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Saga Pure — Annual Report 2020
Apr 15, 2021
3730_10-k_2021-04-15_c34a1150-341f-4977-a04c-9c62bebba106.pdf
Annual Report
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| CEO LETTER 3 | |
|---|---|
| BOARD OF DIRECTORS' REPORT 5 | |
| CORPORATE GOVERNANCE 9 | |
| CONSOLIDAED STATEMENT OF COMPREHENSIVE INCOME 17 | |
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION18 | |
| CONSOLIDATED CASH FLOW STATEMENT 20 | |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY21 | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENT 22 | |
| RESPONSIBILITY STATEMENT44 | |
| PARENT COMPANY INCOME STATEMENT 46 | |
| PARENT COMPANY STATEMENT OF FINANCIAL POSITION 47 | |
| PARENT COMPANY CASH FLOW STATEMENT 48 | |
| NOTES TO THE PARENT COMPANY FINANCIAL STATEMENT49 | |
| AUDITOR'S REPORT 58 |
CEO LETTER
A big, fat green swan in disguise
If you're standing at the edge of a cliff, which way is progress?
The answers to what actions we should take are clearer the more near-term the consequences are – and standing at the edge of the cliff, the answer is obvious.
That the current global economic and industrial way of progress is not sustainable has been apparent to us for a number of years already. Strong policy measures combined with an increased consciousness around how continued growth needs to be coupled with sustainability, and also the potential long-term economical attractiveness of it, has led to strong tailwinds for green technologies over the past years.
The evolution of Saga Pure illustrates the above. Originally named Saga Tankers, the company founded back in 2010 was the proud owner of four super tankers that sailed across the oceans. In 2012, the company sold off the oil tanker business, and became a pure play investment company. Then in October 2020, Saga Tankers announced a new strategy purely focused on sustainability along with the new name Saga Pure, before I joined the company in December, after twelve years in the hydrogen sector – in what at best can be called unprecedented times.
Covid-19 is one of the biggest, black swans the world has ever seen. For some it probably felt like all of 2020 was a flock of angry, black swans. Or perhaps it was a big, fat green swan in disguise – more on that later. The pandemic is still wreaking havoc on a global scale and continues to cause pain and suffering for the ones directly and indirectly affected. The suffering has not only been related to health and losses of loved ones. Economically it has
more than just shaken things up. For certain sectors, the pandemic has been like a nuclear bomb, wiping out the livelihood of thousands, making fortunes shift hands overnight.
With close to all air traffic and several industries shutting down overnight, and staying that way for a long time, allowed for nature to take a deep breath, resulting in the air and rivers in and around our cities clearing up. Pictures of that transformation made almost as strong of an impression as pictures coming in from the hospitals around the world, igniting a long-needed glimmer of hope for nature. If we can travel around the world and manufacture our necessities without harmful emissions – we can have progress – as well as a thriving nature and a healthy environment.
As politicians and businesses around the world started planning for a post-pandemic society, green recovery became the name of the game to achieve the above, while getting the nations into gear again. A strong effort on green technologies is conducive to creating local jobs, future proofing businesses, increasing energy selfsufficiency, and helps maintain pure air and clear rivers. While many governments were already planning large programs to stimulate green growth, Covid-19 supercharged it, making green companies not only show resiliency in the markets, but turning into something that can be described as a green euphoria. Maybe Covid-19 was a big, fat green swan in disguise.
The Sage Pure team has raised the topic of whether we are moving into a green correction – or perhaps even bubble. There are after all some similarities in what we have seen for green technologies with what we saw in the IT sector 20 years ago. Although the IT sector went through a bubble, it didn't mean that IT was a bad idea. It is exactly the same way with green technologies, and while IT started out as more of a nice-to-have to becoming something that we are fully dependent on today, green solutions are starting out even stronger – as a need-tohave for creating a sustainable foundation for human growth along with equalizing the playing field energy wise. And with the global, political momentum and capital being directed into this area now, we are extremely optimistic about the long-term prospects for this sector.
At time of writing in April, we know that we are certainly in a green correction, and capital is no longer being recklessly thrown after anything green that moves. As for Saga Pure, after having realized all the fossil and most of the non-core assets in the fall of 2020, and having been fortunate enough to put the money to good use in a number of other investments like Everfuel, Bergen Carbon Solutions and Horisont Energi, we took the necessary precautions when we saw where things were going, and we are now more financially robust than ever.
Since the strategic change of the company, the key focus besides seeking out and investing in companies that can
make the world greener and cleaner, along with creating value for our shareholders, has been to build a world-class organization. People is everything – both in the companies we invest in, and certainly in our own. I am proud of the team we have started building in the company, and since January we have been joined by additional leading industry experts. That will enable us to make better investment decisions, but also to actively follow up some of our key investments, helping the companies to succeed.
While it feels like everyone is going green these days, lots of work remains. We will continue on our mission to create pure growth in 2021, with our mantra in mind: seek and undestroy.
Wishing all of you a much better 21 than 20.
Bjørn Simonsen CEO
BOARD OF DIRECTORS' REPORT
Saga Pure is an investment Group focusing on opportunities within renewable energy, hydrogen, circular economy, and reduction of CO₂ emissions.
2020 HIGHLIGHTS
October 2020 was a major turning point for the Group, when it announced its new investment strategy. From being a broadly focused investment group, it will now dedicate its resources towards investments in sustainability and renewable space, becoming a green investment group. To make this transition, the Group initiated several major exercises, whereas some were completed in 2020, while others continue into 2021.
The Group's 2020 highlights include:
- Changing the Group's name from Saga Tankers to Saga Pure
- Appointing Bjørn Simonsen as new CEO
- Initiating the recruitment of an investment team with extensive experience and knowledge of the sustainability-segment
- Disposing all its holdings in SD Standard Drilling, Vallhall, Northern PSV as well as the short-term investments
- Investing NOK 55 million in Everfuel A/S, partially realized in 2020 with a gain of NOK 37 million. The remaining holdings had a fair value of 225 million at the year-end whereof NOK 185 million was fair value adjustments in the fourth quarter
- Investing NOK 30 million for 21.4 % ownership in Bergen Carbon Solution AS and assumed a board position in the company. Saga has an option to invest a further NOK 30 million in the company
- Committing to invest NOK 35 million in a private placement in Horisont Energi AS, which was completed in beginning of 2021. The Group is also to assume a board position in the company
- Completing private placements of net NOK 297.5 million
- Initiating private placements and subsequent offerings of net 147 million that was completed in January 2021
- Expanding its shareholder base from 496 shareholders starting January 2020, to 6,401 shareholders at year-end 2020
In addition, the following main events occurred in 2020 prior to the change of strategy:
- Sold 4 million shares in Vistin Pharma at a gain of NOK 8 million compared to fair value per end 2019.
- Distributed dividends at 0.2 NOK per share, totalling NOK 53 million
A LOOK BACK ON 2020
Following the new strategy, the Group has revitalized the investment portfolio adherent to the strategy. At end of 2020, the substantial part of the Group's investments was within the sustainability space. The Vallhall subsidiaries were also disposed, as they were not regarded to be within the scope of the new strategy. The Vallhall business is classified as discontinued business in the financial statements of 2020.
The Board appointed Bjørn Simonsen as new CEO, to lead the Group. Mr. Simonsen has extensive experience within the sustainability segment, in particular hydrogen. The Group will further strengthen its organization with industry expertise.
Five private placements were completed in 2020, raising a net cash of NOK 297.5 million as capital base for further investments. Further, net NOK 147 million were raised in an additional private placement and subsequent offerings completed in January 2021.
THE NEW STRATEGY
The paramount event of 2020 was the new strategy, which transformed the business in terms of investments, operations, organization, and financials.
Saga has now arrived at its destination. From being a crude carrier, owning and operating four Very Large Crude Carriers (VLCC), to becoming an investment group with broad focus including among others property, platform supply vessels,
and pharmaceuticals, to finally transitioning into a green investment group.
The Group strategy is to target its resources towards new prospects within a broad spectrum of industries, with sustainability as the common denominator.
Through active ownership, the Group aims to provide capital and enable business development for its investment targets, in order to create shareholder value.
Examples of technologies and businesses that the Group has been involved in post the strategychange are:
- Conversion of CO2 to valuable carbon nanofibers
- Chemical recycling of waste plastics
- Blue hydrogen- and ammonia-production and CO2 storage solutions
- Hydrogen infrastructure for mobility
- Advanced sensor and IT technology for electrical grids
- Liquid hydrogen storage
The list of technologies and businesses on the Groups résumé is expected to grow going forward, and the Group will continue to recruit talented people with experience and knowledge relevant to the technologies in focus.
FINANCIAL RESULTS 2020 (GROUP)
The Group reports a total comprehensive income for 2020 of MNOK 179.0 (2019: MNOK 50.3).
The major items of the Group's net comprehensive income consist of net gain on non-current financial investments of MNOK 174.5, and profit from discontinued operations of MNOK 23.0. The gain on non-current financial investments is a result of a positive development of the value of the long-term investments during the year. The profit from discontinued operations is substantially gain on disposal of the Vallhall business.
Gross income for 2020 was MNOK 174.5 (2019: MNOK 57.7).
Total operating expenses for 2020 were MNOK 19.3 (2019: MNOK 12.0).
Net operating profit for 2020 was MNOK 155.1 (2019: MNOK 45.7).
Operating profit before interest, taxes, depreciation, and amortization (EBITDA) for 2020 was MNOK 155.2 (2019: MNOK 45.7). The EBITDA can be derived as described directly and unadjusted
from the statement of income. Net financial items for 2020 were NOK 0.8 million (2019: MNOK 1.2).
Basic Earnings per share for 2020 were NOK 0.63 (2019: NOK 0.18), based on the net profit to shareholders of MNOK 177.0 (2019: MNOK 48.8).
Diluted Earnings per share for 2020 were NOK 0.62 (2019: NOK 0.18), based on weighted average of 3.65 million potential dilutive options in 2020 (2019:0). Number of year end dilutive options are 18 million.
As of year-end, the Company had 6,401 shareholders and 439,149,831 shares outstanding. The average number of shares outstanding throughout the year was 281,727,913. The Company's 20 largest shareholders controlled about 64.4 % of the total number of shares outstanding at yearend.
LIQUIDITY AND CASH FLOW
The cash balance as of 31 December 2020 was MNOK 391.1, excluding MNOK 85 in restricted cash which was released in January 2021, (2019: MNOK 87.7). The change in cash over the year was MNOK +303.4 (2019: MNOK -55.6). Of the change in cash in 2020, MNOK +212.5 is from share issuance, while MNOK +154 is from the net investment and MNOK - 53.2 as a result of dividends distributed.
FINANCIAL POSITION
As of 31 December 2020, the Group's total assets amounted to MNOK 783.0 (2019: MNOK 437.6). Total equity to shareholders of parent company was MNOK 772.4 (2019: MNOK 350.9).
It is the opinion of the Board of Directors that the Group is in a sound financial position with an equity ratio of about 98.6 % (2019: 84.8 %).
Please see further information described under the Going Concern section.
RISK FACTORS
The Group is exposed to a limited number of risk factors. The most significant risk factors are market risk, legal risk, credit risk and liquidity risk.
Market risk
The Group's investments in shares and other financial instruments expose the Group to market risk in terms of equity price risk. The Group moderates this risk through careful selection of securities for investments.
Legal risk
The Group is exposed to legal risk within what would be expected for a listed company. This will include, but not limited to, regulatory, compliance and contractual risk. The Group is not aware of any anomalies within this area.
Credit risk
The Group is exposed to credit risk, inherent in the risk that the counterparty will be unable to pay outstanding amounts in full when due. The Group has normally insignificant amounts of outstanding receivables. However, this risk is also applicable to bank deposits. The risk is limited through the use of financial institutions with solid credit ratings for bank deposits and settlement of transactions.
Liquidity risk
The Group continuously monitors the liquidity requirements in order to ensure sufficient cash for meeting the operational needs.
Saga Pure manages these risk factors through internal reporting and control procedures as well as consulting with external advisors. The Group's risk factors are described more detailed in note 17.
HEALTH, SAFETY AND ENVIRONMENT (HSE)
A good and safe working environment has been given a high priority in Saga Pure. The Group's goal is to ensure that it operates in such a way that no detrimental effects are made on either people or the environment in which we operate. The Group's objective is to ensure safe and secure operations. The business operates in compliance with national and international requirements and regulations. There have been no work-related accidents resulting in sick leave during 2020.
Saga Pure aims to have a workplace free from discrimination on the basis of gender, sex and race in matters of salary, promotion and recruitment. At year end the Group had four employees, of which two were part time employees. The Group had no registered sick leave during the year.
The Group is through associates involved in research or development projects. However, no such costs has been recognized during 2020 in the parent company.
CORPORATE SOCIAL RESPONSIBILITY
The Group has no formalized guidelines regarding corporate responsibility. However, The Group is constantly focused on conducting its business through a sound Code of Ethics.
COVID-19
The Covid-19 pandemic has affected the Group directly through the operations in the discontinued operations of Vallhall. Through appropriate measures regarding infection prevention and
control, the business was able to facilitate for the annual summer exams in the premises.
The pandemic caused increased volatility in the financial markets of which the Group operates in.
For the administration of the Group, the use of home office and virtual meetings enabled the Group to operate as usual.
FINANCIAL RESULTS OF PARENT COMPANY
Saga Pure ASA (the Parent Company) reports a net profit for 2020 of MNOK 25.7 (2019: net profit MNOK 12.4).
Gross revenues for 2020 were MNOK 38.1 (2019 MNOK 23.2).
Total operating expenses for 2020 were MNOK 13.2 (2019: MNOK 12.0).
Operating profit before interest, taxes, depreciation and amortization (EBITDA) for 2020 was MNOK 24.9 (2019: MNOK 11.2).
Net financial items for 2020 were MNOK 0.8 (2019: MNOK 1.2).
The Board of Directors proposes that the net profit for 2020 of MNOK 25.7 is attributed to accumulated losses.
SUBSEQUENT EVENTS
At 29 December the Board initiated another private placement of 30 million new shares, raising a net equity of NOK 121 million. As the placement was not completed by 31 December, the placement is not reflected in the fourth quarter balance statement.
6 January the Group settled the announced NOK 35 million investment in Horisont Energi AS. Horisont Energi is a carbon tech company which is developing innovative solutions for blue hydrogen and ammonia production as well as cost effective CO2 handling and storage.
25 January the Group committed to invest NOK 30 million as a cornerstone investor in CRC Holding B.V. ("Pryme"). Pryme has developed an effective solution for recycling of plastic materials in a potential carbon emission free process.
The Group completed three subsequent offerings as repairs for the last three placements, issuing 9,728,592 shares raising gross proceed of NOK 26 million.
24 February the listing of the Company was transferred from Euronext Expand, to Oslo Børs. 22 March the Group agreed to subscribe for additional shares for the value of NOK 15 million in Bergen Carbon Solution. Saga has in addition an option to invest NOK 30 million in the company.
23 March the Group committed to invest through a private placement NOK 75 million in Heimdall Power AS. Heimdall is a technology company providing proprietary smart grid solutions for power grids. The Group will also be represented in the board of the company.
24 March the Group committed to subscribe for NOK 30 million in a private placement in IC Technologies AS (ICT). ICT has developed a novel storage solution for liquid hydrogen and LNG. Following the placement, the Group will hold 33 % of ICT, with an option to further invest NOK 30 million in ICT. The private placement is subject to the success of certain near-term company milestones. The Group will also assume a board position in the company.
The Company has further strengthened the organization by establishing an investment team with experience in a variety of segments within the sustainability space, as well as the capital markets. This far in 2021 the following has joined the Saga Pure team:
- Florian Melcher Investment Manager
- Jørgen Festervoll VP Renewable Opportunities
- Jørgen Kopperstad VP Maritime Opportunities
- Rob Stevens VP Ammonia Opportunities
References are made to note 23 – Subsequent events for further information.
INVESTMENT IN SHARES
The Group has during 2020 renewed its long-term portfolio adherent to the new strategy. At end of 2020, the investments with a fair value of MNOK 276.5 consist primarily of investments within the renewable space.
GOING CONCERN AND DIVIDEND
The Group is currently in a sound position with a net book equity ratio of 98.6 % and surplus liquidity available.
The Board of Directors and the management has substantial experience and competence within the renewable and sustainability segment, as well as proficiency within general business and financial tasks such as M&A, transactions, business development, and IPOs.
It is expected that the shareholders will receive return on more attractive terms if proceeds are managed by the Group. Hence, no suggestions on dividend are currently made by the Board of Directors.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by EU, while the financial statements for the parent company have been prepared in accordance with the Norwegian Generally Accepted Accounting Principles (NGAAP). The Board of Directors confirms that these annual accounts are based on the going concern assumptions.
Øystein Stray Spetalen Board Member
Christine Spiten Board Member
Oslo, 14 April 2021 The Board of Directors
Martin Nes Chairman
Yvonne Litsheim Sandvold
Board Member
Bjørn Simonsen CEO
CORPORATE GOVERNANCE
1. Implementation and reporting on corporate governance
- 1.1. The board of directors (the "Board") must ensure that the Company implements sound corporate governance.
- 1.2. The Board must provide a report on the Company's corporate governance in the director's report or in a document that is referred to in the directors' report. The report on the Company's corporate governance must cover every section of the Code of Practice.
- 1.3. If the Company does not fully comply with the Code of Practice, the Company must provide an explanation of the reason for the deviation and what solution it has selected.
Saga Pure ASA ("Saga Pure" or the "Company", and together with its consolidated subsidiaries, the "Group") has chosen include the Board's report on corporate governance in the annual accounts.
The Board has decided that Saga Pure shall follow the Norwegian Code of Practice for Corporate Governance (the "Code of Practice"). The Board annually reviews and discuss the Code of Practice and the Company's implementation of corporate governance.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
2. Business
- 2.1. The Company's articles of association should clearly describe the business that the Company shall operate.
- 2.2. The Board should define clear objectives, strategies and risk profiles for the Company's business activities such that the Company creates value for shareholders.
- 2.3. The Company should have guidelines for how it integrates considerations related to its stakeholders into its value creation.
- 2.4. The Board should evaluate these objectives, strategies and risk profiles at least yearly.
The business activities clause from the articles of association is investment, management, operation, consultancy and other services within industry, energy and similar business activities, including through ownership and investments in other businesses.
The Company's core objectives and strategies are clearly stated in the Company's annual report.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
3. Equity and dividends
- 3.1. The Board should ensure that the Company has a capital structure that is appropriate to the Company's objective, strategy and risk profile.
- 3.2. The Board should establish and disclose a clear and predictable dividend policy.
- 3.3. The background to any proposal for the Board to be given a mandate to approve the distribution of dividends should be explained.
- 3.4. Mandates granted to the Board to increase the Company's share capital or to purchase own shares should be intended for a defined purpose. Such mandates should be limited in time to no later than the date of the next annual general meeting.
Equity
Saga Pure shall have equity suitable for the character of its operations. The Group's consolidated equity as of 31 December 2020 amounted to NOK 772.4 million, and cash of NOK 391.1 million (in addition, the Company had a restricted cash position of NOK 85 million as of 31 December 2020 relating to a recently completed private placement). The Board deems this to be adequate for the Group's strategy and risk profile.
Dividend policy
Saga Pure's goal is to give shareholders a competitive return on invested capital over time. This return will be achieved primarily through increase in share price and dividends.
Authorization to increase the Company's share capital
The Board is authorized to increase the share capital with a total par value of up to NOK 2,394,392.11, corresponding to 239,439,211 shares which represents 50% of the Company's share capital, each share with a par value of NOK 0.01. The shareholders preferential right to the new shares, cf. the Norwegian Public Limited Liability Companies Act section 10-14, may be deviated from. The authorization was approved by an extraordinary general meeting in February 2021 and is valid for two years following the date of that general meeting. As a result, the Company deviates from the Code of Practice in this respect as the authorization is valid for a longer period than until the next annual general meeting.
The authorization may be used to provide the Company with financial flexibility, including but not limited to, through issuance of shares in connection with investments, mergers and acquisitions. As the purpose of the authorization is very broad, the Company deviates from the Code of Practice in this respect.
Authorization to repurchase own shares
The Board is authorized to purchase own shares with a par value of up to NOK 478,878.42, corresponding to 10% of the current share capital. The authorization was approved by an extraordinary general meeting in February 2021 and is valid for two years following the date of that general meeting. The authorization does not provide a specific purpose for when the authorization may be used. As a result of this, the Company deviates from the Code of Practice as the authorization does not state a specific purpose for when it may be used and as the authorization is valid for a longer period than until the next annual general meeting.
Authorization to distribute dividends
The Board was granted an authorization to resolve dividend distributions in an extraordinary general meeting in June 2020. The authorization is valid until the annual general meeting in 2021. The authorization is general in scope, and does not provide an explanation of how the authorization is based on the Company's dividend policy. As such, the Company deviates from the Code of Practice in respect of the lacking explanation for the authorization.
Authorization to raise convertible loans
The Company does not hold any authorization to raise convertible loans.
The Company has no other deviations from the Code of Practice with regards to this section of the Code of Practice.
4. Equal treatment of shareholders and transactions with close associates
- 4.1. Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in the event of an increase in share capital must be justified. 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.
- 4.2. Any transactions the Company carries out in its own shares should be carried out either through the stock exchange or at prevailing stock exchange prices if carried out in any other way. If there is limited liquidity in the Company's shares, the Company should consider other ways to ensure equal treatment of all shareholders.
- 4.3. In the event of any not immaterial transactions between the Company and shareholders, a shareholder's parent company, members of the Board, executive personnel or close associates of any such parties, the Board should arrange for a valuation to be obtained from an independent third party. This will not apply if the transaction requires the approval of the general meeting pursuant to the requirements of the Public Companies Act. Independent valuations should also be arranged in respect of transactions between companies in the same group where any of the companies involved have minority shareholders.
Class of shares
Saga Pure has one class of shares only. The articles of association include no restrictions on voting rights.
Waiver of pre-emption rights
The Company has issued new shares on several occasions during the period from the annual general meeting in 2020 and until the date of this Corporate Governance report, and the pre-emptive rights of the shareholders was deviated from in all instances. The background for such deviations was to complete private placements towards a limited number of investors, and to complete subsequent offerings of shares to limit the dilution for
existing shareholders who were not invited to participate in the private placements. The justifications for such deviation from the pre-emption rights have been publicly disclosed.
Transactions in own shares
The Company's shares are liquid. In the event of transactions in own shares the Board aims to comply with the Code of Practice. The Company has not carried out any transactions in its own shares in the period since the annual general meeting in 2020 and until the date of this Corporate Governance report.
Transactions with related parties
Members of the Board are obliged to report to the Board's secretary (the management) as to any material involvement (work or investments) they might have which might have relevance for their work on the Board.
As part of the Company's strategy change in the second half of 2020, the Company disposed its ownership interests in the Vallhall arena to Tycoon Industries AS. The transaction price was considered to be on arm's length principles, which was also supported by a fairness opinion provided by a reputable independent company, and subsequently approved by an extraordinary general meeting in the Company. For further information, please see Note 15 and 16 to the Company's 2020 annual accounts.
Saga Pure has an ongoing lease contract and a service agreement with companies affiliated to the Board member and shareholder Mr. Øystein Stray Spetalen. The transaction is described in annual report 2020. All contracts entered into with an affiliated company, has been completed on arm's length basis, but no independent valuation has been obtained for these agreements. Consequently, the Company deviates from the Code of Practice with regards to these agreements.
The Company has no other deviations from the Code of Practice with regards to this section of the Code of Practice.
5. Shares and negotiability
- 5.1. The Company should not limit any party's ability to own, trade or vote for shares in the Company.
- 5.2. The Company should provide an account of any restrictions on owning, trading or voting for shares in the company.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
6. General meetings
- 6.1. The Board should ensure that the Company's shareholders can participate in the general meeting.
- 6.2. The Board should ensure that:
- 6.2.1.1. the resolutions and supporting information distributed are sufficiently detailed, comprehensive and specific to allow shareholders to form a view on all matters to be considered at the meeting
- 6.2.1.2. any deadline for shareholders to give notice of their intention to attend the meeting is set as close to the date of the meeting as possible
- 6.2.1.3. the members of the Board and the chairman of the nomination committee are present at the general meeting
- 6.2.1.4. the general meeting is able to elect an independent chairman for the general meeting
- 6.3. Shareholders should be able to vote on each individual matter, including on each individual candidate nominated for election. Shareholders who cannot attend the general meeting in person should be given the opportunity to vote. The Company should design the form for the appointment of a proxy to make voting on each individual matter possible and should nominate a person who can act as a proxy for shareholders.
Saga Pure follows the guidelines under clause 6 to the best of their ability. However, in the period since the annual general meeting in 2020 and until the date of this Corporate Governance report, only a limited number of Board members have participated in general meetings and independent chairmen have not been elected for the general meetings. This is partly due to the restrictions following from the ongoing Covid-19 pandemic.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
7. Nomination committee
- 7.1. The Company should have a nomination committee, and the nomination committee should be laid down in the Company's articles of association.
- 7.2. The general meeting should stipulate guidelines for the duties of the nomination committee, elect the chairperson and members of the nomination committee and determine the committee's remuneration.
- 7.3. The nomination committee should have contact with shareholders, the Board and the Company's executive personnel as part of its work on proposing candidates for election to the Board.
- 7.4. The members of the nomination committee should be selected to take into account the interests of shareholders in general. The majority of the committee should be independent of the Board and the executive personnel. No more than one member of the nomination committee should be a member of the Board, and any such member should not offer himself for re-election to the Board. The nomination committee should not include the Company's chief executive or any other executive personnel.
- 7.5. The nomination committee's duties should be to propose candidates for election to the Board and nomination committee (and corporate assembly where appropriate) and to propose the fees to be paid to members of those bodies.
- 7.6. The nomination committee should justify why it is proposing each candidate separately.
- 7.7. The Company should provide information on the membership of the committee and any deadlines for proposing candidates.
The Company's shareholders elected to dissolve the Nomination Committee at an extraordinary general meeting in 2012 as it was not considered expedient for the Company to have a Nomination Committee. As a result of this, the Company has deviated from the Code of Practice in this regard.
8. Board of directors: composition and independence
- 8.1. The composition of the Board should ensure that the Board can attend to the common interests of all shareholders and meets the Company's need for expertise, capacity and diversity. Attention should be paid to ensuring that the Board can function effectively as a collegiate body.
- 8.2. The composition of the Board should ensure that it can operate independently of any special interests. The majority of the shareholder-elected members of the Board should be independent of the Company's executive personnel and material business contacts. At least two of the Board members elected by shareholders should be independent of the Company's main shareholder(s).
- 8.3. The Board should not include executive personnel. If the Board does include members of the executive personnel, the Company should provide an explanation for this and implement consequential adjustments to the organisation of the work of the Board, including the use of Board committees to help ensure more independent preparation of matters for discussion by the Board, cf. Section 9.
- 8.4. The general meeting (or the corporate assembly where appropriate) should elect the chairman of the Board.
- 8.5. The term of office for members of the Board should not be longer than two years at a time.
- 8.6. The annual report should provide information to illustrate the expertise of the members of the Board, and information on their record of attendance at Board meetings. In addition, the annual report should identify which members are considered to be independent.
- 8.7. Members of the Board should be encouraged to own shares in the Company.
Members of the Board are presented in the Company's annual report, and all of the Board members are shareholder-elected. The members of the Board are not elected for more than 2 years, and are hence in line with the Code of Practice. The record of attendance can be found in the Company's annual report.
All of the members of the Board are independent of the Company's executive personnel and material business contacts. Two of the members of the Board are independent of the Company's main shareholders.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
9. The work of the board of directors
- 9.1. The Board should issue instructions for its own work as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties.
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9.2. The Board should ensure that Board members and executive personnel make the Company aware of any material interests that they may have in items to be considered by the Board.
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9.3. In order to ensure a more independent consideration of matters of a material character in which the chairman of the Board is, or has been, personally involved, the Board's consideration of such matters should be chaired by some other member of the Board.
- 9.4. The Public Companies Act stipulates that large companies must have an audit committee. The entire Board should not act as the Company's audit committee. Smaller companies should give consideration to establishing an audit committee. In addition to the legal requirements on the composition of the audit committee etc., the majority of the members of the committee should be independent.
- 9.5. The Board should also consider appointing a remuneration committee in order to help ensure thorough and independent preparation of matters relating to compensation paid to the executive personnel. Membership of such a committee should be restricted to Board members who are independent of the Company's executive personnel.
- 9.6. The Board should provide details in the annual report of any Board committees appointed.
- 9.7. The Board should evaluate its performance and expertise annually.
The procedures for the Board have been in effect since 14 May 2010. The instructions comprise the following items: members of the Board, the Board's duties and obligations, responsibilities and authority, Board meetings, the group CEO's duties and objectives, participation in Board meetings, procedures in meetings and minutes.
The chairman of the Board is responsible for the Board's work being carried out in an effective and proper manner in accordance with the duties of the Board. The Group's CEO is responsible for the Company's executive personnel. The Board has drawn up special instructions for the Group's CEO.
The Board shows particular diligence in connection with cases related to financial reporting and fees for the executive personnel. In addition, parts of the Board are constituted as ad hoc working groups. In cases where Board committees are used, the purpose is case preparation where final decisions are to be made by the Board.
The Board has assessed the need for a remuneration committee, and decided that it is not currently necessary to establish a remuneration committee. The Board fulfills the obligations and responsibilities applicable to audit committees, cf. section 6-41 (2) of the Norwegian Public Limited Liability Companies Act.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
10. Risk management and internal control
- 10.1. The Board must ensure that the Company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the Company's activities. Internal control and the systems should also encompass the Company's guidelines etc. for how it integrates considerations related to stakeholders into its creation of value.
- 10.2. The Board should carry out an annual review of the Company's most important areas of exposure to risk and its internal control arrangements.
The Board has through the year regular thorough reviews of the most important risks of the Company with an emphasis on financial risks.
The Board will present an annual review of the risk factors considered most material to the Company in the annual report.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
11. Remuneration of the board of directors
- 11.1. The remuneration of the Board should reflect the Board's responsibility, expertise, time commitment and the complexity of the Company's activities.
- 11.2. The remuneration of the Board should not be linked to the Company's performance. The Company should not grant share options to members of its Board.
- 11.3. Members of the Board and/or companies with which they are associated should not take on specific assignments for the Company in addition to their appointment as a member of the Board. If they do nonetheless take on such assignments, this should be disclosed to the full Board. The remuneration for such additional duties should be approved by the Board.
- 11.4. Any remuneration in addition to the normal directors' fees should be specifically identified in the annual report.
The Board members have not been granted any share options.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
12. Remuneration of the executive personnel
- 12.1. The Board is required by law to establish guidelines for the remuneration of the members of the executive personnel. These guidelines are communicated to the annual general meeting. The Board's statement on the remuneration of executive personnel should be a separate appendix to the agenda for the general meeting. It should also be clear which aspects of the guidelines are advisory and which, if any, are binding. The general meeting should vote separately on each of these aspects of the guidelines.
- 12.2. The guidelines for the remuneration of the executive personnel should set out the main principles applied in determining the salary and other remuneration of the executive personnel. The guidelines should help to ensure convergence of the financial interests of the executive personnel and the shareholders.
- 12.3. Performance-related remuneration of the executive personnel in the form of share options, bonus programmes or the like should be linked to value creation for shareholders or the Company's earnings performance over time. Such arrangements, including share option arrangements, should incentivise performance and be based on quantifiable factors over which the employee in question can have influence. Performance-related remuneration should be subject to an absolute limit.
The remuneration of the executive personnel is explained in detail in the Company's annual report. The Board will prepare guidelines for remuneration of leading personnel pursuant to the Norwegian Public Limited Companies Act section 6-16a, and present such guidelines for approval by the annual general meeting in 2021.
The Board is authorized to issue share options for up to 20 million shares, pursuant to an authorization granted by an extraordinary general meeting held in February 2021.
Under a previous authorization, the Board has issued a total of 18 million share options to two leading employees. These share options hold a vesting period of 36 months from their date of grant. Both of the holders of share options also hold substantial amounts of shares in the Company.
Under the current authorization to issue share options, the Company has granted 3 million share options to an existing employee and six million share options in total will be granted to two employees when they commence their employment with the Company. Such share options hold a vesting period of 36 months from their date of grant.
Any shares acquired through exercise of the share options will not be subject to lock-up undertakings, and the Company deviates from the Code of Practice in this respect.
The Company has no other deviations from the Code of Practice with regards to this section of the Code of Practice.
13. Information and communications
- 13.1. The Board should establish guidelines for the Company's reporting of financial and other information based on openness and taking into account the requirement for equal treatment of all participants in the securities market.
- 13.2. The Board should establish guidelines for the Company's contact with shareholders other than through general meetings.
Saga Pure emphasizes to have an open dialogue with the equity market. Relevant information is presented in the form of press releases, in compliance with applicable law and stock exchange regulations.
The Company's financial calendar can be found on the Company's website.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
14. Take-overs
- 14.1. The Board should establish guiding principles for how it will act in the event of a take-over bid.
- 14.2. In a bid situation, the Company's Board and management have an independent responsibility to help ensure that shareholders are treated equally, and that the Company's business activities are not disrupted unnecessarily. The Board has a particular responsibility to ensure that shareholders are given sufficient information and time to form a view of offer.
- 14.3. The Board should not hinder or obstruct take-over bids for the Company's activities or shares.
- 14.4. Any agreement with the bidder that acts to limit the Company's ability to arrange other bids for the Company's shares should only be entered into where it is self-evident that such an agreement is in the common interest of the Company and its shareholders. This provision shall also apply to any agreement on the payment of financial compensation to the bidder if the bid does not proceed. Any financial compensation should be limited to the costs the bidder has incurred in making the bid.
- 14.5. Agreements entered into between the Company and the bidder that are material to the market's evaluation of the bid should be publicly disclosed no later than at the same time as the announcement that the bid will be made is published.
- 14.6. In the event of a take-over bid for the Company's shares, the Company's Board should not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting following announcement of the bid.
- 14.7. If an offer is made for the Company's shares, the Company's Board should issue a statement making a recommendation as to whether shareholders should or should not accept the offer. If the Board statement on the offer should make it clear whether the view expressed are unanimous, and if this is not the case it should explain the basis on which specific member of the Board have excluded themselves from the Board's statement. The Board should arrange a valuation from an independent expert. The valuation should include an explanation, and should be made public no later than at the time of the public disclosure of the Board's statement.
- 14.8. Any transaction that is in effect a disposal of the Company's activities should be decided by a general meeting (or the corporate assembly where relevant).
The Company has set forth the corporate governance policy of the Company, which include certain provisions related to take-over offers.
The Company has no deviations from the Code of Practice with regards to this section of the Code of Practice.
15. Auditor
- 15.1. The Board should ensure that the auditor submits the main features of the plan for the audit of the Company to the audit committee annually.
- 15.2. The Board should invite the auditor to meetings that deal with the annual accounts. At these meetings the auditor should report on any material changes in the Company's accounting principles and key aspects of the audit, comment on any material estimated accounting figures and report all material matters on which there has been disagreement between the auditor ant the executive management of the Company.
- 15.3. The Board should at least once a year review the Company's internal control procedures, including weaknesses identifies by the auditor and proposals for improvement.
- 15.4. The Board should establish guidelines in respect of the use of the auditor by the Company's executive management for services other than the audit.
The Board seeks to have close and open communication with the Company's auditor. The Board obtains annual confirmation that the auditor satisfies the independence and objectivity requirements pursuant to the Auditors Act. The main features of the auditor's planned work are presented to the Board once a year.
The auditors have and will participate at Board meetings that deal with the annual accounts. The Board will have meetings with the auditors without the management present to review the auditor's report on their view on the Company's accounting principles, risk areas and internal control procedures.
The Board plans to advice the annual general meeting about the remuneration of the auditors, and the auditor's fee is divided between auditing and other services as explained in the relevant notes in the annual report.
Auditors work beyond auditing is explained in the Company's procedures and the annual report for 2020. The Board has currently not deemed it expedient to establish guidelines in respect of the use of the auditor by the Company's executive management for services other than the audit, and deviates from the Code of Practice in this respect. The Company has no other deviations from the Code of Practice with regards to this section of the Code of Practice.
CONSOLIDAED STATEMENT OF COMPREHENSIVE INCOME
For the period 01.01.2020 – 31.12.2020
| NOK 1000 | Note | 2020 | 2019 |
|---|---|---|---|
| Restated* | |||
| Operating income | |||
| Gain from financial investments | 3 | 174 476 | 57 666 |
| Gross income | 174 476 | 57 666 | |
| Operating expenses | |||
| Employee benefit expenses | 5 | 12 512 | 6 240 |
| Other operating expenses | 5 | 6 793 | 5 751 |
| Depreciation | 10 | 24 | 24 |
| Total operating expenses | 19 329 | 12 015 | |
| Net operating profit/loss (-) | 155 147 | 45 652 | |
| Financial income/expenses (-) | |||
| Interest income | 813 | 1 225 | |
| Interest expense | -2 | -2 | |
| Net foreign exchange gain/loss (-) | 16 | 2 | |
| Other financial income/expenses (-) | - | 1 | |
| Net financial income/expenses (-) | 827 | 1 226 | |
| Share of profit from associates | 4 | - | - |
| Net profit before tax | 155 974 | 46 878 | |
| Taxes | 11 | - | - |
| Net profit/loss from continuing operations (-) | 155 974 | 46 878 | |
| Profit (loss) from discontinuing operations | 6 | 22 988 | 3 449 |
| Net profit/loss from total operations (-) | 178 962 | 50 326 | |
| Net profit/loss for the year (-) | 178 962 | 50 326 | |
| Attributable to: | |||
| Non-controlling interests | 1 969 | 1 559 | |
| Shareholders' interests | 176 993 | 48 767 | |
| Items that may be subsequently reclassified to profit or loss | |||
| Other comprehensive income | - | - | |
| Total comprehensive income | 178 962 | 50 326 | |
| Attributable to: | |||
| Non-controlling interests | 1 969 | 1 559 | |
| Shareholders' interests | 176 993 | 48 767 | |
| Basic earnings per share total operations NOK | 0,63 | 0,18 | |
| Diluted earnings per share total operations NOK | 0,62 | 0,18 | |
| Basic earnings per share for continuing operations NOK | 0,55 | 0,18 | |
| Diluted earnings per share for continuing operations NOK | 0,55 | 0,18 | |
| Average number of shares in the period | 281 727 913 | 266 149 831 | |
| Number of shares outstanding at period end | 439 149 831 | 266 149 831 |
*Restated to reflect accounting impact and reclassification to discontinued operations related to the disposal of the Vallhall business, see note 16. The notes on pages 22 to 43 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31.12.2020
| NOK 1000 | Note | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|---|
| Restated* | |||
| ASSETS | |||
| Non-current assets | |||
| Associates | 4 | 30 003 | - |
| Non-current financial investments | 17, 19 | 276 447 | 215 343 |
| Fixed assets | 10 | 16 | 90 008 |
| Receivables | - | 340 | |
| Total non-current assets | 306 465 | 305 691 | |
| Current assets | |||
| Trade receivables and other receivables | 8 | - | 666 |
| Other current assets | 7 | 385 | 667 |
| Current financial investments | - | 42 859 | |
| Restricted cash | 20 | 85 000 | - |
| Cash and equivalents | 6, 17 | 391 113 | 87 684 |
| Total current assets | 476 497 | 131 876 | |
| Total assets | 782 963 | 437 567 |
*Restated to reflect accounting impact and reclassification to discontinued operations related to the disposal of the Vallhall business, see note 16.
The notes on pages 22 to 43 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
As at 31.12.2020
| NOK 1000 | Note | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|---|
| Restated* | |||
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 13 | 4 391 | 2 661 |
| Other paid in equity | 13 | 1 059 771 | 819 655 |
| Total paid-in-capital | 1 064 163 | 822 316 | |
| Accumulated losses | -291 798 | -468 791 | |
| Other reserves | - | -2 648 | |
| Non-controlling interests | - | 20 156 | |
| Total equity | 772 365 | 371 032 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Long-term interest bearing debt | 12, 17 | - | 55 000 |
| Other non-current liabilities | 21 | 5 922 | - |
| Deferred tax | 11 | - | 278 |
| Total non-current liabilities | 5 922 | 55 278 | |
| Current liabilities | |||
| Short-term interest bearing debt | 12 | - | 4 000 |
| Tax payable | - | 55 | |
| Trade and other payables | 229 | 2 072 | |
| Other current liabilities and accruals | 9 | 4 447 | 5 129 |
| Total current liabilities | 4 676 | 11 257 | |
| Total liabilities | 10 598 | 66 535 | |
| Total equity and liabilities | 782 963 | 437 567 |
*Restated to reflect accounting impact and reclassification to discontinued operations related to the disposal of the Vallhall business, see note 16.
The notes on pages 22 to 43 are an integral part of these consolidated financial statements.
Øystein Stray Spetalen
Board Member
Christine Spiten Board Member
Oslo, 14 April 2021 The Board of Directors
Martin Nes Chairman
Yvonne Litsheim Sandvold Board Member
Bjørn Simonsen CEO
CONSOLIDATED CASH FLOW STATEMENT
For the period 01.01.2020 – 31.12.2020
| NOK 1000 | Note | 2020 | 2019 |
|---|---|---|---|
| Restated* | |||
| Net profit/loss from continuing operations (-) | 155 974 | 46 878 | |
| Profit/loss from discounting operations (-) | 16 | 22 988 | 3 449 |
| Profit before tax total operations | 178 962 | 50 326 | |
| Gain on disposal of discounted business | -19 389 | - | |
| Tax in discounted business | - | 72 | |
| Options and share program | 6 144 | - | |
| Profit share from associates | - | - | |
| Depreciations | 10 | 1 036 | 3 262 |
| Net loss/gain from financial investments (-) | -172 888 | -57 666 | |
| Net divestment/investment trading (-) | 39 210 | -38 782 | |
| Foreign exchange losses/gains (-) | -5 | 0 | |
| Interest paid | - | 971 | |
| Interest received | -25 | -1 225 | |
| Income tax paid | -55 | -90 | |
| Increase/decrease receivables and prepayments (-) | -275 | -253 | |
| Increase/decrease payables and accruals (-) | 299 | 175 | |
| Net cash flow from operating activities | 33 014 | -43 211 | |
| Investment in associates | -30 003 | - | |
| Investment in non-current financial assets | 19 | -62 551 | -5 292 |
| Divestment in non-current financial assets | 175 701 | - | |
| Dividends received | 2 284 | - | |
| Net cash effect disposal of subsidiaries | 28 783 | - | |
| Receivable | 340 | -340 | |
| Interest received | 25 | 1 225 | |
| Investment in fixed assets | - | -1 449 | |
| Net cash flow from investing activities | 114 579 | -5 856 | |
| Share issue net of costs** | 212 503 | ||
| Repayments of long term borrowings | 12 | -1 000 | -4 000 |
| Payment of interest | 12 | - | -971 |
| Dividends paid to non-controlling interests | -2 442 | -1 583 | |
| Dividends and repayments to controlling interests | -53 230 | - | |
| Net cash flow from financing activities | 155 831 | -6 553 | |
| Net change in cash and cash equivalents | 303 424 | -55 620 | |
| Cash and equivalents at beginning of period | 87 684 | 143 304 | |
| Net foreign exchange differences (unrealised) | 5 | -0 | |
| Cash and equivalents at end of period | 391 113 | 87 684 |
*Restated to reflect accounting impact and reclassification to discontinued operations related to the disposal of the Vallhall business, see note 16
** Net of share issue costs of TNOK 5.597.
The notes on pages 22 to 43 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For year ended 31.12.2020
| 2020 | Paid-in-capital | Other capital | ||||
|---|---|---|---|---|---|---|
| NOK 1000 | Share capital | Other paid in equity |
Accumulated losses |
Other reserves |
Non controlling interests |
Total |
| Equity as at 1 January 2020 | 2 661 | 819 655 | -468 791 | -2 648 | 20 156 | 371 032 |
| Net profit/loss continuing operations (-) Net profit/loss discounting |
- | - | 155 974 | - | 155 974 | |
| operations (-) | 21 019 | 1 969 | 22 988 | |||
| Total comprehensive income | - | - | 176 993 | - | 1 969 | 178 962 |
| Dividends to controlling interests | -53 230 | -53 230 | ||||
| Dividends to non-controlling interests Disposal of non-controlling |
-2 442 | -2 442 | ||||
| interests | -2 648 | 2 648 | -19 683 | -19 683 | ||
| Share issue | 1 730 | 301 370 | 303 100 | |||
| Share issue costs | -5 597 | -5 597 | ||||
| Options and share program (note 21) |
222 | 222 | ||||
| Equity per ending balance 31 December 2020 |
4 391 | 1 059 771 | -291 798 | - | - | 772 365 |
| 2019 | Paid-in-capital | Other capital | Non | |||
|---|---|---|---|---|---|---|
| NOK 1000 | Share capital | Other paid in equity |
Accumulated losses |
Other reserves |
controlling interests |
Total |
| Equity as at 1 January 2019 | 2 661 | 819 655 | -517 559 | -2 648 | 20 179 | 322 288 |
| Net profit/loss (-) | - | - | 48 767 | 1 559 | 50 326 | |
| Total comprehensive income | - | - | 48 767 | - | 1 559 | 50 326 |
| Dividends to non-controlling | ||||||
| interests | -1 583 | -1 583 | ||||
| Equity per ending balance | ||||||
| 31 December 2020 | 2 661 | 819 655 | -468 791 | -2 648 | 20 156 | 371 032 |
The notes on pages 22 to 43 are an integral part of these consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
Note 1 – Corporate Information
Saga Pure ASA (former "Saga Tankers ASA") ("the Company") is a public limited liability company incorporated and domiciled in Norway. The address of the head office is Sjølyst Plass 2, 0278 Oslo. The Company was incorporated on 24 March 2010 and was listed on the Oslo Stock Exchange "Euronext Expand" (former "Oslo Axess") -list on 18 June 2010.
The consolidated financial statements for the year ended 31 December 2020, were approved by the Board of Directors on 14 April 2021, and will be presented for approval at the Annual General Meeting on 26 May 2021.
The business activity of the Group is investment and management related to industry, energy, real estate, including ownership and investment in other businesses.
Note 2 – Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been applied to all the years presented, unless otherwise stated.
Basis of preparation
The financial statements for Saga Pure for the financial year 2020 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The IFRS principles have been applied consistently since incorporation. Below is a summary of the Group's accounting policies to be applied in the consolidated financial statements.
The consolidated financial statements are presented in NOK and all numbers are rounded to the nearest thousands, except where otherwise indicated.
The statement of comprehensive income is presented on a mixed basis (a blend of expenses by nature and function), as this is assessed to be the most relevant and reliable presentation.
Going concern
The financial statements have been prepared on the going concern assumption. For additional information see Board of Director's report.
Basis of consolidation The consolidated financial statements comprise the financial statements of Saga Pure ASA and its subsidiaries (the "Group") as of 31 December each year. As per 31.12.2020 Saga Pure does not constitute a group as the subsidiaries were disposed of during 2020, reference note 16. However, it has comprised as a group during the financial year of 2020, therefore a consolidation has been prepared.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date the control ceases.
All inter-company transactions and balances are eliminated in the consolidated financial statements.
Associates
Associates are all entities over which the group has significant influence but not control or joint control. This is generally the case when the group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the
carrying amount is increased or decreased to recognize the investor's share of the profit or loss of the investee after the date of acquisition. The group's investment in associates includes goodwill identified on acquisition.
If the ownership interest in an associate is reduced, but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where appropriate.
The group's share of post-acquisition profit or loss is recognized in the income statement, and its share of postacquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
The group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount adjacent to share of profit/ (loss) of associates in the income statement.
Dilution gains and losses arising in investments in associates are recognized in the income statement.
Pensions
The company is obligated to have an occupational pension plan. The company meets the requirements for an occupational pension plan in accordance with the Norwegian law on required occupational pensions.
Significant accounting judgments, estimates and assumptions
The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that may affect assets, liabilities, revenues, expenses and information in notes to the financial statement. Estimates are management's best knowledge based on information available at the date the financial statements are authorized for issue. Actual results may differ from these estimates. Such changes will be recognized when new estimates can be determined with certainty.
Non-current financial investments
Non-current financial investments are valued at fair value. In cases where the fair value is not available through market values in quoted prices, the marked value is estimated through benchmarking, estimates from independent values and other sources.
Summary of significant accounting policies
Depreciation of fixed assets
Fixed assets are depreciated on a straight-line basis over their expected useful lives. Land is not depreciated.
Other income –where the Group act as a lessor
Until disposal of the Vallhall business, the Group earned revenue from Vallhall acting as a lessor in operating leases which do not transfer substantially all of the risks and rewards. Rental income arising from leases is accounted for on a time basis or straight-line basis over the lease term for recurring rentals. Rental income is stated net of discounts, returns and value added tax.
Share-based payments
The Group has an equity-settled share-based remuneration program towards certain employees. The cost of this program is determined by the fair value at the grant date, as calculated by the Black-Scholes model. The cost is recognised as employee benefit expenses, together with a corresponding increase in other equity, over the vesting period. As this is equity settled, no subsequent fair value measurements are made post grant date.
Social security Share-based payments
The potential social security related to the share-based program, will be payable at expiration, based on the end value – if any – of the options. Reserves for social security are made, based in the current value of the option, as if it was at its expiration, hence, a full undiscounted reserve. The calculation is based on the difference between the strike price of the option, and the current stock price. If the option at the time of measurement is "out of the money" – no reserves is made.
Dividend Income
Dividend income is recognised when the right to receive payment is established. The company classifies such income as 'Other Income' on the face of Consolidated Statement of Comprehensive Income.
Investment and trading of financial instruments/assets at fair value through profit or loss
Financial instruments/assets are classified at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income (OCI), or at fair value through profit or loss, whereas the latter acquired principally for the purpose of generating a profit from fluctuation in prices is the most crucial for the Group. The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them.
The group indulges in investment and trading of financial instruments as part of its core business. The group's noncurrent financial investments are characterised in addition to the Groups intention of sale, that this sale could typically be expected to occur within a tree year time frame. The non-current financial investments are therefore treated at fair value through profit or loss.
All such instruments are classified as non-current financial investments, unless the Group exercises significant influence of the investment, in which case the investment will be classified as associate.
Current investments are considered part of a held for trading portfolio if they are acquired for the purpose of selling or repurchasing in the near term. The trading portfolio is considered a subordinated business compared to the long-term investments. These investments is subsequently measured at fair value in the statement of financial position with net changes in fair value recognized in the statement of profit and loss.
Investments subsequently measured at fair value over profit and loss in accordance with the fair value hierarchy:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
- Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Net unrealised and realized gain/losses on the portfolio of investments is classified as operating income, while net unrealized and realized losses is classified as operating expenses.
In cases where as an investment changes classification between associate and non-current financial investment either way, the investment is derecognized and recognized in its new classification based on its fair value as of time of derecognition/recognition. The highest level achievable according to the IFRS fair-value hierarchy will be applied.
Trade receivables and other receivables
Current trade receivables and other receivables are initially recorded at their fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.
Trade payables and other payables
Current trade and other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
Foreign currency
The financial statements are presented in NOK, which is also the functional currency for all the companies in the Group.
Transactions in foreign currencies are recorded at the exchange rate in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate at the financial position date. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.
Impairment of non-financial assets
Fixed assets
Fixed assets are reviewed for indication of impairment at each reporting date, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized. The recoverable amount is the higher of an assets net selling price and its value in use. The net selling price is the amount obtainable from the sale of an asset in an arm's length transaction less the costs of disposal, while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets if possible, or else for the cash-generating unit.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Group's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Cash, cash equivalents and cash flow statement
Cash represents cash on hand and deposits with bank that is callable on demand.
Cash equivalents represent short-term, highly liquid investments which are readily convertible into known amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.
The cash flow statement is prepared using the indirect method.
Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as financial expense.
Equity
Transaction costs related to an equity transaction are recognized directly in equity after deduction of tax.
Ordinary taxation
At year end, all subsidiaries within the Group are subject to the ordinary Norwegian taxation regime. Current income taxes are measured at the amount expected to be paid to (recover from) authorities, deferred tax assets/liabilities are calculated based on temporary differences at the reporting date. Deferred tax assets are recognized to the extent that it is probable that they can be utilized in the future. Dividends and capital gains are taxed according to the Norwegian exemption model.
Financial position classification
Current assets and current liabilities include items due less than one year from the financial position date, and items tied to the operating cycle. The current portion of long-term debt is included as current liabilities.
Related parties
Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence.
Contingent liabilities
Contingent liabilities are defined as possible obligations that arises from past events whose existence depends on one or more future events not wholly within the control of the entity, or present obligations that are not recognized because it is not probable that they will lead to an outflow or resources.
Contingent liabilities are not recognized on the balance sheet unless arising from assuming assets and liabilities in a business combination. Significant contingent liabilities are disclosed unless the possibility of an outflow of resources embodying economic benefit is a remote one.
Contingent assets are not accounted for unless virtually certain.
Events after financial position date
New information regarding the Group's situation on the financial position date is taken into account in the financial statements. Events occurring after the financial position date, that do not affect the Group on the financial position date but will affect the Group's situation in the future, are disclosed if significant.
New and amended standards adopted by the group in the reporting period
There are no new standards in 2020 with significant impact for the Group.
Standards and Interpretations in issue but not yet adopted
There are no new standards or amendments which have been issued, but are not yet effective, that are considered to have an impact on the Group.
Note 3 – Operating Segments
The management monitored the net income from investments in financial assets, and the revenues from lease and operation of property on a separate basis. The Group can also generate other income such as among other fees for services rendered and guarantees.
Segments defined:
- Investments: Investments in financial assets of long and short term, operated through the Saga entity
- Vallhall: Rental and operation of the Vallhall facility, conducted through the Vallhall entities, disposed during the year, reference note 16.
In October 2020 the Group disposed of the lease and operation of property-segment, accordingly, as per year end the Group only have one active segment (Investment).
Investments are governed through continuous assessment of financial markets and investment strategy, supported with scrutiny of expenses.
Other is dependent on the availability of ad-hoc assignment for the staff, and the availability of the resources to fulfil these assignments.
| Segment information | Investment | Vallhall (note 16) | Other | Total | ||||
|---|---|---|---|---|---|---|---|---|
| NOK 1000 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Income | ||||||||
| Net gain/loss on investments (-) | 174 476 | 57 666 | 174 476 | 57 666 | ||||
| Total income | 174 476 | 57 666 | - | - | - | - | 174 476 | 57 666 |
| Operation expenses - excluding loss in | ||||||||
| investments | 19 329 | 12 015 | 19 329 | 12 015 | ||||
| Net operating profit/loss from | ||||||||
| continuing operations (-) | 155 147 | 45 652 | - | - | - | - | 155 147 | 45 652 |
| Profit/loss from discounting operations | ||||||||
| (note 16) (-) | 22 988 | 3 449 | 22 988 | 3 449 | ||||
| Assets | 782 963 | 335 276 | - | 102 291 | 782 963 | 437 567 | ||
| Liabilities | 10 598 | 4 610 | - | 61 925 | 10 598 | 66 535 |
There has not been any transaction across the different segments.
Note 4 – Investment in Associates
The Group participated in an equity offering and achieved 21.43% interest in the unlisted company Bergen Carbon Solutions AS on 18 December 2020.
Bergen Carbon Solutions is using carbon dioxide to produce carbon nanofibers, hence a CO2 negative production of nanofibers. This is a new technology, and the main operations are relating to the development of the equipment and technology for this type of production, and the up-scaling of the equipment. The main asset of the company is therefore related to the technology, know-how and prototype, hence, intangible assets. The Company is represented in the Board of Director's in Bergen Carbon Solution. Since the Company is still in a development phase, and development expenses are capitalized, no share of the profit and loss of the company has been allocated to the Group for the financial year of 2020, due to the late date of the acquisition.
The Group also has an option for subscription of additional shares within 9 months from the initial acquisition, which if exercised will increase the ownership to 34.24 %, at a 10 % increased subscription price compared to the terms in the initial acquisition. Since the transaction occurred ultimo December 2020, no fair value adjustment is made to the option. The table below reflect the book value of assets and liabilities in Bergen Carbon Solution AS as of 31 December 2020. The acquisition resulted in a surplus value of NOK 21.7 million which was allocated to development technology, and will subsequently be amortised over the expected useful life when it's ready for use.
| 2020 | |
|---|---|
| NOK 1000 | Bergen Carbon Solutions AS |
| Current assets | 40 694 |
| Non-current assets | 3 003 |
| Current liabilities | -3 350 |
| Non-current liabilities | -1 500 |
| Equity | 38 847 |
| Groups share of equity (21.3%) | 8 324 |
| Research and development | 21 679 |
| Carrying amount, 31 December 2020 | 30 003 |
Note 5 – Operating Expenses
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Employee benefit expenses | ||
| Salaries | 5 536 | 5 407 |
| Social security costs | 755 | 770 |
| Pension expenses | 43 | 49 |
| Accrual option program | 222 | - |
| Reserves social security option program | 5 922 | - |
| Other personnel expenses | 34 | 14 |
| Total employee benefit expenses | 12 512 | 6 240 |
| Number of man-years | 2 | 2 |
| Other operating expenses | ||
| Fees | 4 682 | 4 441 |
| Travel expenses and membership fees | 17 | 55 |
| Other expenses | 2 094 | 1 256 |
| Total administrative expenses | 6 793 | 5 751 |
Remuneration to the Board of Directors and executive management
| 2020 | ||||||
|---|---|---|---|---|---|---|
| NOK 1000 | ||||||
| Salary and | Vesting | |||||
| Name | Position | bonus | option | Other benefit | Pension cost | Director's fee |
| Bjørn Simonsen | CEO* | 181 | 222 | - | - | - |
| Espen Lundaas | CEO/CFO* | 2 118 | - | - | - | - |
| Tore Jakob Berg | CFO/CAO* | 1 274 | - | - | - | - |
| Martin Nes | Chairman | - | - | - | - | 140 |
| Øystein Stray Spetalen | Board member | - | - | - | - | 100 |
| Kristin Hellebust | Board member** | - | - | - | - | 40 |
| Yvonne Litsheim Sandvold | Board member | - | - | - | - | 100 |
| Total remuneration | 3 574 | 222 | - | - | 380 |
2019
NOK 1000
| Salary and | Vesting | |||||
|---|---|---|---|---|---|---|
| Name | Position | bonus | option | Other benefit | Pension cost | Director's fee |
| Espen Lundaas | CEO | 2 018 | - | - | - | - |
| Tore Jakob Berg | CFO | 1 148 | - | - | - | - |
| Martin Nes | Chairman | - | - | - | - | 140 |
| Øystein Stray Spetalen | Board member | - | - | - | - | 100 |
| Kristin Hellebust | Board member | - | - | - | - | 100 |
| Yvonne Litsheim Sandvold | Board member | - | - | - | - | 100 |
| Total remuneration | 3 167 | - | - | - | 440 |
*In December 2020, Bjørn Simonsen was hired as CEO. As of that date Espen Lundaas altered from CEO to CFO, while Tore Jakob Berg altered from CFO to Chief Accounting Officer (CAO).
** Kristin Hellebust left the Board in May 2020.
The Group had no outstanding loans or guarantees in favour of any member of the Board of Directors or company management in 2020.
Guidelines for determining salaries and other compensation for company management
In accordance with the regulations in paragraph 6-16a in the Norwegian Public Limited Companies Act, the Board of Directors has established a statement regarding remuneration. The focus of the company is to hire qualified managers and to pay according to the market. Salary and remuneration of the CEO and CFO is determined by the Board of Directors, and payments to other employees are determined by the CEO according to guidelines from the Board of Directors.
Saga Pure Group's compensation schemes include only a limited number of benefits in kind. These benefits are offered in line with common practice in international labour markets and typically include personal communication equipment, access to media, and car and parking arrangements. There is a mutual three month termination period for the employees, and there are no agreements for severance packages.
The Statement on the determination salary and other remuneration for senior executives will be presented at the annual general meeting and made available on the Company's webpage.
Stock options program to Board members and Company employees
In October, an equity settled option and share program was initiated towards certain key employees. No stock options or right to stock options are held by members of the board of directors at 31 December 2020. Reference are made to note 21 for further information.
| Audit Fees | ||
|---|---|---|
| NOK 1000 | 2020 | 2019 |
| Audit fees including VAT | ||
| Audit services | 366 | 490 |
| Other attestation services | 58 | - |
| Tax services | - | - |
| Other non-audit services | 19 | - |
| Total | 442 | 490 |
Fees to the Group's auditors are included in administrative expenses.
Note 6 – Cash and Cash Equivalents
The Group's cash and cash equivalents are denominated in the following currencies:
| NOK 1000 | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| US Dollars | 134 | 34 |
| Norwegian kroner | 390 978 | 87 650 |
| Total cash and cash equivalents | 391 113 | 87 684 |
| Restricted cash | ||
| Employee tax accounts | 1 135 | 1 100 |
All cash deposits are held in financial institutions with a long-term credit ratings of minimum A+ according to Standard & Poor's. Reference are made to note 17 for further information.
Deposits carries floating interest rates.
Note 7 – Other Current Assets
| NOK 1000 | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Other receivables | - | 3 |
| Prepayments | 385 | 455 |
| Unbilled revenue | - | 210 |
| Total other current assets | 385 | 667 |
Note 8 – Trade Receivables and Other Receivables
The outstanding amount of trade receivables at 31 December 2020 was TNOK 0 (31 December 2019 of TNOK 666). The trade receivables in 2019 were related to rental income for the Vallhall Arena and services rendered to the tenants.
Note 9 – Other Current Liabilities
| NOK 1000 | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Public duties payable | 1 502 | 1 472 |
| Deferred revenue | - | - |
| Accrued interest | - | 385 |
| Other current liabilities | 2 945 | 3 273 |
| Total other current liabilities | 4 447 | 5 129 |
Other current liabilities are non-interest bearing. Other current liabilities are normally settled on 30 to 60-day terms. Deferred revenues are revenues invoiced, but not earned per 31 December.
Note 10 – Fixed Assets
| 2020 | |||||
|---|---|---|---|---|---|
| Capitalized | |||||
| NOK 1000 | Buildings | Machinery & equipment |
costs – work in progress |
Land | Total |
| Acquisition cost, opening balance 01.01.20 | 100 568 | 4 827 | 38 | 199 | 105 632 |
| Disposal as part of discounted business (note 16) | -100 568 | -4 756 | -38 | -199 | -105 561 |
| Acquisitions during the period | - | - | - | - | - |
| Disposals during the period | - | - | - | - | - |
| Acquisition cost at 31.12.20 | - | 72 | - | - | 72 |
| Accumulated depreciation, opening balance 01.01.20 | -14 015 | -1 610 | - | - | -15 625 |
| Disposal as part of discounted business (note 16) | 14 015 | 1 578 | - | - | 15 593 |
| Depreciation | - | -24 | - | - | -24 |
| Accumulated depreciation disposed assets | - | - | - | - | - |
| Accumulated depreciation at 31.12.20 | - | -56 | - | - | -56 |
| - | |||||
| Net book value at 31.12.20 | - | 16 | - | - | 16 |
| 2019 | |||||
|---|---|---|---|---|---|
| Capitalized | |||||
| NOK 1000 | Buildings | Machinery & equipment |
costs – work in progress |
Land | Total |
| Acquisition cost, opening balance 01.01.20 | 99 141 | 4 806 | 38 | 199 | 104 184 |
| Acquisitions during the period | 1 427 | 22 | - | - | 1 449 |
| Disposals during the period | - | - | - | - | - |
| Acquisition cost at 31.12.20 | 100 568 | 4 827 | 38 | 199 | 105 632 |
| Accumulated depreciation, opening balance 01.01.20 | -10 853 | -1 510 | - | - | -12 363 |
| Depreciation | -3 161 | -100 | - | - | -3 262 |
| Accumulated depreciation disposed assets | - | - | - | - | - |
| Accumulated depreciation at 31.12.20 | -14 015 | -1 610 | - | - | -15 625 |
| - | |||||
| Net book value at 31.12.20 | 86 553 | 3 217 | 38 | 199 | 90 008 |
Depreciation
Assets have been depreciated on a straight-line basis over their expected useful lives as follows:
| Buildings: | 67 years |
|---|---|
| Machinery and equipment: | 5-10 years |
| Capitalized cost - Work in progress: | No depreciation before utilization |
| Land: | No depreciation |
The majority of the fixed assets of the Group was disposed through the sale of the Vallhall business. The implicit recovered amount of the disposed fixed assets, surpassed the book value at time of disposal (see note 16).
Note 11 – Tax
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Current tax expense | - | 55 |
| Deferred tax expense | - | 17 |
| Tax expense | - | 72 |
| Reconciliation of tax expenses | ||
| Net profit before tax | 155 974 | 50 398 |
| Tax expense based on nominal tax rate of 22% | 34 314 | 11 088 |
| Permanent differences* | -37 922 | 83 491 |
| Change in other tax benefits receivables | - | -96 588 |
| Change in not recognized deferred tax assets | 3 607 | 2 082 |
| Tax effect on deferred tax due to change of tax rate | - | - |
| Tax expense | - | 72 |
| Reconciliation of deferred tax (-)/deferred tax assets | ||
| Fixed and other assets | 2 | 23 |
| Net tax loss carried forward | 17 353 | 13 805 |
| Share in partnership | - | -359 |
| Deferred tax assets | 17 355 | 13 469 |
| Net deferred tax assets not recognized | 17 355 | 13 747 |
| Deferred tax (-)/deferred tax assets in the balance sheet | - | -278 |
| Tax on other comprehensive income | ||
| Other comprehensive income | - | - |
| Income tax related to other comprehensive income | - | - |
* Permanent differences are to great extent related to the tax exemption for gain on certain financial assets.
Note 12 – Interest Bearing Debt
| NOK 1000 | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Long term interest bearing debt | - | 55 000 |
| Current portion of long-term debt | - | 4 000 |
| Accrued interest | - | 385 |
| Total interest bearing debt | - | 59 385 |
| NOK 1000 | 2020 | 2019 |
| Opening balance 1 December* | 59 385 | 63 337 |
| Accrued interest for the year | - | 2 134 |
| Instalments paid | - | -4 000 |
| Disposal through discounted business | -59 385 | - |
| Interest payments | - | -2 086 |
| Ending balance 31 December | - | 59 385 |
* Accrued interest of TNOK 385 is included "Other current liabilities" see note 9.
Material loan agreements
The interest-bearing debt was mortgage related to the Vallhall business which was disposed during the 4th quarter in 2020, see note 16.
Note 13 – Issued Capital and Shareholders
| Issued capital | |||
|---|---|---|---|
| 2020 | Other paid in capital | ||
| NOK 1000 | Number of shares | Share capital | |
| Opening balance 01.01.2020 | 266 149 831 | 2 661 | 819 655 |
| Dividends | -53 230 | ||
| Disposal of minorities | -2 648 | ||
| Option and share program | 222 | ||
| Share issue | 173 000 000 | 1 730 | 295 773 |
| Ending balance 31.12.2020 | 439 149 831 | 4 391 | 1 059 772 |
| 2019 | |||
| NOK 1000 | Number of shares | Share capital | Other paid in capital |
| Opening balance 01.01.2019 | 266 149 831 | 2 661 | 819 655 |
| Ending balance 31.12.2019 | 266 149 831 | 2 661 | 819 655 |
All issued shares have a nominal value of NOK 0.01 and are of equal rights. Saga Pure ASA is incorporated in Norway, listed on the Euronext Expand (former Oslo Exchange Axess list), and the share capital is denominated in NOK.
As of 31 December 2020, the Company had 6.401 shareholders, see note 23 related to issuance of shares in the Company after 31 December. Per 31 December 2020, The Company's largest shareholders are;
| Overview of the largest shareholders as per 31 December 2020 Name |
Shares | % of total shares | |
|---|---|---|---|
| 1 | *ØYSTEIN STRAY SPETALEN | 172 841 799 | 39.36 % |
| 2 | *TYCOON INDUSTRIER AS | 25 550 000 | 5.82 % |
| 3 | **SIMONSEN INVEST AS | 17 618 667 | 4.01 % |
| 4 | DALLAS ASSET MANAGEMENT AS | 9 187 461 | 2.09 % |
| 5 | NORDNET LIVSFORSIKRING AS | 6 595 429 | 1.50 % |
| 6 | PÅL KRISTIAN AASEN | 5 866 000 | 1.34 % |
| 7 | AS TANJA | 5 745 000 | 1.31 % |
| 8 | TORSTEIN INGVALD TVENGE | 5 117 841 | 1.17 % |
| 9 | MELCHER HOLDING AS | 4 000 000 | 0.91 % |
| 10 | SONGA CAPITAL AS | 3 723 500 | 0.85 % |
| 11 | BORGEN INVESTMENT GROUP NORWAY AS | 3 500 000 | 0.80 % |
| 12 | FRØILAND INVEST AS | 3 454 554 | 0.79 % |
| 13 | Nordnet Bank AB | 3 206 740 | 0.73 % |
| 14 | TIGERSTADEN AS | 2 750 000 | 0.63 % |
| 15 | OLA STORMYR HOLDING AS | 2 639 242 | 0.60 % |
| 16 | SPAR KAPITAL INVESTOR AS | 2 515 016 | 0.57 % |
| 17 | HEGE BAKKEN | 2 211 580 | 0.50 % |
| 18 | UTHALDEN AS | 2 143 568 | 0.49 % |
| 19 | GIRONDE AS | 2 113 000 | 0.48 % |
| 20 | ***HANEKAMB INVEST AS | 2 000 000 | 0.46 % |
| (shared) 20 (shared) |
****EL INVESTMENT AS | 2 000 000 | 0.46% |
| Total | 282 779 397 | 64.85 % | |
| Total outstanding shares | 439 149 831 | 100.00 % |
* Controlled by Board member Øystein Stray Spetalen
** Controlled by CEO Bjørn Simonsen
*** Controlled by Chairman Martin Nes
**** Controlled by CFO Espen Lundaas
Shareholders per country per 31 December 2020
| Shares | Owner's share % | |
|---|---|---|
| Norway | 428 245 661 | 97.517 % |
| Sweden | 4 642 447 | 1.057 % |
| Luxembourg | 1 984 402 | 0.452 % |
| Denmark | 1 614 812 | 0.368 % |
| United Kingdom | 1 026 407 | 0.234 % |
| Belgium | 876 145 | 0.200 % |
| Ireland | 174 250 | 0.040 % |
| Finland | 173 630 | 0.040 % |
| United States | 80 121 | 0.018 % |
| Switzerland | 61 158 | 0.014 % |
| Singapore | 60 600 | 0.014 % |
| Estonia | 41 596 | 0.009 % |
| France | 36 952 | 0.008 % |
| Germany | 30 330 | 0.007 % |
| The Netherlands | 20 110 | 0.005 % |
| Lithuania | 19 300 | 0.004 % |
| Argentina | 19 000 | 0.004 % |
| United Arab Emirates | 17 500 | 0.004 % |
| Korea, Republic of | 10 000 | 0.002 % |
| Brazil | 7 500 | 0.002 % |
| Thailand | 6 000 | 0.001 % |
| Spain | 1 750 | 0.000 % |
| Colombia | 160 | 0.000 % |
| Total | 439 149 831 | 100.000 % |
Total paid in capital
Please see table above.
Shareholders rights
There are currently no limitations in voting rights or trade limitations related to the Saga Pure share.
Power of attorney to increase the share capital through issuance of new shares
The Board held as per 31 December 2020 authorization to issue up to 41,047,916 new shares, including 30,000,000 shares resulted by the board, not yet issued at 31. December. The authorization may be utilised on one or several occasions. References are made to note 23 regarding subsequent events.
Power of attorney to repurchase own shares
The Board held authorization to repurchase own shares as per 31 December 2020 limited to 26,614,983 shares. References are made to note 23 regarding subsequent events.
Authorization to raise convertible loans
The Board held no authorization to raise convertible bonds as per 31 December 2020.
Stock option arrangements
The Company had issued 18,000,000 stock options, with an authorization to the board to issue further 7,000,000 stock option as of 31 December 2020. References are made to note 23 regarding subsequent events.
Shares owned by the Board, Management and their Related Parties
| 2020 | # of Shares |
|---|---|
| Board of Directors | |
| Martin Nes* (Chairman) | 2 000 000 |
| Øystein Stray Spetalen** | 198 391 799 |
| Yvonne Litsheim Sandvold*** | 1 082 000 |
| Group Management | |
| Bjørn Simonsen****, CEO from Dec 2020 | 17 618 667 |
| Espen Lundaas*, CEO/CFO from Dec 2020 | 2 000 000 |
| Tore Jakob Berg, CFO/CAO from Dec 2020 | 500 000 |
| Total number of shares held by Board members, Group management and related parties | 221 592 466 |
| Total number of shares held by Board members, Group management and related parties in % of total outstanding shares |
50.46 % |
| 2019 | # of Shares |
| Board of Directors | |
| Martin Nes* (Chairman) | 1 000 000 |
| Øystein Stray Spetalen | 172 841 799 |
| Yvonne Litsheim Sandvold | - |
| Kristin Hellebust | - |
| Group Management | |
| Espen Lundaas*, CEO | 1 000 000 |
| Tore Jakob Berg, CFO | 500 000 |
| Total number of shares held by Board members, Group management and related parties | 175 341 799 |
of total outstanding shares
* Holdings through Hanekamb Invest AS
** Including holdings through Tycoon Industrier AS
*** Holdings through Yls Næringseiendom AS
**** Holdings through Simonsen Invest AS
***** Holdings through El Investment AS.
Note 14 – Earnings Per Share
Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year, excluding ordinary shares purchased by the company and held as treasury shares. The company held no such treasury shares as of 31 December 2020.
Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares to ordinary shares. Dilutive shares related to option program for certain employees, see note 21.
Number of shares
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Net profit/(loss) attributable to the shareholders | 176 993 | 48 767 |
| Number of shares | ||
| Weighted average number of ordinary shares outstanding | 281 727 913 | 266 149 831 |
| Weighted average number of shares outstanding, diluted | 285 377 913 | 266 149 831 |
| Number of shares outstanding at period end | 439 149 831 | 266 149 831 |
| NOK per share | ||
| Basic diluted earnings per share | 0.63 | 0.18 |
| Diluted earnings per share | 0.62 | 0.18 |
Note 15 – Related Parties
Transactions with related parties within the ordinary course of business relates limited to office rent including mutual costs, deliverance of strategic management services and services rendered regarding support for financial reporting.
All transactions with related parties have been made on an arm's length basis and are settled on a regular basis. Goods and/or services purchased from related parties have been priced at industry standard rates. Transactions with related parties are specified below:
Related Party Transactions
| 2020 NOK 1000 |
Sales to related parties |
Purchase from related parties |
Amounts owed by related parties |
Amounts owed to related parties |
|---|---|---|---|---|
| Tycoon Industrier AS* | 38 271 | 1 235 | - | - |
| Ferncliff Holding AS* | - | 3 000 | 250 | - |
| Ferncliff TIH AS* | - | - | - | 41 |
| Total | 38 271 | 4 235 | 250 | 41 |
* Entities directly or indirectly controlled by the Company's largest shareholder Øystein Stray Spetalen, which also is represented in the Board of Director's.
As part of the Company's strategy change in the second half of 2020, the Company disposed of the Vallhall business to Tycoon Industries AS for an amount of NOK 38 million. The transaction price was considered to be on arms lengths principles, which also was supported by a fairness opinion provided by a reputable independent company, and subsequently approved by an extraordinary general meeting in the Company. See note 16 for additional information.
| 2019 NOK 1000 |
Sales to related parties |
Purchase from related parties |
Amounts owed by related parties |
Amounts owed to related parties |
|---|---|---|---|---|
| Tycoon Industrier AS* | - | 930 | - | 237 |
| Ferncliff Holding AS* | - | 3 000 | - | 250 |
| Total | - | 3 930 | - | 487 |
Note 16 – Discontinued Operations
As part of the focused strategy towards the sustainability segment, the Group divested in assets no longer considered to be core investment. The 55% ownership in the indoor arena Vallhall ("Vallhall") was thereby sold to Tycoon Industrier AS at an enterprise value of NOK 120 million, corresponding to net cash settlement of NOK 38 million for the 55 % share after adjustments for debt and other assets included.
| Ownership share prior to | ||
|---|---|---|
| Subsidiaries | Country of incorporation | disposal |
| Vallhall Fotballhall KS | Norway | 54.8 % |
| Vallhall Fotballhall AS | Norway | 54.8 % |
| Vallhall Fotballhall Drift AS | Norway | 55.2 % |
As Saga Pure ASA disposed of its shares in Vallhall in October 2020, the net financial statements of Vallhall has been classified as discontinued operations for the financial statements of 2020, and reclassified accordingly in the restated financial statements of 2019.
The disposal resulted in a gain of NOK 19.4 million
Specification of Net profit/loss (-) from discontinuing operations:
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Other income | 13 188 | 20 112 |
| Operating revenues | 13 188 | 20 112 |
| General administrative expenses | 5 863 | 11 258 |
| Depreciation | 2 375 | 3 238 |
| Operating expenses | 8 238 | 14 496 |
| Operating profit/loss (-) | 4 950 | 5 616 |
| Interest income | - | 40 |
| Interest expense | -1 353 | -2 136 |
| Other financial items | 2 | 0 |
| Net financial items | -1 351 | -2 096 |
| Taxes | - | 72 |
| Profit at disposal 19 Oct. 2020 | 19 389 | - |
| Net profit/loss from discounting operations (-) | 22 988 | 3 449 |
| Attributable to: | ||
| Non-controlling interests | 1 969 | 1 559 |
| Shareholders' interests | 21 019 | 1 889 |
| Net cash from discontinuing operations: | ||
| NOK 1000 | 2020 | 2019 |
| Operating | 4 554 | 6 929 |
| Investing | - | -1 449 |
| Financing | -6 400 | -7 500 |
| Net cash (outflow)/inflow | -1 846 | -2 019 |
Note 17 – Financial Risk Management
The Covid-19 pandemic is a temporary incident, acting as an overall risk factor, affecting several of the Groups risk factors. The pandemic increases the volatility in the financial markets, creating both threats and opportunities for the Group. Although it is likely that the dominant effect of the pandemic will ease out in the foreseeable future, it is important to be aware that similar incidents can occur in the future. Therefore the pandemic risk will always be present actively or dormant.
Through its activities the Group is exposed to a variety of financial risks: market risk including currency risk, credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. To reduce and manage these risks, management periodically assesses the Group's financial market risk in general.
Equity price risk
The Group invests in both marketable securities on different stock exchanges as well unlisted securities in order to take advantage of market movements in the equity markets.
All marketable securities present a risk of loss of capital. The Group moderates this risk through a careful selection of securities. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments. The Group's overall market positions are monitored on a quarterly basis. The Group's maximum exposure to risk at the balance sheet date is NOK 276.4 million (2019: NOK 258.2 million).
At 31 December 2020, the impact of increases/decreases of the Oslo Stock Exchange on the group's post-tax profit for the year and on equity would have been as shown below. The analysis is based on the assumption that the equity indexes had increased/decreased by 5% with all other variables held constant and all the group's equity instruments moved according to the historical correlation with the index.
Increase of 5 %:
| NOK 1000 | Impact on post-tax profit | |
|---|---|---|
| Index | 2020 | 2019 |
| Oslo Stock Exchange | 2 118 | 10 200 |
| Euronext Growth | 9 563 | - |
| Total | 11 680 | 10 200 |
Decrease of 5 %:
| NOK 1000 | Impact on post-tax profit | |
|---|---|---|
| Index | 2020 | 2019 |
| Oslo Stock Exchange | -2 118 | -10 200 |
| Euronext Growth | -9 563 | - |
| Total | -11 680 | -10 200 |
Currency Risk
The Group is currently not exposed directly by currency risk, investments are in NOK nominated companies, and all substantial bank deposits are in NOK. The Group have only immaterial transactions in foreign currency.
Tax risk
Saga Pure is subject to taxation by Norwegian authorities. Any change in taxation regime may affect the payable taxes of Saga Pure. Currently the Group's investments are tax exempted («fritaksmetoden»), if the Norwegian tax regime changes and gains/losses on investment become taxable this could have significant impact on the Group's tax position.
Credit Risk
The Group have limited credit risk, inherent in the risk that a counterparty will be unable to pay amounts in full when due. As of the balance sheet date the Company did not have any trade receivables, and bank deposits amounting to NOK 476.1 million are deposited at reputable banks and finance institution in Norway.
Concentration of credit risk exists to the extent that at December 31, 2020 all cash and cash equivalents, and restricted cash, were held at one financial institution, with credit ratings according to Standard & Poor's of AA-:
| NOK 1000 | |||
|---|---|---|---|
| Counterparty | Rating | Geographical segment | 2020 |
| Cash and cash equivalents | |||
| DNB | AA- | Norway | 391 113 |
| Total | 391 113 | ||
| Restricted cash | |||
| DNB* | AA- | Norway | 85 000 |
| Ending balance 31.12.2020 | 85 000 |
*Through client account
Liquidity risk
The group monitors rolling forecasts of the group's liquidity requirements to ensure it has sufficient cash to meet operational needs. The group had no outstanding interest bearing debt, and a limited capital commitment of NOK 35 million (see note 19).
At the reporting date, the Group held cash and cash equivalents of TNOK 391,113 (2019: TNOK 87,684) and other liquid assets of TNOK 85,000 (2019: TNOK 666) that are expected to readily generate cash inflows for managing liquidity risk. The restricted cash of TNOK 85,000 were released to the Group at 4 January 2021.
Interest rate risk
Based on the financial status at balance sheet date, an increase of the general interest level of one percentile would impact the profit and loss accounts with TNOK +391. A decrease in the general interest level of one percentile would impact the profit and loss accounts with TNOK -391.
Capital Management
Capital as defined for capital management for the Group includes all equity reserves attributable to the equity holders of the parent company. As an investment group, the primary objective of Group's capital management is to maximize the value for its shareholders.
In order to achieve this objective, the Group aim to maintain an optimal capital structure by assessing its projected future capital needs for investing and or divesting, towards its capital management tools such as dividends or issuance of new shares.
The Group currently has no interest bearing debt. If the Group were to incur interest-bearing debt, the policy would be to maintain the overall leverage at levels in which financial covenants of such debt does not interfere with autonomy of the Groups investment decisions.
Note 18 – Financial Instruments
Set out below is a comparison by category for carrying amounts and fair values of all of the Group's financial instruments that are carried in the financial statements.
| 2020 | |||
|---|---|---|---|
| NOK 1000 | Carrying amount | Fair value | Fair value hierarchy |
| Loans and receivables | |||
| Cash and cash equivalents | 391 113 | 391 113 | 1 |
| Restricted cash | 85 000 | 85 000 | 1 |
| Investments | |||
| Non-current financial investments | 276 447 | 276 447 | 1 |
| Other financial liabilities | |||
| Other non-current liabilities | 5 922 | 5 922 | 2 |
| Trade payables | 229 | 229 | 2 |
| Other current liabilities | 4 447 | 4 447 | 2 |
| 2019 | |||
| NOK 1000 | Carrying amount | Fair value | Fair value hierarchy |
| Loans and receivables | |||
| Cash and cash equivalents | 87 684 | 87 684 | 1 |
| Trade receivables | 666 | 666 | 2 |
| Investments | |||
| Non-current financial investments | 215 343 | 215 343 | 1 & 2 |
| Other financial liabilities | |||
| Long term interest bearing debt | 55 000 | 55 000 | 2 |
| Short term interest bearing debt | 4 000 | 4 000 | 2 |
| Trade payables | 2 072 | 2 072 | 2 |
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The estimated fair value has been determined by the Group using appropriate market information and valuation methodologies. The different levels have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The following table presents the group's financial assets and liabilities that are measured at fair value at 31 December 2020. The fair value of financial instruments does not significantly deviate from their carrying amount.
| NOK 1000 | ||
|---|---|---|
| Non-current financial investments (equity securities) in NOK | 2020 | 2019 |
| Listed shares (Level 1) | 276 447 | 208 249 |
| Non-listed shares Level 2) | - | 7 094 |
| Total | 276 447 | 215 343 |
There were no transfers between the levels during the year.
(a) Financial instruments in level 1
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 bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily OSE, Euronext Expand, Euronext Growth, DAX and FTSE 100 equity investments classified as trading securities or available for sale.
(b) Financial instruments in level 2
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. Specific valuation techniques used to value financial instruments include:
- Quoted market prices or dealer quotes for similar instruments;
- Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.
Note 19 – Non-Current Financial Investments
As at year end the Group held the following non-current financial instruments carried at fair value in the statement of financial position:
| NOK 1000 | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| At 1 January | 215 343 | 156 462 |
| Additions* | 62 551 | 5 292 |
| Unrealized gain/(loss) | 205 539 | 53 589 |
| Disposals | -206 987 | - |
| At 31 December | 276 447 | 215 343 |
| Less non-current portion | -276 447 | -215 343 |
| Current portion | - | - |
| Fair value hierarchy | 31 Dec 2020 | 31 Dec 2019 | |
|---|---|---|---|
| Listed shares | Level 1 | 276 447 | 208 249 |
| Non-listed shares | Level 2 | - | 7 094 |
| Total | 276 447 | 215 343 |
*The Groups investment through private placement in Horisont Energi, as announced 30 December 2020, is not reflected in the financial statement. Although the allocation was disclosed in 2020, the placement was not completed until January 2021. Horisont Energi is a carbon tech company engaged in blue hydrogen and ammonia, as well as CO₂ handling.
Non-current financial investments include the following:
| Equity securities | 2020 | 2019 |
|---|---|---|
| SD Standard Drilling Plc, market price | - | 142 892 |
| Northern Supply AS, fair value assessment from third parties | - | 7 094 |
| Vistin Pharma ASA, market price | 39 861 | 65 357 |
| Everfuel AS, market price | 225 000 | - |
| Other, market price | 11 586 | - |
All the non-current financial investments shown above are denominated in NOK and are measured at fair value as of year-end.
Note 20 – Restricted Cash
The Group had NOK 85 million as short-term restricted cash as per end of 2020. The cash relates to the net cash of the private placement of 30 million shares at 2.9 NOK per shares, as registered at 30 December 2020. The cash was released from the deposited account at 4 January 2021.
Note 21 – Option and Share Program
An equity settled option and share program has been initiated in 2020 towards certain key employees. Total cost for the option in 2020 was NOK 6.1 million, whereof 5.9 million in Social security reserves. The current vesting periods of the program is ending in the period between 19 April 2022 and 19 October 2023. At initial recognition, the fair value of the options, as estimated by the Black-Scholes model, are straight-lined through the vesting period as General administrative expenses with corresponding entry against other paid in equity. Since the options are equity settled, no subsequent measurement is required under IFRS.
Expenses recognised for employee service received during the year:
| NOK 1000 | 2019 |
|---|---|
| Expenses arising from equity-settled share based payment transactions | 222 |
| Social security reserves for equity-settled share based payment transactions* | 5 922 |
| Total expense arising from share-based payment transactions | 6 144 |
*Social security expenses are accrued for if the options are in the money, and the accrual for social security expenses will be updated quarterly, based on development in the share price. An increase in share price, will increase the value of the options, hence increase the social security expenses.
Input parameters for Black-Scholes option pricing model as applied for options granted in 2020:
| Tranche 1 | Tranche 2 | Tranche 3 | |
|---|---|---|---|
| Number of options granted | 6 000 000 | 6 000 000 | 6 000 000 |
| Fair value at measurement date | 0.17 | 0.13 | 0.13 |
| Share price (spot) at grant date | 0.90 | 0.90 | 0.90 |
| Strike price | 1.50 | 2.00 | 2.50 |
| First exercise* | 19 April 2022 | 19 October 2022 | 19 October 2023 |
| Expiry | 18 April 2024 | 18 October 2024 | 18 October 2025 |
| Expected annualized volatility (weighted average of | |||
| peer group) | 47 % | 47 % | 47 % |
| Asset drift (risk free interest rate) | 1.0 % | 1.0 % | 1.0 % |
| Expected dividends | Not applicable | Not applicable | Not applicable |
*The right to exercise the stock options is subject to that the employment agreement have not been terminated at time of exercise.
Movements during the year:
| 2020 | 2019 | |
|---|---|---|
| Number | WAEP | |
| Outstanding at 1 January | - | - |
| Granted during the year | 18 000 000 | 2.00 |
| Forfeited during the year | - | - |
| Exercised during the year | - | - |
| Expired during the year | - | - |
| Outstanding at 31 December | 18 000 000 | 2.00 |
| Exercisable at 31 December | - | - |
The weighted average remaining vesting period for the options outstanding at 31 December was 1.97 years. The weighted average remaining contractual life for the options outstanding at 31 December was 3.97 years. The range of exercise price for the options outstanding at 31 December was 1.50 to 2.50 with a weighted average of 2.00.
Note 22 – Dividends Paid and Proposed
The group has distributed two dividends, each of NO 0.10 per share during the year, totalling dividends of MNOK 53.2. The board of Directors has decided not to distribute any dividends in 2021 based on the financial year of 2020.
Note 23 – Subsequent Events
At 8 January 2021 the 30,000,000 shares of the private placement as initiated on 29 December 2020, was registered in The Register of Business Enterprises (Brønnøynsundregistrene). At NOK 4.10 per share this raised a gross equity of 123 million.
At 12 January 2021 the listing prospectus was approved by the Financial Supervisory Authority (Finanstilsynet), whereby 183,000,000 of the issued shares became tradable, bringing the total number of tradeable shares in Saga Pure up to 469,149,831.
At 28 January the three subsequent offerings where completed at share prices of NOK 2.10 NOK 2.90 and NOK 4.10. The subsequent offerings raising a gross equity of NOK 26 million, by issuing 9,728,592 new share. Total number of outstanding shares after the subsequent offers where 478,878,423.
19 February 2021 the Board was granted power of attorney to:
- Increase the share capital with up to NOK 2,394,932.11, corresponding to 239,493,211 shares
- Repurchase own shares with a par value of NOK 478,878.42, corresponding to 10 % of total shares issued (47,887,842 shares). The authorization also includes contract liens in the shares of the Company.
- Allocate options to employees and key persons in the company for up to 20,000,000 shares.
These authorizations are valid for two years, and replaces the former authorizations as described in note 13.
24 February the Company's listing was transferred from Euronext Expand to Oslo Børs.
15 March the investment I Vistin Pharma ASA was disposed.
22 March an agreement to subscribe for additional shares at NOK 15 million in Bergen Carbon Solutions AS.
23 March committed to invest NOK 75 million through a private placement in Heimdall AS.
24 March committed to invest NOK 30 million through a private placement in IC Technology AS.
Substantial parts of the Everfuel investment has also been disposed in 2021.
RESPONSIBILITY STATEMENT
We confirm, to the best of our knowledge, that the financial statements for the period from 1 January 2020 to 31 December 2020 have been prepared in accordance with the applicable accounting standards, and give a true and fair view of the Group and the Company's consolidated assets, liabilities, financial position and results of operations. Furthermore, we confirm that the Report of the Board provides a true and fair view of the development and performance of the business and the position of the Group and the Company, together with a description of the key risks and uncertainty factors that the Group is facing.
Øystein Stray Spetalen Board Member
Christine Spiten Board Member
Oslo, 14 April 2021 The Board of Directors
Martin Nes Chairman
Yvonne Litsheim Sandvold Board Member Bjørn Simonsen
CEO
PARENT COMPANY INCOME STATEMENT
For the period 01.01.2020 – 31.12.2020
| NOK 1000 | Note | 2020 | 2019 |
|---|---|---|---|
| Operating income | |||
| Net gain on financial assets | 38 077 | 23 165 | |
| Total operating income | 38 077 | 23 165 | |
| Operating expenses | |||
| Employee benefit expenses | 2 | 6 368 | 6 240 |
| Other operating expenses | 2 | 6 793 | 5 751 |
| Depreciation | 4 | 24 | 24 |
| Total operating expenses | 13 185 | 12 015 | |
| Net operating profit/loss (-) | 24 891 | 11 150 | |
| Financial income/expenses (-) | |||
| Interest income | 813 | 1 225 | |
| Interest expense | -2 | -2 | |
| Net foreign exchange gain/loss (-) | 16 | 2 | |
| Other financial income/expenses (-) | - | 1 | |
| Net financial income/expenses (-) | 827 | 1 226 | |
| Net profit before tax | 25 719 | 12 376 | |
| Taxes | 7 | - | - |
| Net profit/loss (-) for the year | 25 719 | 12 376 | |
| Attributable to | |||
| Accumulated losses | 25 719 | 12 376 |
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
At 31.12.2020
| NOK 1000 | Note | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Fixed assets | 4 | 16 | 40 |
| Shares and other financial assets | 10 | 67 138 | 172 626 |
| Shares in subsidiaries | 6 | - | 11 038 |
| Associated companies | 11 | 30 003 | - |
| Total non-current assets | 97 157 | 183 703 | |
| Current assets | |||
| Receivables | - | 340 | |
| Other current assets | 385 | 344 | |
| Market shares | - | 42 859 | |
| Restricted cash | 85 000 | - | |
| Cash and equivalents | 3 | 391 113 | 76 350 |
| Total current assets | 476 497 | 119 893 | |
| Total assets | 573 654 | 303 596 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 8 | 4 391 | 2 661 |
| Other paid in equity | 8 | 1 062 197 | 819 655 |
| Total paid-in-capital | 1 066 589 | 822 316 | |
| Accumulated losses | 8 | -497 611 | -523 329 |
| Total equity | 568 978 | 298 987 | |
| LIABILITIES | |||
| Current liabilities | |||
| Trade and other payables | 229 | 493 | |
| Public duties payable | 1 514 | 1 326 | |
| Other current liabilities | 2 933 | 2 791 | |
| Total current liabilities | 4 676 | 4 610 | |
| Total liabilities | 4 676 | 4 610 | |
| Total equites and liabilities | 573 654 | 303 596 |
Øystein Stray Spetalen Board Member
Christine Spiten Board Member
Oslo, 14 April 2021 The Board of Directors
Martin Nes Chairman
Yvonne Litsheim Sandvold Board Member
Bjørn Simonsen CEO
PARENT COMPANY CASH FLOW STATEMENT
For the period 01.01.2020 – 31.12.2020
| NOK 1000 | Note | 2020 | 2019 |
|---|---|---|---|
| Profit before tax | 25 719 | 12 376 | |
| Depreciation | 4 | 24 | 24 |
| Loss/gain on sale financial asset (-) | -38 077 | -23 165 | |
| Income tax paid | 7 | - | - |
| Increase/decrease receivables and prepayments | -40 | -260 | |
| Increase/decrease payables and accruals | 67 | -78 | |
| Net cash flow from operating activities | -12 307 | -11 103 | |
| Investment in Financial assets non-current | 10 | -92 554 | -5 292 |
| Divestment in Financial assets non-current | 10 | 175 701 | - |
| Dividends from Financial assets non-current | 2 285 | - | |
| Net divestment/investment trading (-) | 40 797 | -38 782 | |
| Dividends from subsidiaries | 2 958 | 1 917 | |
| Divestment in subsidiaries | 38 271 | - | |
| Cash from merged subsidiaries | - | 1 080 | |
| Loan to investments | 340 | -340 | |
| Net cash flow from investing activities | 167 798 | -41 417 | |
| Share issue net of cost | 212 502 | - | |
| Dividends and repayment of shareholders | -53 230 | - | |
| Net cash flow from financing activities | 159 272 | - | |
| Net change in cash and cash equivalents | 314 763 | -52 520 | |
| Cash and equivalents at beginning of period | 76 350 | 128 870 | |
| Net foreign exchange differences (unrealised) | - | - | |
| Cash and equivalent at end of period | 391 113 | 76 350 |
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENT
Note 1 – Accounting Policies
General
The financial statements are presented in accordance with the Norwegian Accounting Act and Norwegian general accepted accounting principles in Norway (NGAAP). The accompanying notes are an integral part of the financial statements. The parent company accounts are presented in NOK which also is the functional currency for the parent company.
Estimates
The management has used estimates and assumptions that may have effect on revenues, costs and the valuation of assets and liabilities in the reporting of the annual financial statements. These assumptions are in accordance with generally accepted accounting policies in Norway.
Currency
Transactions in foreign currencies are recorded at the exchange rate in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate at the financial position date. Realized currency exchange gains or losses are recorded at the time of payment and recognised as financial income/expense. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.
Measurement of revenues and costs
Revenues are recognized as they are earned. Cost is recognized in the same reporting period as the corresponding revenues.
Classification and evaluation of balance sheet items
Current assets and short-term liabilities consist of items due for payment within a year after establishment. Other items are recognized as long-term assets or liabilities. Current assets are valued at the lowest of acquisition value or fair value. Short-term liabilities are recorded at the nominal value at the time of establishment. Non-current assets are valued to the value at the time of acquisition less accumulated depreciation. Long-term loans are valued at nominal value at the time of establishment.
Receivables
Receivables are recorded in the balance sheet at nominal value less provision for doubtful accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables.
Taxes
The income tax in the profit and loss statement consists of taxes payable and changes in deferred taxes. Deferred tax and deferred tax benefit is calculated based on temporary differences between tax bases of assets and liabilities and their carrying amount for financial reporting purposes, and is based on nominal values. Net deferred tax benefit is recorded in the balance sheet only in the event that it is probable that is can be utilized in the foreseeable future. Taxes payable and deferred taxes are recorded directly in equity in the event that the tax items are related to equity transactions.
Shares in subsidiaries
Investments in shares in subsidiaries are accounted for using the cost-method in the statutory accounts. An impairment loss is recognized if the fair value is lower than book value and this is viewed as non-temporary. The impairment loss is reversed to the degree that the fair value improve, and that the improvement is not assumed to be of a short-term nature.
Dividends, Group contribution and other distributions are recognized in the same year as they are recognized in the subsidiary's financial statement. If dividends / Group contribution exceeds withheld profits after acquisition, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recognized value of the acquisition in the balance sheet for the parent company.
Investments in associates
Investments in shares in associates are accounted for using the cost-method in the statutory accounts. An impairment loss is recognized if the fair value is lower than book value and this is viewed as non-temporary. The impairment loss is reversed to the degree that the fair value improve, and that the improvement is not assumed to be of a short-term nature.
Investments in other non-current shares
Investments s in other shares non-current are accounted for using the cost-method in the statutory accounts an impairment loss is recognized if the fair value is lower than book value and this is viewed as non-temporary. The impairment loss is reversed to the degree that the fair value improve, and that the improvement is not assumed to be of a short-term nature.
Investments in other current shares
Investments s in other current shares, that are part of the trading portfolio and considered to be adequate marketable, are valued at fair value through profit and loss.
Pensions
The company is obligated to have an occupational pension plan. The company meets the requirements for an occupational pension plan in accordance with the Norwegian law on required occupational pensions.
Share-based compensation plans
The Company initiated a share-based compensation plan in 2020 towards certain key employees. The share-based compensation plan is equity-settled, hence no reserves has been made in the statutory accounts.
Cash, cash-equivalents and cash flow statement
Cash and cash-equivalents include cash, bank deposits and other short deposits that are repayable on demand. The cash flow statement is prepared using the indirect method. Restricted bank deposits related to the operations are included in cash equivalents.
Note 2 – Specification of Expenses
The expenses for the financial years are specified below:
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Employee benefit expenses | ||
| Salaries | 5 156 | 4 967 |
| Board fees | 380 | 440 |
| Social security costs | 755 | 770 |
| Pension expenses | 43 | 49 |
| Other personal expenses | 34 | 14 |
| Total employee benefit expenses | 6 368 | 6 240 |
| Number of employees | 4 | 3 |
| Other operating expenses | ||
| Consultancy fees | 3 648 | 4 441 |
| Other operating expenses | 3 146 | 1 311 |
| Total other operating expenses | 6 793 | 5 751 |
Fees to the Group's auditors are included in administration expenses.
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Audit fees including VAT | ||
| Audit services | 366 | 490 |
| Other attestation services | 58 | - |
| Tax services | - | - |
| Other non-audit services | 19 | - |
| Total | 443 | 490 |
Remuneration to the Board of Directors and executive management for the period 01.01.20 – 31.12.20
2020
| NOK 1000 | ||||||
|---|---|---|---|---|---|---|
| Salary and | Vesting | |||||
| Name | Position | bonus | option | Other benefit | Pension cost | Director's fee |
| Bjørn Simonsen | CEO* | 181 | 222 | - | - | - |
| Espen Lundaas | CEO/CFO* | 2 118 | - | - | - | - |
| Tore Jakob Berg | CFO/CAO* | 1 274 | - | - | - | - |
| Martin Nes | Chairman | - | - | - | - | 140 |
| Øystein Stray Spetalen | Board member | - | - | - | - | 100 |
| Kristin Hellebust | Board member** | - | - | - | - | 40 |
| Yvonne Litsheim Sandvold | Board member | - | - | - | - | 100 |
| Total remuneration | 3 574 | 222 | - | - | 380 | |
| 2019 |
| NOK 1000 | ||||||
|---|---|---|---|---|---|---|
| Salary and | Vesting | |||||
| Name | Position | bonus | option | Other benefit | Pension cost | Director's fee |
| Espen Lundaas | CEO/CFO* | 2 018 | - | - | - | - |
| Tore Jakob Berg | CFO/CAO* | 1 148 | - | - | - | - |
| Martin Nes | Chairman | - | - | - | - | 140 |
| Øystein Stray Spetalen | Board member | - | - | - | - | 100 |
| Kristin Hellebust | Board member | - | - | - | - | 100 |
| Yvonne Litsheim Sandvold | Board member | - | - | - | - | 100 |
| Total remuneration | 3 167 | - | - | - | 440 |
*In December 2020, Bjørn Simonsen was hired as CEO. As of that date Espen Lundaas altered from CEO to CFO, while Tore Jakob Berg altered from CFO to Chief Accounting Officer (CAO).
** Kristin Hellebust left the Board in May 2020.
The Company had no outstanding loans or guarantees in favour of any member of the Board of Directors or company management in 2020.
Guidelines for determining salaries and other compensation for company management
In accordance with the regulations in paragraph 6-16a in the Norwegian Public Limited Companies Act, the Board of Directors has established a statement regarding remuneration. The focus of the company is to hire qualified managers and to pay according to the market. Salary and remuneration of the CEO and CFO is determined by the Board of Directors, and payments to other employees are determined by the CEO according to guidelines from the Board of Directors.
Saga Pure's compensation schemes include only a limited number of benefits in kind. These benefits are offered in line with what is common practice in international labour markets and typically include personal communication equipment, access to media, and car and parking arrangements.
The CEO/CFO of Saga Pure ASA has no set bonus scheme. A bonus of TNOK 600 to the CEO/CFO, and TNOK 667 to the CFO/CAO has been granted for the year 2020. The senior executive has a mutual three months termination period, and no contractual agreements for severance compensation in case of termination of employment except for salary through the termination period. The "Statement on the determination salary and other remuneration for senior executives" will be presented at the annual general meeting and made available on the Company's webpage.
Stock options program to Board members and Company employees
The Company had issued 18,000,000 stock options, with an authorization to the board to issue further 7,000,000 stock option as of 31 December 2020. References are made to note 13 regarding subsequent events.
Note 3 – Cash and Cash Equivalents
The Company's cash and cash equivalents are denominated in the following currencies:
| NOK 1000 | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| US Dollar | 134 | 34 |
| Norwegian kroner | 390 978 | 76 316 |
| Total cash and cash equivalents | 391 113 | 76 350 |
| Restricted cash | ||
| Employee tax accounts | 1 135 | 994 |
Interest income is earned at floating interest rates. Restricted cash consists of salary related tax.
Note 4 – Fixed Assets
| 2020 | Machinery and | |
|---|---|---|
| NOK 1000 | equipment | Total |
| Acquisition cost, opening balance 01.01.20 | 72 | 72 |
| Acquisition during the period | - | - |
| Disposal during the period | - | - |
| Acquisition cost at 31.12.20 | 72 | 72 |
| Accumulated depreciation, opening balance 01.01.20 | -32 | -32 |
| Depreciation | -24 | -24 |
| Accumulated depreciation disposed assets | - | - |
| Accumulated depreciation at 31.12.20 | -56 | -56 |
| Net book value at 31.12.20 | 16 | 16 |
| 2019 | Machinery and | |
|---|---|---|
| NOK 1000 | equipment | Total |
| Acquisition cost, opening balance 01.01.19 | 29 | 29 |
| Additions – merger subsidiary | 42 | 42 |
| Acquisition during the period | - | - |
| Disposal during the period | - | - |
| Acquisition cost at 31.12.20 | 72 | 72 |
| Accumulated depreciation, opening balance 01.01.19 | -4 | -4 |
| Depreciation | -24 | -24 |
| Accumulated depreciation disposed assets | - | - |
| Accumulated depreciation at 31.12.20 | -32 | -32 |
| Net book value at 31.12.19 | 40 | 40 |
Note 5 – Related Parties
Remuneration to executives is disclosed in note 2.
Company is sharing office locations for its head office with Ferncliff Holding AS, the holding company of a board member, and the Company's largest shareholder. Transactions with related parties during 2020 are limited to office rent including mutual costs, deliverance of strategic management services, and services rendered regarding support for financial reporting.
As part of the Company's strategy change in the second half of 2020, the Company disposed of the Vallhall business to Tycoon Industries AS for an amount of NOK 38 million. The transaction price was considered to be on arms lengths principles, which also was supported by a fairness opinion provided by a reputable independent company, and subsequently approved by an extraordinary general meeting in the Company. References are made to note 6.
All transactions with related parties have been made on an arm's length basis and are settled on a regular basis. Goods and/or services purchased from related parties have been priced at industry standard rates. Transactions with related parties are specified below:
Related Party Transactions
| 2020 | ||||
|---|---|---|---|---|
| NOK 1000 | ||||
| Sales to related parties |
Purchase to related parties |
Amount owed by related parties |
Amount owed to related parties |
|
| Tycoon Industrier AS | 38 271 | 1 235 | - | - |
| Ferncliff Holding AS | - | 3 000 | 250 | - |
| Ferncliff TIH AS | - | - | - | 41 |
| Total | 38 271 | 4 235 | 250 | 41 |
| 2019 | ||||
| NOK 1000 | ||||
| Sales to related parties |
Purchase to related parties |
Amount owed by related parties |
Amount owed to related parties |
|
| Tycoon Industrier AS | - | 930 | - | 237 |
| Ferncliff Holding AS | - | 3 000 | - | 250 |
| Total | - | 3 930 | - | 487 |
Note 6 - Investments in Subsidiaries
The consolidated financial statements include the financial statements of Saga Pure ASA and its subsidiaries listed in the table below:
| NOK 1000 | Country of incorporati on |
Ownership/ voting rights |
Consolidate d in the Group financial statement from |
Consolidate d in the Groups financial statement to |
Share capital/ partner capital |
Net book value 31 December 2020 |
Net book value 31 December 2019 |
|---|---|---|---|---|---|---|---|
| Vallhall Fotballhall KS | Norway | 54.8% | 2014 | Sept. 2020 | N/A | N/A | 9 664 |
| Vallhall Fotballhall AS | Norway | 54.8% | 2014 | Sept. 2020 | N/A | N/A | 2 864 |
| Vallhall Fotballhall Drift AS |
Norway | 55.2% | 2014 | Sept. 2020 | N/A | N/A | 427 |
| Total | - | - | 12 995 |
All subsidiaries were disposed of in September 2020.
Note 7 – Income Tax
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Current tax expense | - | - |
| Deferred tax expense | - | - |
| Tax effect of group contribution | - | - |
| Tax expense | - | - |
| Reconciliation of tax expense | ||
| Net income before tax | 25 719 | 12 376 |
| Tax expense based on nominal tax rate 22% | 5 658 | 2 723 |
| Tax effect of permanent differences | -7 914 | 91 784 |
| Net recognized deferred tax assets | 2 256 | -94 507 |
| Tax expense | - | - |
| Reconciliation of deferred tax (-)/deferred tax assets | ||
| Tangible assets | -2 | 1 |
| Receivables | - | - |
| Net tax loss carried forward* | 16 001 | 13 748 |
| Net deferred tax assets | 15 999 | 13 749 |
| Net deferred tax assets not recognized | -15 999 | -13 749 |
| Deferred tax (-)/deferred tax assets in the balance sheet | - | - |
| Tax payable | - | - |
| Current tax expense | - | - |
| Deferred tax expense | - | - |
| Tax payable | - | - |
* Net tax loss carried forward is available indefinitely for offset against future taxable profits.
Permanent differences are to great extent related to the tax exemption for gain on certain financial assets.
Note 8 – Issued Capital and Shareholders
Issued capital
| Number of shares issues |
Number of outstanding |
Share capital | Other equity | Accumulated losses |
Total | |
|---|---|---|---|---|---|---|
| NOK 1000 | shares | |||||
| Equity per 1 January 2019 | 266 149 829 | 266 149 829 | 2 661 | 819 655 | -530 084 | 293 232 |
| Net profit/loss (-) for the year 2019 | 12 376 | 12 376 | ||||
| Merger with subsidiaries | -5 622 | -5 622 | ||||
| Equity per 1 January 2020 | 266 149 829 | 266 149 829 | 2 661 | 819 655 | -523 329 | 293 987 |
| Net profit/loss (-) for the year 2020 | 25 719 | 25 719 | ||||
| Dividends | -53 230 | -53 230 | ||||
| Share issue | 173 000 000 | 173 000 000 | 1 730 | 301 370 | 303 100 | |
| Share issue costs | -5 597 | -5 597 | ||||
| Equity per 31 December 2020 | 439 149 829 | 439 149 829 | 4 391 | 1 062 197 | -497 611 | 568 978 |
All issued shares have a nominal value of NOK 0.01 and are of equal rights. Saga Pure ASA is incorporated in Norway, listed on the Euronext Expand list, and the share capital is denominated in NOK. References are made to note 13 regarding subsequent events.
Board authorizations
Power of attorney to increase the share capital through issuance of new shares
The Board held as per 31 December 2020 authorization to issue up to 41,047,916 new shares, including 30,000,000 shares resulted by the board, not yet issued at 31. December. The authorization may be utilised on one or several occasions. References are made to note 13 regarding subsequent events.
Power of attorney to repurchase own shares
The Board held authorization to repurchase own shares as per 31 December 2020 limited to 26,614,983 shares. References are made to note 13 regarding subsequent events.
Authorization to raise convertible loans
The Board held no authorization to raise convertible bonds as per 31 December 2020.
Stock option arrangements
The Company had issued 18,000,000 stock options, with an authorization to the board to issue further 7,000,000 stock option as of 31 December 2020. References are made to note 13 regarding subsequent events.
As of 31 December 2020, the Company had 6,401 shareholders.
| Overview of the largest shareholders as per 31 December 2020 | |||
|---|---|---|---|
| Name | Shares | % of total shares | |
| 1 | *ØYSTEIN STRAY SPETALEN | 172 841 799 | 39.36 % |
| 2 | *TYCOON INDUSTRIER AS | 25 550 000 | 5.82 % |
| 3 | ** SIMONSEN INVEST AS | 17 618 667 | 4.01 % |
| 4 | DALLAS ASSET MANAGEMENT AS | 9 187 461 | 2.09 % |
| 5 | NORDNET LIVSFORSIKRING AS | 6 595 429 | 1.50 % |
| 6 | PÅL KRISTIAN AASEN | 5 866 000 | 1.34 % |
| 7 | AS TANJA | 5 745 000 | 1.31 % |
| 8 | TORSTEIN INGVALD TVENGE | 5 117 841 | 1.17 % |
| 9 | MELCHER HOLDING AS | 4 000 000 | 0.91 % |
| 10 | SONGA CAPITAL AS | 3 723 500 | 0.85 % |
| 11 | BORGEN INVESTMENT GROUP NORWAY AS | 3 500 000 | 0.80 % |
| 12 | FRØILAND INVEST AS | 3 454 554 | 0.79 % |
| 13 | Nordnet Bank AB | 3 206 740 | 0.73 % |
| 14 | TIGERSTADEN AS | 2 750 000 | 0.63 % |
| 15 | OLA STORMYR HOLDING AS | 2 639 242 | 0.60 % |
| 16 | SPAR KAPITAL INVESTOR AS | 2 515 016 | 0.57 % |
| 17 | HEGE BAKKEN | 2 211 580 | 0.50 % |
| 18 | UTHALDEN AS | 2 143 568 | 0.49 % |
| 19 | GIRONDE AS | 2 113 000 | 0.48 % |
| 20 | *HANEKAMB INVEST AS | 2 000 000 | 0.46 % |
| (shared) 20 (shared) |
** EL INVESTMENT AS | 2 000 000 | 0.46 % |
| Total | 282 779 397 | 64.85 % | |
| Total outstanding shares | 439 149 831 | 100.00 % |
* Board members
** Management
Shares owned by the Board, Management and their Related Parties
| 2020 | # of Shares |
|---|---|
| Board of Directors | |
| Martin Nes* (Chairman) | 2 000 000 |
| Øystein Stray Spetalen ** | 198 391 799 |
| Yvonne Litsheim Sandvold*** | 1 082 000 |
| Group Management | |
| Bjørn Simonsen****, CEO from Dec. 20 | 17 618 667 |
| Espen Lundaas*, CEO/CFO from Dec. 20 | 2 000 000 |
| Tore Jakob Berg, CFO/CAO from Dec. 20 | 500 000 |
| Total number of shares held by Board members, Group management and related parties | 221 592 466 |
| Total number of shares held by Board members, Group management and related parties in % of total outstanding shares |
50,46% |
| 2019 | # of Shares |
|---|---|
| Board of Directors | |
| Martin Nes* (Chairman) | 1 000 000 |
| Øystein Stray Spetalen | 172 841 799 |
| Yvonne Litsheum Sandvold | - |
| Kristin Hellebust | - |
| Group Management | |
| Espen Lundaas*, CEO/CFO from Dec. 20 | 1 000 000 |
| Tore Jakob Berg, CFO/CAO from Dec. 20 | 500 000 |
| Total number of shares held by Board members, Group management and related parties | 175 341 799 |
| Total number of shares held by Board members, Group management and related parties in % of total outstanding shares |
65.88 % |
* Through Hanekamb Invest AS ** Including Tycoon Industrier AS *** Through Yls Næringseiendom AS **** Through Simonsen Invest AS ***** Through El Investment AS
Shares and stock options by Board members and Group management
The CEO holds 15,000,000 stock options rights under vesting. Other non-managerial employees holds 3,000,000 stock option rights under vesting.
Note 9 –Risks
The risk exposure of Saga Pure ASA is considered to be similar as the risks described for the Saga Pure Group. References are made to note 17 in the Saga Pure Group consolidated accounts. The sensitivity analysis for the equity instruments in the consolidated accounts will not be applicable to the Company's accounts, due to differences in accounting principles.
Note 10 – Shares and Other Financial Assets
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| At 1 January | 172 626 | 107 096 |
| Addition | 62 551 | 5 292 |
| Disposals | -168 039 | - |
| Added through merger | - | 41 149 |
| Impairment/+ reversal of impairment | - | 19 088 |
| At 31 December | 67 138 | 172 626 |
The Company investment through private placement in Horisont Energi, as announced 30 December 2020, is not reflected in the financial statement. Although the allocation was disclosed in 2020, the placement was not completed until January 2021. Horisont Energi is a carbon tech company engaged in blue hydrogen and ammonia, as well as CO₂ handling.
Shares and other financial assets include the following
| NOK 1000 | 2020 | 2019 |
|---|---|---|
| Listed shares | 67 138 | 165 531 |
| Non-listed shares | - | 7 094 |
| Total | 67 138 | 172 626 |
The financial assets are denominated in NOK and are measured at cost.
Note 11 – Associates
| NOK 1000 | Bergen Carbon Solutions AS | ||||||
|---|---|---|---|---|---|---|---|
| At 1 January 2020 | - | ||||||
| Acquisition 21,43% December 2020 | 30 003 | ||||||
| At 31 December 2020 | 30 003 | ||||||
| NOK 1000 | 31 December 2020 | ||||||
| Name | Country of incorporation |
Assets | Liabilities | Revenues* | Profit* | % pf interest held |
|
| Bergen Carbon Solution AS | Norway | 43 697 | 4 850 | - | - 21.43 % |
The Group also has an option for subscription of additional shares within 9 months from the initial acquisition, which if exercised will increase the ownership to 34.24 %, at a 10 % increased subscription price compared to the terms in the initial acquisition
Note 12 – Subsequent Events
References are made to note 23 Subsequent Events in the Group financial statements, as the same events will apply here.
AUDITOR'S REPORT
Statsautoriserte revisorer Ernst & Young AS
Dronning Eufemias gate 6A, NO-0191 Oslo Postboks 1156 Sentrum, NO-0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00
www.ey.no Medlemmer av Den norske revisorforening
INDEPENDENT AUDITOR'S REPORT
To the Annual Shareholders' Meeting of Saga Pure ASA
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Saga Pure ASA comprising the financial statements of the parent company and the Group. The financial statements of the parent company comprise the statement of financial position as at 31 December 2020, the income statement and the statement of cash flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies. The consolidated financial statements comprise the statement of financial position as at 31 December 2020, the statements of comprehensive income, cash flows and changes in equity for the year then ended and notes to the financial statements, including a summary of significant accounting policies.
In our opinion,
- ► the financial statements are prepared in accordance with the law and regulations
- ► the financial statements present fairly, in all material respects, the financial position of the parent company as at 31 December 2020, and of its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway
- ► the consolidated financial statements present fairly, in all material respects the financial position of the Group as at 31 December 2020 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU
Basis for opinion
We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including 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 and the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in Norway, and we have fulfilled our ethical responsibilities as required by law and regulations. We have also complied with our other ethical obligations 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.
Key audit matters
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. We have determined that there are no key audit matters to communicate in our report.
Other information
Other information consists of the information included in the Company's annual report other than the financial statements and our auditor's report thereon. The Board of Directors and Chief Executive Officer (management) are responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information, and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed on the other information obtained prior to the date of the auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway for the financial statements of the parent company and International Financial Reporting Standards as adopted by the EU for the financial statements of the Group, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with law, regulations and generally accepted auditing principles in Norway, including ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also
- ► identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
- ► obtain an understanding of internal control relevant to the audit 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;
- ► 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 those charged with governance 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 those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and 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 those charged with governance, 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 and on the statement on corporate governance
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 in the statement on corporate governance concerning the financial statements, the going concern assumption, and proposal for the allocation of the result 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 (ISAE) 3000, «Assurance Engagements Other than Audits or Reviews of Historical Financial Information», it is our opinion that management has fulfilled its duty to ensure that the Company's accounting information is properly recorded and documented as required by law and bookkeeping standards and practices accepted in Norway.
Oslo, 14 April 2021 ERNST & YOUNG AS
The auditor's report is signed electronically
Jon-Michael Grefsrød State Authorised Public Accountant (Norway)