the balance sheet date <strong>Comrod</strong> Communication ASA’s overdraftfacility has been increased from NOK 35 million to NOK 55million. Lerc SAS’s overdraft facility remains at EUR 60,000. Thecompany will seek to keep the total level of short-term creditfrom lending institutions, excluding next year’s instalments onlong-term liabilities, below NOK 50 million. There are significantvariations in net working capital and utilization of credit facilitiesbetween quarters due to seasonality.Raw materials riskAgreements relating to the purchase of raw materials representa large part of the Group’s finished products. These are normallysigned on an annual basis, with an agreed price and quantityfor the term of the agreement. The Group endeavours to havethe same commitment periods in its raw materials purchasingagreements as in its agreements for the sale of finished products.Access to raw materials has not been limited. We have, however,experienced longer lead-times in <strong>2008</strong> than before due to thevery high activity level in many companies and countries. Apartfrom fixed-price contracts with suppliers, there is no alternativeway of hedging the Group’s most important raw materials usingderivatives or financial contracts.SHARE PRICE DEVELOPMENT<strong>Comrod</strong> Communication ASA has a share capital of NOK 16.9million. Each share has a nominal value of NOK 1.00. At the endof 2007 the share price was NOK 13.80, while it was 10.90 at theend of <strong>2008</strong>. This represents a decline in value of 21.0% during<strong>2008</strong>, while the Oslo Stock Exchange’s benchmark index (OSEBX)fell by 54.1% in the same period.In <strong>2008</strong>, <strong>Comrod</strong> shares were traded on 151 of the 252 tradingdays. Average daily transactions were low. A total of 2.4 millionshares were traded in <strong>2008</strong> (2007: 4.9), which correspondsto 13.9% (2007: 28.7%) of the total number of shares. Thecompany’s market capitalization was NOK 184.6 million at theend of <strong>2008</strong>, compared to NOK 233.8 million at the end of 2007.More detailed information on the share, its price development andliquidity is provided later in this annual <strong>report</strong>.As a company with a relatively low market value, it is difficult togain sufficient attention from stock analysts and the media. Themarket cap and low liquidity are also factors that limit institutionalinvestors’ investments in the company.<strong>Comrod</strong> Communication ASA signed a market making agreementin November 2007 to improve the liquidity of the share. Theagreement complies with the standard requirements of the OsloStock Exchange.The company is working actively on increasing the number ofanalysts, media and investors that monitor the company. All<strong>report</strong>s and presentation materials are available in English tofacilitate information provision to broader groups. Companypresentations are normally also webcast.COMPENSATION TO SENIOR EXECUTIVESAs a leading player in its field, <strong>Comrod</strong> Communication ASAmust offer salaries that attract top-grade managers. The Board’spolicy is that salaries shall be offered at a level that satisfies theindividual and is competitive in an international market in order tosecure the best possible management.The basic principle is that management salaries must be at acompetitive level in a national context (this may mean that salarylevels for managers based abroad may sometimes exceed levelsfor corresponding positions in Norway, and vice versa).The Group’s policy is that the salary of senior executives shall bealmost entirely in the form of a fixed monthly salary that reflectsa level appropriate for the position held by the person concernedand normal business practice.The Board of <strong>Comrod</strong> Communication ASA sets the salary andother remuneration of the Group’s President. The boards ofthe subsidiaries fix the salaries and other remuneration of theirmanaging directors. The Group’s President sets the salary andother remuneration of key members of the Group managementteam in consultation with the Chairman of the Board.Pursuant to Norwegian company legislation, the Board ofDirectors has also prepared guidelines for the remuneration ofthe executive management that will be presented and discussedat this year’s general meeting. Details of remuneration andcontractual arrangements may be found in note 28 of the financialstatements of <strong>Comrod</strong> Communication Group.Statement related to the annual accountsThe consolidated financial statements for <strong>2008</strong> have beenprepared and presented in accordance with IFRS. The financialstatements for the parent company have been prepared inaccordance with the Norwegian Accounting Act (NGAAP).The Board of Directors confirms that, to the best of its knowledge,the financial statements for <strong>2008</strong> provide a true and fair view of<strong>Comrod</strong> Communication Group’s consolidated assets, liabilities,financial position and results of operations. The Board alsoconfirms, to the best of its knowledge, that the annual <strong>report</strong>includes a fair review of important events that have occurredduring the year and their impact on the annual financialstatements.No significant events occurred after the year-end balance sheetdate.Allocation of profit for the year in <strong>Comrod</strong> Communication ASA.The Board of <strong>Comrod</strong> Communication ASA (parent company)proposes that the profit for the year be allocated as follows:The profit for the year of NOK 17,963,351 is proposed transferredto other equity.Distributable equity as of 31 December <strong>2008</strong> is NOK 20,732,139.30 <strong>Comrod</strong> Communication Group <strong>Annual</strong> <strong>report</strong> <strong>2008</strong>
TAU, 31.12.<strong>2008</strong>/24.03.2009The Board of Directors of <strong>Comrod</strong> Communication ASAErik Espeset Randi Elin Hognestad Frode SvaboeChairman of the Board Vice-Chairman of the Board Member of the BoardMerete Alnes Mostue Tore J. Fjell Kristin Krohn Devold Niklas Lars HermanssonMember of the Board Member of the Board Member of the Board President & CEOINCOME STATEMENT, CONSOLIDATED1 January - 31 December(NOK 1 000) Note <strong>2008</strong> 2007Operating incomeOperating revenue 4 368 631 289 937Total operating income 368 631 289 937Operating expensesCost of materials 14 143 700 113 455Payroll & social security expenses 10, 20, 27, 28 128 161 97 966Depreciations and amortizations 11, 12 13 610 11 175Other operating expenses 25 52 417 37 766Total operating expenses 337 888 260 362Operating profit 30 743 29 575Finance income and expenseFinancial income 7 12 995 2 150Financial expense 7 28 677 13 571Net financial items (15 682) (11 421)Profit before tax 15 061 18 154Tax expense 8 4 604 5 895Profit for the year 10 457 12 259Attributable toEquity holders of the parent 10 812 12 715Minority interests (355) (456)Earnings per share (NOK) 9 0.62 0.76Diluted earnings per share (NOK) 9 0.62 0.76<strong>Comrod</strong> Communication Group <strong>Annual</strong> <strong>report</strong> <strong>2008</strong> 31
Change language