Annual report 2013/2014

Annual Report 2013/14 (01.04.2013 - 31.03.2014)

KNI A/S Reg. no. 209.713

Contents Page

Company details

1

Management statement

7

Independent auditor's report

8

Financial highlights and key figures

9

Management report

10

Applied accounting principles

29

Profit and loss account

36

Balance sheet

37

Equity capital statement

39

Cash flow statement

40

Notes

41

Segment accounts

53

Company information Company name: Subsidiary names:

KNI A/S

Address:

J. M. Jensenip 2, Postbox 319 3911 Sisimiut

Registration number GER number CVR/SE number Domicile:

209.713 1660 7398 1660 7398 Qeqqata Municipality

Tel. Fax E-mail Website

+299 86 24 44 +299 86 62 63 kni@kni.gl www.kni.gl

Pilersuisoq A/S (KNI A/S) Polaroil A/S (KNI A/S)

Shareholder: Government of Greenland, Postbox 1015, 3900 Nuuk - (ownership share: 100%)

Board of Directors:

Niels Thomsen (b. 1981) Chairman of the Board of Directors (appointed by the Government of Greenland) since 2013.

Educational background: MSc (Public Administration) Current career: Managing director/ CEO, Halibut Greenland ApS. Also occupies other directorships in companies in Denmark.

Competencies: Experienced in operations, organisation and business development, strategy formation and implementation. Good knowledge of the political system in Greenland.

1

Høgni Hansen (b. 1961) Vice-Chairman of the Board of Directors (appointed by the Government of Greenland) since 2014.

Educational background: Commercial training Current career: Managing director/CEO, P/F Poul Hansen Group. Also occupies other directorships in companies in the Faroe Islands.

Competencies: Experienced in operations, organisation and business development, strategy formation and implementation. Good knowledge of the retail and meat industries.

Bodil Nyboe Andersen (b. 1940) Member of the Board of Directors (appointed by the Government of Greenland) since 2014 Educational background: MA (Political Science) and former director of the National Bank.

Current career: Occupies other directorships in large companies in Denmark.

Competencies: International top management in the financial sector and board positions in large companies. Extensive experience in strategy, organisation and personnel matters.

2

Annette K. Sadolin (b. 1947) Member of the Board of Directors (appointed by the Government of Greenland) since 2014 Educational background: LLM Current career: Occupies other directorships in large companies in Denmark.

Competencies: International top management and board positions in large companies. Extensive experience in strategy, organisation and personnel matters, legal matters, risk management, and sales and marketing.

Julia Pars (b. 1968) Member of the Board of Directors (appointed by the Government of Greenland) since 2014 Educational background: MBA Current career: Director of Katuaq – the Greenland Cultural Centre. Also occupies other directorships in companies in the Nordic countries.

Competencies: Experience in operations, organisational and business development, strategy formation and implementation.

3

Jens Kristian Therkelsen (b. 1966) Member of the Board of Directors (appointed by the Government of Greenland) since 2009 Educational background: Fishing industry Current career: Chairman of ‘Kanunupe’ (the National Villages Association) Competencies: Experience from chairmanship of the National Villages Association, etc.

Jonas Aronsen (b. 1971) Member of the Board of Directors (staff representative) since 2006 Educational background: Office and commercial Current career: Head of Sales at Pilersuisoq Competencies: Possesses a sound knowledge of retail sales and personnel management.

4

Inger Eriksen (b. 1959) Member of the Board of Directors (staff representative) since 2011 Educational background: Office and commercial, as well as various management training programmes.

Current career: Training consultant for KNI A/S Competencies: Sound knowledge of organisation and management.

H.P. Lynge-Larsen (b. 1967) Member of the Board of Directors (staff representative) since 2008 Educational background: Office and commercial, as well as various courses in finance.

Current career: Chef controller in the finance department of KNI A/S Competencies: Experience in finance and accounts preparation, budgeting, financial analysis, etc.

5

Management:

Peter Grønvold Samuelsen (b. 1960) Acting Managing director / Acting CEO, KNI A/S Educational background: MSc (Public Administration) Competencies: Experienced in operations, organisation and business development, strategy formation and implementation. Has previously held other directorships in companies in Greenland, both as chairman and as an ordinary board member.

Auditors: Deloitte Certified Accountants

6

Management statement We have today presented the annual report for KNI A/S for the financial year 1 April 2013 - 31 March 2014.

The annual report is presented in conformity with the Financial Statements Act. We consider the chosen accounting policies to be appropriate, such that the annual report gives a true and fair view of the Group’s and the Parent Company’s assets and liabilities, financial position, result and cash flow for the group.

We recommend the annual general meeting to endorse the annual report.

Sisimiut, 24 June 2014

Management:

Peter Grønvold Samuelsen

Board of Directors:

Niels Thomsen Chairman

Høgni Hansen Vice-chairman

Bodil Nyboe Andersen

Annette K. Sadolin

Jens Kristian Therkelsen

Jonas Aronsen

Inger Eriksen

H. P. Lynge-Larsen

Julia Pars

7

Independent auditor’s report To the shareholder in KNI A/S We have audited the annual report of KNI A/S for the financial year 1 April, 2013 - 31 March, 2014, pages 1-52, which encompasses the management statement, accounting policies, income statement, balance sheet, capital and reserves calculation and notes for both the Group and the Parent Company, plus the cash flow statement for the Group. The annual report is presented in conformity with the Financial Statements Act. Management’s responsibility for the annual report The management is responsible for drawing up an annual report which gives a true and fair view in accordance with the Financial Statements Act. The management is also responsible for such internal control as it deems necessary in order to draw up an annual report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on the annual report on the basis of our audit. We conducted our audit in accordance with international auditing standards and an additional requirement under Greenland’s auditing legislation. This demands that we comply with ethical requirements and plan and perform the audit to obtain a high degree of assurance that the annual report is free from material misstatement.

An audit entails performing procedures to secure auditable evidence for the amounts and disclosures set forth in the annual report. The procedures selected depend on the auditor's assessment, including assessment of risk of material misstatement in the annual report, whether due to fraud or error. With this risk assessment, the auditor reviews internal controls relevant to the preparation and presentation of an annual report which presents an accurate picture, with a view to carrying out auditing procedures that are applicable to the circumstances, but not with the intent to express a conclusion concerning the reliability of the internal controls at the company. An audit also includes an assessment of whether the accounting policies chosen by the management are appropriate, and whether the accounting estimates exercised by the management are reasonable, as well as an evaluation of the overall presentation of the annual report.

It is our view that the audit evidence obtained provides a sufficient and appropriate basis for our opinion.

The audit has not resulted in any qualification.

Conclusion In our opinion, the annual report gives a true picture of the assets, liabilities and financial position of the Group and Parent Company as of 31 March 2014, the results of the operations of the Group and the Parent Company, and cash flows for the Group, for the financial year 1 April 2013 - 31 March 2014, in accordance with the Financial Statements Act.

Sisimiut, 24 June 2014 Deloitte Certified Accountants

Claus Bech Certified Public Accountant

Jesper Blom Certified Public Accountant

8

Financial highlights and key figures Financial highlights

1/4 - 31/3

1/4 - 31/3

1/4 - 31/3

1/4 - 31/3

1/4 - 31/3

(DKK mill.)

2013/14

2012/13

2011/12

2010/11

2009/10

Net revenue

2.393,4

2.468,0

2.537,7

2.174,0

2.105,4

82,0

43,1

56,7

83,4

21,5

(20,0)

(3,6)

(3,6)

(11,6)

(3,9)

Pre-tax profit

62,3

39,6

53,1

71,8

17,6

Result for the year

42,3

34,7

35,9

48,9

12,0

943,5

854,1

716,9

753,6

762,5

82,2

77,5

79,5

81,1

76,3

904,9

937,2

920,0

857,7

901,5

2.061,5

1.995,6

1.700,0

1.659,3

1.719,2

108,6

188,1

125,2

97,1

93,7

1/4 - 31/3

1/4 - 31/3

1/4 - 31/3

1/4 - 31/3

1/4 - 31/3

2013/14

2012/13

2011/12

2010/11

2009/10

Result of primary operations Result of financial items

Inventories Trade debtors Equity Total assets Investments in tangible assets

Key figures

EBIT - margin (%)

3,4 %

1,7 %

2,2 %

3,8 %

1,0 %

16,3 %

12,5 %

13,5 %

16,2 %

14,1 %

Net revenue/Invested capital

2.4

2.7

2.9

2.5

4.0

Financial gearing

0.9

0.8

0.6

0.5

0.6

4.7 %

3.7 %

3.9 %

5.7 %

1.3 %

43.9 %

47.0 %

54.1 %

51.7 %

52.4 %

Return on invested capital (%)

Return on equity (%) Solvency ratio (%)

9

Management report General remarks The financial year 2013-14 has been an exciting and challenging year for KNI, during which the work to implement the strategy project “KNI towards 2016” has continued undiminished. During the financial year, the strategy project, which in essence is all about transforming the company from a traditional supply company into a modern trade and service company with a strong and sustained customer focus, has left its mark in the form of the implementation of new processes and working procedures, with associated improvements in earnings. Many of the 40 strategic initiatives originally contained in the strategic plan are now complete, and the remainder are expected to be completed within the original schedule.

With pre-tax profits of DKK 62.3 million, KNI has once again achieved an improvement in financial performance compared to earlier financial years. Despite the tougher market conditions, which have included a 6% drop in revenues in the Energy Division due to lower activity both inside and outside the service contract, we have managed to improve our earnings by comparison with previous years.

The improvement in performance has been achieved through the continuous effect of the implementation of the strategy project, a very high focus on significantly better cost control, and finally, significantly lower write-downs and adjustments of the Group's inventories, which have had a serious effect on the accounts, in particular over the past six financial years. The result for the year is the second-best in the past nine financial years – surpassed only by the result in 2010/11, which produced a pre-tax profit of DKK 71.8 million.

The year has also featured a milestone in the Company’s history, as 2014 marks 240 years since KNI was founded, under the name KGH. The state-run trading company was taken over by Greenland Home Rule in 1986, and since then the Company, under its new name Kaalallit Niuerfiat, has undergone several restructuring processes.

Today, the KNI Group is entrusted with the task of supplying and operating shops in villages and small towns, providing nationwide supplies of liquid fuels, and in recent years, operating the lamb slaughterhouse Neqi A/S in Narsaq. These tasks present constant challenges, inter alia because while KNI must be operated on commercial principles and a commercial basis, it “must not” operate shops in the larger towns. The reasoning behind this is that the national treasury pays for a service contract which ensures that there are supplies of goods to the villages and outlying districts, and that there therefore would not be competition on equal terms if the Company were permitted to operate in the larger towns.

The population of the villages and small towns where KNI operates shops is declining. For this reason alone KNI’s growth opportunities are severely limited, while the Group's fixed costs remain unchanged, since it is not directly possible to shut down unprofitable shops, even in very sparsely populated villages. The service contract states that KNI has a supply duty, with which we of course intend to comply.

10

Together with our 1,000 skilled and customer-oriented staff, we will continuously improve our service products. We will continue to increase our customer focus and boost our competencies in all the business areas of the Group, among both employees and managers, through a large-scale skills enhancement programme that we call “Taqqissuut”. It is crucial that KNI meets its supply obligations all year round in a commendable manner.

We are therefore also proud that we have decided to set continually higher demands and goals, thereby increasing our level of expertise, including through the strategy project “KNI towards 2016”, but also in terms of greater and clearer requirements towards management and staff and a well-defined distribution of roles and responsibilities in the organisation.

We wish to demonstrate towards our customers and partners, and our fellow Greenlanders that everything we do in the KNI Group will and must reflect very considerable business acumen.

Annual report It is the view of the management that all essential information for evaluating the Company's and the Group's financial position, profit for the year and financial development are contained in the annual report and this report.

Main activity The activities of KNI A/S are based on Parliamentary Regulation no. 4 of 6 June 1997, Parliamentary Regulation no. 1 of 31 May 2001 and Parliamentary Regulation no. 7 of 14 November 2004.

KNI is a Greenlandic company that shows respect for Greenland’s social and cultural values, and is operated on commercial principles on the basis of solidarity towards all parts of the Greenlandic community. Quality, safety, environmental awareness and the best possible level of service must characterise the activities of KNI. The Company will strive to achieve profits that will ensure continued operation on a financially secure basis, including the provision of sufficient funds for maintenance and necessary investments, together with satisfactory solvency and liquidity.

The Company will seek to carry out its activities and achieve its goals through targeted focus on the following areas:   

Decentralised organisation, in which important decisions are made as close to the customers and employees as possible.

High-priority training for employees at all levels to ensure that qualifications, skills and responsibility go together.

Follow-up, evaluation and adjustment of goals, strategies and action plans through documentation and measurable success criteria.

11

   



Development of existing business areas so that they are always characterised by good business acumen, good service and efficiency.

KNI A/S will continuously maintain strict and visible cost control.

KNI must be a good and attractive workplace that focuses on skills and motivation.

The administrative systems must provide users with the necessary clarity, and must be simple, efficient and economical. KNI A/S prioritises operating reliability as more important than technical innovation.

KNI A/S aims to provide clear and targeted information on the company's strategies to its owners and employees, and to the Greenlandic community.

The main activities of the Parent Company's two primary business units in 2013/14 were:

Goods Division:  Retail and wholesale sales in villages and towns.  Distribution and wholesale sales of beer and soft drinks.  Sales of service tasks to partners in villages and outlying districts.

Energy Division:  Import, distribution and sale of liquid fuels.  Import, distribution and sale of lubricants, bottled and industrial gases.

Some parts of KNI’s activities cannot be carried out on commercial and market terms. This means that there is a service contract with the Government of Greenland to pay for these tasks for society.

The current service contract covers the period 1 April 2012 to 31 December 2016.

By entering into the service contract, KNI has assumed an obligation to operate shops in villages and small towns where retail and wholesale services cannot be maintained on a profitable basis.

Similarly, a service contract has been entered into for the period 1 April 2012 - 31 December 2016 for the sale of liquid fuels in Greenland, under which the company does not receive payment from the Treasury, but a maximum limit is set on what the company may earn on oil sold under the service contract.

In addition, KNI also undertakes service contract tasks in villages and outlying districts which encompass the provision of basic services such as post offices, banks, helistops and other goodsrelated and socially relevant tasks.

All other main business activities are run on a commercial basis.

12

Ownership KNI A/S is 100% owned by the Government of Greenland. The Company’s share capital amounts to DKK 310 million.

The table below shows the net cash flows that have been generated between the Company and the Government of Greenland in the period from 2000 until the end of the financial year 2013/14.

D KK m il.

2000

2001

2002

2003

2004

2005

2006

2007

2008

2 0 0 9 ( *) 0 9 / 10

10 / 11

11/ 12

12 / 13

13 / 14

R e c e iv e r f ro m t h e s e rv ic e c o n t ra c t KNI A/S i a lt: P a ym e n t s f ro m t h e G o v e rn m e n t :

-45,3

-67,9

-55,6

-55,6

-55,6

-54,6

-52,1

-50,1

-45,1

-10,0

-40,1

-39,3

-37,0

-36,0

-37,0

- 4 5 ,3

- 6 7 ,9

- 5 5 ,6

- 5 5 ,6

- 5 5 ,6

- 5 4 ,6

- 5 2 ,1

- 5 0 ,1

- 4 5 ,1

- 10 ,0

- 4 0 ,1

- 3 9 ,3

- 3 7 ,0

- 3 6 ,0

- 3 7 ,0

211,1

9,9

3,8

2,9

4,1

41,6

43,1

43,8

68,4

69,3

C a p it a l d e c re a s e : C a pita l de c re a s e - KNI A/S D iv id e n d t a x: Divide nd ta x - KNI P is iffik A/S (c a pita l re duc tio n)

56,0

Divide nd ta x - KNI P is iffik A/S

3,0

2,0

Divide nd ta x - KNI P ile rs uis o q A/S

10,0

4,0

C o m p a n y t a x: C o m pa ny ta x - KNI P ile rs uis o q A/S

7,3

C o m pa ny ta x - KNI A/S

3,7

P e rs o n a l in c o m e t a x: P e rs o na l inc o m e ta x - KNI A/S (**)

29,0

31,5

41,2

64,5

70,5

72,8

17,6

69,7

66,5

67,4

C o m p a n y d iv id e n d : Divide nd - KNI A/S

18,0

9,0

4,6

4,8

20,8

2,0

20,0

20,0

20,0

P a ym e n t s t o t h e G o v e rn m e n t :

6 0 ,0

4 6 ,5

3 2 0 ,2

6 0 ,1

6 6 ,8

4 9 ,9

6 4 ,5

7 4 ,2

7 2 ,8

17 ,6

6 9 ,7

6 6 ,5

8 7 ,4

8 8 ,4

8 9 ,3

N e t t o c a s h f lo w t o t h e G o v e rn m e n t :

14 ,7

- 2 1,4

2 6 4 ,6

4 ,5

11,2

- 4 ,7

12 ,4

2 4 ,1

2 7 ,7

7 ,6

2 9 ,6

2 7 ,2

5 0 ,4

5 2 ,4

5 2 ,3

(*): This perio d co vers o nly the co nversio n perio d 1January - 31. M arch 2009 (**): In the perio d 2000 - 2005 has no t been included perso nal taxes o n ho urly wo rkers - but o nly o n the salaried

During the period, KNI thus received DKK 681.3 million in service contract payments from Greenland, while within the same period the Company repaid DKK 1,233.9 million to the Government.

KNI has thus during the period 2000 - 2013/14 contributed a positive cash flow to the Government of Greenland, corresponding to DKK 552.6 million.

Group structure

13

Affiliates: As of the balance sheet date, KNI A/S owns 100% of the shares in Neqi A/S (share capital DKK 0.6 million) and KNI Ejendomme A/S (share capital DKK 1.0 million).

In addition, KNI A/S possesses, as of the balance sheet date, an ownership share in Akia Sisimiut A/S corresponding to 82.5% (share capital DKK 3.0 million).

Associates: Pitsaatsut ApS, in which the ownership share is 50% (share capital DKK 80,000).

The year in brief This annual report covers the period from 1 April 2013 to 31 March 2014.

During the financial year 2013/14 revenue amounted to DKK 2,393 million, corresponding to a fall of just under DKK 75 million compared to the previous financial year.

The reason for this can be found in the Energy Division, where a decline in activities both within and outside the service contract resulted in s drop of around 6% in revenue.

Revenue in the Goods Division was on a par with the previous year.

Pre-tax profit for the Group as a whole was DKK 62.3 million for the financial year, as against DKK 39.6 million in the previous year. The result is thus an improvement of DKK 22.7 million, corresponding to 57.3%.

The profit and loss account after tax totalled a profit of DKK 42.3 million, compared to a profit of DKK 34.7 million in the financial year 2012/13.

The improved profitability compared to the previous financial year has been achieved on the basis of the following three factors:

  

The continuing work on the implementation of the strategy project “KNI towards 2016” A significant focus on cost savings A significant reduction in write-offs and adjustments in relation to the Company’s inventories

At year-end, KNI had a registered outflow of DKK 754 million in credit facilities, as against DKK 701 million the previous year – an increase of DKK 53 million in credit utilisation. This slight increase is mainly due to time lags relating to working capital up to the balance sheet date.

14

In general, cash flows have been significantly better in the financial year 2013/14 than was the case in 2012/13. Cash flows from operating activities improved by DKK 86 million, and amounted to DKK 50 million in the financial year 2013/14. In addition, the level of investment underwent a significant decline corresponding to DKK 79 million, and thus overall comprised DKK 109 million for 2013/14.

The cash impact relating to the changes in working capital was negative at DKK 107 million, as against DKK 147 million in 2012/13. The negative value of DKK 107 million for the year primarily relates to the change in inventories in the Energy Division, which have risen by DKK 78 million due to rising oil prices.

The Company’s credit facilities amounted to a total of DKK 902 million as of the balance sheet date, and have thus fallen by DKK 41 million compared to the previous year. After the balance sheet date, the Group's credit facilities have been restructured and now amount to DKK 1,100 million.

KNI has a business strategy to maintain a continuous, close, open and constructive dialogue in every respect with the Company’s bankers. The Company has good financial potential, including for 2014/15 and the years ahead.

The trend in the Company’s current outflow on its credit facilities, measured at the balance sheet date, is shown in the graph below. The graph shows the trend over the past nine years.

Mio. kr.

Drawings on credit 1.000,0 900,0 800,0 700,0 600,0 500,0 400,0 300,0 200,0 100,0 0,0

Drawings on credt Credit limit

Accounting year

During the financial year, the Company has been operating in an unstable market characterised by rising oil prices. The economic crisis continues to affect the global economy, and thereby interest rates and the currency and commodity markets. The situation requires constant monitoring and 15

close co-operation with the Company’s financial partners in order to hedge the risks to which the Company may be exposed through the market conditions.

Organisational structure

Management From April to November 2013, KNI A/S was administered by managing director Claus Jensen. In the period from November 2013 to March 2014, the company was managed by acting managing director Peter Grønvold Samuelsen.

Besides the executive board, the senior management of KNI has consisted of:

Finances: Acting CFO Jan H. Lynge-Pedersen (from November 2013). During the period April-November 2013, the position was held by Jan Rahbech.

Goods Division: Chain Director Frederik Olsen, Pilersuisoq Energy Division: Acting Energy Division Manager Tage Lindegaard (from November 2013) During the period AprilNovember 2013, the position was held by Peter Grønvold Samuelsen.

16

Employees KNI is represented in 66 towns and villages in Greenland, and at the end of the financial year 2013/14 the Company had around 1,150 employees, corresponding to 752 full-time positions.

As of 31 March

2010

2011

2012

2013

2014

Number of full-time employees

860

804

786

777

752

Since the end of the last financial year 2012/13, the workforce has fallen by 3%, mainly in the Goods Division. The fall in staff numbers over the past five years has mainly occurred in association with adjustments and optimisations in the shops, but there has also been a decline at head office.

Conditions of employment will alter in all parts of the Group in accordance with the strategy project “KNI towards 2016”, and will not only be focused on the Goods Division. The goal is to optimise customer focus, increase competitiveness and secure earnings on the basis of employee skills, new work behaviour and technology.

KNI is characterised by a very high level of local presence and a good gender balance, as more than 50% of the employees are women.

Skilled, committed and proud employees are a prerequisite for KNI to perform its duties well and professionally. The focus is therefore on the internal training of employees, so that their practical skills are supported by both internal and external courses and training. At KNI, we regard training as an investment. As previously mentioned under “General remarks”, KNI has launched a comprehensive skills enhancement programme called “Taqqissuut”.

(“Taqqissuut” is the word for a small wooden stick which is used to control the light from a blubber lamp.)

17

The skills enhancement project aims to cultivate several types of skills, as it is the combination of these that creates the ideal employee. These skills are divided into the following categories:

  

Professional skills Personal skills Social skills

Taqqissuut will thus be the name used henceforth to refer to KNI’s skill enhancement project in the coming years. Taqqissuut has connotations with information, training and increased skills.

In the financial year 2013/14 KNI devoted DKK 6.8 million to training, compared to DKK 5.9 million the previous year.

KNI seeks to ensure that employees and partners have a safe working day, and that they are in possession of the right equipment, the right training and the knowledge necessary for them to perform their work without risk of injuries or accidents.

KNI wishes to promote awareness and knowledge of diet and healthy lifestyles among its customers, employees and partners. The goal is a healthier life with less illness and improved well-being.

At KNI, we continuously strive to create a good working environment in which our employees will thrive and enjoy their work.

Social responsibility KNI regards social responsibility as an integrated part of its activities. KNI has the goal of making the greatest possible contribution to the community, including by attracting and developing committed employees. KNI works actively with CSR, including through membership of CSR Greenland.

KNI’s fundamental social responsibility is to ensure supplies of foodstuffs and fuel to the villages and small towns of Greenland. Security of supply is essential to allow people to have a good life in the country’s villages and small towns. KNI maintains a constant focus on this responsibility.

KNI and its employees are an important part of the community, and, through their presence, share a joint responsibility for positive development. KNI strives to shoulder its part of this joint social responsibility in co-operation with its stakeholders, including customers, staff, other companies, organisations and the public authorities.

Every year, KNI A/S, Polaroil, Pisisa.gl and Pilersuisoq sponsor a wide range of social, cultural and sporting activities. This is primarily done through long-term agreements with a number of organisations and institutions that reflect our values and our vision of being an active player in the development of society.

18

KNI contributes on an ongoing basis to a range of cultural and sporting activities in Greenland. In addition to cultural activities, the largest sponsorships encompass the Greenland Handball Federation, the Arctic Circle Race, football schools, school sports, the Sisimiut Marathon, the Taekwondo Association of Greenland and a wide range of sports associations in the villages and outlying districts.

As part of KNI's social commitment and social responsibility, we provide ongoing support to humanitarian organisations and activities for vulnerable children. In addition to ‘Grønlandske Børn´ (Children of Greenland), we also have a partnership agreement with MIO - Meeqqat Inuusuttullu Oqaloqatigiinnittarfiat (the Children’s Rights Institution).

KNI also supports activities in our market area with participation in local events, including as a sponsor.

KNI has drawn up a sponsorship policy that applies to the whole group.

Corporate Governance At the end of 2012, the Government of Greenland introduced a catalogue of recommendations on corporate governance, with which KNI, as a publicly-owned company, seeks to comply.

In this context, a self-assessment has been published on the Company website with the following link: www.kni.gl/da/kni/kni-i-dag/retningslinjer-god-selskabsledelse The catalogue consists of 54 specific recommendations, of which KNI now complies with 42. The Management and Board are continuing to work on the remaining recommendations.

The management of KNI consists of a Board of Directors and an Executive Board. The Board of Directors has nine members, three of whom are employee representatives elected for a period of four years, while the six others stand for election every two years. Three shareholder-elected board members thus stand for election each year at the annual general meeting. The six board members elected by the general meeting are independent, corresponding to the recommendation of the “Committee for Good Corporate Governance”.

The Board of Directors is chaired by Niels Thomsen, who is appointed for a two years at a time.

The board members represent a wide spectrum of experience from Greenlandic, Danish and international business life, and of course Greenlandic society.

The Board has not set up a management committee.

The Board held five ordinary meetings and two conference call meetings during the financial year.

The meetings have been held either in Greenland or in Denmark.

19

The Company does not purchase goods or services from board members or their relatives.

Internal controls and business ethics The Company has established a controller function, which is amongst other things intended to reduce losses due to crime committed by employees, customers or others. KNI is at risk as a result of its trading with commodities, including beer, wine and tobacco, and in its sales for cash.

KNI undertakes regular internal checks to detect, prevent and reduce fraud. During the financial year, these checks uncovered a small number of cases of fraud by employees, who were subsequently prosecuted.

All employees of KNI have a duty to report any suspected irregularities to the management.

Controllers follow up on all reports and act on their own initiative to uncover possible fraud, including unannounced audit visits and checks of cash holdings in shops.

Risk management KNI buys oil and oil-based products. These products are traded at world market prices, which are highly volatile.

To prevent price fluctuations and ensure stable prices for consumers, KNI undertakes hedging against the risk of fluctuations in both oil prices and the currencies used. Prices are secured with a horizon of up to four years.

The Company's debt financing is largely subject to variable interest rates. To hedge this risk, the Company has taken out hedging contracts that convert floating interest rates to fixed rates. At the conclusion of the financial year, the interest rate risk was fully hedged.

The Company's cash resources are assessed to be of a sufficient size to enable the Company to meet its obligations at all times. Contingency is available in the form of unutilised drawing rights.

In order to reduce the risk of failure in debt financing, KNI makes use of a number of reputable and solid banks and credit institutions in Greenland and abroad. No one bank may provide more than 20% of KNI’s overall loan facilities.

KNI has taken out comprehensive insurance to cover the damages and incidents that can be insured.

The Company makes use of insurance brokers in the ongoing optimisation of its insurance programme.

The Board and Management are continuously working to identify and hedge business risks. During the financial year, a risk profile has been established that identifies the main risk factors. This profile is used to identify any risks which have a higher probability or more serious potential consequences than are acceptable, for which countermeasures are then instituted.

20

Developments during the financial year Trends in revenue and profits, etc.

Financial highlights in the Group’s revenue and profit compared to last year (DKK million):

Profit and loss account – group

2013/14

2012/13

2.393,4

2.468,0

405,9

352,0

Profit before financial items

82,0

43,1

Pre-tax profit

62,3

39,6

Result for the year

42,3

34,7

(DKK mill.)

Revenue Gross profit

The result from ordinary activities for the Group in 2013/14 is a pre-tax profit of DKK 62.3 million.

The result for the financial year is thus DKK 22.7 million better than the previous year. The performance improvement is primarily due to the following three factors:

  

As expected, positive effects have been realised through the strategy implementation Significantly lower write-downs and stock adjustments were realised than previously There has been a very high focus on cost savings.

Trend in pre-tax profit – Group

2013/14

2012/13

54,1

73,1

Goods Division – Pilersuisoq

2,7

-12,7

Staff – KNI

4,4

-18,3

-0,1

-2,7

Akia Sisimiut A/S

0,5

0,5

KNI Ejendomme A/S

0,7

-0,3

62,3

39,6

(DKK mill.)

Energy Division – Polaroil

Neqi A/S

Pre-tax profit

21

Pre-tax profit for Polaroil, the Company’s energy division, was DKK 54.1 million for the financial year, as against DKK 73.1 million in the previous year. This performance deviation is due to the significantly lower activity outside the service contract during the financial year than in previous years, while revenue within the service contract was also at a lower level than in the financial year 2012/13.

The drop in revenues outside the service contract is mainly due to the lack of activities relating to oil exploration, while activity within the service contract is being challenged by the introduction of hydropower in Greenland. Finally, the division has incurred greater interest charges than last year – corresponding to DKK 6.3 million – as the financing costs of the Group have been higher.

In the Company’s Goods Division, the result of activities was a profit of DKK 2.7 million for the financial year, as against losses of DKK 12.7 million the previous year. The performance improvement has been achieved on the basis of unaltered revenue, but with a significant reduction in inventory write-downs and adjustments. However, the Goods Division also incurred greater interest charges than in previous years, corresponding to DKK 8.1 million, which has of course offset the performance improvement.

In the Company's staff functions a profit of DKK 4.4 million was posted in the financial year, compared to a loss corresponding to DKK 18.3 million the previous year. The performance improvement was largely generated by the positive effects of the strategy implementation, together with significant cost savings.

The consolidated pre-tax profit for the year was DKK 62.3 million, which is regarded as satisfactory.

The outlook for 2014/15 is for a profit of the order of DKK 85 million before tax.

Events following the conclusion of the financial year No events have occurred after the balance sheet date which would change the perception of the annual report.

22

Comments on the Parent Company’s profit and loss account Goods Division – Pilersuisoq For the Company’s Goods Division, the financial year 2013/14 has been characterised by continued work with the analysis, planning and implementation of new strategic initiatives in connection with the strategy project “KNI towards 2016”. The tasks have inter alia included:     

Inventory optimisation and reductions Warehouse and shop amalgamations Efficiency improvements in shop structure Development of the Division's organisational structure Negotiations on service agreements

The Division's revenue was realised at DKK 1,152.1 million, which is on a par with last year. The contribution margin on revenue was DKK 299.1 million, as against DKK 255.7 million the previous financial year.

The realised contribution margin corresponds to a gross margin of 26.0%, compared to 22.2% the previous year.

The result for the year in the Goods Division was a profit of DKK 2.7 million, as against a loss of DKK 12.7 million the previous financial year.

As previously mentioned, the result for the year has been substantially less subject than in the previous year to major inventory write-downs and adjustments. In the financial year 2012/13, an extraordinary provision was thus made for obsolescence amounting to DKK 23.5 million. In the financial year 2013/14 this provision was reduced to DKK 18.0 million, which indicates a positive development in relation to the division’s clean-up in its stocks of obsolete products.

Goods Division (DKK mill.)

2013/14

2012/13

Retail revenue, villages

404,2

397,7

Retail revenue, towns

373,8

371,5

Wholesale revenue and online sales

374,1

382,7

Revenue, total

1.152,1

1.151,9

Gross margin

26,0 %

22,2 %

23

KNI has entered into a service contract with the Government of Greenland on the operation of shops in villages, outlying districts and smaller towns. Payment for this service contract during the financial year amounted to DKK 36 million, which is on a par with the previous financial year.

Total staff costs for the year were DKK 164.3 million, as against DKK 162.5 million the previous year – an increase of 1.1%, mainly due to the regulation of overtime supplements within the SIK area.

Highly focused work is still being performed to realise the optimisation opportunities offered by the implementation of the strategy project. One of the most important areas has been the introduction of category management, which will both create new processes and better organisation of the business processes between purchase and sale. The introduction of category management will reduce the overall number of goods, and create the possibility of significantly lower reject rates than before.

This will also lead to an optimisation of inventory management, which will be crucial in future in order to secure a good and stable revenue base in the Goods Division.

During the financial year, an ambitious effort was also launched in the Goods Division to analyse the resources required for the Division to plan and remedy the current lag in refurbishment work in the Division’s property and warehouses. The goal is for the Goods Division to achieve the same clarity over the overall renovation and maintenance tasks that has already been achieved in the Energy Division.

Energy Division – Polaroil Revenue in the Energy Division for the financial year 2013/14 was DKK 1,208 million, compared to DKK 1,292 million the previous year – a decrease of DKK 84 million, corresponding to 6%. The contribution margin on revenue was DKK 158 million, as against DKK 186 million last year.

The realised contribution margin corresponds to a gross margin of 13.1%, compared to 14.4% the previous year.

The result for the year in the Energy Division was a profit of DKK 54.1 million, as against DKK 73.1 million the previous financial year.

As previously mentioned, the result for the year was substantially influenced by a lower level of activity, both within and outside the service contract. The drop in revenues outside the service contract is primarily attributable to the lack of activities in the oil exploration sector in the financial year 2013/14, while activities within the service contract were affected by the introduction of new hydroelectric plants during the year.

A service contract has been entered into with the Government of Greenland for the period 2012 until 2016, inclusive. The Division does not receive payment for the service contract, and the earnings of the Division under the service contract are subject to a maximum limit.

24

On the basis of the agreed level of income, the Division must allocate the necessary resources for the renovation and maintenance tasks that are necessary to maintain Polaroil’s production apparatus in a responsible condition with regard to production and safety. A comprehensive renovation plan has been drawn up which will involve investments of approximately DKK 425 million over the next 14 years.

As a consequence of the very large investment requirements in the Division, the annual estimated current cash flow – during the period of the service contract – will be largely neutral when tax and dividend payments have been calculated.

Energy Division (DKK mill.)

Sales of liquid fuels – mill. litres Revenue, sales of liquid fuels – DKK mill.

Revenue, other energy products – DKK mill.

Import of liquid fuels – mill. litres Gross margin

2013/14

2012/13

219,0

257,8

1.191,0

1.241,6

27,5

33,5

231,5

213,3

13,1 %

14,4 %

Overall consumer prices were adjusted once during the period, on 7 June 2013, when a price rise of DKK 0.26 per litre was introduced.

Continuous efforts are made to undertake the necessary product and currency hedges to keep the prices of petroleum products stable in Greenland.

Polaroil has a total of 451 tanks at its disposal for liquid fuels: 176 tanks in the towns, and 275 tanks in the villages. The capacity of the village tanks is 21 million litres of fuel, and in the towns 260 million litres. Total tank capacity is 281 million litres.

The Division's challenges remain:   

To increase and maintain sales revenue Correct positioning in relation to oil and mineral exploration activities Increasing environmental requirements, with greater demands on employee skills and the physical equipment

25

Comments on the Parent Company’s balance sheet Intangible fixed assets As of the balance sheet date, intangible fixed assets amounted to DKK 55.5 million, as against DKK 60.6 million in the financial year 2012/13. Investments worth DKK 8.8 million were undertaken in the financial year, compared to the previous year’s DKK 21.8 million.

Property, plant and equipment As of the balance sheet date, property, plant and equipment amounted to DKK 731.1 million, as against DKK 721.9 million in the financial year 2012/13. Investments worth DKK 70.8 million have been undertaken in the financial year, compared to the previous year’s DKK 132.3 million.

Financial fixed assets Capital shares in affiliated undertakings consist of:   

DKK 3.9 million in Neqi A/S DKK 3.9 million in Akia Sisimiut A/S DKK 0.5 million in KNI Ejendomme A/S

Capital shares in associated undertakings consist of: 

DKK 0.1 million in Pitsaatsut ApS

Financial fixed assets have risen during the year from DKK 8.1 million to DKK 8.9 million. The increase is solely attributable to the profit share in the subsidiaries and the addition of shares relating to Pitsaatsut ApS.

Inventories At year-end, inventories amounted to DKK 929.1 million, as against DKK 837.8 million last year; a rise of DKK 91.3 million or approximately 10.9%.

The primary reason for this increase has been an increase in inventories in the Energy Division, equivalent to DKK 78.4 million. In the Goods Division, inventories have risen by just DKK 12.8 million.

The rise in inventories in the Energy Division is mainly due to an increase in the price of oil and, to a lesser extent, changes in volume.

26

The composition of the inventories can be seen in the table below:

Inventories (DKK mill.)

2013/14

2012/13

Goods Division – Pilersuisoq

469,2

456,5

Energy Division – Polaroil

457,8

379,3

2,1

2,0

929,1

837,8

Consumables Total

Equity The Company’s equity fell from DKK 937.2 million as of 31 March 2013 to DKK 904.8 million as of 31 March 2014 – an overall drop of DKK 32.4 million.

The change in equity is composed of the value of retained earnings for the period and changes in the market value of the financial instruments, after deduction of deferred tax.

The market value of the financial instruments fell by DKK 89.4 million in the period from 31 March 2013 to 31 March 2014. The value at the end of the financial year 2013/14 was negative by DKK 99.3 million, compared to a negative value of DKK 9.9 million at the end of the financial year 2012/13.

The financial instruments are established by entering into a number of product and currency hedges on an ongoing basis, with the aim of ensuring stable consumer prices for liquid fuels. The market value of these hedges is calculated on the balance sheet date and is recognised directly in equity.

The Company also enters into interest rate hedging contracts to guard against unfavourable fluctuations in market interest rates.

The market value of these hedges is calculated on the balance sheet date and is also directly recognised in equity, to the extent that the hedges are assessed to be effective in relation to the Company’s exposure.

27

Outlook for KNI A/S Expectations towards the coming financial year 2014/15 in terms of profits are in line with the ambitions outlined in the strategic material “KNI towards 2016”, i.e. continuing positive growth in terms of pre-tax profit, including return on equity and equity ratio.

KNI A/S does not anticipate any major changes in its activities during the financial year 2014/15, for which reason the Company, on the basis of its strategy, expects to earn a profit of around DKK 85 million before tax in the next financial period.

In relation to the strategy, work is still being done to fulfil the ambition expressed in the vision: “KNI wishes to be a dynamic and profitable company that understands its customers and their needs.”

During the financial year the company will also maintain focus on optimising its organisation and business processes, as these are essential to securing stability in daily operations, and thereby contribute to maintaining the crucial focus on customers and the creation of earnings.

The retail chain Pilersuisoq will continue to face major challenges in the coming years. Its customer base of more than 22,000 people is receding in parallel with the ongoing migration from the villages and towns where the chain operates. The potential for growth is thus naturally limited. Consequently, intensive work will be done to improve the internal lines, including education, training, securing better purchasing terms from suppliers, and cost management, which are an implicit part of the strategy project.

Growth in Polaroil depends very much on the progress of activities outside the service contract – primarily in the area of oil and mineral exploration. The business unit is working long-term on securing contacts with possible future players, but no increase in activity is currently expected in this area in the coming years. In that part of the business that is operated within the service contract, and in other commercial activity at market rates, a relatively stable development is expected.

During the financial year, the Neqi slaughterhouse concluded a number of conversions and extensions and is now ready for the 2014/15 slaughtering season, which begins in mid-September 2014.

Current expectations for the future are that new possibilities will be created for the slaughterhouse, including a greater degree of processing than previously, together with other new activities. Work is being done to establish a revised strategy for Neqi that will be completed during the financial year 2014/15.

28

Accounting principles applied The annual report for the KNI group is presented in conformity with the provisions of the Financial Statements Act for class D companies.

The annual report is presented in accordance with the same accounting policies as last year.

A reclassification has taken place during the year of software from tangible to intangible assets. The reclassification does not affect the profit and loss account or equity. The comparative figures, financial highlights and key figures have been adapted accordingly.

General remarks on inclusion and valuation Assets are recognised in the balance sheet when, as the result of a past event, it is likely that future financial advantages will accrue to the group, and when the value of the assets can be reliably measured.

Liabilities have been recognised in the balance sheet when the Group, as the result of a past event, has acquired a legal or constructive obligation, and it is probable that future financial benefits will be deducted from the Group, and the value of the liability can be reliably measured.

On initial recognition, assets and liabilities are valued at cost price. Subsequently, assets and liabilities are valued as described below in the individual items in the accounts.

In recognition and measurement, account is taken of predictable losses and risks that arise before the presentation of the report and which confirm or deny conditions that existed at the balance sheet date.

In the profit and loss account, revenues are recognised as they are earned, while costs are recognised at the amounts relating to the financial year.

Consolidated accounts The consolidated group accounts encompass KNI A/S (the Parent Company) and those companies (affiliated undertakings) that are controlled by the Parent Company.

Such control is achieved when the Parent Company directly or indirectly possesses more than 50% of the voting rights or in any other manner potentially or actually exercises a controlling influence.

Companies in which the Group directly or indirectly possesses between 20% and 50% of the voting rights and exercises significant influence but not control are regarded as associated companies.

29

Principles of consolidation The consolidated financial statements are prepared on the basis of the financial statements of KNI A/S and its subsidiaries. The consolidated statements are prepared by combining entries of a uniform nature. On consolidation, intra-group income and expenses, internal accounts, and gains and losses on transactions between the consolidated companies are eliminated. The accounts used in consolidation are prepared in accordance with the Group's accounting policies.

Capital interests in subsidiaries are offset against the proportionate share of the subsidiaries’ net assets at the acquisition date, calculated at market value.

Minority interests The entries of the subsidiaries are recognised at 100% in the consolidated accounts.

The share of the subsidiaries’ annual profit/loss and equity attributable to minority interests is recognised under separate items in the profit and loss account and balance sheet.

Conversion of foreign currencies Transactions in foreign currencies have been calculated on initial recognition according to the rate on the date of the transaction. Receivables, liabilities other than provisions and other monetary entries in foreign currency which are not settled on the balance sheet date are converted at the exchange rate prevailing on the balance sheet date. Any exchange rate differences occurring between the exchange rate prevailing on the transaction day and that of the balance sheet date are recognised in the profit and loss accounts as financial items. Tangible and intangible fixed assets, inventories and other non-monetary assets acquired in foreign currencies are converted at historic rates.

Derivatives Derivative financial instruments are initially recognised in the balance sheet at cost price, and subsequently at market value. Derivatives are recognised under Other receivables and Other debt, respectively.

Alterations in the market value of derivatives that are designated and qualify as hedges of future transactions are recognised directly in equity. When the hedged transactions are realised, the cumulative alterations are recognised as part of the cost price in the relevant entries.

Alterations in the market value of derivative financial instruments that do not qualify as hedging instruments are recognised on an ongoing basis in the profit and loss account as financial items.

30

Profit and loss account Net revenue Net revenue comprises net cash and invoiced sales for the year, less returns and discounts directly related to sales.

Payments from the Government of Greenland for community tasks are recognised as income at the amount approved in the national budget.

Other operating income and operating costs Other operating income and operating costs encompass income and costs of a secondary character in relation to the Group's main activities.

Other external costs Other external costs encompass costs relating to distribution, sales, advertising, administration, premises, bad debts, etc.

Staff costs Staff costs encompass wages and salaries as well as social costs, pensions, etc., for the Group’s personnel.

Financial items Financial items include interest income and expenses, realised and unrealised gains and losses on securities, payables and transactions denominated in foreign currencies.

Tax The tax for the year, which consists of the current tax for the year and any changes in the deferred tax, is recognise in the profit and loss account in the proportion attributable to the net profit for the year, and directly in equity capital in the proportion attributable to entries recognised directly in equity.

In Greenland, dividends are tax-deductible. The taxable value of the allocated dividend in the annual report is therefore recognised directly in equity, in accordance with the above.

Current tax liabilities and tax receivables are recognised in the balance sheet as the calculated tax on the year's taxable income.

31

Deferred tax is recognised on all temporary differences between the book and taxation values of assets and liabilities, where the taxation value of the assets is calculated on the basis of the planned use of the individual asset.

Deferred tax assets, including the taxation value of tax losses allowed for carry-forward, are recognised at the value at which the asset is expected to be realised, either by offsetting in deferred tax liabilities or as net tax assets.

Balance sheet Intangible fixed assets Software is valued at cost price after deduction of accumulated depreciation and write-downs.

The cost price comprises the price of acquisition and expenses directly attributable to the acquisition, plus the preparation costs for the asset until such time as the asset is ready to be put into service.

The depreciation is based on the cost price, amortised linearly over an estimated useful life of from three to ten years.

Intangible assets are written down to the recoverable amount, if this is lower than the book value.

Property, plant and equipment Land and buildings, production equipment and machinery, as well as other plant, operating fittings and fixtures, are measured at cost price less accumulated depreciation and impairment. Land is not depreciated.

The cost price comprises the price of acquisition and expenses directly attributable to the acquisition, plus the preparation costs for the asset until such time as the asset is ready to be put into service.

The basis of depreciation is the cost price less the estimated residual value at the end of its useful life. Linear depreciation is conducted, based on the following assessment of the estimated useful lives of the assets: Buildings Plant and machinery Other infrastructure, operating plant and fixtures

20-50 years 10-40 years 3-10 years

Tangible fixed assets are written down to the recoverable amount, if this is lower than the book value.

32

Gains and losses on disposal of property, plant and equipment are calculated as the difference between the sales price minus sales costs and the book value at the time of sale.

Gains or losses are recognised in the profit and loss account as an adjustment of depreciation and impairment, or under other operating income if the sales price exceeds the original cost.

Capital interests in subsidiaries and associated companies Capital interests in subsidiaries and associates are recognised and valued under the equity method, which implies that capital interests are valued at the proportionate share of the companies’ book equity value, plus or minus unamortised positive or negative group goodwill, plus or minus unrealised intra-group profits and losses.

In the profit and loss account, the Parent Company’s share of the companies’ results is recognised after the elimination of unrealised intra-group profits and losses, plus or minus the amortisation of positive or negative Group goodwill.

Subsidiaries and associates with negative book equity value are valued at zero, and any receivables from these enterprises are written down by the Parent Company’s share of the negative equity, to the extent that they are assessed to be irrecoverable. If the negative equity exceeds the amount owed, the remaining amount is recognised under provisions to the extent that the parent has a legal or constructive obligation to cover the liabilities of the company in question.

The net revaluation of capital interests in subsidiaries and associates is transferred to the revaluation reserve for capital interests, to the extent that the book value exceeds the cost price.

Inventories Inventories are valued at cost price using the FIFO method, or at the net realisable value, if this is lower. The cost price of commodities, raw materials and consumables comprises the purchase price plus transportation costs. The cost price of finished goods and work in progress comprises the cost of raw materials, consumables, direct wages and indirect production costs.

Indirect production costs comprise indirect materials and wages, maintenance and depreciation costs for production machinery, factory buildings and equipment, plus costs for factory management and administration. Financing costs are not included in the cost price.

The net realisable value of inventories is calculated as the anticipated sales price, less completion costs and sales expenses.

Receivables Receivables are valued at the amortised cost price, which usually corresponds to the nominal value, less write-downs to counter expected losses.

33

Prepayments Prepayments recognised under assets include costs incurred for subsequent financial years. Prepayments are valued at cost price.

Equity Dividends are recognised as a liability at the time of adoption by the general meeting. The proposed dividend for the financial year is shown as a separate item under equity.

Mortgage debt Mortgage debt is valued at cost price at the time of borrowing, corresponding to the proceeds received after deduction of transaction costs.

Mortgage debt is subsequently valued at amortised cost price. This means that the difference between the proceeds and the nominal amount to be repaid is recognised in the profit and loss account over the term of the loan as a financial expense, using the effective interest method.

Other financial liabilities Other financial liabilities are valued at amortised cost price, which usually corresponds to the nominal value.

Prepayments Prepayments recognised under liabilities include earnings received for recognition in the subsequent financial year. Prepayments are valued at cost price.

Cash flow statement The cash flow statement is presented on the basis of the indirect method, and indicates cash flows associated with operations, investments and financing, as well as liquid funds at the beginning and end of the year.

Cash flows from operations are calculated as operating profit for the year adjusted for non-cash operating items, changes in working capital and paid corporate tax.

Cash flows relating to investment activities encompass outgoing payments in connection with the purchase and sale of companies, activities and financial assets, as well as the purchase, development, improvement and sale, etc., of tangible and intangible assets, including the acquisition of assets under finance leases.

Cash flows relating to financial activities encompass alterations in the size or composition of the Group’s share capital and associated costs, as well as the raising of loans, entry into financial leas34

ing agreements, installments on interest-bearing debt, acquisition of own shares and the payment of dividends.

Cash and cash equivalents include cash at bank and in hand and short-term securities with insignificant price risk, less short-term bank debt.

Segment information Information is provided on business segments. The segment information accords with the Group’s accounting policies, risks and internal financial management. Fixed assets in the segments comprise assets used directly in the operation of each segment, including intangible assets, property, plant and equipment, and capital interests in associates. Segment liabilities include debt liabilities and other provisions deriving from the operation of each segment, including trade payables and other debt. Deferred tax is not included in segment liabilities.

Financial highlights and key figures The financial highlights and key figures have been calculated in conformity with the ‘Recommendations and Financial Ratios 2010’ of the Danish Society of Financial Analysts.

EBIT margin (%)

=

EBIT x 100 Net revenue

Return on invested capital including goodwill (%)

=

EBITA x 100 Average invested capital incl. goodwill

Net revenue / Invested capital including goodwilll

=

Net revenue Average invested capital incl. goodwill

Financial gearing

=

Net interest-bearing debt Equity

Return on equity capital (%)

=

Result for the year x 100 Average equity

Solvency ratio (%)

=

Equity x 100 Total assets

35

Income statement 1. April 2013 - 31. March 2014 Parent Company Note

Group

2014

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

(tkr.)

Net revenues

1

2.360.470

2.443.779

2.393.417

2.467.979

Income from the Governments payment for service contract Other operating income Consumables Other external costs

21 2

36.000 81.887 (1.902.974) (187.208)

36.000 84.428 (2.002.179) (219.993)

43.000 81.632 (1.923.851) (188.335)

40.750 83.865 (2.019.005) (221.538)

388.174

342.034

405.864

352.049

4 9,10

(237.055) (74.320) 76.799

(231.690) (68.558) 41.787

(246.059) (77.847) 81.956

(238.149) (70.751) 43.146

5 6 7

821 20.112 (35.713)

1.430 36.408 (36.063)

18.310 (38.006)

34.799 (38.369)

62.019

43.562

62.260

39.578

(19.722)

(8.882)

(19.886)

(4.844)

42.297

34.680

42.374

34.735

-

-

(77)

(55)

Earnings for the year

42.297

34.680

42.297

34.680

Proposed distribution of earnings Proposed dividends for the financial year Provision for reserve for net revaluation under the equity method Retained earnings Total

20.000 351 21.946 42.297

20.000 1.845 12.835 34.680

20.000 22.297 42.297

20.000 14.680 34.680

3

Gross earnings Costs of employment Depreciation and write-down Earnings before financials Results of affiliates Financial income Financial expenses Pre-tax earnings for the year Tax on earnings for the year After-tax earnings for the year Minority interests 'share of associated companies' profit after tax

8

36

Balance Sheet 31. March 2014 Parent Company

Group

Assets Note

Software Intangible fixed assets

2014

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

(tkr.)

9

55.523 55.523

60.642 60.642

55.523 55.523

60.642 60.642

10

327.402 212.152 90.458 101.067 731.079

334.686 229.558 88.203 69.411 721.858

474.800 215.516 94.462 101.506 886.284

404.654 233.342 88.406 125.240 851.643

11

8.342 40 540 8.922

7.521 0 540 8.061

40 540 580

0 540 540

Total fixed assets

795.524

790.561

942.387

912.826

Consumables Raw materials and consumables Retail/wholesale goods Liquid fuels etc Inventories

2.113 0 469.215 457.755 929.084

1.993 0 456.453 379.312 837.758

2.113 14.918 468.669 457.755 943.456

1.993 16.173 456.656 379.312 854.134

Receivables from sales and services Receivables from affiliated companies Deferred tax asset Product hedging Other accounts receivable Accruals Receivables

79.570 14.336 0 15.702 16.175 14.829 140.612

76.951 26.022 0 85.635 4.812 22.633 216.052

82.236 4.582 15.702 17.362 14.907 134.789

77.478 4.540 85.635 4.856 22.669 195.178

29.618

28.980

40.878

33.434

Total current assets

1.099.314

1.082.790

1.119.123

1.082.748

Total assets

1.894.838

1.873.351

2.061.509

1.995.572

Property Plant and machinery Other fixtures and fittings Tangible fixed assets under construction Tangible fixed assets Holdings in affiliates Holdings in associated company Deposits Financial fixed assets

Cash and cash equivalents

37

Balance Sheet 31. March 2014 Parent Company

Group

Liabilities Note

Share capital Reserve for net revaluation under the equity method Special reserve Retained profit Proposed dividends for the financial year Total equity

12

13

Total minority interests Provision for deferred tax Total provisions Mortgages Other credit institutions Long-term debt Short-term part of long-term debt Credit institutions Suppliers of goods and services Prepayments from customers Company tax Other debt Interest hedging Forward contracts USD Accruals Short term debt

14

15

16

Total current liabilities Total liabilities

Contingent / guarantees Fee to the General Assembly elected auditor Derivative financial instruments Related party transactions and ownership Business Management Distribution of service contract

2014

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

(tkr.)

310.000 5.095 283.163 286.587 20.000 904.845

310.000 4.744 283.163 319.260 20.000 937.167

310.000

310.000 -

-

283.163 291.682 20.000 904.845

283.163 324.003 20.000 937.167

814

737

-

-

19.098 19.098

39.144 39.144

19.867 19.867

39.708 39.708

0 223.999 223.999

0 232.166 232.166

72.539 223.999 296.539

48.750 232.166 280.916

8.167 488.631 74.427 0 6.701 32.491 75.555 59.463 1.460 746.895

20.667 427.066 76.307 0 1.727 31.873 84.591 12.454 10.189 664.873

9.972 562.856 75.553 0 6.701 35.637 75.555 59.463 13.708 839.444

22.198 481.727 77.397 34 2.421 33.952 84.591 12.454 22.272 737.044

970.894

897.039

1.135.983

1.017.959

1.894.838

1.873.351

2.061.509

1.995.572

17 18 13 19 20 21

38

Egenkapital 31. March 2012

Share capital

Reserve for net revaluation under the equity method

Retained profit

Special reserve

Proposed dividends for the financial year

Total

Equity statement for the parent company

(tkr.)

(tkr.)

(tkr.)

(tkr.)

(tkr.)

(tkr.)

310.000

2.899

303.923

283.163

20.000

919.985

0 0 0 0 0

1.845 0 0 0 0

12.835 0 0 12.720 (10.217)

0 0 0 0 0

0 20.000 (20.000) 0 0

14.680 20.000 (20.000) 12.720 (10.217)

310.000

4.744

319.260

283.163

20.000

937.167

0 0 0 0 0

351 0 0 0 0

21.946 0 0 6.360 (60.978)

0 0 0 0 0

0 20.000 (20.000) 0 0

22.297 20.000 (20.000) 6.360 (60.978)

310.000

5.095

286.587

283.163

20.000

904.845

After-tax earnings for the year Proposed dividends for the financial year Dividends paid Tax value of dividends Adjustments - derivatives Equity 31 March 2013 After-tax earnings for the year Proposed dividends for the financial year Dividends paid Tax value of dividends Adjustments - derivatives Equity 31 March 2014

Egenkapital 31. March 2012 After-tax earnings for the year Proposed dividends for the financial year Dividends paid Tax value of dividends Adjustments - derivatives Equity 31 March 2013 After-tax earnings for the year Proposed dividends for the financial year Dividends paid Tax value of dividends Adjustments - derivatives Equity 31 March 2014

Share capital

Reserve for net revaluation under the equity method

Retained profit

Special reserve

Proposed dividends for the financial year

Total

Equity statement for the group

(tkr.)

(tkr.)

(tkr.)

(tkr.)

(tkr.)

(tkr.)

310.000

0

306.822

283.163

20.000

919.985

0 0 0 0 0

0 0 0 0 0

14.680 0 0 12.720 (10.217)

0 0 0 0 0

0 20.000 (20.000) 0 0

14.680 20.000 (20.000) 12.720 (10.217)

310.000

0

324.003

283.163

20.000

937.167

0 0 0 0 0

0 0 0 0 0

22.297 0 0 6.360 (60.978)

0 0 0 0 0

0 20.000 (20.000) 0 0

22.297 20.000 (20.000) 6.360 (60.978)

310.000

0

291.682

283.163

20.000

904.845

39

Cash flow statement for the group 1. April 2013 - 31. March 2014

Note

Earnings before financials Depreciation and write-down Minority interests

2014

2013

(tkr.)

(tkr.)

81.956 77.847 (77)

43.146 70.751 (55)

(107.581) 52.145

(147.289) (33.447)

18.310 (25.009) (14.474) 19.970 (694) 50.248

34.799 (24.693) (12.196) 0 0 (35.537)

Acquision of property, plant and equipment Sale of property, plant and equipment

(108.620) 1.250

(188.098) 3.780

Cash flows from investing activities

(107.370)

(184.318)

Dividends paid Instalments on long-term liabilities other than provisions Cash flows from financing activities

(20.000) 24.158 4.158

(20.000) 20.318 318

Increase/decrease in cash and cash equivalents

(52.963)

(219.537)

(701.181) (754.144)

(481.589) (701.126)

(89.322) (9.502) (8.757) 0 (107.581)

(137.279) (3.814) (6.196) 0 (147.289)

40.878 (795.022) (754.144)

33.434 (734.560) (701.126)

Working capital changes Cash flows from ordinary operating activities Interest income and similar income Interest expenses and similar income Interest hedging Product hedgings Company tax Cash flows from operating activities

Cash funds primo Cash funds ultimo

1

Notes to the cash flow statement Note 1: Working capital changes Change in inventories Change in receivables Change in trade payables and other payables, etc Change in provisions

Cash funds ultimo Cash funds ultimo Credit institutions

40

Notes Parent Company

Group

2014

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

(tkr.)

1 Net revenues Goods Liquid fuels etc Pisisa Neqi Rental income

1.148.060 1.208.351 4.058 0 0

1.149.032 1.291.904 2.843 0 0

1.148.060 1.208.351 4.058 32.543 403

1.149.032 1.291.904 2.843 23.464 738

2.360.470

2.443.779

2.393.417

2.467.979

24.345 27.507 16.129 2.183 350 11.373

27.084 25.456 16.855 12.602 603 1.830

24.345 27.552 16.129 2.183 (0) 11.423

27.084 25.497 16.855 12.602 0 1.829

81.887

84.428

81.632

83.865

(14.948) (4.365) (11.983) (12.775) (8.514) (35.128) (4.661) (55.465) (22.604) (14.938) (1.826)

(13.728) (4.933) (13.223) (17.123) (6.700) (52.722) (7.252) (59.154) (26.434) (11.109) (7.616)

(15.788) (4.365) (11.998) (12.901) (8.679) (36.733) (4.682) (58.913) (23.355) (9.094) (1.827)

(14.181) (4.933) (13.236) (17.269) (6.850) (54.170) (7.445) (61.762) (26.966) (7.111) (7.617)

(187.208)

(219.993)

(188.335)

(221.538)

(211.784) (14.316) (10.955) (237.055)

(206.568) (13.376) (11.746) (231.690)

(219.935) (14.841) (11.284) (246.059)

(212.331) (13.793) (12.025) (238.149)

(909) (3.388)

(965) (2.200)

752

777

779

800

KNI A/S only operates in a single geographic market

2 Other operating income Service contracts Rental income Fee income Rental of equipment Group contribution Miscellaneous

3 Other external costs Service travel Course - expenses Marketing costs, net Office expenses Insurance External services Acquisitions Operating equipment Repairs and maintenance costs Rent - expenses Miscellaneous

4 Costs of employment Wages and salaries Pensions Other costs of employment

Salaries and remuneration og Directors and Board Board and directors Executive board Avarage number of employees

The executive board does not hold any speciel or unusual condition with respect to notice period or pension scheme.

41

Notes Parent Company

Group

2014

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

(tkr.)

5 Holdings in affiliated companies Akia Sisimiut A/S Neqi A/S KNI Ejendomme A/S Internal gains - timing differences

363 (553) 465 546

258 1.555 (180) (203)

0 0 0 0

0 0 0 0

821

1.430

0

0

6 Financial income Interest income - contract of sale Interest income - bank Product hedgings Net forex gains/losses Intra-Group interest

805 591 15.000 1.815 1.901

657 2.115 0 31.970 1.665

805 683 15.000 1.823 0

657 2.171 0 31.970 0

20.112

36.408

18.310

34.799

(20.521) 0 0 (12.995) (2.197)

(19.542) 0 0 (13.675) (2.846)

(20.745) (1.919) (148) (12.995) (2.197)

(20.398) (1.194) (243) (13.675) (2.857)

(35.713)

(36.063)

(38.006)

(38.369)

(4.974) (14.748) 0

(1.727) (2.183) (4.972)

(4.974) (14.912) 0

(1.727) 1.855 (4.972)

(19.722)

(8.882)

(19.886)

(4.844)

7 Financial expenses Interest charges - banks Interest charges - mortgages Other bank charges Interest hedging Other bank charges

8 Tax on earnings for the year Current tax year Adjustment of deferred tax Regulatory deferred tax earlier years

42

Notes 9 Intangible fixed assets

Software

Parent Company

(tkr.)

Cost 1. April 2013 Additions during the year Transferred from investment in progress Disposals during the year

104.568 0 8.842 0

Cost 31. March 2014

113.410

Depreciations and write-downs 1. April 2013 Depreciations and write-downs of the year Depreciations at write-downs divested assets

43.926 13.961 0

Depreciations and write-downs 31. March 2014

57.887

Book value 31. March 2014

55.523

Book value 1. April 2013

60.642

9 Inangible fixed assets (continue)

Software

Group

(tkr.)

Cost 1. April 2013 Additions during the year Transferred from investment in progress Disposals during the year

104.568 0 8.842 0

Cost 31. March 2014

113.410

Depreciations and write-downs 1. April 2013 Depreciations and write-downs of the year Depreciations at write-downs divested assets

43.926 13.961 0

Depreciations and write-downs 31. March 2014

57.887

Book value 31. March 2014

55.523

Book value 1. April 2013

60.642

43

Notes 10 Tangible fixed assets

Property

Plant and machinery

Other fixtures and fittings

Tangible fixed assets under construction

Total

Parent Company

(tkr.)

(tkr.)

(tkr.)

(tkr.)

(tkr.)

Cost 1. April 2013 Additions during the year Transferred from investment in progress Disposals during the year

571.444 0 14.269 (2.632)

490.028 0 151 (381)

329.376 0 24.754 (3.214)

69.411 70.830 (39.174) 0

1.460.259 70.830 0 (6.227)

Cost 31. March 2014

583.081

489.798

350.916

101.067

1.524.862

Depreciations and write-downs 1. April 2013 Depreciations and write-downs of the year Depreciations at write-downs divested assets

236.757 20.814 (1.892)

260.470 17.557 (381)

241.172 22.412 (3.127)

0 0 0

738.400 60.783 (5.400)

Depreciations and write-downs 31. March 2014

255.679

277.645

260.457

0

793.783

Book value 31. March 2014

327.402

212.152

90.458

101.067

731.079

Book value 1. April 2013

334.686

229.558

88.203

69.411

721.858

Depreciation and write-down Depreciation and write-downs for the year: 2014 (tkr.)

2013 (tkr.)

Property Plant and machinery Other fixtures and fittings Loss/gain on sale of fixed assets

20.814 17.557 22.412 (423)

18.884 19.430 32.618 (2.375)

Depreciation and write-downs total

60.359

68.558

44

10 Tangible fixed assets (continue)

Property

Plant and machinery

Other fixtures and fittings

Tangible fixed assets under construction

Total

Group

(tkr.)

(tkr.)

(tkr.)

(tkr.)

(tkr.)

Cost 1. April 2013 Additions during the year Transferred from investment in progress Disposals during the year Cost 31. March 2014

649.929 0 94.528 (2.632) 741.825

508.855 0 151 (381) 508.625

331.161 0 28.834 (3.214) 356.781

125.241 99.778 (123.513) 0 101.506

1.615.186 99.778 0 (6.227) 1.708.738

Depreciations and write-downs 1. April 2013 Depreciations and write-downs of the year Depreciations at write-downs divested assets Depreciations and write-downs 31. March 2014

245.275 23.642 (1.892) 267.025

275.515 17.977 (381) 293.111

242.751 22.691 (3.127) 262.315

0 0 0 0

763.541 64.311 (5.400) 822.452

Book value 31. March 2014

474.800

215.516

94.462

101.506

886.286

Book value 1. April 2013

404.654

233.342

88.406

125.240

851.643

Depreciation and write-down Depreciation and write-downs for the year: 2014 (tkr.)

2013 (tkr.)

Property Plant and machinery Other fixtures and fittings Loss/gain on sale of fixed assets

23.642 17.977 22.691 (423)

20.539 19.850 32.736 (2.375)

Depreciation and write-downs total

63.886

70.751

45

Notes 11 Financial fixed assets

Total

Deposits

Holdings in affiliates

Holdings in associated company

Kapitalandele i øvrigt

Parent Company

Cost 1. April 2013 Additions during the year Disposals during the year Cost 31. March 2014

0 0 0 0

0 40 0 40

8.792 0 0 8.792

1.076 0 0 1.076

9.868 0 0 9.868

Adjustments 1 April 2012 Additions during the year Disposals during the year Profit share Adjustments 31. March 2013

0 0 0 0 0

0 0 0 0 0

(133) 0 0 274 141

(536) 0 0 0 (536)

(669) 0 0 274 (395)

Internal profits early 1. April 2012 Displacement of internal profits Internal profits 31. March 2013

0 0 0

0 0 0

(1.138) 547 (591)

0 0 0

(1.138) 547 (591)

Book value 31. March 2014

0

40

8.342

540

8.881

Book value 1. April 2013

0

0

7.521

540

8.060

Equity in % Home

2014

2013

Kommuneqarfik Kujalleq Qeqqata Kommunea Qeqqata Kommunea

100 82,5 100

100 82,5 100

50

-

Subsidiaries companies are followings: Neqi A/S Akia Sisimiut A/S KNI Ejendomme A/S

Company capital (tkr.)

Equity 31/3 2014 (tkr.)

600 3.000 1.000

4.523 4.650 522

80

80

Associated company consists of the following Pitsaasut ApS

NĂŚstved Kommune

46

Notes 11 Financial assets (continue)

Holdings in associated company

Deposits

Total

Group

(tkr.)

(tkr.)

(tkr.)

Cost 1. April 2013 Additions during the year Disposals during the year Cost 31. March 2014

0 40 0 40

1.076 0 0 1.076

1.076 40 0 1.116

Adjustments 1 April 2012 Additions during the year Disposals during the year Profit share Adjustments 31. March 2013

0 0 0 0 0

(536) 0 0 0 (536)

(536) 0 0 0 (536)

Book value 31. March 2014

40

540

580

Book value 1. April 2013

40

540

580

2014

2013

(tkr.)

(tkr.)

12 Share capital Company´s share capital consists of shares in the amount of 1.000 DKK or multiples thereof.

No shares are granted special rights. There have been no changes in share capital during the last 5 years

310.000

310.000

13 Retained profit Adjustments - derivatives Parent Compagny / Group

Open positions: Product hedging Interest hedging Forward contracts USD Closed positions: Product hedging

2014

2013

Change in total

(tkr.)

(tkr.)

(tkr.)

15.702 (75.555) (59.463) (119.316)

85.635 (84.591) (12.453) (11.409)

69.933 (9.036) 47.010 107.907

19.970

0

(19.970)

0

1.478

1.478

31.592

3.158

(28.434)

(67.753)

(6.774)

60.978

Value of inefficient hedgings: Interest hedging Deferred tax: Deferred tax on financial instruments

47

Notes 14 Deferred tax Parent Company

Book value

Property Plant and machinery Other fixtures and fittings Financial fixed assets Inventories Receivables Basis

327.402 212.152 145.981 8.922 0 0 694.457

Value for tax purposes

Difference in the balance

205.152 174.302 116.205 9.908 17.827 11.656 535.050

122.250 37.850 29.776 (986) (17.827) (11.656) 159.407

Deferred tax 31. March 2014, 31,8% Deferred tax on equity items, see note 13 Provisions deferred tax 31. March 2014

50.690 (31.592) 19.098

The note for the group is omitted, because there are no joint taxation in Greenland The change in the deferred tax is put together as follows: Parent Company 2014 (tkr.)

Deferred tax beginning Deferred tax on year profit Change in deferred tax on equity items, see note Regulatory deferred tax earlier years Tax value of dividends Deferred tax end

39.144 14.748 (28.434) 0 (6.360) 19.098

Group

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

49.474 10.520 (3.158) (4.972) (12.720) 39.144

39.708 14.953 (28.434) 0 (6.360) 19.867

49.892 10.666 (3.158) (4.972) (12.720) 39.708

15 Long-term debt Parent Company

Credit institutions Due after more than 5 years Credit institutions

Due within 1 year

Due after 1 year

Amortized debt in total

Nominel debt in total

(tkr.)

(tkr.)

(tkr.)

(tkr.)

8.167 8.167

223.999 223.999

232.166 232.166

232.166 232.166

223.999 72.539 296.538

232.166 74.344 306.509

232.166 74.344 306.509

0 0

Group

Credit institutions Mortgages Due after more than 5 years Credit institutions Mortgages

8.167 1.805 9.972 0 41.510 41.510

48

Notes Parent Company

Group

2014

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

(tkr.)

16 Other debt Accrued vacation pay Accrued tax and pensions Other debts

17.418 5.463 9.610 32.491

17.277 6.168 8.428 31.873

17.811 5.818 12.008 35.637

17.677 6.346 9.929 33.952

17 Contingent liabilities, other financial commitments and guarantees Residual benefits of rents and lease obligations represent For collateral guarantees payment of 0,4 mio. DKK The parent company has guaranteed the subsidiaries Neqi A/S, Akia Sisimiut A/S and KNI Ejendomme A/S´s debts to the bank of Greenland.

According to instructions from the Government of Greenland KNI operates in locations where there is a risk that operations may be discontinued following a governmental decision to close certain settlements. According to the land use legislation in Greenland the licensee is charged with the duty to clean up and restore the area before handing it back to the society. However since the obligation to secure supplies and the decision power to determine in which settlements and towns KNI operates at any particular time remains with the Govenment of Greenland, KNI is at present not able to estimate this liability reliably, neither with respect to the actual need for cleanup and restoration, the monetary extent or the timing of the actualization, if any.

The KNI Group is currently part of an ongoing lawsuit. Management believes that the outcome of this litigation will not have a material impact on its financial position

2014

2013

2014

2013

(tkr.)

(tkr.)

(tkr.)

(tkr.)

18 Fee to the General Assembly elected auditor Audit fee Other assistance

852 1.241

1.304 1.443

932 1.241

1.414 1.443

2.093

2.747

2.173

2.857

49

Notes 19 Related party transactions and ownership for the parent company Dominant influence Government of Greenland

Grundlag Basis Hovedaktionær Sole shareholder

Other related parties Neqi A/S Akia Sisimiut A/S KNI Ejendomme A/S

Affiliated company in KNI-group Affiliated company in KNI-group Affiliated company in KNI-group

Niels Søren Thomsen Høgni Hansen Bodil Nyboe Andersen Annette K. Sadolin Julia Pars Jens Kristian Therkelsen Jonas Aronsen Inger Eriksen H.P. Lynge-Larsen

3952 3800 1270 2900 3900 3961 3911 3911 3911

Ilulissat Thorshavn København K Hellerup Nuuk Uummannaq Sisimiut Sisimiut Sisimiut

Peter Grønvold Samuelsen

3911 Sisimiut

Chairman Board member Board member Board member Board member Board member Board member Board member Board member Acting CEO

Transactions There has not during the year - apart from intragroup transactions that are eliminated in the consolidated financial statements of KNI been completed transactions with board, directors, executives, shareholders, affiliated companies or other related parties, except for the redemption of a loan of DKK 50.0m from Greenland Holding A/S.

20 Board positions Board members have the following board positions in other companies Peter Grønvold Samuelsen

Neqi A/S - chairman Akia Sisimiut A/S - chairman KNI Ejendomme A/S - chairman

Niels Søren Thomsen

North Atlantic Seafood A/S - chairman

Bodil Nyboe Andersen

Kirstein Holding A/S - chairman Kirstein A/S - chairman

Annette K. Sadolin

Skodsborg sundhedscenter A/S - board member Topdanmark A/S - board member Danske forsikring A/S - board member Topdanmark forsikring A/S - board member DSV A/S - board member Kurhotel Skodsborg A/S - board member

Julia Pars

Air Greenland A/S - board member

H. P. Lynge-Larsen

Neqi A/S - board member

50

Notes 2014

2013

(tkr.)

(tkr.)

21 Distribution of service contract Narsarmiut Aappilattoq Tasiusaq- NAN Alluitsup Paa Saarloq Ammassivik Eqalugaarsuit Qallimiut Igaliku Qassiarsuk Qassimiut Arsuk Qeqertarsuatsiaat Kapisillit Atammik Napasoq Kangaamiut Itilleq Sarfannguaq Attu Iginniarfik Ikerasaarsuk Niaqornaasuk Kangaatsiaq Akunnaaq Ikamiut Qasigiannguit Kitsissuarsuit Ilimanaq Oqaatsut Qeqertarsuaq Kangerluk Qeqertaq Saqqaq Ikerasak Uummannaq Qaarsut Saattut

312

312

504 200 1.146 172 286 334 0 268 380 198 594 892 446 870 498 1.244 404 512 784 310 342 1.024 2.564 478 334 0 338 442 238 0 318 638 838 852 0 692 942

504 200 1.146 172 286 334 0 268 380 198 594 892 446 870 498 1.244 404 512 784 310 342 1.024 2.564 478 334 0 338 442 238 0 318 638 838 852 0 692 942

51

Notes 2014

2013

(tkr.)

(tkr.)

21 Distribution of service contract, (continue) Niaqornat Ukkusissat Illorsuit Nuugaatsiaq Upernavik kujalleq Kangersuatsiaq Upernavik Aappilattoq - UPV Innaarsuit Tasiusaq - UPV Nuussuaq Kullorsuaq Savissivik Moriusaq Qeqertat Qaanaaq Siorapaluk Isortoq Tasiilaq Kulusuk Tiniteqilaaq Kuummiut Sermiligaaq Narsarssuaq Kangerlussuaq Ittoqqortoormiit

270 644 466 544 738 798 0 700 646 874 702 1.414 354 0 104 0 296 314 0 904 492 1.138 662 464 1.584 1.498 36.000

270 644 466 544 738 798 0 700 646 874 702 1.414 354 0 104 0 296 314 0 904 492 1.138 662 464 1.584 1.498 36.000

52

Income statement 1. April 2013 - 31. March 2014 Product division 2014

2013

1.152.119

1.151.875

36.000 74.968 (853.056) (185.887)

36.000 55.950 (896.189) (152.672)

224.144

194.965

Costs of employment Depreciation and write-down

(164.320) (41.026)

(162.526) (33.011)

Earnings before financials

18.797

(571)

0 (1.276) (14.844)

0 (1.374) (10.791)

2.677

(12.737)

Net revenues Income from the Governments payment for service contract Other operating income Consumables Other external costs Gross earnings

Financial income Financial expenses Intra-Group interest Pre-tax earnings for the year

Income statement 1. April 2013 - 31. March 2014 Energy division 2014

2013

1.208.351

1.291.904

548 (1.049.919) (46.353)

127 (1.105.988) (48.590)

Gross earnings

112.628

137.453

Costs of employment Depreciation and write-down

(33.538) (21.826)

(30.024) (22.488)

Earnings before financials

57.264

84.940

15.000 (64) (18.055)

13 (78) (11.748)

54.144

73.128

Net revenues Other operating income Consumables Other external costs

Financial income Financial expenses Intra-Group interest Pre-tax earnings for the year

53

Income statement 1. April 2013 - 31. March 2014 Staffs 2014

2013

Other operating income Other external costs

6.021 45.382

27.745 (18.128)

Gross earnings

51.407

9.617

Costs of employment Depreciation and write-down

(39.199) (11.468)

(39.141) (13.060)

Earnings before financials

740

(42.584)

38.011 (34.372)

58.933 (34.611)

4.378

(18.261)

Financial income Financial expenses Pre-tax earnings for the year

Income statement 1. April 2013 - 31. March 2014 Affiliated companies 2014

2013

Results of affiliates Provision for losses at affiliates

821 0

1.430 0

Pre-tax earnings for the year

821

1.430

54