the weak levels seen last year.
Korean vehicle exports continued the negative trend from 2015 and ended in 2016 at 2.5 million units, down 13% from the year before.
The shareholding in Hyundai Glovis dominates the risk of Treasure ASA group, through its capital intensity and cyclical exposure to demand and supply of vehicles. This corresponds to a relatively high degree of volatility and financial risk.
The group is committed to manage risks in a sound manner related to its investments. The responsibility of governing boards and management is to be aware of the current environment in which they operate, implement measures to mitigate risks, prepare to act upon unusual observations, threats or incidents and respond to risks to mitigate consequences. The group has put in place a risk monitor process based on identification of risks for each investment (owned or potential), with a consolidated report presented to the board on a quarterly basis for review and necessary actions.
Treasure ASA is indirectly exposed to the global automotive industry in general, with complex supply chains spanning multiple countries and the Hyundai Motor Group in particular. Changes in trade conditions and demand for Hyundai and Kia car volumes may affect transportation flows.
The Treasure ASA group has no employees. Corporate functions as general management, accounting, investor relations, legal, tax, communication etc. are covered via extensive and detailed SLAs with WWH. The board is familiar and confident with the quality of these services.
The Treasure ASA group remains exposed to a range of financial risk factors, particularly stemming from the equity market conditions globally and in Korea as well as from currency movements. Whereas global equity markets have remained volatile within an upward trend, the multi-year appreciation of USD has caused the USD-value of the Hyundai Glovis-stake to lose value.
The group's exposure to and management of financial risk are further described in Note 8 of the 2016 accounts. This includes foreign exchange rate risk, credit risk and liquidity risk.
While the main investment is of a long-term nature, any fluctuations in values will have impact on the net asset value and solidity of the group and may affect profitability.
The board's corporate governance report for 2016 can be found on treasureasa.com and on pages 34-41 in this report.
Treasure ASA group observes the Norwegian Code of Practice for corporate governance, in addition to requirements as specified in the Norwegian Public Companies Act and the Norwegian Accounting Act.
It is the board's view that, given the company's business model, the company has an appropriate governance structure and that it is managed in a satisfactory way.
The board is unaware of any material issues concerning work related issues nor is it aware of any material alleged violations stemming from the SLAs between WWH and Treasure ASA.
Since the company's main asset is a shareholding in a listed company, the board has not developed a separate sustainability report for the company. As the group's main activity is investments, the potential environmental impacts of its own business activities are not material.
However, the company builds its social responsibility guidelines on the foundation set by its majority shareholder and includes environmental, social and corporate governance issues in its investment analysis, business decisions, ownership practices and financial reporting.
Treasure ASA's majority shareholder (WWH) issues an annual sustainability report, which is available on wilhelmsen.com.
Through clearly expressed expectations to Hyundai Glovis, the group will contribute to promote human rights, sound working standards, reduce environmental impact, and work towards eliminating corruption in operations and investments, as well in the operations of suppliers and business partners.
The board's proposal for allocation of the net profit for the year is as follows:
Parent company accounts (NOK thousand)
| Profit for the year | NOK | 4 918 |
|---|---|---|
| From equity | NOK | 61 082 |
| Proposed Dividend | NOK | (66 000) |
| Total Allocation | NOK | 4 918 |
The board is proposing a NOK 0.30 dividend per share payable during the second quarter of 2017, representing a total payment of NOK 66 million. The board of directors also propose that the annual general meeting (AGM) gives the board of directors authority to approve further dividend of up to NOK 0.30 per share for a period limited in time up to the Annual General Meeting in 2018, but no longer than to 30 June 2018.
The Treasure ASA board of directors is proposing to the AGM to issue an authorization to, on behalf of the company, acquire up to 10% of the company's own issued shares and to issue up to 10% of new shares.
Treasure ASA is a maritime investment company with currently one main asset. The prospects for the group
correlates strongly with the general development of the Hyundai Glovis financial and share price performance.
Projections for 2017 indicates a modest uptick in global growth. The current political landscape with potential for increased protectionism, however, adds uncertainty.
The main customers of Hyundai Glovis, Hyundai Motor Group and Kia Motor Group, are experiencing an increasing global demand for their vehicles from a shipping volume perspective. Hyundai Glovis will benefit from the establishment of further manufacturing sites outside of Korea. Kia Motors opened a factory in Mexico in 2016 and Hyundai Motors will add one factory in India in 2017.
Extensive information on Hyundai Glovis can be found on ir.glovis.net/eng
In 2017, Treasure ASA will continue to strengthen its strategic relationship with Hyundai Glovis.
Given the strong balance sheet, the investment capacity is significant. Management will continue its strategy development, including a systematic assessment of potential investment opportunities within the maritime and logistics segments.
On 2 February 2017, Hyundai Glovis announced that the company will pay an annual cash dividend for FY 2016 of 3.000 KRW per share.
The board expects the value of the group's main asset to fluctuate in line with the general equity indexes of the Korean Stock Exchange.
Lysaker, 20 March 2017 The board of directors of Treasure ASA
Thomas Wilhelmsen chair
Marianne Lie
Bente G. Brevik
Christian Berg Magnus Sande CEO
| USD thousand | Note | 2016 |
|---|---|---|
| Operating revenue | ||
| Other income | ||
| Dividend from available-for-sale financial asset | ||
| Other income | 201 | |
| Total income | 201 | |
| Operating expenses | ||
| Other expenses | 1 | (595) |
| Total operating expenses | (595) | |
| Operating profit/(loss) | (394) | |
| Financial income | 1 | 33 |
| Financial expenses | 1 | (782) |
| Financial income/(expenses) | (749) | |
| Profit/(loss) before tax | (1 143) | |
| Tax income/(expense) | 2 | 440 |
| Profit/(loss) for the year | (704) | |
| Of which: | ||
| Profit attributable to owners of the parent | (704) | |
| Basic / diluted earnings per share (USD) | 3 |
| USD thousand | Note | 2016 |
|---|---|---|
| Profit/(loss) for the year | (704) | |
| Items that may be reclassified to the income statement | ||
| Changes in fair value of available-for-sale financial asset | 4 | (132 576) |
| Currency translation differences | 334 | |
| Other comprehensive income, net of tax | (132 242) | |
| Total comprehensive income for the year | (132 945) | |
| Total comprehensive income attributable to: | ||
| Owners of the parent | (132 945) | |
| Total comprehensive income for the year | (132 945) |
Notes 1 to 11 on the next pages are an integral part of these consolidated financial statements.
| USD thousand | Note | 31.12.2016 |
|---|---|---|
| ASSETS | ||
| Non current assets | ||
| Deferred tax asset | 2 | 458 |
| Available-for-sale financial assets | 4 | 580 194 |
| Total non current assets | 580 652 | |
| Current assets | ||
| Account Receivables | 90 | |
| Prepaid expenses | 53 | |
| Cash and cash equivalents | 16 416 | |
| Total current assets | 16 559 | |
| Total assets | 597 211 | |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Paid-in capital | 2 719 | |
| Retained earnings and other reserves | 594 425 | |
| Attributable to equity holders of the parent | 597 144 | |
| Current liabilities | ||
| Other current liabilities | 68 | |
| Total current liabilities | 68 | |
| Total equity and liabilities | 597 211 |
Lysaker, 20 March 2017 The board of directors of Treasure ASA
Thomas Wilhelmsen chair
Marianne Lie
Bente G. Brevik
Christian Berg Magnus Sande CEO
Notes 1 to 11 on the next pages are an integral part of these consolidated financial statements.
| USD thousand Note |
2016 |
|---|---|
| Cash flow from operating activities | |
| Profit before tax | (1 143) |
| Financial (income)/expenses | 749 |
| Change in working capital | (411) |
| Tax paid (company income tax, withholding tax) | (24) |
| Net cash provided by operating activities | (829) |
| Cash flow from investing activities Interest received |
33 |
| Net cash flow from investing activities | 33 |
| Cash flow from financing activities | |
| Demerger WWASA 4 |
17 212 |
| Net cash flow from financing activities | 17 212 |
| Net increase in cash and cash equivalents | 16 416 |
| Cash and cash equivalents at the beginning of the period | |
| Cash and cash equivalents at 31.12 | 16 416 |
The group has bank accounts in different currencies. The cash flow effect from revaluation of cash and cash equivalents is included in net cash flow provided by operating activities.
Notes 1 to 11 on the next pages are an integral part of these consolidated financial statements.
| Share | Retained | Total | ||
|---|---|---|---|---|
| USD thousand | capital | earnings | Total | equity |
| Demerger from Wilh Wilhelmsen ASA | 2 719 | 727 370 | 730 089 | 730 089 |
| Comprehensive income for the period: | ||||
| Profit for the period | (704) | (704) | (704) | |
| Other comprehensive income | (132 242) | (132 242) | (132 242) | |
| Total comprehensive income for the period | 0 | (132 945) | (132 945) | (132 945) |
| Balance 31.12.2016 | 2 719 | 594 425 | 597 144 | 597 144 |
The proposed dividend for fiscal year 2016 in 2017 is NOK 0.30 per share, payable in the second quarter of 2017. A decision on this proposal will be taken by the annual general meeting on 27 April 2017.
The proposed dividend is not accrued in the year-end balance sheet. The dividend will have effect on retained earnings in second quarter of 2017.
Notes 1 to 11 on the next pages are an integral part of these consolidated financial statements.
Treasure ASA (referred to as the parent company) is domiciled in Norway. The parent company's consolidated accounts for fiscal year 2016 include the parent company and its subsidiary (referred to collectively as the group).
The annual accounts for the group and the parent company were adopted by the board of directors on 20 March 2017.
The parent company is a public limited liability company, listed on the Oslo Stock Exchange.
The financial accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS), as endorsed by the European Union, to the extent applicable.
The main assets of the Treasure group are shares held in Hyundai Glovis, which are accounted for as "available-for-sale". The shares in Hyundai Glovis are denominated in KRW and traded on the KRX.
The principal activity of the Company is investment in financial assets and investments in other companies with similar activities. The Company was incorporated on 12 February 2016 and was a wholly owned subsidiary of Wilh. Wilhelmsen ASA ("WWASA"). For the period prior to this, the Company has no historical financial information.
Treasure ASA and Den Norske Amerikalinje AS ("NAL") comprise the Group (the "Group"). NAL own 12.04% in Hyundai Glovis Co. Ltd., Korea. WWASA's shares in NAL were transferred to Treasure ASA by a demerger on 8 June 2016. Before the demerger the group has no historical figures.
The accounts for the group and the parent company are referred to collectively as the accounts.
The group accounts are presented in US dollars (USD), rounded off to the nearest thousand. The Treasure group is a subsidiary of Wilh Wilhelmsen Holding ASA (own 72,73% of the shares). Since Wilh Wilhelmsen Holding group presents the group accounts in USD, the same presentation currency is chosen for Treasure group.
The parent company is presented in its functional currency NOK.
The income statements and balance sheets for group companies with a functional currency which differs from the presentation currency (USD) are translated as follows:
Preparing financial statements in conformity with IFRS and simplified IFRS requires the management to make use of estimates and assumptions which affect the application of the accounting policies and the reported amounts of assets and liabilities, revenues and expenses.
Estimates and associated assumptions are based on historical experience and other factors regarded as reasonable in the circumstances. The actual result can vary from these estimates.
Areas involving a higher degree of judgement or complexity, or where assumptions and estimates are significant to the consolidated financial statements are described in more detail below in the section on critical accounting estimates and assumptions.
The accounting policies outlined below have been applied consistently for all the periods presented in the accounts.
There are no new or amended standards adopted by the group or parent company from 1 January 2016 or later.
New standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the group;
• IFRS 9 The complete version of IFRS 9 was issued in July 2014. It replaces the
guidance in IAS 39 that relates to the classification and measurement of financial instruments.
The group has evaluated the impact of above IFRS standards and currently the standards have no impact of the financial statements for the group.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group and the parent company.
Subsidiaries are all entities over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than half of the voting rights. Subsidiaries are consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the group. When relevant the consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the group recognises any minority interests in the acquirer either at fair value or at the minority interest's proportionate share of the acquirer's net assets.
Intercompany transactions, balances and unrealised gains and losses on transactions between group companies are eliminated.
The operating segments are reported in a manner consistent with the internal financial reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board and management team who makes the strategic decisions.
The group has one segment only, since the main asset is the investment in Hyundai Glovis Ltd.
The group and the parent company have contracts and transactions with sister companies in Wilh Wilhelmsen Holding group based on market terms and cover management services.
See note 9 to the group accounts for transactions and note 7 to the parent company accounts.
Individual companies' transactions in foreign currencies are initially recorded in the functional currency by applying the rate of exchange as of date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rate of the exchange at the balance sheet date. The realised and unrealised currency gains or losses are included in financial income or expense.
In the consolidated financial statements, the assets and liabilities of non USD functional currency subsidiaries, joint ventures and associates, including the related goodwill, are translated into USD using the rate of exchange as of the balance sheet date. The results and cash flow of non USD functional currency subsidiaries, joint ventures and associates are translated into USD using average exchange rate for the period reported (unless this average is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions).
Exchange adjustments arising when the opening net assets and the net income for the year retained by non USD operation are translated into USD are recognised in other comprehensive income. On disposals of a non USD functional currency subsidiary, joint ventures or associates, the deferred cumulative amount recognised in equity relating to that particular entity is recognised in the income statement.
Revenue is recognised when it is probable that a transaction will generate a future economic benefit that will accrue to the entity and the size of the amount can be reliably estimated.
Revenues are recognised at fair value and presented net of value added tax and discounts.
For cash-settled payments, a liability equal to the portion of services received is recognised at the current fair value determined at each balance sheet date.
The group and the parent company classify financial assets in the following categories: trading financial assets at fair value through the income statement, loans and receivables, and available-for-sale financial assets. The classification depends on the purpose of the asset.
Management determines the classification of financial assets at their initial recognition.
Financial assets carried at fair value through the income statement are initially recognised at fair value, and transaction costs are expensed in the income statement.
This category consists of financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of profit from short term price gains. Short term investments are valued at fair value (market value). The resulting unrealised gains and losses are included in financial income and expense. Derivatives are also placed in this category unless designated as hedges. Assets in this category are classified as current.
Loans and receivables are non derivative financial assets with fixed or determinable payments, which are not traded in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non current assets. Loans and receivable are classified as other current assets or other non current assets in the balance sheet.
Loans and receivables are recognised initially at their fair value plus transaction costs. Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or are transferred, and the group has transferred by and large all risk and return from the financial asset.
Realised gains and losses are recognised in the income statement in the period they arise.
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
In case of equity investments classified as available-for-sale financial investments, an objective evidence of impairment would include a significant or prolonged decline in the fair value of the investments below its cost.
Where there is evidence of impairment, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the income statement, is removed from equity and recognized in the income statement. Impairment losses on equity investments are not reversed through the income statement. Increases in fair value after impairment are recognized in other comprehensive income.
The fair value of the investments that are actively traded in organised financial markets is determined by reference to quoted market bid price at the close of business on the balance sheet date. For investments where there is no active market, fair value is determined applying acknowledged valuation methodology.
Available-for-sale financial assets are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.
Deferred tax is calculated using the liability method on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates and laws which have been enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available, and that the temporary differences can be deducted from this profit.
Deferred income tax is calculated on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the group.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other liquid investments with maturities of three months or less. Bank overdrafts are shown under borrowings in current liabilities on the balance sheet.
When the parent company purchases its own shares (Treasury shares), the consideration paid, including any attributable transaction costs net of income tax, is deducted from the equity attributable to the parent company's shareholders until the shares are cancelled or sold. Should such shares subsequently be sold or reissued, any consideration received is included in share capital.
Dividend payments to the parent company's shareholders are recognised as a liability in the group's financial statements from the date when the dividend is approved by the general meeting.
Proposed dividend for the parent company's shareholders is shown in the parent company account as a liability at 31 December current year.
Loans are recognised at fair value when the proceeds are received, net of transaction costs. In subsequent periods, loans are stated at amortised cost using the effective yield method. Any difference between proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the term of the loan. Loans are classified as current liabilities unless the group or the parent company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
The group and the parent company make provisions for legal claims when a legal or constructive obligation exists as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be estimated with a sufficient degree of reliability. Provisions are not made for future operating losses.
When preparing the financial statements, the group and the parent company must make assumptions and estimates. The critical accounting estimates and assumptions in the Financial Statements are impairment of financial assets available-for-sale.
Financial assets classified as available-for-sale are evaluated for impairment on a quarterly basis, or more frequently if events or changes in circumstances indicate that these assets are impaired. The objective evidence of impairment would include a significant or prolonged decline in fair value of the investment below cost. It could also include specific conditions in an industry or geographical area or specific information regarding the financial condition of the company, such as a downgrade in credit rating. Because the estimate for impairment could change from period to period based upon future events that may or may not occur, the group considers this to be a critical accounting estimate. For additional information, see Note 4 "Available-for-sale financial asset".
| USD thousand | 2016 |
|---|---|
| OTHER EXPENSES | |
| Personnel expenses | (16) |
| IT and office expenses | (5) |
| Travel expenses | (8) |
| Audit fee | (6) |
| Consultants fee (listing expenses) | (385) |
| Management fee | (175) |
| Total other expenses | (595) |
| Financial income/(expenses) | (749) |
|---|---|
| Net currency gain/(loss) | (358) |
| Other financial expenses | (424) |
| Interest income | 33 |
| Total expensed audit fee | (6) |
|---|---|
| Other assurance services | (2) |
| Statutory audit | (4) |
| USD thousand | 2016 |
The ordinary rate of corporation tax in Norway is 25% of net profit for 2016. Norwegian limited liability companies are encompassed by the participation exemption method for share income. Thus, share dividends and gains are tax free for the receiving company. Corresponding losses on shares are not deductible. The participation exemption method does not apply to share income from companies considered low taxed and that are located outside the European Economic Area (EEA), and on share income from companies owned by less than 10% resident outside the EEA.
For group companies located in the same country and within the same tax regime, taxable profits in one company can be offset against tax losses and tax loss carry forwards in other group companies. Deferred tax/deferred tax asset has been calculated on temporary differences to the extent that it is likely that these can be utilised in each country and for Norwegian entities the group has applied a rate of 24%. The effective tax rate for the group will, from period to period, change dependent on the group gains and losses from investments inside the exemption method.
The ownership of Hyundai Glovis is 12.04% and the share income is thus considered tax free.
Dividends from Hyundai Glovis Co Ltd are subject to 15% withholding tax in Republic of Korea.
| Total tax income/(expense) | 440 |
|---|---|
| Change in deferred tax | 464 |
| Payable tax in Norway (withholding tax) | (24) |
The tax income for 2016 is driven by the tax effect of operating expenses and non taxable income in the period.
| Profit before tax | (1 143) |
|---|---|
| 25% tax | 286 |
| Tax effect from: | |
| Permanent differences | 88 |
| Currency translation from USD to NOK for Norwegian tax purpose | 91 |
| Withholding tax | (24) |
| Calculated tax income/(expense) for the group | 440 |
| Effective tax rate for the group | 38.5% |
The effective tax rate for the group will, from period to period, change dependent on the group gains and losses from investments inside the exemption method.
| Deferred tax assets to be recovered after more than 12 months | 458 |
|---|---|
| Net deferred tax assets | 458 |
| Net deferred tax assets/(liabilities) at 8 June 2016 | |
| Currency translation differences | (6) |
| Income statement charge | 464 |
| Net deferred tax assets at 31.12 | 458 |
| Deferred tax assets in balance sheet | 458 |
| Net deferred tax assets at 31.12 | 458 |
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:
| Deferred tax assets at 31.12.2016 | 458 |
|---|---|
| Currency translations | (6) |
| Through income statement | 464 |
| At 08.06.2016 | |
| Deferred tax assets | |
| USD thousand | Tax losses carried forward |
Earnings per share taking into consideration the number of outstanding shares in the period.
Basic / diluted earnings per share is calculated by dividing profit for the period after minority interests, by average number of total outstanding shares.
Earnings per share is calculated based on 220 000 000 shares for 2016.
| USD thousand | 2016 |
|---|---|
| Available-for-sale financial assets | |
| Demerger from Wilh Wilhelmsen ASA | 712 769 |
| Change in value of available-for sale assets | (132 576) |
| Total available-for-sale financial assets | 580 194 |
| Available-for-sale financial assets | |
| Hyundai Glovis Ltd | 580 194 |
The change in market value represent the volatility in the shares and there have been no significant decline during the period. The market value fell below cost early November 2016. The period it has been below cost to 31 December 2016 is not considered a prolonged decline. No impairment has been recogniced in 2016.
Available-for-sale financial assets are denominated in KRW
| USD thousand | Level 1 |
|---|---|
| Financial assets at fair value | |
| Available-for-sale financial assets | 580 194 |
| Total financial assets 31.12 | 580 194 |
The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group,
pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.
The quoted market price used for financial assets held by the group is the current close price. These instruments are included in level 1. Instruments included in level 1 at the end of 2016 are liquid equities.
| Business office/ country |
Nature of business |
Proportion of ordinary shares directly held by parent (%) |
Proportion of ordinary shares held by the group (%) |
|
|---|---|---|---|---|
| Den Norske Amerikalinje AS | Lysaker, Norway | Investments | 100% | 100% |
The group's principal subsidiary at 31 December 2016 is set out above, and has share capital consisting solely of ordinary shares that are held directly by the group, and the proportion of ownership interests held equals the voting rights held by the group. The country of incorporation or registration is also its principal place of business.
The chief operating decision-maker monitores the business by combining having similar entities characteristics such as product services, market and underlying asset base, into operating segments. The group main investment is investment in Huyndai Glovis Ltd. There is only one business area in the group at the end of December 2016.
The group has exposure to the following financial risks from its ordinary operations:
The group has exposure to risk connected with the movements in the share price of Hyundai Glovis. Although fundamentals have been stable over time and reflecting the underlying stable business model of Hyundai Glovis, valuation has been volatile, causing the share price to periodically move heavily and not always in sync with the broader Korean Equity Market.
The group has exposure to currency risk mainly on balance sheet items denominated in currencies other than non-functional currencies (translation risk, mainly share price of Hyundai Glovis, denominated in KRW), and to a much lesser extent on revenues and costs in non-functional currencies (transaction risk, mainly dividends from Hyundai Glovis, denominated in KRW).
The group has not established hedging strategies to mitigate risks originating from movements in share price and/or currencies.
The group has zero exposure to credit risk due to lack of material receivables.
The parent company has issued a guarantee towards its former parent company Wilh Wilhelmsen ASA, whereby the company under certain conditions will support repayment of certain bond debt held by Wilh Wilhelmsen ASA prior to the de-merger of Wilh Wilhelmsen ASA and the company. The guarantee is reported as an "off balance sheet item".
The group's approach to managing liquidity is to secure that it will always have sufficient liquidity to meet its liabilities under both normal and stressed conditions. The group's liquidity risk is low in that it holds significant liquid assets in operational bank accounts.
On 31 December 2016, material foreign currency balance sheet exposure subject to translation risk was in KRW. Income statement sensitivities (post tax) for the net exposure booked are as follows:
| Sensitivities | (20%) | (10%) | 0% | 10% | 20% |
|---|---|---|---|---|---|
| Change in share price of Hyuandai Glovis (KRW) | 123 600 | 139 050 | 154 500 | 169 950 | 185 400 |
| Change in Other Comprehensive Income | (116) | (58) | 0 | 58 | 116 |
| USD thousand | |||||
| Sensitivities | (20%) | (10%) | 0% | 10% | 20% |
| Change in USDKRW exchange rate | 962 | 1 082 | 1 202 | 1 323 | 1 443 |
| Change in Other Comprehensive Income | (116) | (58) | 0 | 58 | 116 |
The group's policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future investment capabilities.
| Average equity | 663 616 |
|---|---|
| Average interest-bearing debt | |
| Profit after tax | (704) |
| Net profit before tax* | (1 143) |
| Interest expenses and realised interest derivatives | |
| Return on equity | 0% |
*Profit before taxes plus interest expenses and realised derivatives, in percent of average equity and interest-bearing debt.
into on market terms.
| USD thousand Assets |
Note | Loans and receivables |
Available for-sale financial asset |
Total |
|---|---|---|---|---|
| Available-for-sale financial assets | 4 | 580 195 | 580 194 | |
| Other current assets | 143 | 143 | ||
| Cash and cash equivalent | 16 416 | 16 416 | ||
| Assets at 31.12.2016 | 16 559 | 580 194 | 596 753 |
The ultimate owner of the group Treasure ASA is Tallyman AS, which controls about 60% of voting shares of the group Wilh Wilhelmsen Holding ASA. Wilh. Wilhelmsen Holding ASA controls 72.73% of the Treasure group. The beneficial owners of Tallyman AS are the Wilhelmsen family. Mr Wilhelm Wilhelmsen controls Tallyman AS.
The group had transactions with related parties in 2016. All transactions are entered
The services are:
• Management team (CEO and CFO)
• Shared services
Generally, Shared Services are priced using a cost plus 5% margin calculation, in accordance with the principles set out in the OECD Transfer Pricing Guidelines and are delivered according to agreements that are renewed annually.
| Material related parties for Treasure group are: | Business office, country | Ownership | |
|---|---|---|---|
| Wilh Wilhelmsen Holding ASA (WWH) | Lysaker, Norway | Owned 72.73% of Treasure ASA | |
| Wilhelmsen Accounting Services AS | Lysaker, Norway | Owned by WWH | |
| USD thousand | Note | 2016 | |
| OPERATING EXPENSES FROM RELATED PARTY | |||
| Purchase of services from Wilh Wilhelmsen Holding group: | |||
| Management and accounting services | (161) |
| Operating expenses from related party | (161) |
|---|---|
| FINANCIAL INCOME | |
| Interest income from Wilh Wilhelmsen ASA | 5 |
| Financial income from related party | 5 |
| Pro forma | ||
|---|---|---|
| USD thousand | Q1 2016 | Full year 2015 |
| Income | ||
| Dividend from available-for-sale financial asset | 11.9 | 8.2 |
| Other income | ||
| Total income | 11.9 | 8.2 |
| Operating expenses | ||
| Other expenses | (0.4) | |
| Total operating expenses | 0.0 | (0.4) |
| Operating profit | 11.9 | 7.8 |
| Financial income/(expenses) | (1.1) | |
| Profit/(loss) before tax | 10.8 | 7.8 |
| Income tax | (1.8) | (1.4) |
| Profit/(loss) | 9.0 | 6.3 |
| STATEMENT OF COMPREHENSIVE INCOME | ||
| Profit for the period | 9.0 | 6.3 |
| Items that will be reclassified to income statement | ||
| Changes in fair value of available-for-sale financial asset | 8.4 | (465.7) |
| Other comprehensive income, net of tax | 8.4 | (465.7) |
| Total comprehensive income for the period | 17.4 | (459.4) |
No material events occurred between the balance sheet date and the date when the accounts were presented which provide new information about conditions prevailing on the balance sheet date.
| 2016 | ||
|---|---|---|
| NOK thousand | Note | (12.02.2016- 31.12.2016) |
| Operating income | 1 | 1 680 |
| Operating expenses | ||
| Operating expenses | 1 | (4 634) |
| Total operating expenses | (4 634) | |
| Operating profit/(loss) | (2 954) | |
| Financial income/(expenses) | ||
| Net financial income | 1 | 10 077 |
| Net financial expenses | 1 | (3 541) |
| Financial income/(expenses) | 6 536 | |
| Profit before tax | 3 582 | |
| Tax income | 3 | 1 336 |
| Profit for the year | 4 918 | |
| Transfers and allocations | ||
| From equity | 5 | 61 082 |
| Proposed dividend | 5 | (66 000) |
| Total transfers and allocations | 4 918 | |
Notes 1 to 9 on the next pages are an integral part of these financial statements.
| NOK thousand | Note | 31.12.2016 |
|---|---|---|
| ASSETS | ||
| Non current assets | ||
| Deferred tax asset | 3 | 1 540 |
| Investments in subsidiaries | 4 | 5 906 857 |
| Total non current assets | 5 908 398 | |
| Current assets | ||
| Account receivables | 777 | |
| Other current assets | 452 | |
| Cash and cash equivalents | 2 149 | |
| Total current assets | 3 378 | |
| Total assets | 5 911 775 | |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Paid-in capital | 5 | 22 000 |
| Retained earnings | 5 | 5 823 775 |
| Total equity | 5 845 775 | |
| Dividend | 66 000 | |
| Total current liabilities | 66 000 | |
| Total equity and liabilities | 5 911 775 |
Lysaker, 20 March 2017 The board of directors of Treasure ASA
Thomas Wilhelmsen chair
Marianne Lie
Bente G. Brevik
Christian Berg Magnus Sande CEO
Notes 1 to 9 on the next pages are an integral part of these financial statements.
| NOK thousand | Note | 2016 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit before tax | 3 582 | |
| Financial (income)/expenses | 1 | (6 536) |
| Change in working capital | (1 247) | |
| Tax paid (withholding tax) | (204) | |
| Net cash provided by operating activities | (4 405) | |
| Cash flow from investing activities | ||
| Interest received | 1 | 18 |
| Net cash flow from investing activities | 18 | |
| Cash flow from financing activities | ||
| Dividends from subsidaries | 7 | 10 000 |
| Financial expenses | 1 | (3 464) |
| Net cash flow from financing activities | 6 536 | |
| Net increase in cash and cash equivalents | 2 149 | |
| Cash and cash equivalents, at the beginning of the period | ||
| Cash and cash equivalents at 31.12 | 2 149 |
The company has bank accounts in both USD and NOK. Unrealised currency effects are included in net cash provided by operating activities.
Notes 1 to 9 on the next pages are an integral part of these financial statements.
| NOK thousand | Note | 2016 |
|---|---|---|
| OPERATING INCOME | ||
| Other income | 1 680 | |
| Total operating income | 1 680 | |
| OTHER OPERATING EXPENSES Expenses to group companies |
7 | (1 045) |
| Communication and IT expenses | (33) | |
| External services | 2 | (3 237) |
| Travel and meeting expenses | (199) | |
| Other administration expenses | (120) | |
| Total other operating expenses | (4 634) | |
| FINANCIAL INCOME/(EXPENSES) Financial income |
||
| Interest income | 18 | |
| Dividend from subsidiaries | 7 | 10 000 |
| Net currency gain | 59 | |
| Net financial income | 10 077 | |
| Financial expenses | ||
| Other financial items | (3 541) | |
| Net financial expenses | (3 541) | |
| Net financial income | 6 536 |
No audit fee has been expensed in 2016.
| NOK thousand | 2016 |
|---|---|
| Allocation of tax income/(expense) | |
| Withholding tax | (204) |
| Change in deferred tax | 1 540 |
| Total tax income/(expense) | 1 336 |
| Basis for tax computation | |
| Profit before tax | 3 582 |
| 25% tax | (896) |
| Tax effect from | |
| Permanent differences | 2 500 |
| Withholding tax | (204) |
| Change in tax rate | (64) |
| Current year calculated tax | 1 336 |
| Effective tax rate | 37.3% |
| Deferred tax asset/(liability) | |
| Tax effect of temporary differences | |
| Tax losses carried forward | 1 540 |
| Deferred tax asset/(liability) | 1 540 |
| Deferred tax asset/(liability) at 8 June 2016 | |
| Change of deferred tax through income statement | 1 540 |
| Deferred tax asset/(liability) 31.12 | 1 540 |
Investments in subsidiaries are recorded at cost. Where a reduction in the value of shares in subsidiaries is considered to be permanent and significant, a impairment to net realisable value is recorded.
| NOK thousand | Business office country |
Nature of business |
Voting share/ ownership share |
2016 Book value |
|---|---|---|---|---|
| Den Norske Amerikalinje AS | Lysaker, Norway | Investment | 100% | 5 906 857 |
| Total investments in subsidiaries | 5 906 857 |
The company's subsidiary at 31 December 2016 is set out above. The share capital consist solely of ordinary shares that are held directly by the company, and the propotion of ownership interest held equals the voting rights held by the company. The country of incorporation or registration is also their prinsipal place of business.
Treasure ASA was demerged from Wilh. Wilhelmsen ASA on 8 June 2016, and as a consequence the investment in Den Norske Amerikalinje AS was transferred to Treasure ASA.
| Equity 31.12.2016 | 22 000 | 5 823 775 | 5 845 775 |
|---|---|---|---|
| Proposed dividend | (66 000) | (66 000) | |
| Profit for the year | 4 918 | 4 918 | |
| Opening balance 08.06.2016 | 5 884 857 | 5 884 857 | |
| Share capital Treasure ASA | 22 000 | 22 000 | |
| Repayment share capital WWASA | (1 000) | (1 000) | |
| Current year's change in equity Equity 12.02.2016 |
1 000 | 1 000 | |
| NOK thousand | Share capital | Retained earnings |
Total |
At 31 December 2016 the company's share capital comprises 220 000 000 shares with a nominal value of NOK 0.10 each.
Dividend
The proposed dividend for fiscal year 2016 is NOK 0.30 per share, payable in the second quarter 2017. A decision on this proposal will be taken by the annual general meeting on 27 April 2017.
| Total number | % of | |
|---|---|---|
| Shareholders | of shares | total shares |
| Wilh. Wilhelmsen Holding ASA | 160 000 000 | 72.73% |
| Folketrygdfondet | 7 328 031 | 3.33% |
| Danske Invest Norske Instit. II. | 5 075 992 | 2.31% |
| VPF Nordea Norge Verdi | 4 853 436 | 2.21% |
| Fidelity Funds-Nordic fund/sicav | 2 645 306 | 1.20% |
| Danske Invest Norske Aksjer Inst | 2 442 904 | 1.11% |
| Storebrand Norge i verdipapirfond | 2 151 860 | 0.98% |
| VPF Nordea Kapital | 1 818 842 | 0.83% |
| J.P. Morgan Securities LLC | 1 769 075 | 0.80% |
| Deutche Bank AG | 1 581 389 | 0.72% |
| JP Morgan Chase Bank, N.A., London | 1 489 098 | 0.68% |
| VPF Nordea Avkastning | 1 219 364 | 0.55% |
| Tallyman AS | 1 109 095 | 0.50% |
| Danske Invest Norge II | 1 085 092 | 0.49% |
| Skeie Capital Investment AS | 1 000 000 | 0.45% |
| Nordnet Bank AS | 976 527 | 0.44% |
| Pershing LLC | 830 499 | 0.38% |
| JP Morgan Chase Bank, N.A., London | 750 115 | 0.34% |
| SEB Nordenfond | 729 378 | 0.33% |
| Verdipapirfondet SR-Utbytte | 684 034 | 0.31% |
| Other | 20 459 963 | 9.30% |
| Total number of shares | 220 000 000 | 100.00% |
Shares on foreigners hands At 31. December 2016 - 20 341 021 (9.25%) shares.
Guarantees
The company has issued a guarantee towards its former parent company Wilh Wilhelmsen ASA, whereby the company under certain conditions will support repayment of certain bond debt held by Wilh Wilhelmsen ASA prior to the de-merger of Wilh Wilhelmsen ASA and the company. The guarantee is reported as an "off-balance sheet item".
The parent's general policy is that no financial guarantees are provided by the parent company.
The parent's exposure to credit risk on cash and bank deposits is considered to be very limited as the parent maintain banking relationships with a selection of well-known and good quality banks.
The parent's approach to managing liquidity is to ensure, that it will always have sufficient liquidity to at all times meet its liabilities under both normal and stressed conditions.
The ultimate owner of Treasure ASA is Tallyman AS, which controls the company through its ownership in Wilh. Wilhelmsen Holding ASA. Tallyman AS control about 60% of voting shares of Wilh. Wilhelmsen Holding ASA who has an ownership of approximately 73% in Treasure ASA. In addition, Tallyman AS directly owns 0.5% of Treasure ASA.
The beneficial owners of Tallyman AS are the Wilhelmsen family. Mr Wilhelm Wilhelmsen controls Tallyman AS.
The company has several transactions with related parties within the Wilh. Wilhelmsen Holding group. All transactions are entered into in the ordinary course of business of the company and the agreements pertaining to the transactions are all entered into on market terms.
Shared Services delived to Treasure ASA relates to management, tax, communication, treasury, legal services, accounting and rent of office facilities. Generally, Shared Services are priced using a cost plus 5% margin calculation, in accordance with the principles set out in the OECD Transfer Pricing Guidelines and are delivered according to agreements that are renewed annually.
| NOK thousand Note |
2016 |
|---|---|
| OPERATING EXPENSES FROM GROUP COMPANIES | |
| WilService AS | 8 |
| Wilhelmsen Accounting Services AS | 89 |
| Wilh. Wilhelmsen Holding ASA | 949 |
| 1 Operating expenses from group companies |
1 045 |
| DIVIDEND FROM SUBSIDIARIES | |
| Den Norske Amerikalinje AS | 10 000 |
| Dividend from subsidiaries 1 |
10 000 |
No material events occurred between the balance sheet date and the date when the accounts were presented which provide new information about conditions prevailing on the balance sheet date.
Treasure ASA does not have any employees. The CEO and CFO who composes the management of Treasure ASA are employed by Wilh.Wilhelmsen Holding ASA (WWH) and are hired in on the basis of an Service Level Agreement. See note 7 for further details.
To the Annual Shareholders' Meeting of Treasure ASA
We have audited the financial statements of Treasure ASA (the "Company"). The financial statements comprise:
In our opinion:
We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, included International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org.no.: 987 009 713 VAT, www.pwc.no
State authorised public accountants, members of The Norwegian Institute of Public Accountants, and authorised accounting firm
Auditor's Report - 20 March 2017 - Treasure ASA
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Impairment assessment of financial assets available-for-sale
The Group holds 12.04 % of the shares in Hyundai Glovis Co.Ltd. The assets are available-for-sale and held at fair value with USD 580 million as of 31 December 2016. Impairment indicators were considered present as the fair value was below original cost. No impairment charge was recognised.
Management tests at each reporting date whether there is objective evidence that financial assets available-for-sale is impaired, including an assessment of whether the decline in fair value is significant or prolonged. The fair value of the financial assets available-for-sale was determined by reference to quoted market bid price at the close of business expressed in US Dollar.
We focused on this area due to the relative size of the amounts and the judgement inherent in the impairment review.
See further information in note 4 to the Group financial statements.
We assessed Management's impairment review, the underlying analysis and the assumptions adopted by Management. The fair value of the financial assets available-for-sale was tested against external sources. We challenged Management's assessment regarding whether the decline in fair value was significant or prolonged or if other objective evidence was present.
We corroborated Management's documentation against external market information such as unexpected corrections or volatility in the quoted market price and press releases from Hyundai Glovis Co.Ltd. We also assessed the period the fair value was below original cost. We found Management's assessment to be reasonable.
We satisfied ourselves about the appropriateness of the disclosures in note 4 of the Group financial statements by comparing them to the requirements in IFRS.
Management is responsible for the other information. The other information comprises the Board of Directors' report and report on Corporate Governance, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
| • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • conclude on the appropriateness of Management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements |
|---|
| Opinion on the Board of Directors' report |
| Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors' report and report on Corporate Governance concerning the financial statements, the going concern assumption, and the proposal for the allocation of the profit is consistent with the financial statements and complies with the law and regulations. |
| Opinion on Registration and Documentation |
| Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements |
| (4) |
| Auditor's Report - 20 March 2017 - Treasure ASA |
|---|
| (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, it is our opinion that Management has fulfilled its duty to produce a proper and clearly set out registration and documentation of the Company's accounting information in accordance with the law and bookkeeping standards and practices generally accepted in Norway. Oslo, 20 March 2017 PricewaterhouseCoopers AS Fredrik Melle State Authorised Public Accountant |
We confirm, to the best of our knowledge, that the financial statements for the period from 12 February (the company was incorporated on 12 February 2016) to 31 December 2016 have been prepared in accordance with current applicable accounting standards, and give a true and fair view of the assets, liabilities, financial position and profit for the entity and the group taken as a whole.
We also confirm that the Board of Directors' Report includes a true and fair review of the development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties facing the entity and the group.
Lysaker, 20 March 2017 The board of directors of Treasure ASA
Thomas Wilhelmsen chair
Marianne Lie
Bente G. Brevik
Christian Berg Magnus Sande CEO
The board's corporate governance report for 2016
| Principle | Deviations | Reference in this report | ||
|---|---|---|---|---|
| 1. | Implementation and reporting on corporate governance |
None | On page 36 | |
| 2. | The business | None | On page 36 | |
| 3. | Equity and dividend | None | On page 36 | |
| 4. | Equal treatment of shareholders and transactions with close associates |
None | On page 38 | |
| 5. | Freely negotiable shares | None | On page 38 | |
| Corporate governance comply or explain overview |
6.-9. | Governing bodies | The chair of the board also acts as chair of the general meeting as stated in the company's Articles of Association. The board elects its own chair. Given the size of the board and the fact that the board jointly is responsible for its decisions, separate committees are not valued as necessary. The board therefore acts as remuneration and audit committee. Last, the Articles of Association does not include a reference to the nomination committee and the company has not developed a formal way for shareholders to submit proposals for candidates to the committee. |
On page 38 |
| 10. | Risk management and internal control | None | On page 39 | |
| 11. | Remuneration of the board of directors | None | On page 40 | |
| 12. | Remuneration of the executive personnel | None | On page 40 | |
| 13. | Information and communications | None | On page 40 | |
| 14. | Takeovers | No policy developed. However, intention is described in the report. |
On page 40 | |
| 15. | Auditor | None | On page 40 |
This report is, amongst others, based on the requirements covered in the Norwegian Code of Practice for Corporate Governance.
The board believes sound corporate governance reduces risk and contributes to value creation in the best interest for the company's shareholders and other stakeholders.
The board discussed and approved this report 20 March 2017 – with all directors present – and assesses the company's corporate governance performance to be of a high standard.
The report will also be presented to the annual general meeting 27 April 2017.
Thomas Wilhelmsen Chair of the board
Treasure ASA is a public limited company organised under Norwegian law. Listed on the Oslo Stock Exchange, the company is subject to Norwegian securities legislation and stock exchange regulations.
This report originates from the requirements covered in the Norwegian Code of Practice for Corporate Governance ("the code"), the Public Limited Companies Act and the Norwegian Accounting Act, approved by the board and published as part of the company's annual report.
In addition to provisions and guidance that in part elaborate on company, accounting, stock exchange and securities legislations, as well as the Stock Exchange Rules (dated 1 October 2014), the code also covers areas not addressed by legislation. Building on a "comply or explain" principle, the code requires the company to justify deviations from its 15 provisions and to describe alternative solutions where and if applicable. A summary of Treasure ASA's adherence to the code can be found on page 34 in this report.
A responsible business model has to be sustainable. With a majority shareholder, Treasure ASA's sustainability targets and achievements are included in Wilh. Wilhelmsen Holding ASA's sustainability report, based on the requirements stated by the Global Reporting Initiative. The report describes how the majority shareholder combines long-term profitability with emphasis on ethical business conduct including respect for human rights, the natural environment and the societies in which the company operates. The report includes how the group addresses employee rights and working environment, human rights, health and safety issues, the environment, prevention of corruption and last but not least how the group works to the best of the communities in which it operates. The report is available on wilhelmsen.com.
Employees and others working for and on behalf of Treasure ASA should carry out their business in a sustainable, ethical and responsible manner and in accordance with current legislation and the company's standards.
To ensure the right results are achieved the right way, the company has a set of governing elements including values, basic philosophy, leadership expectations, code of conduct and company principles. A corporate social responsibility statement is part of the company's principles. Making up the core of the company's governance framework, the governing elements guide the employees in making the right decisions and navigating safely in a rapidly changing environment.
A summary of the governing elements are available electronically on the majority shareholder's intranet, as written documentation, as e-learning and on wilhelmsen. com. In 2016, anti-corruption, competition law, fraud and theft as well as whistleblowing received particular attention.
Articles of Association
Treasure ASA's business activities and the scope of the board' authority are restricted to the business specified in its Articles of Association.
The group's fundamental objective is to generate strong total shareholder returns from investments within the maritime and logistics industries, by growing the market value of its shares, through dividends or other distributions to shareholders.
Whereas the primary focus is on managing the shareholding in Hyundai Glovis, the financial capabilities of the group are strong. The board and management will continue to
The parent company has a sound level of equity tailored to its objectives, strategy and risk profile.
Total assets for Treasure ASA group at the end of 2016 was USD 597 million, of which USD 16 million in cash and cash equivalents. The company has no interest bearing debt.
The company did not pay any dividend in 2016 following its incorporation in June.
The board is proposing a NOK 0.30 dividend per share payable during the second quarter of 2017, representing a total payment of NOK 66 million. The board also proposes that the AGM gives the board authority to approve further dividend of up to NOK 0.30 per share for a period limited in time up to the AGM in 2018, but no longer than to 30 June 2018.
The board proposes to the AGM to issue an authorization to, on behalf of the company, acquire up to 10% of the company's own issued shares and to issue up to 10% of new shares. The decision will be taken by the AGM 27 April 2017.
Deviations from the code: None
Shareholders
As of 31 December 2016, the company had more than 3 200 shareholders. The Norwegian shareholders count for 90.75% of the total number of shares.
The company has one share class, comprising 220 000 000 shares. No share options nor other rights to subscribe nor acquire shares issued by the company exist. Neither the company nor its subsidiary directly or indirectly own shares in the company.
Where the board resolves to carry out an increase in share capital and waive the pre-emption rights of existing shareholders on the basis of a mandate granted to the board, the justification should be publicly disclosed in a stock exchange announcement issued in connection with the increase in share capital.
Any transactions the company carries out in its own shares are carried out through the stock exchange and at prevailing stock exchange prices. Any transactions taking place between a principal shareholder or close associates and the company will be conducted on arm's length terms. A similar principle will be used for certain transactions between companies within the group. In the event of material transactions, the company will seek independent advise and valuation. Relevant transactions will be publicly disclosed to seek transparency. Pursuant to the instructions issued by and for the board, directors are required to inform the board if they have interests and/or relations, directly or indirectly, with Treasure ASA or the majority shareholder (including subsidiaries).
On the website of the Oslo Stock Exchange – oslobors.no – a list of insiders is available.
Deviations from the code: None
The shares with the ticker TRE is listed on the Oslo Stock Exchange and are freely negotiable. There are no restrictions on negotiability in the company's Articles of Associations.
Deviations from the code: None
The company's governing bodies consist of the general meeting, the board of directors and the management team.
The general meetings deal with and decide on the following matters:
The general meeting is held late April or early May.
Shareholders are notified by mail no later than 21 days prior to the meeting and all relevant documents are published on treasureasa.com no later than 21 days prior to the meeting. Hard copies of the material are available to shareholders upon request.
Shareholders wishing to attend the general meeting must notify the company at least two working days before the meeting takes place. Shareholders may participate at the meeting without being present in person, and can vote in advance through electronic communication. Guidelines for voting are included in the notice to the meeting The shareholders can appoint a proxy to vote for their shares. Shareholders receive a proxy appointment form by mail. The form is also downloadable from treasureasa.com.
The chair, auditor and representatives from the company are present at the general meeting, which is organised in a way that facilitates dialogue between shareholders and representatives from the company.
The chair of the board opens and directs the general meeting, as described in the Articles of Association.
The minutes from the AGM are available on treasureasa.com immediately after the meeting and may be inspected by shareholders at the company's office.
The general meeting appoints the nomination committee and has approved guidelines for the committee's work. The committee nominates candidates to the board and proposes board members' remuneration. As part of its nomination process, the committee will have contact with major shareholders, the board and the company's executives to ensure the process takes the board's and company's needs into consideration. A justification for a candidate will include information on each candidate's competence, capacity and independence.
The nomination committee currently consists of Wilhelm Wilhelmsen (chair), Gunnar Frederik Selvaag and Jan Gunnar Hartvig. The committee members are up for election in 2017.
The majority of the committee is independent of the board and executives in the company. None of the committee members are executives in the company.
In 2016, the nomination committee held one meeting proposing the board for the company.
Board of directors – composition and independence The company does not have a corporate assembly (see executive committee), and therefore the general meeting elects the board. The board comprises four directors, of which two are women. Two of the directors are independent of the majority owner and the executive management. The board does not include executive personnel. However, the CEO and/or CFO are present at the board meetings depending on agenda and issues to be discussed.
Information on the background and experience of the directors is available on treasureasa.com, which also lists the number of shares in the company held by each director.
All the board members have attended a seminar hosted by the Oslo Stock Exchange. The objective of the course was to provide information on legislation, rules, regulations and best practice that are relevant for board members of listed companies.
| Board member | Elected | Up for election |
|---|---|---|
| Thomas Wilhelmsen, chair | April 16 | 2018 |
| Marianne Lie | April 16 | 2018 |
| Bente Brevik | April 16 | 2018 |
| Christian Berg | April 16 | 2018 |
The instruction for the board includes rules on the work of the board and its administrative procedures determining what matters should be considered by the board. The board has the ultimate responsibility for the management of the company and that the business is run in a sustainable and responsible way.
The board heads the company's strategic planning and makes decisions that form the basis for the execution of the agreed strategy by the management.
The chair of the board has an extended duty to ensure the board operates well and carries out its duties.
The board establishes an annual plan for its work. In 2016, the company hosted 3 board meetings, including a strategy meeting, where all directors were present.
The company keeps the board regularly updated on development in the group through a variety of communication channels, including a board portal containing timely and relevant information.
The board serves as the company's audit committee.
The board has not deemed it as relevant to have a separate remuneration committee, and therefore acts collectively as the remuneration committee.
The management team consists of the chief executive officer and chief financial officer.
The management team discusses and coordinates all main business and management issues relevant for the group of companies. It also makes benefit of the majority shareholders' total expertise and knowledge when executing strategies and goals set by the board. An overview of the background and expertise of the management is available on treasureasa.com
Treasure ASA owns 100% of Den Norske Amerikalinje (NAL), which again holds the 12.04% shareholding in Hyundai Glovis.
Treasure ASA's ambition is to be a demanding and reliable owner, taking the long-term interests of the companies and the total group into consideration when developing its future strategy, including how ownership will be exercised, financial prospects as well as expectation towards code of conduct, environmental and sustainable standards and aspirations.
Control and management of subsidiaries and shareholdings are based on the same governance principles applicable to Treasure ASA.
Deviations from the code: The chair of the board also acts as chair of the general meeting as stated in the company's Articles of Association. The board elects its own chair. Given the size of the board and the fact that the board jointly is responsible for its decisions, separate committees are not valued as necessary. The board therefore acts as remuneration and audit committee. The Articles of Association does not include a reference to the nomination committee and the company has not developed a formal way for shareholders to submit proposals for candidates to the committee.
The board is responsible for the company's internal control and risk management, and believes that the company's systems are sound and appropriate given the extent and nature of the company's activities. The system contributes to sound control characterised by integrity and ethical attitudes throughout the organisation. It is based on the majority shareholder's governing elements including the guidelines for business standard and corporate social responsibility.
The board reviews the company's risk regularly and the internal control arrangements at least once a year, preferably together with the company's auditor.
Governing documents, code of conduct, company principles (including corporate social responsibility), policies, guidelines and process descriptions are documented and electronically available through the majority shareholder's global integrated management system. Various internal control activities give management assurance that the internal control of financial systems is working adequately and according to management's expectations.
The internal control is a process designed to provide reasonable assurance of:
Internal control includes:
Confirmation from external auditors and internal procedures i.e. business reviews (financial, operational and quality) give the management and board confidence that the group complies with external and internal rules and regulations.
The company's auditors conduct audit in accordance with the laws, regulations and auditing standards and practices generally accepted in Norway and give reasonable assurance as to whether the consolidated financial statements are free from material misstatements and whether internal control over financial reporting were appropriate in the circumstances relevant to the audit. The audit includes examining on test basis evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting policies used and the reasonableness of accounting estimates made by management as well as evaluation of the overall financial statement presentation including the disclosures.
Treasure ASA is part of the majority shareholder's global whistleblowing system including procedures and channels for giving notice about potential noncompliance, e.g. corruption, theft, fraud, sexual harassment or other breaches to the company's business standards. Strengthening transparency and safeguarding that the business standards are applied the way they are intended, the procedures also ensure that the group has a professional way of handling potential breaches to laws and regulations, self-imposed business standards or other serious irregularities. The procedures also include guidelines to safeguard the whistle-blower.
The group has no employees. Management functions (CEO and CFO) are covered via extensive and detailed Service Level Agreement with Wilh.Wilhelmsen Holding ASA. No director holds share options in the company.
Deviations from the code: None
Remuneration policy The group has no employees.
Deviations from the code: None
Communication principles and standards Transparency, accountability and timeliness guides the group's communication activities. The company follow the guidelines set out by the Oslo Stock Exchange.
Financial reports are available on treasureasa.com. In addition, an update is presented to the financial markets and stakeholders as part of the majority shareholder's quarterly presentations and capital markets day.
The market will be informed about the company's activities and results through stock exchange notices, annual and interim reports, press releases and updates on treasureasa.com. Mr Morten Lertrø is the company's Investor relations contact.
The company is not present on social media.
Two weeks before the planned release of quarterly financial reports – the silent period – the company will not comment on matters related to the general financial results or expectations, and contact with external analysts, investors and journalists will be minimised. This is done to reduce the risk of information leakages and that the market has access to different information.
Deviations from the code: None
The board has not established a policy for its response to possible takeover bids. The board and management will seek to treat any takeover bids for the company's activities or shares in a professional way and in the best interest of the company's shareholders. If such circumstances arise, the board and the company's management will seek to treat all shareholders equally and take action to secure that shareholders receive sufficient and timely information to consider the offer.
Deviations from the code: No policy developed, but intention described above.
The company's auditor – PricewaterhouseCoopers AS (PwC) – attends board meetings as required and is always present when the annual accounts are approved. To ensure the board has solid understanding of the accounts and any changes in the accounting principles, the auditor discuss changes in IFRS relevant for the group's
accounting principles or other law requirements relevant for the company with the board. The auditor also runs through the main features of the audits carried out. There were no disagreements between the management and PwC during 2016.
It is of importance to the board that the auditor is independent of management. The board therefore has at least one meeting with PwC without senior management being present. If used for other services than accounting, the parties will follow guidelines as described in the Auditing and Auditors' Act. The auditor provides the board with a confirmation of independence in relation to nonaudit services provided.
In 2016, PwC has audited accounts and notes and read through and commented on the director's report and the board's report on corporate governance and the majority shareholder's sustainability report, which Treasure ASA is a part of.
The auditor's fee, broken down by audit work, audited related services, tax services and other consultancy services, is specified in note 1 to Treasure ASA's group accounts and note 2 to the parent company accounts.
For the financial year 2016, Mr Fredrik Melle has been the company's engagement partner from PwC. For the fiscal year 2017, Mr Thomas Fraurud will succeed Mr Melle.
Deviations from the code: None
As of 31 December 2016
| Treasure ASA, Norway |
|---|
| Den Norske Amerikalinje AS Norway |
| Hyundai Glovis Ltd South Korea, 12.04% |
Unless otherwise stated, the company is wholly-owned
Treasure ASA P O Box 33 NO-1324 Lysaker, NORWAY Tel: +47 67 58 40 00 www.treasureasa.com
Org no 916 803 222 MVA
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