English version - Hexagon Composites ASA

COMROD COMMUNICATION ASA – LISTING ON THE OSLO STOCK EXCHANGE
7 FINANCIAL INFORMATION
This chapter gives an overview of the Company’s financial condition. In order to fully understand the
Company’s financial condition, this chapter should be read in conjunction with the Company’s audited
annual and interim reports. Historical financial information, including annual reports and audit reports,
can be found on the Company’s website at www.comrod.com. The most recent financial statements,
i.e. the annual report for 2005 and the interim report for the 3 rd quarter of 2006, can be found in
Appendix 2 and 3 to this Prospectus. The IFRS adjusted financial figures for the past three accounting
years and the figures for the 3 rd quarter of 2006, which have been subject to a limited review, are
presented in section 7.3. The effects from the transition from NGAAP to IFRS are shown in section
7.2. In connection with the Company’s acquisition of Lerc, pro-forma financial statements have been
prepared. The pro forma figures are presented in section 7.4 of this Prospectus.
7.1 Significant accounting policies
7.1.1 General information
Comrod Communication ASA will not be the parent company of the group until the Demerger is
effective (expected to be medio January 2007, for further description of the demerger, please refer to
section 4.2 of this Prospectus). The following financial information includes Comrod AS. The
historical financial information presented does not include Fidulerc/Lerc except for the balance sheet
at 30 September 2006 and income statement for the 3 rd quarter 2006. Fidulerc SA and its subsidiary
Lerc SA was acquired 29 June 2006. The purchase was subject to approval of French authorities
regarding competitive regulations. Comrod AS received the necessary approval by French authorities
medio September 2006. Hence, consolidation and purchase price allocation of Fidulerc/Lerc started
medio September 2006.
Comrod AS has not published any audited stand-alone financial statements prepared in accordance to
IFRS. As part of the Hexagon Composites Group, IFRS has been applied in the preparation of the
Hexagon Composites ASA’s consolidated financial statements for 2005. The published audited
financial statements for Comrod AS for the years 2003, 2004 and 2005 were prepared in accordance
with the Norwegian Accounting Act and Norwegian Generally Accepted Accounting Principles.
7.1.2 Basis for preparation
The following consolidated financial statements for the Comrod AS Group are prepared in accordance
with the international reporting standards published by the International Accounting Standards Board,
as adopted by the European Union (EU). Comparative figures for 2004 have been restated. As these
are the company’s first IFRS accounts, IFRS 1, First-Time Adoption of International Financial
Reporting Standards, has been adopted in preparing Comrod AS Group’s opening balance sheet at 1.
January 2004. The effect of transition to IFRS is presented in section 7.2.The measurement basis used
is historical cost, except for derivatives which are measured at fair value according to IAS 39.
7.1.3 Functional currency and presentation currency
The group presents its financial statements in NOK. Functional currency for the Norwegian companies
is NOK. For the French companies the functional currency is EUR. For consolidation purposes,
balance sheet figures for subsidiaries which have a different functional currency are translated at the
exchange rate on the balance sheet date, and income statement figures are translated at the average
exchange rate for the period. Exchange differences are recognised as a separate component of equity.
On disposal of a foreign subsidiary, any accumulated exchange differences are recognised in the
income statement.
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