Fuentes de la Doctrina Militar

General information

Scana Industrier ASA is located at Strandkaien 2 in Stavanger, Norway. The company is a public limited company which is listed on the Oslo Stock Exchange. Its activities are described in note 3. The consolidated financial statements for Scana Industrier ASA for 2011 were approved by the Board of Directors on 12 April 2012.

Main principles

The consolidated financial statements for Scana Industrier ASA have been prepared in accordance with IFRS and the interpretations specified by the International Accounting Standards Board, as approved by the EU.

The consolidated financial statements have been prepared on the basis of the going concern requirements. The annual accounts consist of the income statement, total comprehensive income, balance sheet, statement of cash flows, statement of changes in equity and notes to the accounts. The most important consolidation and accounting principles followed in the preparation of the annual accounts are as follows:

The consolidated financial statements are based on the principles of historical cost accounts, with the exception of the following items:

• Buildings which are valued at recorded value

• Financial instruments at fair value through profit and loss, financial instruments available for sale which are recognised at fair value, loans and receivables and other financial obligations that are recognised at amortised cost

The consolidated financial statements have been prepared in accordance with the standard accounting principles for similar transactions and events under otherwise similar circumstances.

Functional currency and presentation currency

The consolidated financial statements are presented in Norwegian kroner (NOK), and all figures are rounded to the nearest thousand (’000) unless otherwise indicated. The functional currency for the parent company Scana Industrier ASA is NOK, while the functional currency for the subsidiaries is their local currency. Subsidiaries with a functional currency other than NOK are translated at the exchange rate on the balance sheet date for balance sheet items, while income statement items are translated at the transaction rate. The transaction rate is determined using monthly average exchange rates. Translation differences are recognised against total comprehensive income.

On the disposal of investments in foreign subsidiaries, accumulated translation differences associated with the subsidiary are recognised in the income statement.

Consolidation principles

The consolidated financial statements cover the parent company Scana Industrier ASA and the companies in which Scana Industrier ASA has a controlling interest, either directly or indirectly through ownership or through separate agreements. A controlling interest is defined as Scana Industrier ASA controlling over 50 per cent of the votes at the general meeting. The group’s subsidiaries are listed in note 2 to the annual accounts for the parent company. Minority interests are included in the group’s equity.

Company mergers are recognised using the purchase method of accounting. The cost price is measured at the fair value of the assets acquired, the shares issued or the liabilities assumed at the acquisition date. Additional cost price in excess of the fair value of the net assets in the acquired business is recognised as goodwill.

Companies that are bought or sold during the course of the year are included in the consolidated financial statements from the date at which control was acquired and until control ceases.

Inter-company transactions and inter-company balances, including internal revenues and unrealised gains and losses, are eliminated.

Unrealised gains relating to transactions with associates and jointly controlled companies are eliminated through the group’s share of the

company/business. Similarly, unrealised losses are eliminated, but only to the extent that there are no indications of a loss of value of the assets sold internally.

The group has implemented the following amended standards and interpretations in 2011:

• IAS 24 (revised) Related Party Disclosures

• IAS 32 (amendment) Financial Instruments – Presentation – Classification of Rights Issues

• IFRIC 14 (amendment) IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction – Prepayments of a Minimum Funding Requirement

• IFRIC 19 (guideline) Extinguishing Financial Liabilities with Equity Instruments

The implementation of these changes has not resulted in any changes for the group.

the following standards and interpretations have been published but have not yet come into force and have therefore not been applied.

Amendment to IFRS 7 Financial Instruments – Disclosures The amendment relates to disclosure requirements in connection with the transfer of financial assets with which the company has a continued involvement, and aims to provide users with a better representation of the exposure to the company transferring the financial assets. The amendments apply to financial years beginning on or after 1 july 2011. The group expects to apply the amended standard as of 1 january 2012.

Amendment to IFRS 7 Financial Instruments – Disclosures The amendments mean that companies are obliged to disclose a range of quantitative information relating to the offsetting of financial assets and financial liabilities. The disclosure requirements apply to all recognised financial instruments that are offset in accordance with IAS 32. The amendments apply to financial years beginning on or after 1 january 2013, but have not yet been approved by the EU.

Early application is permitted if the EU approves the standard. The group expects to apply the amended standard as of 1 january 2013.

IFRS 9 Financial Instruments

IFRS 9 will replace the current IAS 39. The project will be divided into several phases. The first phase relating to classification and measurement regulations has been completed by the IASB. In this first phase, IFRS 9 stipulates that financial assets incorporating standard loan conditions must be recognised at amortised cost, unless it is decided to recognise them at fair value, while other financial assets must be recognised at fair value. The classification and measurement regulations for financial liabilities in IAS 39 continue to apply, with the exception of financial liabilities reported at fair value with changes in value through profit and loss (fair value option), where the changes in value associated with own credit risk are separated and recognised against other comprehensive income.

IFRS 9 applies to financial years beginning on or after 1 january 2015, but the standard has not yet been approved by the EU. Early application is permitted if the EU approves the standard. The group expects to apply IFRS 9 as of 1 january 2015.

IFRS 10 Consolidated Financial Statements

IFRS 10 replaces the portions of IAS 27 Consolidated and Separate Financial Statements that address consolidated financial statements, and SIC-12 Consolidation – Special Purpose Entities. IFRS 10 establishes a single control model that applies to all entities. The meaning of the term ‘control’ is somewhat different to that in IAS 27. The factor that determines whether companies should be consolidated under IFRS 10 is whether there is control. Control exists when the investor has power over the investment object, is exposed to or has rights to variable returns from the investment object, and has the ability to use their power to direct the activities at the investment object with a significant impact on returns. IFRS 10 applies to financial years beginning on or after 1 january 2013, but

t 2011 Scana Industrier ASA

the standard has not yet been approved by the EU. Early application is permitted if the EU approves the standard. The group expects to apply IFRS 10 as of 1 january 2013.

IFRS 11 Joint Arrangements

This standard supersedes IAS 31 Interests in joint ventures, as well as SIC-13 jointly Controlled Entities – Non-Monetary Contributions by venturers.

IFRS 11 applies to joint arrangements and provides guidelines for the financial statements of two different kinds of joint arrangement – joint operations and joint ventures. According to IFRS 11, joint ventures must be recognised using the equity method. For joint operations, each party must recognise their share of assets and liabilities in which they have a joint interest. Assets and liabilities which a party has alone must be recognised in their entirety. The profit from joint operations must be recognised by each party relative to its proportionate holding of the operation. IFRS 11 applies to financial years beginning on or after 1 january 2013, but the standard has not yet been approved by the EU. Early application is permitted if the EU approves the standard. The group expects to apply IFRS 11 as of 1 january 2013.

IFRS 12 Disclosure of Interests in Other Entities

IFRS 12 applies to entities with interests in subsidiaries, joint arrangements, associates or unconsolidated structured entities. IFRS 12 replaces the disclosure requirements previously covered by IAS 27 Consolidated and separate financial statements, IAS 28 Investments in Associates, and IAS 31 Interests in joint ventures. A number of new disclosure requirements have also been introduced. IFRS 12 applies to financial years beginning on or after 1 january 2013, but the standard has not yet been approved by the EU. Early application is permitted if the EU approves the standard. The group expects to apply IFRS 12 as of 1 january 2013.

IFRS 13 Fair Value Measurement

This standard specifies principles and guidelines for the measurement of fair value for assets and liabilities which other standards require or permit to be measured at fair value. IFRS 13 applies to financial years beginning on or after 1 january 2013, but the standard has not yet been approved by the EU. Early application is permitted if the EU approves the standard. The group expects to apply IFRS 13 as of 1 january 2013.

Amendment to IAS 1 Presentation of Financial Statements The amendment to IAS 1 was a requirement to group together revenue and costs on the statement of other comprehensive income on the basis of whether or not they could be reclassified in the profit and loss section. The amendments apply to financial years beginning on or after 1 july 2012, but the amendments have not yet been approved by the EU. Early application is permitted if the EU approves the amendments. The group expects to apply the amended standard as of 1 january 2013.

Amendments to IAS 12 Income Taxes

The amendment to IAS 12 means that deferred tax on investment assets measured at fair value IAS 40 Investment Property must be calculated on the basis of whether the entity expects to recover the carrying amount of the asset through sale (and not use). This expectation can be disproved if two closely specified criteria are met.

The amendment also includes the incorporation of SIC 21- Income Taxes – Recovery of Revalued Non-Depreciable Assets which stipulates that deferred tax on non-depreciable assets measured using the revaluation model in IAS 16 Property, Plant and Equipment must always be calculated on the basis of whether the entity expects to recover the carrying amount of the asset through sale (and not use). The amendments to IAS 12 apply to financial years beginning on or after 1 january 2012, but the amendments have not yet been approved by the EU. Early application is permitted if the EU approves the amendments. The group expects to apply the amended standard as of 1 january 2012.

Amendments to IAS 19 Employee Benefits

According to the amendments of 2011, IAS 19 does not allow the use of the ‘corridor’ method for recognising actuarial gains and losses.

Actuarial gains and losses must now be recognised immediately and in their entirety in the statement of other comprehensive income in the period in which they arise. The amendment also means that pension

costs are split between ordinary income and other comprehensive income. The expected returns on pension assets must be calculated using the discount rate calculated for gross pension obligations. The accrued pension rights and net interest expense for the period are presented under ordinary income, while ‘remeasurements’ such as actuarial gains and losses are presented under other comprehensive income in the total comprehensive income. The disclosure

requirements relating to defined-benefit pension plans have also been amended. The amendments apply to financial years beginning on or after 1 january 2013, but the amendments have not yet been approved by the EU. Early application is permitted if the EU approves the amendments. The group expects to apply the amended standard as of 1 january 2013.

Amendment to IAS 27 (Revised) Separate Financial Statements As a result of the introduction of IFRS 10 and IFRS 12, amendments have been made to IAS 27 which coordinate the standard with the new financial reporting standards. IFRS 10 Consolidated Financial Statements replaces the portions of IAS 27 that address consolidated financial statements. IAS 27 now only refers to company financial statements and will therefore no longer apply to the consolidated financial statements once it has come into force. The amendments apply to financial years beginning on or after 1 january 2013, but the amendments have not yet been approved by the EU. Early application is permitted if the EU approves the amendments. The group expects to apply the amended standard as of 1 january 2013.

Amendment to IAS 28 (Revised) Investment in Associates and Joint Ventures

The scope of IAS 28 has been expanded to also include investments in joint ventures. The standard describes the principles of accounting for investments in associates and joint ventures, and also stipulates how the equity method should be applied. The amendments apply to financial years beginning on or after 1 january 2013, but the amendments have not yet been approved by the EU. Early application is permitted if the EU approves the amendments. The group expects to apply the amended standard as of 1 january 2013.

Amendments to IAS 32 Financial Instruments – Presentation IAS 32 has been amended in order to clarify the meaning of

“currently has a legally enforceable right to set-off” and also to clarify the application of IAS 32’s offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The amendments apply to financial years beginning on or after 1 january 2014, but the amendments have not yet been approved by the EU.

Early application is permitted if the EU approves the amendments and if the amendments in IFRS 7 which require the disclosure of the offsetting of financial instruments are also met. The group expects to apply the amended standard as of 1 january 2014.

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine IFRIC 20 stipulates the accounting treatment of costs relating to the removal of waste (stripping costs) during the production phase of a surface mine. The amendments apply to financial years beginning on or after 1 january 2013, but the amendments have not yet been approved by the EU. Early application is permitted if the EU approves the amendments. The group expects to apply the amended standard as of 1 january 2013.

The group does not expect the implementation of the proposed list above to have any impact on the consolidated financial statements at the time of implementation, but will perform further analyses on the various proposals prior to implementation.

Core accounting assessed evaluations and estimates

Management has applied estimates and assumptions that affect the recognition and valuation of assets, liabilities, revenues, expenses and information concerning contingent liabilities. This applies in particular to the recognition of revenues from long-term construction contracts, the assessment of depreciation and write-down of non-current assets, income taxes, evaluation of bad debts, evaluation of inventory obsolescence, reporting of development costs and the valuation of pension obligations. Future events may result in changes to these estimates. Estimates and the underlying assumptions are regularly assessed. Changes to accounting estimates are recognised in the period in which the changes occur. See also note 2.

Annual Report 2011 Scana Industrier ASA

CORE ACCOUNtiNG PRiNCiPlES Revenue

Revenue is recognised when it is probable that the transactions will generate future economic benefits for the company and where the amount of these can be measured reliably. Sales revenue is presented net of value-added tax and discounts.

Revenue from the sale of goods is recognised when delivery has taken place, i.e. the risk and potential gains associated with the goods have been transferred to the purchaser and the group has established a claim against the customer.

Rental income is recognised on a straight-line basis over the period of the lease.

Revenue related to long-term construction contracts (projects) is recognised in line with the progress of the project, where the outcome of the project can be measured reliably. The stage of completion is calculated using the most suitable method for the individual contract, which is normally the costs incurred as a percentage of the expected total cost. If the outcome of the project cannot be measured reliably, only revenue equivalent to the project costs incurred is recognised as revenue. Any loss on a contract is recognised in full in the period in which it is established that the project will result in a loss.

Advances on construction contracts are classified on the balance sheet under current liabilities.

Royalties are recognized in accordance with the conditions of the various royalty agreements. Dividends are recognised when the rights to receive a dividend are established.

Interest income is recognised as it is accrued.

The tax cost in the income statement is the sum of the tax currently payable and the change in deferred tax.

Currency translation

Transactions in foreign currency are recognised using the exchange rate on the transaction date. Monetary items and liabilities in foreign currency are translated using the exchange rate on the balance sheet date. Any exchange differences are recognised as financial items.

Balance sheet items at foreign subsidiaries are translated to NOK using the exchange rate as at 31 December. All items in the income statement are translated to NOK using the weighted average exchange rate. Consolidation leads to currency translation differences, which are presented as other comprehensive income in the total comprehensive income. Exchange rate gains and losses relating to liabilities in foreign currency which for accounting purposes are considered to hedge investments in foreign subsidiaries and the currency effects of monetary items which represent a portion of the net investment in the foreign subsidiaries are recognised as other comprehensive income in total comprehensive income until the subsidiary is disposed of.

intangible assets

Intangible assets with a limited life are depreciated over the

anticipated useful life and are assessed for possible impairment when there are indications that the value of the intangible assets may have been reduced. The depreciation period and method for intangible assets with a limited life are evaluated at least at the end of each financial year. Changes to the anticipated useful life or anticipated pattern of use of the intangible assets are recognised by changing the depreciation period or method and are treated as changes to accounting estimates.

Internally generated intangible assets, excluding capitalised development costs, are not recognised on the balance sheet and expenses are recognised in the income statement in the period in which the expense is incurred. The useful life of intangible assets is considered to be either limited or indefinite.

Goodwill

Goodwill arising on acquisition is valued at acquisition cost. This represents the portion of the total acquisition cost that exceeds the

net fair value of identifiable assets, liabilities and contingent liabilities.

Following initial recognition, goodwill is valued at the acquisition cost less any accumulated impairment.

The group tests goodwill for impairment annually or when there are

The group tests goodwill for impairment annually or when there are