annual performance

Annual Performance
Our vision Nemko makes the world a safer place by safeguarding products, the environment, people and systems.
Values Our values safeguard the way we work: • Integrity • Competent • Caring • Improving
Mission statement Nemko creates value by being a customer- oriented and knowledge-driven company. Profitable growth is achieved by assisting our customers with testing, certification and international market access for electrical products.
Ethical policy The Nemko Group ethical policy is anchored in our business strategy, our leadership principles and our values. All the business units across the globe have given input to the policy and it guides us in our everyday way of working and in our interaction with all stakeholders.
Message from the CEO 4
Highlights 2016 5
Our services 8
An excerpt of certifications and marks 13
Nemko Direct for Energy Efficiency 14
Our commitments 16
Group management 17
Ownership structure 19
Companies around the world trust Nemko to assess their products, systems, installations and personnel for conformity with relevant standards and regulations.
Since 1933, we have ensured that our customers comply with requirements anywhere in the world. Our services include pre-compliance, international approvals, product and system certifications as well as product testing.
Through our offices, laboratories and extensive partner network in Asia, North America, Europe, Middle East and Africa we are able to serve our customers in a reliable, efficient and open manner. We provide local presence coupled with global knowledge.
One world - our approval
Following our clients all the way 2016 was a year that continued to prove our value as a partner for some of the world´s strongest brands in consumer electronics. As our clients enter new markets and must relate to new regulations, we help them optimise their time to market.
In 2016 Nemko qualified as Notified Body to certify electrical products in the Arabic Gulf Region. To prepare our clients for this market and the increased demand for
Energy Efficiency-marking, we established a proprietary calorie chamber for energy testing in South Korea.
Furthermore, as the Indian market gains momentum, it attracts attention from our clients. With an annual growth rate of about 7%, the fast growing middle class of India represents one of the most attractive business opportunities today. But the increase in regulations specific to the Indian market makes a demanding business environment even more complex. In June 2016 we established a new office in Delhi. Here, we will adress the Indian compulsary registration scheme (CRS) with a proprietary test laboratory.
A global, consistent testing environment Last year saw an increased focus on our testing facilities. With time being critical, potential flaws in new products must be revealed at an early stage. This accentuates the need for integrated testing and inspection services as a global service. In order to provide consistent high quality lab-services throughout our markets, we recognised our lab responsible Tore Ledaal as part of the group management. This role will contribute to a unified, best practice testing environment that meets the requirements of our global clients.
The internet of regulated things As everything from fridges to loud- speakers and sports equipment are connected online, they also become subject to new regulations. Only 3 years
ago, who would have considered a tennis racket in terms of EMC compliance? The increased connectivity opens a world of opportunities, but also unexpected issues related to compliance. Manufacturers that are unfamiliar with EMC regulations represent a new segment for TIC industry, and we believe that our role as advisor and facilitator will be highly valued.
Market outlook Nemko is part of one of the best performing industries over the last 10 years, and a number of factors strongly indicate sustainable growth in the years to come. The non-cyclical nature of the TIC business, high market barriers and increasingly complex business models are among these factors. Also, an increasing number of standards, regulations and safety requirements motivate the trend towards outsourcing of testing and certification services.
At Nemko, we are proud to be part of a quality-focused and customer centric culture that moves fast. This is reflected in our annual customer satisfaction survey, showing that 85% of our clients are satisfied or very satisfied with our services. I would like to thank all our employees, customers and partners for making 2016 a successful year. Together, we are well prepared for an exciting 2017.
Svein Ola Ulven President & CEO
THE NEED FOR SPEED
In a world where new regulations are introduced at a pace rivalled only by new product launches, compliance and time to market is a business critical combination. As the world´s third largest CB certification body, Nemko is a leading TIC player in the market for electrical products – thus playing an important role in our clients’ effort to stay ahead of the competition. Flexibility and agility combined with a high sense of quality are the keys to our success.
4 NEMKO ANNUAL PERFORMANCE 2016
5NEMKO ANNUAL PERFORMANCE 2016
REGULATIONS related to energy and environment are becoming an increasingly more important factor in the global industry. In order to support our customers better, we have launched a new leg in our market access portfolio; Nemko Direct for Energy Efficiency.
NEMKO has been appointed as a certification body for the gulf region and can now issue the G-mark to our customers, planning to sell their products, in Kuwait, Bahrain, Oman, Qatar, Saudi Arabia, Yemen and the United Arab Emirates (UAE).
NEMKO is now able to offer OSHA/ NRTL (USA) and cNemko (Canada) certificates for the new hazard based bi-national standard UL/CSA 62368-1. The Nemko electrical safety programme for North America’s scope includes the Information Technology/Audio-Video category (60950-series, 60065-series, and 62368-series), the Household category (60335-series plus other UL/ CSA national standards), the Medical category (60601-series), and the Test and Measurement category (61010-series).
FEEDBACK from our annual customer survey shows that 85% of our customers are very satisfied or satisfied with Nemko’s services.
12% GROWTH within our International Approval services shows our ability to help our customers globalise their products and to be a more integrated part of their value chain.
THE ENERGY testing laboratory of Nemko Korea is now accredited to standard ISO/IEC 17025 by TAF (Taiwan Accre ditation Foundation), to perform energy measurement of electrical household appliances such as air conditioners and refrigeration equipment for our customers.
A NEW ROLE in the Nemko Group, Senior Vice President Group Labs, has been established to further improve and strengthen our delivery to customers.
NEMKO CANADA has been qualified by the Canadian Governmental Control Goods Program (CGP). This program extends the services of Nemko Canada to cover military and other governmental EMC testing contracts, e.g. testing of equipment for ships, which is already in process.
NEMKO launched a branding campaign in Norway to further improve our positioning in the market. The campaign “Approved by Nemko” included a campaign page that showcased some of the most iconic products we have certified over the years. It was well received by consumers as well as customers. Visit the campaign page at www.approvedbynemko.com (In Norwegian).
NEMKO is honored to have been chosen by the Norwegian Directorate for Civil Protection (DSB) to assist on a Market Surveillance project that requests testing of electrical products according to the relevant standards and directives.
We take great pride in improving public awareness on the importance of safety of electrical products and are very happy to see DSB’s commitment towards the same goal. Nemko was also chosen by the Norwegian Water Resources and Energy Directorate (NVE) to perform market surveillance in connection with the eco-design and energy labeling directive. We are proud and humbled to have been chosen to help consumers make better choices when it comes to energy efficient and, in many instances, also cost effective products.
NEMKO’S Next Generation Leaders Programme was successfully launched. The programme was initiated to prepare the future leaders in Nemko for the challenges and possibilities that lay ahead. Close to 20 participants from all around the world have completed the 4 modules. The programme has resulted in improved cooperation across markets and departments, developing our future leaders to serve our customers better.
HIGHLIGHTS 2016
USA AND CANADA Nemko is now able to offer NRTL and cNemko
certificates for the new hazard-based standard.
Nemko extended the NRTL scope to also include
household products. Other categories are IT/AV,
Medical Equipment and Test and measurement.
NORWAY Nemko maintains the position as the world´s
third largest CB certification body.
ARABIC GULF REGION Nemko qualified as Notified Body to certify
electrical products in the Arabic Gulf Region.
INDIA Nemko established an office in Delhi, India.
SOUTH KOREA Nemko established a proprietary calorie
chamber for energy testing in South Korea.
02
product according to applicable
according to a standard.
various schemes.
or manufacturer qualification
according to country-specific
INDUSTRIES WE SERVE
Europe
REVENUE PER REGION
10,0 %
5,0 %
0,0 %
NEMKO NO.3 IN GLOBAL CB RANKING
• The CB scheme has grown by 10.8% from 2015 to 2016
• No.1 position within audio/video and no. 2 position within
household appliances
27%
24%
KEY FIGURES
Nemko (0470)
OTHER RECOGNITIONS AND ACCREDITATIONS
Member body of the European EEPCA/ECS (ENEC and CCA schemes):
The Nemko Group holds the following national accreditations • Testing and calibration according to ISO/IEC 17025 • Product certification according to ISO/IEC 17065 • Management system certification according to ISO/IEC 17021 • Personnel certification according to ISO/IEC 17024 • Inspection according to ISO/IEC 17020
Also, some of the labs have special accreditations by Russian ROSSTANDART, Taiwanese BSMI, Korean NRRA, Australian NATA, German ZLS, Canadian SCC and US OSHA.
AN EXCERPT OF CERTIFICATIONS AND MARKS
E
Regulations related to energy and environment are becoming an increasingly important factor in the global industry.
As a growing number of countries apply their own regulations to new products and components, the compliance process gets more complex. So how do you know your products comply before entering a new market?
NEMKO KNOWS.
Through our subsidiaries and a network of local partners, Nemko has profound and updated knowledge of relevant rules and regulations. With Nemko Direct for Energy Efficiency, we take care of all the practical details so you can get your product out to the markets.
NEMKO DIRECT FOR ENERGY EFFICIENCY
35 countries
780 million
7 countries
450 million
3 countries
470 million
9 countries
345 million
21 countries
Guidance in obtaining
Handle final approval documents
Through our service, we can help you comply with/obtain the following:
Europe ErP Directive, Energy Labeling Directive, Eco Label, TCO Development, Nordic Swan and more
Asia Korean Energy Label, China Energy Label, Vietnam Energy marking, Singapore Green Label, HK EELS and more
America Energy Star, CEC, NRCAN, Mexican energy labeling and DOE (Department of Energy)
Oceania Australian E3Program, New Zealand Energy rating program
MENA Saudi Arabia Energy program
Faster market access with Nemko’s International Approval services:
Nemko’s International Approval services is a portfolio of services designed to provide market access in the shortest possible time. The portfolio consists of:
• Nemko Direct for Safety and EMC • Nemko Direct for Telecom and Wireless • Nemko Direct for Energy Efficiency
These services undertake the burden of submitting applications with necessary documentation, follow-up and communication with foreign approval agencies.
A one stop shop Nemko was one of the first companies in the world to offer market access services, and we remain one of the best in class. With our portfolio, we can offer you a one stop shop for your market access requirements.
Nemko has the local expertise required Through our unique combination of local presence, international networks and bi-lateral agreements, we have provided market access for our customers for more than 20 years.
As part of our Nemko Direct portfolio of services, we currently cover more than 150 countries world-wide.
Nemko Direct for Energy Efficiency This service is your market access in countries with required energy efficiency regulation.
Based on your product and target markets, Nemko takes care of the necessary steps in order to obtain the final approval:
OUR COMMITMENTS
Our promise Through our unique combination of local presence, international networks and bi-lateral agreements we obtain regulatory access for our customers products in each and every market globally.
We live in an age of ever-shorter time- to-market requirements and a constant pressure in keeping costs down. Globalisation requires products to be sold in more and more countries worldwide. Delays in obtaining access to new markets around the world will be costly and result in lost sales.
Rules and regulations are changing rapidly, making it time consuming to be up-to- date. Interpretation of new regulations and approvals is often difficult and takes time. Nemko has local expertise and global knowledge.
Our common cultural mind-set In Nemko, we have embraced six statements describing the way we work and interact. • We have customer focus! • We create leadership opportunities! • We are proactive! • We support each other! • We share our knowledge! • We deliver as promised!
Our ethical commitment We are loyal to our ethical guidelines by being compliant with professional frameworks, regulations, standards and agreed processes and by abiding to our ethical policy. Our leaders will • Set the example. As in any business
practice, honesty and integrity must be top priority for our leaders.
• Have an open door policy and welcome
suggestions and concerns from employees. This will allow employees and their leaders to be comfortable in discussing issues and making sound decisions. In addition, employees are herewith in a better position to alert leaders to concerns within their teams.
Our employees will • Treat everyone fairly, have mutual
respect and promote a harmonious team environment.
• Challenge harassment and discrimination.
• Support our colleagues in making the right choices ethically, responsibly and based on our values.
• Not use corporate assets or business relationships for personal use or gain.
• Act ethically, responsibly and in accordance with our ethical policy
• Apply their effort and their intelligence in maintaining our values.
Yong Beom Choi Region Asia
Grant Schmidbauer Region North America Group QA
Aqsa Butt CFO
John Bakken Nemko Group Services, Region Europe
Hannes Skisaker Global Sales & Business Development
Tore Ledaal Nemko Group Lab
GROUP MANAGEMENT
HOW WE ARE ORGANISED
Objective The objective of the foundation is to promote safety in the sale and use of electro-technical equipment.
History Nemko’s history goes back to 1933, when it was established as an independent association to promote product safety for electrical products in Norway. Nemko had the monopoly for testing and approval of electrical products and material manufactured, imported and sold in Norway.
The NEMKO foundation was established 19 December 1990, as a continuation of the former state-owned company Nemko. All such national monopolies were later abolished by the EU – in 1991.
Mission The foundation shall, through its wholly owned subsidiary Nemko AS, maintain internationally competitive and recognised test laboratories and certification bodies, who, through their expertise and independent positions, can contribute to safety within the sale and use of electro-technical equipment in Norway and worldwide.
Nemko creates value by being a customer- oriented and knowledge-driven company. Profitable growth is achieved by assisting our customers with testing, certification and international market access for electrical products.
Ownership structure The foundation ownership structure ensures that Nemko has the necessary independence and integrity towards the authorities, accreditation bodies, the customers and the safety of the product.
The foundation is managed by a board of 10 members, of which three are employee representatives elected by the employees of Nemko in Norway and 7 representatives designated by the following Norwegian industry and trade associations:
• Elektroforeningen (Norwegian association of electrical manufacturers, importers and wholesalers)
• Energi Norge (Energy Norway) • Industriens Forening for Elektroteknikk
og Automatisering (The Association for Electrotechnics and Automation in Industry)
• IKT-Norge (The voice of the Norwegian ICT industry)
• Elektronikkbransjen (Consumer Electronics Trade Foundation)
• NELFO, foreningen for EL- og IT bedriftene (Norwegian Electrical Contractors’ Association)
• Norsk Industri (Federation of Norwegian Industries)
Nemko is a private, independent
company owned by the NEMKO
foundation.
OWNERSHIP STRUCTURE
ASIANORTH AMERICAEUROPE
NEMKO NORWAY Oslo
NEMKO TAIWAN Taipei
Delhi
NEMKO CCL Inc Salt Lake City
NEMKO CANADA Inc Ottawa
DNV NEMKO PRESAFE AS
Bjørn Ove Skjeie Board member
Arne Jorde Board member
Ove Guttormsen Board member
Espen Eriksen Board member
Lene Martinsen Board member
Nemko AS is owned by the NEMKO Foundation, which is a private, independent foundation with the purpose of working for safety in the trade and use of electronic equipment. The Nemko Group has separate subsidiaries in 11 countries in Europe, North America and Asia, and is a world-leading provider of test and certification services within electro- technical products. Nemko’s headquarters are in Oslo. The global network is supplemented by several strategic alliances and partnerships.
Operating revenues for 2016 amounted to NOK 560.4 million (527.3 in 2015). The Group’s operating revenues adjusted for currency changes increased by 3.4 percent in 2016. Operating profits ended at NOK 41.7 million (48.7 in 2015) with an EBITDA margin of 7.4 percent and pre-tax profits of NOK 29.2 million (52.5 in 2015).
Nemko has been providing certification body certificates (CB) for companies and products around the world for many years. We were ranked third among CB schemes in 2016. Nemko is number one for the audio/video product category (TRON), second for household appliances/products (HOUS), third for measurement equipment (MEAS) and fourth for IT equipment (OFF).
Nemko is also one of the world’s leading suppliers of certificates issued by other certification bodies, in terms of numbers. Nemko’s CB testing certificates were used as the basis for 1707 national certifications around the world in 2016, which represents 6 percent of global market volume. This is proof of Nemko’s strong position where global market access is concerned.
Nemko strengthened its global position as a main supplier of market access services in 2016 with a growth of 13 percent. Being the world’s best supplier of market access services attracts attention. That attention helps us explore potential new markets and new customers, and develop and deliver services to meet new demands.
Optimising laboratory operations and sales activities were important goals for 2016 and we expect to continue those projects in 2017.
2016 was a good year for Nemko. We began a process of developing and implementing strategic priorities in 2014, which continued in 2015 and 2016. Our staff are eager to reach Nemko’s strategic goals. This is proof of the organisation’s constructive mindset and go-getter initiative. It is also proof of how the Group works well with employees and maintains good relationships with employee representatives and unions.
The branding project initiated in Norway in 2015, continued in 2016. The aim of the campaign was to improve Nemko’s visibility in the Norwegian market, and with a long term goal of improving Nemko’s competitiveness. The project involved both employees and customers.
India is one of the world’s fastest growing economies. India’s production sector continues to grow and manufactured products for the Indian market are subject to new requirements for product and quality control. Nemko India was founded in 2016 to secure revenue from the growing market and from the increased emphasis on local product testing.
For several years Nemko in Norway has worked to strengthen profitability and customer satisfaction, and this purposeful work also continued in 2016. The high level of costs in Norway emphasises the importance of ensuring cost-effective operations, and also to concentrate services in areas that provide higher margins.
In 2016 Nemko confirmed its position as a leading provider of CB certificates and strengthened the solidity by achieving good results. The Group continues to work to ensure profitability, and the Board of Directors expects the approved strategy and measures related to increased visibility in the market will further bolster a profitable growth. In 2016 Nemko has strengthened its Korean organisation to meet the increased demand for EMC and radio testing in the region. As a result of the increased testing capacity, an increase in related IA services is also expected. Asia is the most important region for production of electrical appliances and by setting up operations in India, Nemko’s foothold in Asia has increased and control of local deliveries will improve.
Our customers need of support to navigate through complex rules and regulations to bring their products to global markets, open possibilities for companies like Nemko to continue its expansion. Demands related to delivery times and quality are increasing, and by being a more integrated part of our customers’ value chain Nemko can help in this area. Through Nemko’s well-established network our customers have access to one of the most complete services in market access for electrical- and other products on the global market.
2016 2 015
Other revenue 102 050 90 514
Total revenue 560 402 527 269
Salary and other personnel costs 289 755 256 072
Other operating and administrative expenses 204 893 201 608
Depreciation 21 242 19 522
Amortisation 2 801 1 406
Total operating costs 518 691 478 608
Operating profit 41 711 48 661
Finance income 44 928 54 746
Finance costs -57 449 -50 928
Net finance -12 521 3 818
Profit before tax 29 190 52 479
Tax 6 913 17 317
Profit after tax 22 277 35 162
Minority 538 427
2016 2015
Goodwill 2 789 5 679
Other intangible assets 0 0
Intangible assets 23 374 22 136
Land and buildings 20 496 25 816
Lab equipment and machines 49 831 43 232
Inventory 8 234 7 630
Office and IT equipment 11 187 8 328
Fixed assets 89 747 85 006
Investment in subsidiaries 0 0
Investment in joint ventures 166 3 982
Fixed financial assets -884 0
Long term receivables 9 780 10 587
Long term receivables joint venture 2 373 2 373
Financial assets 11 435 16 942
Total fixed assets 124 556 124 084
CURRENT ASSETS
Short term receivables intercompany 1 983 1 647
Short term receivables joint venture 0 202
Other short term receivables 26 604 19 434
Receivables 108 611 112 731
Market based financial assets 70 266 0
Cash and cash equivalents 166 667 205 609
Current assets 345 544 318 340
Total assets 470 099 442 424
Ove Guttormsen Board member
Espen Eriksen Board member
Arne Jorde Board member
Lene Martinsen Board member
2016 2015
Premium 251 825 251 825
Paid-in capital 306 825 306 825
Other equity -8 873 -26 607
Minority interests 2 410 1 890
Retained earnings -6 463 -24 717
Equity 300 362 282 108
LIABILITIES
Deferred tax liabilities 8 348 4 261
Pension liabilities 21 608 21 405
Statutory redundancy payments to employees 9 993 9 563
Long term liabilities intercompany 0 0
Long term liabilities joint venture 0 0
Other long term liabilities 2 170 4 214
Long term liabilities 42 174 39 529
Account payables 17 300 12 355
Short term payables intercompany 0 0
Short term payables joint venture 0 2 699
Tax payables 3 054 1 780
Government taxes etc 21 034 19 184
Other short term payable 86 174 84 769
Short term payables 127 562 120 787
Liabilities 169 736 160 316
Total liabilities and equity 470 099 442 424
Oslo, 26 April 2017 Bjørn Ove Skeie Board member
Siv Hege Solheim Board member
Svein Ola Ulven Presiden & CEO
(NOK 1 000) GROUP
Profit before tax 29 610 52 479
Taxes paid -8 302 -4 668
Depreciation and amortisation 24 043 20 929
Loss/(gain) on sale of fixed assets 0 0
Share of profit from joint ventures 3 816 515
Difference in cost and payments in pension -947 -27 435
Change in accounts receivables 11 424 -11 890
Change in accounts payables 4 945 -173
Change in balance with group companies -336 -1 097
Change in other accruals, including currency effects -2 175 -9 318
Net cash flow from operating activities 61 658 19 342
Cash flow from investing activities
Sale of fixed assets 0 0
Purchase of fixed assets -33 171 -11 345
Purchase of stocks -3 843 0
Sale of stocks 0 0
Change in loan to group companies 0 16 875
Net cash flow from investing activities -37 014 5 530
Cash flow from financing activities
Change in long term liability -2 044 -78 484
Dividend paid to minority 0 -333
Equity issue 0 201 500
Net cash flow from financing activities -2 044 122 683
Net change in cash and cash equivalents 22 600 147 555
Cash and cash equivalents pr. 01.01 205 609 49 330
Currency effect on net change in cash and cash equivalents 8 724 8 724
Cash and cash equivalents per 31.12 236 933 205 609
KPMG AS Sørkedalsveien 6 Postboks 7000 Majorstuen 0306 Oslo
Telephone +47 04063 Fax +47 22 60 96 01 Internet www.kpmg.no Enterprise 935 174 627 MVA
To the General Meeting of Nemko AS
Independent Auditor’s Report
Opinion
We have audited the financial statements of Nemko AS showing a loss of NOK 7 826 000 in the financial statements of the parent company and profit of NOK 22 277 000 in the financial statements of the group. The financial statements comprise:
• The financial statements of the parent company, which comprise the balance sheet as at 31 December 2016, and the income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and
• The financial statements of the group, which comprise the balance sheet as at 31 December 2016, and the income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion:
• The financial statements are prepared in accordance with the law and regulations.
• The accompanying financial statements give a true and fair view of the financial position of the parent company as at 31 December 2016, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway.
• The accompanying financial statements give a true and fair view of the financial position of the group as at 31 December 2016, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway.
Basis for Opinion
We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
To the General Assembly of Nemko AS
2
Other information
Management is responsible for the other information. The other information comprises the Board of Directors’ report, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
The Board of Directors and the Managing Director (management) are responsible for the preparation in accordance with law and regulations, including fair presentation of the financial statements in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's or the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to
Auditor's Report - 2016 Nemko AS
3
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report
Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors’ report concerning the financial statements, the going concern assumption, and the proposal for the coverage of the loss is consistent with the financial statements and complies with the law and regulations.
Opinion on Registration and Documentation
Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, it is our opinion that management has fulfilled its duty to produce a proper and clearly set out registration and documentation of the company’s accounting information in accordance with the law and bookkeeping standards and practices generally accepted in Norway.
Oslo, 4 May 2017 KPMG AS
John Thomas Sørhaug State Authorised Public Accountant
Note: This translation from Norwegian has been prepared for information purposes only.
CONTACT INFORMATION NEMKO GROUP Nemko AS - Head Office Gaustadalléen 30 P.O. Box 73 Blindern, N-0314 Oslo, Norway Phone: +47 22 96 03 30 Fax: +47 22 96 05 50
DNV GL NEMKO PRESAFE DNV GL Nemko Presafe AS Veritasveien 3 N-1363 Høvik, Norway Phone: +47 67 57 88 00
EUROPE NEMKO GERMANY Nemko GmbH & Co. KG Postfach 1250, D-76318 Pfinztal Reetzstr. 58 D-76327 Pfinztal (Karlsruhe area) Germany Phone: +49 7240 63 0 Fax: + 49 7240 6312
NEMKO ITALY Nemko Spa a Socio Unico Via del Carroccio 4, (ang. Via Cavallotti) 20853 Biassono (MB), Italy Phone: +39 039 220 1201 Fax: +39 039 220 1221
NEMKO SWEDEN Nemko Sweden AB Alviks Strand Gustavslundsvägen 143 16751 Bromma, Sweden Phone: +46 8 473 00 61 Mobile: +46 708 11 97 17
NEMKO DENMARK Nemko Denmark AS Hejrevej 34 DK-3120 Dronningmølle, Denmark Mobile: +45 22 20 02 45
ASIA NEMKO SHANGHAI Nemko China Ltd Shanghai (WFOE) 18G, Zao-Fong Universe Building No.1800 Zhongshan West Road, Xuhui District, Shanghai 200235, China Phone: +86 21 54453132 Fax: +86 21 54453215
NEMKO SHENZHEN Nemko Shanghai Ltd., Shenzhen Branch Room C &D, Floor 10, Financial Base Tower 2 Kefa Road 8#, Hi-Technology Park, Nanshan District, Shenzhen 518057, China Phone: +86 755 82210420 Fax: +86 755 82213363
NEMKO HONG KONG Nemko Hong Kong Ltd. Unit 23, 19/F, Tuen Mun Central Square No. 22 Hoi Wing Road Tuen Mun, N.T., Hong Kong Phone: +852-2675 0288 Fax: +852-2675 0550
NEMKO TAIWAN Nemko AS, Taiwan Branch 5F, No. 413, Section 2, Tiding Blvd., Neihu, Taipei, 11493 Taiwan Phone: +886-2-8797-8790 Fax: +886-2-8797-8791
NEMKO KOREA Nemko Korea Co. Ltd. 159, Osan-ro (300-2, Osan-ri) Mohyeon-myeon, Cheoin-gu, Yongin-si, Gyeonggi-do (Seoul area), Republic of Korea, 16885 Phone: +82 31 330 1700 Fax: +82 31 322 3971
NEMKO JAPAN Nemko Japan Ltd. 5F, 1-7-39, Miyajiri, Ise-shi, Mie-ken, 516-0072, Japan Phone: +81 596 24 7755 Fax: +81 596 24 7795
NEMKO INDIA Nemko India (Test Lab) Pvt Ltd Plot no 2, Second Floor, DLF Industrial Estate -I, Sector -37 ( Near NHPC Metro Station), Faridabad ( HR), India - 121003 Phone : +91 129 4905500
NORTH AMERICA NEMKO SAN DIEGO Nemko USA, Inc. 2210 Faraday Ave. Suite 150 Carlsbad, CA 92008 Phone: +1 760 444 3500 Fax: +1 760 444 3005
NEMKO SALT LAKE Nemko-CCL, Inc. 2964 West 4700 South, Suite 200, Salt Lake City, Utah 84129 Phone: +1 801 972 6157 Fax: +1 801 972 4218
NEMKO CANADA Nemko Canada, Inc. 303 River Road, Ottawa Ontario K1V1H2, Canada Phone: +1 613 737 9680 Fax: +1 613 737 9691
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