Hydro Annual Report 2011b

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F62 FINANCIAL STATEMENTS Note 44 - Board of Directors and Corporate Assembly Board member Board fees 1) Board members as of December 31, 2011 Terje Vareberg 4) Bente Rathe 5) Finn Jebsen 6) Inge K. Hansen 7) Eva Persson 8) Liv Monica Stubholt 6) Tito Martins 9) 10) 11) Billy Fredagsvik 6) 10) Sten Roar Martinsen 10) 12) Ove Ellefsen Outstanding loans 1) 2) Number of shares 3) 581 18 391 459 29 000 326 53 406 475 12 000 389 326 250 338 96 2 159 326 3 215 175 2 544 10) 13) Jørn B. Lilleby 172 33 2 074 Heidi M. Petersen 14) Board members during 2011 and 2010, not on the board as of December 31, 2011 7 10 000 Total 3 824 129 132 789 1) Amounts in NOK thousand. 2) Loans are extended to board members who are also Hydro employees under an employee benefit scheme available to all employees in Norway. The loans to Billy Fredagsvik have an interest rate of 3.9-7.25 percent and a repayment period of 1-7 years. The loan to Jørn Lilleby has an interest rate of 3.9 percent and a repayment period of 2 years. All payments have been made in a timely fashion and in accordance with the agreed payment schedule. Loans have not been extended to related parties. 3) Number of shares owned as of December 31, 2011 for board members as of December 31, 2011; otherwise it is the number of shares owned as of the date the individual stepped down from the Board of Directors. Shareholdings disclosed include shares held by close members of family and controlled entities, in addition to shares held directly by the board member/former board member. 4) Chairperson of the board and chairperson of the board compensation committee. 5) Deputy chairperson of the board and member of the board audit committee. 6) Member of the board compensation committee. 7) Chairperson of the board audit committee. 8) Member of the board audit committee. 9) Member of the board as of February 28, 2011. 10) Employee representative on the board elected by the employees in accordance with Norwegian Company Law. As such, these individuals also are paid regular salary, remuneration in kind and pension benefits that are not included in the table above. 11) Member of the board audit committee as of October 1, 2011. 12) Member of the board as of May 13, 2011. 13) Member of the board and member of the board audit committee until May 13, 2011. 14) Member of the board and member of the board compensation committee in 2010. Corporate Assembly Corporate Assembly members owned 284,769 shares as of December 31, 2011. Loans to Corporate Assembly members were extended under an employee benefit scheme that is available to all employees in Norway. Loans outstanding to Corporate Assembly members who are also Hydro employees totaled NOK 762 thousand as of December 31, 2011. The interest rate on these loans is between 3.90 and 7.25 percent and the repayment period is between two and 22 years. Note 45 - Related party information As of December 31, 2011, The Norwegian state owned 39.1 percent of the total shares outstanding (2010: 50.9 percent). This comprises the combined holdings of the Ministry of Trade and Industry and the holdings of Folketrygdfondet, which manages the Government Pension Fund - Norway. There are no preferential voting rights associated with the ordinary shares held by the Norwegian State. Hydro has concluded that the Norwegian state's shareholding represents significant interest in Hydro, and that the State thus is a related party. As of December 31, 2011, Vale Austria Holdings GmbH, a wholly owned subsidiary of Vale S.A. owned 22 percent of the outstanding shares in Norsk Hydro ASA. The shares were issued as consideration for Hydro's acquisition of Vale Aluminium, see note 5 Acquisitions. Hydro has concluded that the Vale's shareholding represents significant influence in Hydro, and that Vale thus is a related party.
Long-term purchase contracts for bauxite with Vale were entered into as part of the acquisition. The contracts provides Hydro right and obligation to purchase bauxite from Vale at a price formula consisting of a fixed element and a variable element linked to the price of aluminium and alumina. In addition, some service and supply arrangements for the newly acquired entities with Vale S.A and its subsidiaries exists. The majority of these arrangements are of a transitional nature. The Norwegian state has ownership interests in a substantial number of companies. The ownership interests in 52 companies are managed by the ministries and covered by public information from the Ministry of Trade and Industry 1). For the purpose of this disclosure we have not assessed which of these companies that are controlled by the State. Hydro has business transactions with a number of these companies, including purchase of power from Statkraft SF. Generally, transactions are agreed independent of the common control exercised by the State. Hydro completed a rights issue in July 2010. The Ministry of Trade and Industry participated in the rights issue for its relative share. Folketrygdfondet subscribed and underwrote for its pro rata share of the rights issue. Both shareholders participated at the same price as other shareholders. A significant share of Hydro's defined benefit post-employment plans is managed by the independent pension trust, Norsk Hydro Pensjonskasse. This trust owns some of the office buildings rented by Hydro. The rental arrangements are based on market price benchmarks and has a remaining life of around 9 years. Hydro has paid a total rental of NOK 192 million and NOK 189 million for 2011 and 2010, respectively. In addition, Hydro is involved with pension trusts in Great Britain and some other countries. There are no similar arrangements with those trusts. The members of Hydro's board of directors during 2011 and 2010 are stated in note 44 Board of Directors and Corporate Assembly, where their remuneration and share ownership is outlined. Some of the board members or their close members of family serve as board members or executive directors in other companies. In addition, some members of Hydro's corporate management board or their close members of family serve as board members in other companies. Hydro has not identified any transactions where the relationship is known to have influenced the transaction. Some close family members of members of Hydro's management are employed in non-executive positions in Hydro. Hydro's significant associated companies and transactions with those companies are described in note 25 Investments in associates. Hydro's significant jointly controlled entities and transactions with those entities are described in note 26 Investments in jointly controlled entities. Hydro has joint venture arrangements with a number of other companies. Generally, the relationships are limited to a combined effort within a limited area. Hydro considers the joint venture partners as competitors in other business transactions, and do not see these relationships as related party relationships. 1) According to information on the Government web site www.regjeringen.no, state ownership FINANCIAL STATEMENTS Note 45 - Related party information F63
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Annual Report - 2011
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Annual Report - 2011 HyDRO’S REPO
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Aluminium market price weakens LME
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cost renewable energy production, w
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Corporate Management Board AnnuAl r
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• Secure stable production and fi
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Key financial information NOK milli
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for foundry alloys continued to be
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• Using viable energy sources •
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Share of non-Norwegian leaders Perc
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Capital employed - - upstream focus
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petitive supply of standard alumini
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Further improved bauxite and alumin
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Alumina production Million mt 7 6 5
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and Hydro - but both have also rest
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Operations Hydro’s primary alumin
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Plant Country Employees (per Dec. 3
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Active risk management We have deve
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Contribution margin to profit EUR p
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Flat rolled products consumption We
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Build on the high performance of ou
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European extrusion consumption (tot
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Operations Hydro is a global energy
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expected remediation costs relating
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Direct greenhouse gas emissions fro
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The Qatalum aluminium plant, in whi
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postponed in 2011 due to the market
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Water management Enough clean water
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The annual business planning proces
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Total payments (taxes, fees, etc.)
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Qatalum, where Hydro holds a 50 per
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Effective organization Hydro had 22
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Cooperating for safety at Slovalco
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from a 10-year perspective, we redu
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In 2011, we established an electron
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sold or demerged during the year ha
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vIABIlItY perForMAnCe Auditor’s R
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Current income tax tax vIABIlItY pe
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Environment Greenhouse gases gases
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Total waste vIABIlItY perForMAnCe F
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81 FInAnCIAl AnD operAtInG perForMA
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FINANCIAL AND OPERATING PERFORMANCE
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Market developments and outlook Mar
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Items excluded from underlying EBIT
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Items excluded from underlying EBIT
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Financial income (expense), net Yea
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Primary Metal Operational and finan
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Liquidity and capital resources The
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3) Including provisions for pension
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108 RISK REVIEW Risk factors Risk f
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110 RISK REVIEW Risk factors or var
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112 RISK REVIEW Risk factors leadin
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Share price development in 2011 Sha
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Major shareholders and voting right
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Key figures for the Hydro share Key
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Tittel Hydro present Based in Norwa
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Corporate directives and code of co
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Pre-approval of audit services The
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Billy Fredagsvik, employee represen
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Hans-Joachim Kock Key experience: H
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Description Developments and events
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Topic Comments References Transacti
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Topic Comments References 8 Corpora
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Topic Comments References 13 Inform
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F2 FINANCIAL STATEMENTS Consolidate
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F8 FINANCIAL STATEMENTS Note 1 - Si
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F10 FINANCIAL STATEMENTS Note 1 - S
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Hydro Annual Report 2011b

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