Arrow Prospectus - PGS

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ARROW SEISMIC ASA – INITIAL PUBLIC OFFERING Convertible bonds that contain both a liability and equity element are divided into two components upon issuance based on the net present value of the bond’s cash flow, and each of these elements is accounted for separately as a liability and equity, respectively. Company’s own shares The nominal value of the company’s own shares is presented in the balance sheet as a negative equity element. The purchase price in excess of the nominal value is recognised in other equity. Losses or gains on transactions with the company’s own shares are not recorded in the profit and loss statement. Equity transaction costs Transaction costs related to equity transactions are recognised directly against equity after the deduction of tax expenses. Only transaction costs directly related to the equity transaction are recorded directly against equity. Other equity Foreign currency differences Foreign currency differences arise in connection with translation of foreign currency transactions in the consolidation of foreign entities. Foreign currency differences with respect to monetary items (liabilities or receivables) that are in reality part of the company’s net investment in a foreign unit are treated as foreign currency differences. Upon the disposal of a foreign unit the accumulated foreign currency differences related to that entity are reversed and recorded in the profit and loss statement in the same period that the gain or loss on the disposal is recorded. 8.3.13 Principles for recognition of revenue and expenses Revenue is recognised when it is probable that the transaction will generate future economic benefits that will accrue to the company and the value of such benefits can be estimated reliably. Sales revenues are recorded less value added tax and discounts. Income and expenses related to the vessels’ journeys are accrued based on the number of days the journey lasts before and after the end of the year. Dividend income Dividend income is recognised on an accrual basis in accordance with the substance of the relevant agreements. 8.3.14 Loans Borrowing expenses are recognised in the profit and loss statement when the borrowing expenses arise. Borrowing expenses are capitalised if they are directly related to the purchase, construction or production of a fixed asset. The capitalisation of borrowing expenses occurs when interest expenses are incurred during the construction of the fixed asset. Borrowing expenses are capitalised until the point in time when the fixed asset is placed into service. If the cost price exceeds the fair value of the fixed asset, an impairment loss is recognised. Loans are recorded as the proceeds that are received, net of any transaction costs. Loans are subsequently accounted for at the amortised cost through application of the effective interest rate, where the difference between the net proceeds and redemption value are recognised in the profit and loss statement over the term of the loan. 8.3.15 Public grants The Group presents is government grants according to IAS 20; Government Grants. Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. The Group receive grants from Reimbursement system for Seamen for some ships due to secure employment of Norwegian seamen. The grant is recognised as reduction in crew expenses. 8.3.16 Taxes Taxes consist of the tax payable and change in deferred tax. Deferred tax liabilities/assets are calculated based on all the differences between the financial and tax values of assets and liabilities, with the exception of: • deferred tax that arises as a result of goodwill depreciation that is not tax deductible 61
ARROW SEISMIC ASA – INITIAL PUBLIC OFFERING • temporary differences related to investments in subsidiaries, associated companies or joint ventures, since the group determines when the temporary differences will be reversed and this is not assumed to occur in the foreseeable future. Deferred tax assets are recorded in the accounts when it is probable that the company will have sufficient taxable profit to benefit from the tax asset. On the date of each balance sheet the group will review unrecognised deferred tax assets and the book value of such assets. The companies record prior unrecognised deferred tax assets in the accounts if it becomes probable that the company can use the deferred tax asset. Moreover, the company will reduce the deferred tax asset if the company can no longer benefit from the deferred tax asset. Deferred tax liabilities and assets are measured based on the current tax rates that apply to the companies in the group where temporary differences have arisen. Deferred tax liabilities and assets are recorded in the accounts regardless of when the differences will be reversed. Deferred tax liabilities and assets are recorded at their nominal value and are classified as fixed asset investments (long-term liabilities) on the balance sheet. Tax payable and deferred tax are recorded directly against equity if the tax is related to transactions that are recorded directly against equity. Tax payable and deferred tax assets/liabilities are measured at the tax rate that applies to accrued, undistributed equity. The tax effects of dividends are taken into account when the company has incurred a liability to distribute a dividend. For Norwegian companies a tax rate of 28% is employed. For UK companies the tax rate is 30 %, 8.3.17 Classification of assets and liabilities on the balance sheet Assets intended for permanent ownership or use and receivables that mature later than one year after the end of the accounting period are identified as fixed assets. Other assets are classified as current assets. Liabilities that mature later than one year after the end of the accounting period are classified as long-term liabilities. Other liabilities are classified as current liabilities. The first year’s instalments on long-term loans are classified as current liabilities in the balance sheet. 8.3.18 Business areas The Group presents financial numbers for the business areas as seismic operations and offshore subsea support. Indirect attributable costs are allocated to the business areas. Financial information regarding the segments is presented in note 5. Internal profit from sale between the business areas is eliminated in the segment reporting. 8.3.19 Contingent liabilities and assets Contingent liabilities are defined as: (i) Possible liabilities resulting from prior events where the existence of the liability is dependent on future events. (ii) Liabilities that have not been recognised because it is not probable that they will entail any payment. (iii) Liabilities that cannot be measured with an adequate degree of reliability. Contingent liabilities are not recorded in the annual accounts. Significant contingent liabilities are disclosed unless the probability of the liability occurring is low. A contingent asset is not recorded in the annual financial statements, but it will be disclosed if there is a certain probability that it will benefit the group. 8.3.20 Events after the date of the balance sheet New information on the company’s positions on the balance sheet date has been incorporated into the annual financial statements. Events after the balance sheet date that do not affect the company’s position on the balance sheet date, but will affect the company’s position in the future, have been disclosed if they are material. 62
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Prospectus Arrow Seismic ASA Offeri
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The contents of this Prospectus are
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7.2 OVERVIEW OF THE GLOBAL SEISMIC
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1. SUMMARY The following summary sh
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• Geopolitical risks - Changes in
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Solheimsgt 13, PB 1114 Sentrum, N-5
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Arrow Prospectus - PGS

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