Annual report 2013
Contents
03 - The Oslo Børs VPS Business Areas
51 - Note 13 Fixed assets
03- Oslo Børs
52- Note 14 Intangible assets - including assets
06- Verdipapirsentralen (VPS)
developed in-house
09- Oslo Clearing
54- Note 15
Goodwill
10- Oslo Market Solutions
55- Note 16 Financial instruments 60-Note 17 Accounts receivable/Losses on receivables
11 - Board of Directors of Oslo Børs VPS Holding
61 - Note 18 Share capital and shareholder information
63-Note 19 Outstanding derivatives position
12 - Board of Directors’ Annual Report 2013
64 - Note 20 Related parties
64- Note 21 Contingent liabilities
23 - Group Annual Accounts
64- Note 22 Other liability
23- Statement of comprehensive income
24- Statement of financial position
65 - Annual Accounts Oslo Børs VPS Holding ASA
26- Statement of changes in equity
65- Profit and loss account
27- Cash flow statment
66- Balance sheet
28- Notes to the group accounts
68- Cash flow analysis
69- Notes to annual accounts
28- Accounting principles
34- Note 1 Business combinations
69- Accounting principles
35- Note 2 Segment information
70- Note 1 Shares in subsidiary companies
37- Note 3 Investments in joint ventures, shares etc.
70- Note 2 Tax expense/deferred tax assets
39 - Note 4 Specification of profit and loss items
71- Note 3 Receivables and payables between
39- Note 5 Pension costs and pension liabilities
companies in the same group
45- Note 6 Remuneration of officers,
72 - Note 4 Equity
executive personnel, the auditor etc.
72- Note 5 Share capital and shareholder information
47- Note 7 No. of employees
75- Note 6 Financial expense
47- Note
8
Leasing contracts
75 - Note 7 Remuneration of executive personnel
48- Note
9
Taxation
75- Note 8 Pension cost and pension liabilities
49- Note 10 Earnings per share, diluted earnings per share
75- Note 9 Auditor
49- Note 11 Uncertainty associated with estimates used
76 - Auditor’s Report
50 - Note 12 Specification of balance sheet items
2
The Oslo Børs VPS Group
The Oslo Børs VPS Group operates and develops co-ordinated and attractive
marketplaces for listing and trading of securities, together with securities
registration, clearing and settlement services for securities in Norway,
financial market data and internet solutions.
Oslo Børs VPS Holding ASA owns 100% of the share capital of
Oslo Børs ASA, Verdipapirsentralen ASA (VPS), Oslo Clearing
ASA and Oslo Market Solutions AS. Oslo Børs owns 94.3% of
the shares in Fish Pool ASA, and VPS owns 100% of the shares
in Evolution Software Sweden AB.
Business areas
Through its business areas, the Oslo Børs VPS Group operates
marketplaces for trading in financial instruments, together
with clearing, settlement, securities registration and information
services, in order to give customers access to an efficient and
effective capital market.
Oslo Børs
The Oslo Børs business area comprises the wholly-owned
subsidiary Oslo Børs ASA, which is authorised to operate stock
exchange activities.
The main objective of Oslo Børs is to be the central marketplace for listing and trading of financial instruments in the
Norwegian market. The role of Oslo Børs is to make it possible
for purchasers and sellers of securities to carry out their
transactions in a rapid, efficient and secure manner.
Oslo Børs organises listing and trading of equities, equity
certificates, ETPs, fixed income products and derivatives products.
Montreal Exchange. For trading in non-standardised derivatives
(OTC derivatives) Oslo Børs uses the EDGE trading system,
which was developed by Baymarkets AB.
As in recent years, 2013 was a year characterised by increased
competition, especially for trading in equities, and by fluctuating
levels of market activity. The aggregate market capitalisation
of listed and registered companies increased. The OBX Index
for Oslo Børs was 503.58 at the close of 2013, up by 22.7%
for the year as a whole. The value of shares and equity
certificates traded totalled NOK 866 billion for the year. This
was 13% lower than in 2012. The number of transactions
carried out through the exchange’s trading system totalled
18.1 million for the year, which was approximately 16% lower
than in 2012. 12 new companies were admitted to listing in
2013, up from four new listings in 2012.
Oslo Børs purchased Burgundy AB and Fish Pool ASA in 2013.
Burgundy AB was merged into Oslo Børs in June 2013. Both
Burgundy and Fish Pool are included in the Oslo Børs business area.
Segmental information for the Oslo Børs business area over
the last three years is as follows (figures in NOK 1,000):
Operating revenue - external
Operating revenue - internal
Bente A. Landsnes is the Chief Executive Officer of Oslo Børs.
The other members of the executive management team are
Anders Brodin (secondary market), Tom Kristoffersen (client
relations secondary Market), Øyvind Skar (market data), Kjetil
Nysæther (IT), Øivind Amundsen (legal affairs and primary
market), Thomas Borchgrevink (surveillance and operations),
Bodil Østby (strategy and product development) and Per
Eikrem (corporate communications/market and staff).
7 559 7 328 6 949
Depreciation
55 817 25 580 27 230
Amortisation of excess value
-
-
-
Write-down of excess value
-
-
-
Other operating costs
273 503 170 715 184 277
Total operating costs
329 320 196 295 211 507
Operating profit 192 207 193 921 242 832
Share of income in joint ventures Oslo Børs had 86 employees at the close of 2013, as compared
to 101 at the close of 2012 and 103 at the close of 2011.
201320122011
513 968 382 888 447 390
427 647 -674
Financial income
20 662 14 225 15 949
Financial expense
-1 384 574 513
Oslo Børs uses the Millennium Exchange trading system for
trading in equities and fixed income instruments. Millennium
Exchange is owned and operated by the London Stock
Exchange Group. Oslo Børs uses the SOLA system for trading
in standardised derivatives. This system is licensed from the
Investment in joint ventures 8 359 8 481 8 484
Other assets
665 611 646 502 680 867
Liabilities
177 022 199 908 245 506
Investment in the period
3
12 284 8 308 3 772
Revenue increased by NOK 131 million between 2012 and
2013. Revenue from the companies acquired in 2013
(Burgundy and Fish Pool) amounted to NOK 156 million, of
which NOK 83 million relates to recognition of the negative
goodwill that arose in connection with the acquisition of
Burgundy AB in January 2013.
New share issues carried out in 2013 raised NOK 20 billion as
compared to NOK 18 billion in 2012. There were eight new
listings on Oslo Børs in the year, and 16 companies were
removed from listing, so the total number of companies listed on
Oslo Børs reduced to 186 at the close of 2013. The number of
companies listed on the regulated marketplace Oslo Axess fell
to 32 after four new companies were admitted to listing and six
companies were removed from listing. There were 13 exchange
traded funds (ETFs) listed on Oslo Børs at the close of 2013,
down from 15 ETFs listed at the close of 2012. Of the companies listed on the Oslo Børs and Oslo Axess marketplaces, 44
are from countries other than Norway.
Ordinary revenue from the equity instruments area increased
by NOK 32 million, revenue from the derivatives area increased
by NOK 15 million, and revenue from the fixed income area was
NOK 7 million higher. The market data area reported a
reduction in revenue of NOK 7 million.
The number of firms with membership for trading in equities
increased to 59 at the end of 2013 from 50 at the end of 2012,
of which 41 are located outside Norway. The increase was
largely due to the takeover of the Nordic MTF Burgundy and its
membership. The number of firms that have membership of the
marketplaces for bonds and derivatives is somewhat smaller.
Depreciation was NOK 30 million higher in 2013 than in 2012
as the result of depreciation and write-downs affecting
systems taken over in connection with the purchase of
Burgundy. Other operating expenses together with salary and
other personnel expenses were in total NOK 103 million higher
in 2013 than in 2012. Changes to pension arrangements
resulted in a NOK 23 million reduction in costs in 2012, while
preparations for implementation of Millennium Exchange
incurred costs of NOK 12 million in 2012. The acquisitions of
Burgundy and Fish Pool caused an increase in operating
expenses in 2013 of NOK 91 million. After adjusting for these
non-recurring items and changes, operating expenses were
virtually unchanged from 2012.
The revenue generated from fixed fees paid by issuers (annual
listing fees) is dependent on the number of listed companies and
their market capitalisation. Revenue from fixed fees paid by
members depends on the number of active member firms and
the pricing tariffs they select. Revenue from variable trading
fees is affected by order fees and the value of transactions
carried out. With effect from 2013, only variable trading fees
apply. Document inspection, registration and admission to listing
fees depend on the number of new companies admitted to stock
exchange listing as well as the number and size of share issues
and other equity transactions carried out by listed companies.
Equity Markets
The Equity Markets area’s operating revenue accounted for
around 54% of total operating revenue for Oslo Børs in 2013.
Operating revenue - Equity Markets (Figures in NOK 1,000)
An increase or decrease of 10% in the market capitalisation of
listed companies would normally cause an increase or decrease
in annual revenue from listing fees of between 3% and 4%.
201320122011
Fixed fees - issuers
61 725 59 108 63 749
Trading and technical fees - members 139 272 120 030 151 137
Document, registration and
new listing fees
30 363 20 106 25 291
Total operating revenue
231 360 199 244 240 177
The most widely traded equity market security accounted in 2013
for 5% of the total number of trades and 12% of total trading value.
Key figures - Equity Markets
No. of listed shares at 31.12
218 OBX Index at 31.12
503.58 Market capitalisation of listed
companies at 31.12 (NOK billion)
1 968 No. of member firms - equity markets
59 No. of trades (1,000)
18 128 Value of trades (NOK billion)
866 228 410.30 237
357.60
Fixed Income Markets
The Fixed Income Markets area’s operating revenue accounted
for around 10% of total operating revenue for Oslo Børs in 2013.
1 646 50 21 469 1 576
55
23 086
Operating revenue - Fixed Income Markets (Figures in NOK 1,000)
1 000 1 542
Fixed fees - issuers
Fixed fees - members
Trading fees
Document, registration and
new listing fees
Other revenue
Total operating revenue
Turnover in shares and equity certificates for 2013 as a whole
totalled NOK 866 billion, a decrease of 13% from 2012. The
year saw 18.1 million transactions carried out, representing a
decrease of around 16% from 2012.
4
201320122011
24 931 20 938 18 292
1 600 1 725 1 800
5 094 3 939 3 965
6 162 3 828 41 615 3 824 4 185 34 611 2 399
4 697
31 153
Operating revenue - Derivatives Markets (Figures in NOK 1,000)
201320122011
Key figures - Fixed Income Markets
No. of listed issues at 31.12 (Oslo Børs) 603 No. of listed issues at 31.12 (Nordic ABM) 967 Market value of listed issues at 31.12
(NOK billion)
1 414 No. of member firms - fixed income
16 Value of trades exc. repos (NOK billion) 1 610 1 349 17 1 593 1 174
18
1 603
Value of repo trading (NOK billion)
1 329 1 689
2 329 543 840 496
715
201320122011
Trading fees
35 119 20 124 265 366 570
35 384 20 490 32 674
Other revenue
Total operating revenue
32 104
Key figures - Derivatives Markets
201320122011
Equity options, No. of contracts
Figures for market value and trading value include fixed income
instruments listed on both the Oslo Børs and Nordic ABM marketplaces.
traded (1,000)
3 639 3 362 4 131
833 731 1 403
traded (1,000) 864 802 712
Index options, turnover (NOK million) 434 417 400
3 685 1 645 1 938
Equity forwards, turnover (NOK million) 10 651 7 115 11 819
5 018 6 810
Equity options, turnover (NOK million) Index options, No. of contracts
The revenue Oslo Børs derives from the fixed income market is
principally determined by the number of issues listed. In all,
1,570 loans were listed at the end of 2013 on the Oslo Børs
and Nordic ABM marketplaces, representing an increase of
187 loans since the start of the year. New debt issued in
respect of new and existing loans amounted to NOK 613 billion
in 2013, which was NOK 87 billion lower than in 2012.
Equity forwards, No. of contracts
traded (1,000) Index forwards, No. of contracts
traded (1,000) 3 506 Index forwards, turnover (NOK million) 159 022 196 526 251 834
The revenue generated from fixed fees paid by issuers of fixed
income securities (annual listing fees) is dependent on the
number of listed bond issues and their nominal value. Revenue
from fixed fees paid by members depends on the number of
active member firms. Trading fees reflect the number of
transactions carried out and their value. A repo is a repurchase
agreement whereby the parties simultaneously agree the sale
and future repurchase of a specified amount of a bond issue.
Repo transactions incur trading fees equivalent to 10% of the
rate for a normal trade.
Total No. of contracts (1,000)
11 694 10 827 13 591
1 267 1 149 1 803
Total value of turnover - options
(NOK milllion)
Total value of turnover - forwards
(NOK million)
169 673 203 641 263 653
Derivatives Market
The Derivatives Markets area accounted for approximately
8% of total operating revenue for Oslo Børs in 2013. With
effect from mid-February 2013, the revenue reported by the
Derivatives Markets area includes revenue generated by Fish
Pool. This amounted to NOK 12.3 million in 2013.
Average premium equity options (NOK)
2.3 2.2 Average premium index options (NOK)
5.0 5.2 3.4
5.6
Average premium equity forwards (NOK) 28.9 43.2 61.0
Average premium index forwards (NOK) 453.6 391.6 369.8
Tonnes traded on Fish Pool (full year) 98,530 46,565
Market data
Revenue from sales of financial market data accounted for approximately 28% of total operating revenue for Oslo Børs in 2013.
Sales of financial market data are principally measured by the
number of end users that have access to market data from Oslo
Børs. Customers of information distributors such as Thomson
Reuters, Bloomberg etc. subscribe to price and market index
information from a range of different marketplaces, providing
the real-time information that is essential for trading on Oslo
Børs. The number of terminals with access to data from Oslo
Børs decreased by 7% in 2013 to approximately 39,316.
Trading fees account for around 99% of the area’s revenue.
The revenue from trading fees is dependent on the number of
contracts traded and the premiums paid. The premium paid on
a derivatives contract is determined principally by the price of
the underlying instrument, the period to maturity and, in the
case of options, the price volatility of the underlying instrument.
The level of activity in the derivatives market, as measured by
the number of contracts traded, increased in 2013. However,
the total value of trading fell as a result of a reduction in the
level of activity in index forwards.
Three types of subscription to real-time information from Oslo
Børs are available: Professional users with full access to
real-time information (58%), private individuals with limited
access to real-time information (28%) and private individuals
with full access to real-time information (13%).
5
The two largest distributors accounted for around 51% of
revenue from sales of financial market data in 2013.
Segmental information for the VPS business area over the last
three years is as follows (figures in NOK 1,000):
Revenue for 2013 and 2011 was affected by non-recurring
revenue of NOK 1.7 million and NOK 3 million respectively
following customer audits.
Operating revenue - external
405 223
380 270
383 917
Operating revenue - internal
11 975
15 506
18 016
2013 20122011
Other revenue is generated by the sale of various products
such as share price tables for newspapers, index weighting and
SMS services. The two products that produce the largest
revenue are fundamental data on issuers and mutual funds
information.
Depreciation
34 645
35 548
38 772
Amortisation of excess value
80 904
88 390
103 685
Write-down of excess value
- -
Other operating costs
224 436
198 751
Total operating costs
339 985 322 689 362 004
Operating profit
77 213 73 087 219 547
39 929
Operating revenue - Market Data (Figures in NOK 1,000)
Financial market data
Other revenue
Total operating revenue
201320122011
Share of income in joint ventures
100 064 106 069 114 915
19 820 21 028 Financial income
23 733
Financial expense
119 884 127 097 138 648
25 850 215
9 852 12 088 13 650
22 325 137
Investment in joint ventures
4 680 4 429 3 579
Verdipapirsentralen (VPS)
Other assets
640 041 1 256 477 1 342 138
The business area comprises the wholly-owned subsidiary
Verdipapirsentralen ASA, which is a Norwegian public limited
company authorised to register rights to financial instruments
pursuant to the Securities Register Act.
Liabilities
151 391 Investment in the period
20 089 190 522 257 133
55 225 36 954
External operating revenue increased by NOK 25 million from
2012 to 2013. All business areas reported an increase in
revenue. Operating revenue generated within the group was
lower. The acquisition of Evolution on 1 July 2013 resulted in
an increase in revenue of NOK 7 million for the year.
VPS develops and markets products and services for banks,
investment firms, investment management companies and
other financial institutions. These in turn deliver the products
and services to issuers and investors. The services offered by
VPS make it easier and more efficient for issuers to raise
capital and manage their securities registers, and give
investors the reassurance that they will be able to exercise
their rights as owners of securities. Registering the ownership
of securities with a central securities depository such as VPS
provides legal protection and procedures for the priority of
interests, which are important practical features for confidence in the capital markets. VPS helps to improve the
efficiency of securities trading through its participation in
payment clearing and settlement systems.
Operating costs, excluding depreciation and amortisation,
increased by NOK 26 million from 2012 to 2013. After
adjusting for a reduction in capitalisation of internal resources
(NOK 3 million), non-recurring items in connection with
changes to pension arrangements (NOK 20 million) in 2012,
costs at Evolution in 2013 (NOK 5 million) and costs incurred
in 2013 in connection with evaluating the replacement of core
systems (NOK 6 million), underlying costs were NOK 7 million
lower than in 2012.
Issuer Products
The Issuer Products area’s operating revenue accounted for
30% of total VPS revenues in 2013.
John-Arne Haugerud is the Chief Executive Officer of VPS.
The other members of the executive management team are
Sveinung Dyrdal (securities services), Leif Arnold Thomas
(fund services), Jorunn Blindheim Øystese (legal affairs and
compliance), Harald Næss (IT) and Arne Adli (strategy and
business analyses).
The Issuer Products area offers products and services that
rationalise and improve the efficiency of tasks carried out by
account operators and issuers, while at the same time ensuring
that investors, companies and other users receive accurate
information. The services are delivered through reliable and
secure applications. Most services are available over the
internet.
VPS had 111 employees at the close of 2013, as compared to
114 at the close of 2012 and 118 at the close of 2011.
6
Investor Products
The Investor Products area’s operating revenue accounted for
27% of total VPS revenues in 2013.
The Issuer Products area offers its services through the
following products:
VPS Corporate is a web-based work platform for account
operators that operate share and equity certificate VPS
accounts for issuers, providing services for registering and
monitoring the companies they have registered in VPS. VPS
Corporate is also used by investment firms to register
subscriptions for new issues/distribution sales and for
registering bid acceptances.
The Investor Products area provides registration of rights to
securities for investors through products and services that
allow them to own, transfer and manage their holdings of
securities securely and efficiently. The core element of this
offer is the VPS account, which is offered to investors through
a network of account operators. Investors use their VPS
accounts to record all types of registered securities that they
own, whether these are shares, warrants, units in mutual funds,
equity certificates or fixed income instruments.
VPS Company Services is a web-based application that allows
VPS-registered issuers to make more efficient use of the
information registered about the securities they own. The
application is a subscription-based additional service for
companies registered in VPS.
The Investor Products area delivers its services through the
following products:
VPS Fixed Income is a web-based work platform for account
operators that operate fixed income VPS accounts for issuers.
The system was launched in 2008, and is used by account
operators and VPS to register fixed income instruments and
carry out actions relating to these instruments.
VPS Investor Services is a web-based work platform used by
account operators for operating investor accounts. The platform
allows account operators to setup and manage investors and their
rights on the VPS system. VPS Investor Services is used by banks
and savings banks as well as investment firms and investment
managers. 150 institutions have entered into agreements for
VPS Investor Services, and the platform has 8,500 users. VPS
Investor Services is recognised as the core VPS system.
The revenue generated by the Issuer Products area in respect
of limited companies is affected by the value of the share
capital of the companies registered for the services and the
number of shareholders. In respect of fixed income instruments, revenue is affected by the volume of debt issued and
the number of bondholders. In addition, revenue is affected by
the number of corporate actions relating to securities that are
carried out, and the complexity of these actions.
VPS Client Services is a web-based interface used by
end-investors that is delivered either through internet banking
services or from the web pages of investment managers. VPS
Client Services gives investors access to complete information
on their holdings of VPS registered securities, even if they use
more than one account operator, as well as details of account
information and personal information and reports of their
holdings and transactions. In addition, investors can use VPS
Client Services to subscribe for and sell fund units and to
participate in corporate actions such as share issues, annual
general meetings etc.
At the close of the year, a total of 1,158 (1,252) share issues/
equity certificate issues and 2,682 (2,531) bond/certificate
issues were registered in VPS.
Operating revenue - Issuer Products (Figures in NOK 1,000)
Total operating revenue
201320122011
1 126 1 223 1 308
Revenue from the Investor Products area is very largely
dependent on the number of VPS accounts and the market
value of the securities registered in VPS at the start of the
year. The number of VPS accounts decreased by 12% between
2012 and 2013, while total market value increased by 14%.
32 29 27
Operating revenue - Investor Products (Figures in NOK 1,000)
2 292 2 076 1 974
126 357 116 856 116 180
Key figures - Issuer Products
No. of AS/ASA companies
registered in VPS
No. of equity certificate issues
registered in VPS
No. of bond issues registered in VPS
No. of short-term fixed income
issues registered in VPS
201320122011
Total operating revenue 390 455 114 088 103 776 97 124
394
Key figures - Investor Products
No. of accounts Market value (NOK million) 7
1 357 188 1 549 693 1 627 391
4 589 4 039 3 959
Settlement Products
The Settlement Products area’s operating revenue accounted
for approximately 23% of total VPS revenues in 2013.
the market, but following the introduction of a CCP the number of
financial instruments listed and the number of firms with
membership of Oslo Børs have become more important as factors
that determine the volume of settlement transactions carried out
by VPS. A further important factor is the number of transactions
carried out between investment firms and their end-customers.
VPS processed 10.3 million settlement transactions for trades in
securities in 2013. This represents an increase of 2% from 2012,
when 10.1 million transactions were settled.
Settlement Products provides clearing and settlement services
for trading in securities. VPS Settlement contributes to the
effective operation of the capital market in Norway through
efficient and secure transfers of securities on the one hand and
monetary settlement from buyer to seller on the other hand.
Operating revenue - Settlement Products (Figures in NOK 1,000)
The clearing and settlement system supports ‘straight through
processing’ (STP) for the entire value chain. VPS attaches great
importance to developing the system in response to changing
customer requirements, and VPS closely follows market developments and trends both in Norway and internationally. In addition,
VPS pays particular attention to complying with international
recommendations and standards for clearing and settlement.
201320122011
Total operating revenue
94 012 94 107 100 883
Key figures - Settement Products
Settlement ratio
No. of trades settled (1,000)
96.59 %
96.13 %
96.20 %
10 325
10 124
11 484
Oslo Børs has chosen Clearnet to operate as a central clearing
counterparty (CCP) in the Norwegian market in addition to
Oslo Clearing.
Fund Services
The Fund Services area’s operating revenue accounted for
approximately 18% of total VPS revenues in 2013.
The clearing and settlement services provided by VPS are
based on generally recognized principles such as delivery
against payment (DvP) and multilateral netting between
settlement participants. Clearing of payments takes place
through the central bank of Norway, Norges Bank.
Fund Services offers a broad range of services for fund
management companies and other distributors of mutual fund
products to assist with the management of their funds and the
unit holder registers for individual funds. The VPS account
system provides the basis for the Fund Services products, and
investors’ holdings of fund units are registered on a VPS
account in the same way as for other securities.
The settlement ratio achieved by VPS has risen significantly
over the years, from 80% at the end of the 1990s to over 96%
at the close of 2013. The efficiency of the settlement process
is supported by an automated securities borrowing and lending
arrangement based on a lending pool. In addition, trades that
cannot be settled on the agreed settlement day are resubmitted
for settlement until they are cancelled or settled, and the
settlement cycle is run twice a day. Transfers of securities
holdings take place in real time, and the system can handle
settlement on the same day that a trade takes place (S = T + 0).
Standard settlement of T+2 will be introduced in October 2014.
The Fund Services area comprises two main areas, complemented by additional services: Fund Services and Distribution
Solutions. In both these areas, VPS is responsible for operations, maintenance and ongoing development of the systems,
which allows customers to focus on their core activities. The
Fund Services area started work in 2011 on a major project to
modernise the systems used for fund services. The project was
completed and the final elements of the solutions involved
were put into production in 2013.
Fund Services covers all aspects of the value chain, from
establishing and registering a mutual fund through to distribution and customer service. Fund Services also includes integrated payment functionality that supports purchases and sales of
fund units with full delivery against payment for investors.
Settlement participants communicate with the system using
an international open-standard interface (ISO 15022). VPS
started implementation of ISO 15022 communication in
2002, and usage has grown very strongly.
At year-end 2013, VPS had 99 settlement participants (i.e.
entities that have entered into a settlement agreement with
VPS). Of these, 31 are settlement agents, one is a CCP and 68
are investment firms (brokers).
It is not compulsory to register holdings of fund units with a
central securities depository. Accordingly, the Fund Services
area markets its registration services to securities custodians
and distributors of both Norwegian and international fund
management products in competition with other service
providers and the customers’ own systems.
The revenue generated by the Settlement Products area is
dependent on the number of securities transactions carried out in
8
At the close of 2013, 60% of the market value of Norwegian
mutual funds was registered in VPS. In addition, various
foreign mutual funds and nominee-registered funds are
registered in VPS. The total market value of VPS-registered
mutual fund holdings was NOK 452 billion at the close of
2013, representing an increase of 28% from 2012. The
number of investments in mutual funds registered in VPS
decreased by 27% in 2013, and the number of transactions in
mutual funds fell by 9% between 2012 and 2013.
Oslo Clearing is committed to delivering added value for members
through the solutions it provides for the securities market. The
business area distributes its products and services through banks
and investment firms, but certain types of institutional customers
can also apply for direct membership of Oslo Clearing.
Christian Sjöberg is the Chief Executive Officer of Oslo Clearing.
The other members of the executive management team are Kari
Geier (IT), Håvard Thorstad (Risk Management) and Halvard
Tretvoll (Business Development).
The revenue generated by the Fund Services area is principally
dependent on the number of transactions, the value of assets
registered and the number of holdings.
Oslo Clearing ASA had 17 employees at the close of 2013 (17 in
2012 and 16 in 2011).
Operating revenue - Fund Services (Figures in NOK 1,000)
Total operating revenue Segmental information for the Oslo Clearing business area over
the last three years is as follows (figures in NOK 1,000):
2013 20122011
74 969 68 875 75 797
2013 20122011
Operating revenue - external
54 035 Key figures - Fund Services
Operating revenue - internal
504 No. of mutual funds registered in VPS 1 024
51 612 - 69 107
17
1 017
1 402
352
383
Amortisation of excess value
- No. of investor holdings in mutual funds 844 139 1 156 183 1 315 409
Write-down of excess value
- No. of mutual fund transactions
Other operating costs
40 229 49 021 44 395
Total operating costs
42 361 55 229 50 599
Operating profit 12 178 -3 617 18 525
Market value of mutual funds
registered in VPS (NOK billion)
Depreciation
452
4 693 637 5 155 186 6 218 456
In July 2013, VPS purchased 100% of the shares in Evolution
Software Sweden AB and its wholly-owned subsidiary Evolution
Financial Services AB (together referred to as Evolution). The
acquisition strengthened both VPS’s and Evolution’s positions in the
Nordic investment fund market. Evolution offers Cairo, an efficient
and flexible solution for portfolio management and reporting for all
types of asset managers. Evolution provides services to asset
managers and investment fund managers in both Sweden and
Finland. VPS confidently expects further growth in the investment
funds and asset management industry and will, along with
Evolution, offer a competitive and efficient alternative to fund
managers and distributors in the Nordic market. The companies
have products and services that complement each other, and they
will provide a comprehensive offer, as well as strengthening their
presence in several of the Nordic countries. Both VPS and Evolution
have recently renewed their respective services and are accordingly well-equipped to meet the requirements of the market.
Evolution gained its first Norwegian customer in late 2013.
2 132 Share of income in joint ventures
Financial income
Financial expense
6 208 6 204
-
- -
4 033 4 171 4 934
310 122 371
Investment in joint ventures
- -
Other assets
1 252 254 1 130 045 625 860
Liabilities
1 105 387 Investment in the period
7 284 963 546 427 227
151 68
Oslo Clearing reported an increase in external revenue of
NOK 2 million in 2013. The increase was principally due to new
revenue from the management of cash collateral received from
members. Revenue generated from clearing of equity instruments fell by NOK 1 million, whereas revenue generated from
clearing of derivatives was virtually unchanged from 2012.
Operating expenses reduced by NOK 13 million between 2012
and 2013. Depreciation and capitalisation of internal resources
fell by NOK 9 million. Other operating costs reflected lower
guarantee costs and a reduction in the use of external support
following the completion and cost recognition of a project in
2012. Oslo Clearing developed a new clearing system for
derivatives in 2013. The costs of both the internal and external
resources involved were capitalised to the balance sheet.
The number of derivatives contracts traded on Oslo Børs
Oslo Clearing
The business area comprises the wholly-owned subsidiary Oslo
Clearing ASA. Oslo Clearing is a Norwegian public limited liability
company licensed to operate as a clearing house for derivatives
and equity instruments, as well as for borrowing and lending of
financial instruments. Oslo Clearing was granted an extension to
its authorisation in 2010 to include operating as a clearing
house for equity instruments.
9
Oslo Market Solutions
increased by 8% between 2012 and 2013, while aggregate
premium turnover for all derivatives products showed a reduction
of approximately 17%. Stock forwards saw a reduction in the
number of contracts traded in 2013, while the numbers of stock
options, index options and index forwards contracts increased.
The business area comprises the wholly-owned subsidiary Oslo
Market Solutions AS.
Oslo Market Solutions has specialist expertise in capturing,
processing, distributing and presenting financial market data.
Sales of information relating to Norwegian securities forms a
central part of the business area’s activities. A second major
aspect is sales of specialised web and internet solutions for
trading in securities and real-time presentation of market data.
The business area offers both standard products and customised solutions for issuers, investment firms, leading media
players and other parties involved with the financial markets.
Business volumes in the securities lending market were
somewhat lower than in 2012, whereas volumes for clearing of
OTC derivatives were higher than in 2012.
Oslo Clearing made changes to its clearing structure and
business model in 2012 in readiness for future regulatory
changes and in order to increase its competitiveness. The changes involved implementing a unified margin model for all Oslo
Clearing product segments, together with a unified solution for
pledging collateral, a unified clearing model and a common rule
book. In 2013, the company continued its work on developing a
system for derivatives clearing that will result in unified
technology for all clearing products.
Hugo Sundkjer is the Chief Executive Officer of Oslo Market
Solutions AS. The business area had 12 employees at the close
of 2013, as compared to 12 employees at the close of 2012
and 14 employees at the close of 2011.
Segment information for the Oslo Market Solutions business
area over the last three years is as follows (figures in NOK 1,000):
Oslo Clearing introduced a number of new revenue elements in
September 2012 in response to new regulatory requirements,
price differentiation and changes to its business model.
Traditional clearing revenue in 2013 was lower than in 2012.
At the close of 2013, Oslo Clearing had 13 clearing members for
derivatives and 17 clearing members for equity capital instruments.
201320122011
Operating revenue - external
13 686 15 540 21 480
Operating revenue - internal
6 903 5 509 3 601
Depreciation
Oslo Clearing carries out regular stress tests in accordance
with international recommendations. Oslo Clearing’s primary
capital was NOK 135 million at the close of 2013. The Board
was comfortable with Oslo Clearing’s capital adequacy
situation at the close of 2013.
241 465 656
Amortisation of excess value
5 376 5 376
Write-down of excess value
5 372 -
Other operating costs
17 528 17 619 19 987
Total operating costs
17 769 28 832 26 019
2 820 -7 783 -938
Share of income in joint ventures
- -
Operating profit
Oslo Børs VPS Holding has agreed to sell 100% of Oslo Clearing
to Swiss SIX group. Subject to satisfaction of the closing condi-
Financial income
tions, the sale is expected to close in the second quarter of 2014.
Financial expense
172 246 339
5
10 -
Investment in joint ventures
Oslo Clearing – Key figures
Other assets
Liabilities
201320122011
Investment in the period
No. of derivatives clearing
members at 31.12.
13
13
27
1,099
1,231
1,549
Total no. of cleared OTC derivative
contracts (1,000)
4,0443,0823,647
Total no. of cleared lending
contracts (1,000) 685,445
836,839
988,394
Total no. of cleared equities
transactions 29,57726,43936,122
No. of equities clearing
members at 31.12.
17
17
-
10 638 10 159 24 079
4 357 5 021 8 137
91 357 149
Operating revenue in 2013 was on the same level as in 2012.
However, there was a shift in the source of revenue from external
revenue to internal revenue from within the group as a result of
projects carried out for Oslo Børs, VPS and Fish Pool. Revenue is
lower than in 2011 due largely to the transfer of an area of
revenue generation to VPS in 2012. This transfer also caused a
reduction in costs between 2011 and 2012. The business area’s
operating revenues vary with the state of completion of customer
projects and the timing of annual system licence payments.
No. of active derivatives
accounts at 31.12. - 21
Personnel expenses and other operating expenses were in line
with 2012. Depreciation and amortisation of excess value
were lower because systems and operating assets are now
fully depreciated/amortised.
10
Board of Directors of
Oslo Børs VPS Holding ASA
Benedicte Schilbred Fasmer (born 1965),
Acting Chair
Benedicte Schilbred Fasmer has been a member of the
board of Oslo Børs VPS since 2007 and was a member of
the board of Oslo Børs Holding ASA from 2005 to 2007.
She holds the position as Head of Business Development
and Investor Relations at Argentum. She has a Master of
Science from the Norwegian School of Economics and
Business Administration. She was previously Director Capital Markets
Division at Sparebanken Vest, the Chief Financial Officer and Investor
Relations Officer, and more recently Head of Corporate Communications and
HR, at Rieber & Søn. Her work experience prior to this included Paal Wilson
Management AS, chief of staff and later vice president at Citibank
International plc, head of the Norwegian branch of Nautopolis.com, and as an
investment banker at Pareto Securities ASA in Bergen. Schilbred Fasmer was
previously a member of the Council of Representatives of Exportfinans ASA,
the Nomination Committee of Lerøy Seafood ASA and the Council of
Representatives and the Nomination Committee of StatoilHydro ASA. She
has also been a board member of Vesta Forsikring and Fana Sparebank, and a
member of the Control Committee of Storebrand Bank.
Wenche Agerup (born 1964)
Wenche Agerup has been member of the board of Oslo
Børs VPS since 2012. Agerup is responsible for
Corporate Staffs and has been member of Hydro’s
Corporate Management Board since April 2010.
She is responsible for Legal Services, Corporate Social
Responsibility (CSR), Human Resources and Organizational Development (HR), Health, Safety and Environment (HSE) and the Company Secretary in Hydro. Agerup has a law degree
from the University of Oslo and an MBA from Babson College in Boston, U.
S. Agerup has worked in Hydro since 1997, including positions as plant
manager in Årdal, Norway, and head of Mergers and Acquisitions (M&A).
She has also headed Hydro’s bauxite exploration activities in Western
Australia.
Harald Espedal (born 1972)
Harald Espedal has been member of the board of Oslo
Børs VPS since 2008. Espedal is managing director of
Skagen AS, which acts as investment manager for Skagen
Funds. He has a Masters degree in business and is a
graduate of the higher-level auditing course at the
Norwegian School of Economics and Business Administration. Before joining Skagen AS in 2002, Espedal was
the manager of Andersen (Ernst & Young) in Stavanger and also worked as
Investment Director at Vesta and as European portfolio manager at Skandia
(which at that time owned Vesta). Prior to this, he was head of finance and
analysis with SpareBank1 SR-Bank. He has also been Chairman of the Board
of the Norwegian Mutual Fund Association.
Christian F. Falkenberg Kjøde (born 1972),
employee representative Oslo Børs
Christian F. Falkenberg Kjøde was elected as an
employee representative to the Oslo Børs Board in
2009. Kjøde works as Head of Enquiries and Analysis in
Market surveillance. He has been a employee at Oslo
Børs since 1999 and has held different positions at
Market surveillance. He has a Master of Business
Administration and Economics from handelshøyskolen BI. He has
been a deputy employee representative of the Oslo Børs board from
2007 to 2009.
Ottar Ertzeid (born 1965)
Ottar Ertzeid has been member of the board of Oslo Børs
VPS since 2009. He was a member of the boards of Oslo
Børs Holding and of Oslo Børs from 2002 to 2007, and
from 2007 to 2009 he was a member of the Nomination
Committee for Oslo Børs VPS Holding ASA. Ertzeid is a
Group Executive Vice President of DNB, responsible for
DNB Markets and is a business economics graduate of the
Norwegian School of Management. Ertzeid has been head of DNB Markets
since 2003. Prior to this he was head and deputy head of DNB Markets, and
held various senior management positions in the foreign exchange and
capital markets area at DNB. He has also been the chief financial officer of
DNB Boligkreditt and the head of finance at Realkreditt.
Sissel Bakker (born 1963),
employee representative VPS
Sissel Bakker was elected as an employee representative to the VPS board in 2010. She is responsible for
project management in VPS and has been employee at
VPS since 2007. Bakker is PMP certified and has
education in project management from Handelshøyskolen BI. She has long experience as project
manager and adviser from implementation of IT systems in different
industries.
Employee deputy representatives
Ingvild Resaland (born 1979),
employee representative Oslo Børs
Ingvild Anita Resaland was elected as an employee
representative to the Oslo Børs ASA Board in 2010.
Since 2008 Resaland has been working as an adviser for
Issuers of bonds and commercial papers and is also
responsible for the secondary market for bonds on Oslo
Børs and Nordic ABM, including market model and
functionality for trading. She has previously held several positions in Oslo
Børs Market Data department (previously Oslo Børs Informasjon AS)
between 2001 and 2007 and worked as an adviser in Optimum ASA from
2007-2008. She has a Bachelor of Business Administration and Economics
from Handelshøyskolen BI.
11
Morten Nordby (born1959),
employee representative VPS
Mr Nordby is Senior Development Officer, VPS
Clearing and Settlement. He has been with VPS since
1985, and was responsible for developing the VPS
settlement environment and ISO 15022 interface. He
has been a employee representative since April 2005.
Board of Directors`Annual Report for 2013
The group’s main challenge over the next few years will be the
competitive environment in Europe and the effect this will
have on the entire Norwegian securities chain, including listing,
trading and settlement.
The Oslo Børs VPS group comprises Oslo Børs VPS Holding
ASA, Oslo Børs ASA, Verdipapirsentralen ASA, Oslo Clearing
ASA and Oslo Market Solutions AS. Oslo Børs ASA owns 94%
of the shares in Fish Pool ASA. Verdipapirsentralen ASA owns
100% of the shares in Evolution Software Sweden AB. Oslo
Børs VPS Holding ASA operates from Tollbugata 2, Oslo.
Unless otherwise stated, this commentary applies to the Oslo
Børs VPS group.
The group intends to prioritise the following goals over the
next three years:
1.We will operate a profitable and attractive financial
infrastructure
2.We will develop and market profitable value-adding services
that meet the market’s requirements
3.We will be the preferred securities chain for domestic
companies, investors and investment firms
4. We will develop greater international interest in the group
• The leading marketplace for selected sectors
• International focus on selected value-adding services
• Broadly-based and robust distribution network
5. We will be an attractive workplace
6. We aim to have satisfied shareholders
The Oslo Børs VPS group can look back on 2013 as a year with
a variable level of market activity. The level of activity in the
market declined for the year as a whole, but the market values
of listed and registered companies increased. Oslo Børs VPS
Holding ASA reports a consolidated profit for 2013 of NOK
214 million as compared to profit of NOK 194 million in 2012.
The information required pursuant to Sections 3-3b and 3-3c
of the Norwegian Accounting Act is provided in the Board’s
report on Corporate Governance and the company’s report on
Corporate Social Responsibility, which are available on the
company’s website – www.osloborsvps.no.
Over the next three year period, the group will pay particular
attention to:
1.Strong focus on customer relationships with the most
important customers
2.Continuing the development of marketplace rules, pricing
structures, technology, networks and products
3. Improving the efficiency of the group’s operations
4.Focusing on increasing sales of core products and existing
complementary products. The group will develop new
services on a cautious scale, principally working in
collaboration with other suppliers
Strategy
The Oslo Børs VPS group comprises the marketplaces
operated by Oslo Børs ASA, the central securities depository
and settlement activities operated by Verdipapirsentralen ASA
and the clearing house business of Oslo Clearing ASA, together
with the financial market data and on-line solutions company
Oslo Market Solutions AS. In addition, Oslo Børs ASA owns
94% of the shares in Fish Pool ASA. Verdipapirsentralen ASA
owns 100% of the shares in Evolution Software Sweden AB.
Through these companies, the group aims to offer attractive
marketplaces, services for clearing, settlement and registration of securities and information services for financial
instruments, in order to give its customers access to an
efficient capital market.
In addition, the group will aim to reinforce its sectors of particular
strength, namely energy, shipping and seafood, as well as making
use of the potential it expects in the derivatives market.
The group will ensure that its prices and services are competitive
in relation to its most important competitors.
The group has formulated its overall strategy for the imminent
strategy period with the objective of meeting the increasing
competition faced by its core businesses, as well as generating
increasing revenue from value-adding services.
Market trends
Just as in 2012, 2013 was a year characterised by increased
competition, especially for trading in equities, and by fluctuating levels of market activity. The first half of the year saw a
somewhat lower level of activity in most areas, but this was
overtaken by higher activity in both the primary and secondary
markets over the second half of the year. 12 new companies
were admitted to listing in 2013. The volume of new issues in
the equities market was therefore lower than the level seen in
recent years, although it was higher than in 2012. There was an
increase in the number of listed fixed income instruments, and
2013 was a new record year for the volume of new issues in
the fixed income market. The overwhelming majority of
The strategy attaches importance to ensuring that the group
continues to operate a state-of-the-art and competitive
infrastructure. In addition to this, the group aims to create
additional sources of revenue by attracting new customers and
building value-adding products and services that complement
its core activities. The Oslo Børs VPS group’s approved
strategy ensures that the group enjoys a high degree of
commercial flexibility. The Board accordingly has a very
positive view of the opportunities that the continuing development of its activities will offer.
12
Norway. For customers of Oslo Børs, this transaction will
ensure the continuation of modern and efficient clearing
services in a larger, international unit that will also maintain the
implementation of CCP interoperability for clearing of equities
with LCH.Clearnet.
Norwegian companies recognise Oslo Børs as the natural
choice of venue for listing. In addition, Oslo Børs has a strong
international position in the sectors of offshore and energy,
seafood, and shipping.
A major challenge for an operation such as Oslo Børs VPS is the
need to maintain liquidity in listed securities. The emergence
of competing marketplaces and private liquidity pools
operated by major international investment banks represents
very significant competition.
Future changes in the regulatory framework will have an
impact on the group. Over recent years, the EU has intensified
its work on regulating the infrastructure for financial instruments. EU initiatives in this area will affect Oslo Børs VPS
Holding ASA to varying degrees.
Since MiFID came into effect in November 2007, a number of
new players have established marketplaces and trading
facilities for trading in European securities in the form of MTFs
(multilateral trading facilities) and dark pools. Dark pools
include both regulated and un-regulated marketplaces that
offer no order book transparency. Their objective is to attract
investors looking to trade major blocks of shares without
affecting the market in the share in question. Some exchanges
also offer what are known as unsponsored listings, which
means that they offer trading in companies that are listed on
competing exchanges. In addition, increasing volumes of
trading activity are taking place through broker-crossing
networks, which are unregulated venues with little transparency. In summary, competition continues to intensify, and this
has been reflected in the fee offers and general level of fees
charged by both new and existing marketplaces. In addition,
the ability to facilitate high-frequency trading by offering a
local presence convenient for customers, together with low
latency, continue to be important themes for both exchanges
and MTFs.
As part of its program to create a transparent and stable
financial system, the EU Commission is working on a new
version of the 2007 Markets in Financial Instruments Directive
(MiFID). The background for revising this directive is the
experience gained from the financial crisis, the rapid pace of
development seen for trading technology and hence trading
patterns, and changes in the financial infrastructure. The EU is
also concerned that the trend for a large proportion of trading
to take place away from the regulated markets and trading
facilities is seen as damaging investor protection and reducing
market quality. In dialogue with the European Parliament and
Council, the European Commission reached agreement in
principle in January 2014 on the text that will provide the basis
for the updated Markets in Financial Instruments Directive
(MiFID II). The members of the European Parliament will vote
on the final text of the directive. Assuming that the directive is
approved, the next step will be an extended period of work on
technical standards under the leadership of the European
Securities and Markets Authority (ESMA).
In its current form, the wording of MiFID II deviates from
earlier proposals in relation to new trading facilities (OTFOrganised Trading Facility) for shares, and instead takes the
direction of seeking to limit fragmentation and reducing OTC
volumes. OTFs will apply to other types of instrument, and
there are new requirements for trading in certain types of
standardised cleared OTC derivatives to take place on regulated marketplaces. The text includes new rules for what is
known as ”high frequency trading” including marketplace rules
and controls for such trading. MiFID II represents greater
transparency for trading in shares and OTC trading through a
stricter approach to the current exemptions from transparency requirements, consolidation of market information and
rules to improve investor protection. The EU Commission’s
proposals for changes to MiFID II were first launched on 20
October 2011. The completion of work on technical standards
and the likely implementation of the new directive is not
expected to take place until 2016 at the earliest.
There is intense competition between investment firms, and
an increasing number of firms are establishing trading
infrastructure using order routers that have links to a number
of marketplaces. Smaller investment firms that do not operate
their own order routers are offered opportunities to connect
up to this kind of structure via intermediaries. These developments add to the trend for traditional exchanges to experience
greater competition for trading business and downward
pressure on trading fees. Investment firms in general welcome
alternative marketplaces in order to encourage competition.
The costs involved in clearing and settlement also play a role
when investment firms choose which marketplaces to use for
their trading activity.
Oslo Børs VPS has agreed to sell 100% of Oslo Clearing to
SIX, the Swiss financial market infrastructure group. This
agreement is part of Oslo Børs VPS group’s continuous efforts
to ensure an internationally competitive securities market in
13
The launch of Target2Securities (T2S) in 2015/2016 may also
result in greater competition for post-trade processing.
Settlement services are expected to become standardised,
with pricing structure and the level of prices falling into line
across Europe and resulting in falling margins for service
providers. The impact of T2S will depend on how many
countries and CSDs outside the euro zone decide to participate. This is currently uncertain. VPS has decided to participate in T2S at a later date, and will in the meantime position
its offer to ensure that it offers a competitive and attractive
product when T2S is launched. The company will not enter into
any agreement to participate until it has consulted fully with
market participants. Settlement on the T2S platform will not
be available for securities listed on Oslo Børs that are
denominated in Norwegian kroner until such time as Norges
Bank makes Norwegian kroner available in T2S. No decision
has yet been made on when this might take place.
The European Market Infrastructure Regulation (EMIR), which
introduces mandatory clearing for OTC derivatives and common
rules for central counterparties (CCPs), is expected to be
implemented in Norwegian law. The European Securities and
Markets Authority (ESMA) is responsible for deciding which OTC
derivatives will be subject to mandatory clearing. These changes
will mean that CCPs will handle additional or new derivatives.
Authorisation to operate as a clearing house will now apply
throughout the EEA area, and existing clearing houses will be
required to apply for new authorisation pursuant to EMIR.
The EU is also working on the regulation of entities that
provide securities registration services (Central Securities
Depositories or CSDs) and rules for the settlement of
transactions in financial instruments. Regulation in this area is
intended to improve the efficiency of cross-border activities
and increase competition, while also promoting financial
stability. The new rules will include greater clarity on which
activities a CSD is able to carry out, while at the same time
seeking to increase competition in post-trade services in
Europe. The EU’s work in this area has fallen behind its
timetable, but preliminary agreement was reached at the
political level in December 2013. There is as yet no decision of
a final text of the proposed regulation. Implementation will
take place over time depending on when the EU publishes the
necessary technical standards. Implementation of the new rules
in Norway is expected to take place at the end of 2015/start
of 2016.
VPS has been working for some time on modernising its IT
platform. In 2013, VPS worked on evaluating specific alternatives to replace its core systems for securities registration and
settlements. This process will continue in the first half of
2014, and will then be followed by a decision on the start of
the implementation project.
Market activity in 2013
The OBX Index closed 2013 at 503.58, having risen by 22.7%
over the course of 2013. The value of trading turnover in
shares and equity certificates amounted to NOK 866 billion in
2013. This represented a reduction of 13% from 2012. The
number of transactions carried out through the exchange’s
trading system totalled 18.1 million for the year as a whole,
down by around 16% from 2012.
Existing CSDs will have to apply for new authorisation under
the Central Securities Depository Regulation. Based on the
information currently available, it does not appear that VPS
will have to make significant changes to its activities. Together
with other work currently underway on rules related to
securities markets and other regulation applicable to customers of CSDs, the changes that are now in progress will
encourage greater focus on the division of roles between
securities registers/operators of settlement systems for
securities and their customers.
VPS processed 10.3 million transactions relating to securities
trading in 2013. This represents an increase of 2% from 2012,
when 10.1 million transactions were processed. In addition,
VPS handled 4.7 million transactions for purchases and sales
of units in mutual funds, a decrease of 8% from 2012.
CSDs will be required to maintain capital appropriate to the
risks associated with their business, and the level of capital
will have to be sufficient at all times to ensure the continuing
operation of the CSD, which must include a run-down period of
six months. VPS held primary capital at 31 December 2013
(calculated in accordance with Norwegian rules) equivalent to
13.8 months’ operating expenses (calculated in relation to
operating expenses in 2013). The new regulations will also
impose requirements for each CSD to prepare a contingency
plan for raising further capital in the event that its capital falls
below the capital adequacy requirements imposed by the
regulation.
New share issues carried out in 2013 raised NOK 20 billion as
compared to NOK 18 billion in 2012. With eight new companies
admitted to listing and 16 companies removed from listing, the
number of companies listed on Oslo Børs fell to 186 at the
close of 2013. The regulated marketplace Oslo Axess saw a
decrease in the number of listed companies to 32, with four
companies admitted to listing in the year and six companies
removed from listing. At the close of 2013 there were 13
exchange traded funds (ETFs) listed on Oslo Børs, a decrease
from 15 ETFs at the close of 2012. 44 of the companies listed on
Oslo Børs and Oslo Axess are from countries other than Norway.
14
in order to improve its competitive capability. The changes
involved implementing a unified margin model for all Oslo
Clearing product segments, together with a unified solution for
pledging collateral, a unified clearing model and a common
rulebook. In 2013, the company continued its work on
developing a system for derivatives clearing that will result in
unified technology for all clearing products.
At the close of the year, 2.4 million holdings of financial
instruments were registered in VPS, held on 1.4 million VPS
accounts. The number of mutual funds registered in VPS fell by
seven in 2013 to 1,024 funds. This was largely the result of
mergers between funds in 2013. In total, 1,126 limited
companies and 32 equity certificate issuers were registered in
VPS at the end of the year, a net reduction of 94 from the end
of 2012. The number of bond and commercial paper issues
listed at the end of the year was 2,682, an increase of 151
from the end of 2012.
Oslo Clearing introduced certain new revenue elements in
September 2012 as a result of new regulations, price differentiation and changes to its business model. Revenue from
traditional clearing activities in 2013 was lower than in 2012.
The number of stock exchange member firms increased from
50 to 61 in 2013, of which 42 member firms were located
outside Norway. The increase was largely due to the takeover
of the Nordic MTF Burgundy and its membership. At the end of
2013, VPS had 99 settlement participants (i.e. entities that
have entered into a settlement agreement with VPS). Of these,
31 were settlement agents, 68 were investment firms and one
was a central counterparty.
At the close of 2013, Oslo Clearing had 13 clearing members
for derivatives and 17 clearing members for equity capital
instruments.
Oslo Clearing carries out regular stress testing in accordance
with international recommendations. The primary capital of
Oslo Clearing at 31 December 2013 was NOK 135 million. The
Board is satisfied with Oslo Clearing’s capital adequacy at the
close of 2013.
Sales of financial market data are principally measured in
terms of the number of end-users with access to market data
from Oslo Børs. Customers of information distributors such as
Thomson Reuters, Bloomberg, etc. subscribe for access to
price and index information from a variety of different
marketplaces. The number of end-users subscribing for access
to data from Oslo Børs decreased by around 7% in 2013,
bringing the total to approximately 39,300 end users. User
numbers fell for both professional users and private users.
Oslo Market Solutions is one of the leading Nordic suppliers
of internet-based solutions for the securities market. The
company is also a significant vendor of information on
Norwegian securities. The company reported a decline in
revenue of approximately 2% in 2013. Revenue from external
customers was lower in 2013, but revenue from other
companies in the group increased.
Revenue from the fixed income market is principally determined
by the number of issues listed. In all, 1,570 loans were listed at
the end of 2013, made up of 967 loans listed on Nordic ABM
(Alternative Bond Market) and 603 on the stock exchange
market, representing an increase of 187 loans since the start
of the year. New debt issued in respect of new and existing
loans amounted to NOK 613 billion in 2013, which was
NOK 87 billion lower than in 2012.
Financial results
The unconsolidated annual accounts of Oslo Børs VPS Holding
ASA have been prepared in accordance with Norwegian
legislation and generally accepted accounting practice in
Norway. The consolidated annual accounts of Oslo Børs VPS
have been prepared in accordance with the International
Financial Reporting Standards (IFRS) approved by the EU.
The number of derivatives contracts traded on the Oslo Børs
marketplace increased by 8% between 2012 and 2013, while
aggregate premium turnover for all derivatives products
showed a reduction of approximately 17%. Index futures saw a
reduction in the number of contracts traded in 2013, but there
was an increase in the overall number of contracts for other
types of derivatives contract.
Operating revenue increased by NOK 157 million between 2012
and 2013. Revenue reported by companies acquired in 2013
(Burgundy, Fish Pool and Evolution) amounted to NOK 163
million, of which NOK 83 million represents the recognition of
negative goodwill that resulted from the acquisition of
Burgundy AB in January 2013. Other than this, revenue from
trading, clearing and settlement was NOK 46 million lower.
Revenue in connection with the registration and listing of
securities increased by NOK 40 million.
Oslo Clearing made major changes in 2012 to its clearing and
business model in response to future changes in regulation and
15
OPERATING REVENUES
were NOK 9 million lower in 2013 than in 2012. After
adjusting for this, other operating costs were NOK 2 million
lower than in 2012.
MNOK
1200
1000
Ordinary depreciation and write-downs totalled NOK 92
million in 2013, an increase of NOK 26 million from 2012.
Depreciation recognised in connection with Burgundy, Fish
Pool and Evolution amounted to NOK 30 million.
987
922
830
800
600
Amortisation of excess values in relation to IT systems and
customer relationships that arose as a result of the merger
between Oslo Børs Holding ASA and VPS Holding ASA in
November 2007 amounted to NOK 81 million in 2013, a
decrease of NOK 13 million from 2012. This was a consequence
of excess value relating to certain systems being fully amortised
by the start of 2013 or during the course of the year.
400
200
0
2011
2012
2013
Total operating costs in 2013 totalled NOK 709 million, up
from NOK 583 million in 2012.
EBITDA and operating profit (EBIT)
MNOK
Operating costs
MNOK
500
600
443
404
400
544
500
467
300
455
296
426
200
300
200
277
247
400
100
171
157
0
165
2011
100
EBITDA
2012
2013
EBIT
0
2011
2012
2013
EBITDA and EBIT for 2013 were NOK 443 million and
NOK 277 million respectively.
perating costs before capitalisation of internal resources, depreciation,
O
amortisation and write-downs
Capitalisation of internal resources, depreciation, amortisation and write-downs
Net financial items were in line with 2012. However, this is
after recognising the currency accounting effects of the
acquisition and merger of Burgundy, which had a positive
effect of NOK 3 million. Interest rates on deposits were lower
in 2013 than in 2012.
Personnel-related costs, before capitalisation of internal
resources, totalled NOK 286 million, up by NOK 54 million
from 2012. After adjusting for non-recurring items in connection with restructuring in 2013 (NOK 6 million), the effect of
changes to pension arrangements in 2012 (NOK 42 million)
and costs incurred by Burgundy, Fish Pool and Evolution in
2013 (NOK 20 million), personnel-related costs showed a
decrease of NOK 15 million. Capitalisation of internal resource
costs for projects decreased from NOK 8 million in 2012 to
NOK 7 million in 2013.
The result for the year was a profit of NOK 214 million as
compared to a profit of NOK 194 million in 2012.
Profit for the year
MNOK
300
233
Other operating costs increased by NOK 65 million from
NOK 193 million in 2012 to NOK 258 million in 2013. Costs
reported for 2013 were affected by costs incurred by
connection with Burgundy, Fish Pool and Evolution in 2013
(NOK 76 million). Other cost-increasing non-recurring items
200
194
214
100
0
2011
16
2012
2013
ratio of 44%. The holding company, which produces its
accounts in accordance with Norwegian generally accepted
accounting practice, reported equity of NOK 978 million and
an equity capital ratio of 63%. The holding company’s equity
includes undistributable reserves of NOK 86 million.
The merger of Oslo Børs Holding ASA and VPS Holding ASA
was registered on 26 November 2007. At the time of the
merger, Oslo Børs Holding ASA changed its name to Oslo Børs
VPS Holding ASA. The merger was recognized for accounting
purposes as a transaction with Oslo Børs Holding ASA as the
acquiring company. The excess value analysis, which was
carried out by independent financial advisers, identified excess
values of NOK 640 million for IT systems, NOK 87 million for
customer relationships and NOK 10 million for licences.
Goodwill, after deferred tax on excess value (increase of NOK
177 million) and adjustment for step acquisition (reduction of
NOK 93 million), amounted to NOK 1,931 million. The expected
life of IT systems and customer relationships was initially
estimated to be 15 years.
The group generated cash flow from operational activities of
NOK 317 million in 2013. Cash flow from investment activities
represented an inflow of NOK 253 million. Financial income
(NOK 21 million), changes in placements of liquidity in treasury
bills and bonds (outflow of NOK 4 million) and the receipt of
cash collateral pledged by members (NOK 276 million) are
classified as investment activities. Cash flow for investments
in intangible assets and fixed assets totalled NOK 47 million.
Following an outflow of NOK 302 million for financing
activities, net cash flow for the year was an inflow of NOK 268
million. Liquidity at year-end was NOK 1,571 million, up from
NOK 1,303 million at 2012 year-end. The total holding of
liquidity and bank deposits at the close of the year was
NOK 1,934 million. Total cash collateral from members was
NOK 1,091 million. Net liquidity after deducting cash collateral
from members was NOK 844 million, a reduction of
NOK 5 million from NOK 849 million at the end of 2012.
The balance sheet item for intangible assets comprises the
excess values described above and capitalised costs incurred
by Oslo Børs and VPS in developing and implementing IT
systems since the merger came into effect. The balance
sheet value of goodwill has been reduced by write-downs of
NOK 363 million and NOK 1,102 million carried out in 2008
and 2009 respectively.
The market value of outstanding derivatives positions totalled
NOK 290 million. As part of its normal business, Oslo Clearing
is a formal counterparty in derivative transactions traded on
Oslo Børs and in derivative transactions or securities borrowing and lending transactions notified for clearing. Counterparty risk is measured using models designed under international standards. Counterparty exposure is covered through
individual collateral provided by each customer. In accordance
with IAS 39 and IAS 32, the clearing business is required to
recognise in its balance sheet the commitments borne by the
company as a central counterparty in derivative contracts. The
estimated market value of the positions is recognised as a
current liability, with a matching entry under current receivables. Claims and liabilities that can be assigned to outstanding
derivative positions are netted against each other to the
extent that such offsetting is permitted.
The boards of directors of the subsidiary companies Oslo Børs
ASA, Verdipapirsentralen ASA and Oslo Market Solutions AS
have proposed dividend and/or group contribution payments
to the parent company Oslo Børs VPS Holding ASA of NOK
197 million, NOK 119 million and NOK 3 million respectively,
totalling NOK 318 million. Following these transfers, the
unconsolidated accounts of Oslo Børs VPS Holding ASA show
an accounting profit for the year in 2013 of NOK 302 million.
As part of its approval of the Annual Report and Accounts, the
Board of Oslo Børs VPS Holding ASA intends to propose to the
Annual General Meeting that an ordinary dividend of NOK 7.00
per share, equivalent to NOK 301 million in total, be approved.
The proposed dividend per share represents 111% of earnings
per share. The Board of Oslo Børs VPS Holding ASA considers
it to be in general appropriate that at least half of the group’s
annual profit should be distributed as dividend. However,
decisions on dividend payments must also take into account
the need to maintain satisfactory levels of liquidity and
solidity, including the effect of planned and possible investment on liquidity and solidity. Payments of dividend by Oslo
Børs VPS Holding are the result of dividends received from its
subsidiaries. The dividends proposed by subsidiaries take into
account their liquidity and capital adequacy requirements,
as well as the regulatory requirements that apply to the
subsidiary in question.
Pension liabilities are reduced by NOK 22 million to NOK 147
million compared to the 2012 year-end. Actuarial differences
that arose in 2013 amounted to NOK 23 million (before tax)
and were recognised as part of other income and costs in the
statement of comprehensive income. Reported pension
liabilities therefore represent gross pension liabilities less the
calculated value of pension assets. Further information is
provided in Note 5 to the consolidated accounts.
The equity of Oslo Børs VPS Holding was NOK 1,382 million at
the end of 2013, representing a consolidated equity capital
17
The composition of the Board and its work
IFRS accounting does not recognise a proposed dividend as a
liability until the annual general meeting has passed a resolution to approve payment of the dividend. Generally accepted
Norwegian accounting practice recognises a proposed
dividend as a liability from the time it is proposed. The
proposed dividend is therefore included as a liability in the
unconsolidated accounts of Oslo Børs VPS Holding ASA, but is
not included as a liability in the consolidated accounts.
The Board of Directors held 11 meetings in 2013, including
two group strategy meetings. The Board has focused in
particular on the group’s strategy, the new competitive
situation, improving efficiency, risk management and major
projects. Two of the five members of the Board of Directors
elected by shareholders are female. Reference is also made to
the information on the Board’s composition and independence,
and the work of the Board, which is provided in the Board’s
report on Corporate Governance.
It is proposed that the profit for the year of the holding
company, Oslo Børs VPS Holding ASA, of NOK 302,386,384
should be allocated as follows:
Provision for dividend: NOK 7 per share
Transfer to retained earnings
Total allocations
Leiv Askvig resigned on his own initiative from his positions as
chairman of the boards of directors of Oslo Børs VPS Holding
ASA and Oslo Børs ASA on 27 January 2014. The reason for this
was that in the late afternoon of 27 November 2013, the
company Sundt AS exceeded the 20% limit for a notifiable
change of shareholding in respect of EAM Solar ASA, but
notification of this was not sent to Oslo Børs until 11:56 on 28
November 2013. Leiv Askvig is the Managing Director of Sundt AS.
NOK 301,028,000
NOK
1,358,384
NOK 302,386,384
Shareholder information
Oslo Børs VPS Holding ASA has only one class of shares, and
its shares are freely negotiable, subject to limitations imposed
by legislation. Each share carries one vote at general meetings
of the company, subject to limitations imposed by legislation.
The deputy chair, Benedicte Schilbred Fasmer, has taken over
as acting chair of the boards of both companies until the annual
general meeting in May 2014.
The Stock Exchange Act and the Securities Register Act
establish the general principle that no single party may own
shares that represent more than 20% of the share capital or
voting capital of Oslo Børs VPS Holding. Any acquisition of a
significant ownership interest in a regulated market can only
be carried out after giving prior notice to Finanstilsynet (the
Financial Supervisory Authority of Norway). A significant
ownership interest for this purpose is defined as a direct or
indirect ownership interest that represents at least 10% of
the share capital or voting capital, or an interest that in some
other way makes it possible to exercise significant influence
over the management of the company. Exemptions from the
general principle on ownership interests are available for
entities that as their main business operate or own a regulated
market or similar marketplace or operate or own infrastructure
activities related thereto. The EFTA Court ruled in July 2012
that the current restrictions on ownership are in breach of the
EEA Agreement. The Norwegian Ministry Finance circulated
proposals for changes to the rules on the ownership of
exchanges and central securities depositories for consultation
prior to summer 2013. The proposed changes are still under
consideration.
Personnel and organisational issues
The Oslo Børs VPS group had 250 employees at 31 December
2013. Nine employees were employed on fixed term contracts
and three employees were absent on unpaid leave.
Female staff accounted for around 28% of employees at the
close of 2013. Female staff held 12 of the senior management
positions in the group. Salary statistics do not show any
differential caused by gender. As mentioned above, two of the
five shareholder-elected members of the Board of Directors of
Oslo Børs VPS Holding ASA are female. No special measures
have been implemented to encourage the promotion of female
employees to management positions.
In its recruitment processes, Oslo Børs VPS places emphasis
on the expertise required for the position in question and
language skills in Norwegian and English, regardless of a
candidate’s ethnic background, age and gender. At the end of
2013, the group had three employees with a non-Scandinavian
background. The average age of the group’s employees is 45.
For the group in 2013, parental leave of absence totalled the
equivalent of three full-time appointments. Oslo Børs VPS
provides appropriate arrangements for parents to be able to
combine a demanding job with their family responsibilities.
Leave of absence and flexible working play important roles in
this respect.
The company is not aware of any agreements between
shareholders that impose restrictions on trading in the
company’s shares or on the exercise of voting rights.
18
prepares the group’s guidelines on the remuneration of senior
employees, as well as the principles for variable salary
payments to other employees of the group and advises the
chief executive officer on the remuneration of other senior
employees.
The group strives, wherever working conditions permit, to
make arrangements for employees with partial disability in
order that they are able to continue with their role in the group.
Six new employees were recruited in 2013 on permanent
terms. In addition, the acquisitions of Burgundy, Fish Pool and
Evolution added 35 new employees to the group’s headcount in
2013. 37 permanent employees resigned in 2013, representing staff turnover of just under 8%. Of the staff leaving,
14 were employed by Oslo Børs, while 18 were employed by
Burgundy. Oslo Børs and Burgundy implemented headcount
reduction measures in 2013.
The remuneration of senior employees comprises normal
salary together with employment benefits including company
car, telephone and newspapers, in addition to any variable
salary payment, and senior employees also participate in the
group pension arrangements and early retirement arrangement in the same way as other employees. The general
retirement age for employees of the group is 67. The group has
terminated its defined benefit group pension schemes. All
employees are now members of the group’s defined contribution
group pension schemes. With effect from 2013, employees
affected by the change will receive compensation.
In overall terms, the group’s employees represent a sound pool
of experience and expertise. 74% of employees have been
with the group for five years or more, and 39% had been with
the group for 10 years or more. 23 employees have been recruited over the last two years, representing approximately 9% of
the workforce. This has helped to ensure a sound mixture of
new expertise and employees with long-standing experience.
The Board allocates a budget at each year-end for variable
salary payments to employees and managers in Oslo Børs,
Verdipapirsentralen, Oslo Clearing and Oslo Market Solutions
and makes its decision on an overall evaluation of performance
relative to predefined objectives for financial earnings, the
successful implementation of action plans, attainment targets,
operational reliability, quality standards and customer
satisfaction. For managers, employee satisfaction is also a
criterion. Fish Pool ASA has its own variable salary arrangement based on the volume of product traded and profit.
Variable salary payments to senior employees are evaluated
individually by the group chief executive officer in relation to
predetermined objectives, and with the exception of Fish Pool
such payments cannot exceed 25% of the fixed annual salary.
In the case of Fish Pool, variable salary payment cannot exceed
an employee’s fixed annual salary. This structure relates to the
total remuneration package offered by Fish Pool. Variable
salary payments to the group chief executive officer are
determined by the Board on the basis of the same criteria as
for other senior employees.
Results from employee satisfaction surveys carried out in
2013 that focused on employee commitment and motivation
showed overall stable and good results for the group as a whole.
The group takes a pro-active approach to preventative medical
measures, particularly in respect of the problems that may be
caused by working with personal computers. Statistics show
that absence due to sickness for the group in 2013 was 3.6%.
There were no incidents of personal injury or reportable
accidents involving employees of the group in 2013.
Statement on the remuneration of senior employees
The Oslo Børs VPS group has unified guidelines for the
remuneration of senior employees throughout all companies in
the group. The objective of the guidelines is to offer a total
compensation package that is competitive in order to attract
high-quality managers, but without offering market-leading
terms.
Senior employees shall be entitled to the same rights as other
employees in respect of pension benefits and employee
insurance arrangements.
The Board’s guidelines for the remuneration of the chief
executive officer and other senior employees are for remuneration to be determined on an individual basis, taking into
account the individual’s area of responsibility, results achieved,
expertise and background.
The remuneration of the Group Chief Executive Officer is
determined by a meeting of the Board. The Group CEO is
responsible for deciding the salary increases awarded to other
members of senior management, after consultation with the
Remuneration Committee.
The Board of Oslo Børs VPS Holding ASA has appointed a
Remuneration Committee, and the chair of the board of VPS
ASA also participates in meetings of this committee. The
Remuneration Committee makes preparation for the Board’s
decision on the remuneration of the chief executive officer,
Oslo Børs VPS Holding ASA does not provide any remuneration
linked to shares or to the performance of the company’s share
19
perspective, it is uncertain how cross-border settlement of
securities transactions in Europe will be carried out. The EU
authorities have launched a number of initiatives to encourage
greater harmonisation and competition, and central banks
have taken the initiative to plan the establishment of centralised
pan-European settlement arrangements. There is also a trend
for the authorities to impose stricter requirements on
businesses in the financial sector, including providers of
financial infrastructure. This may affect the capital adequacy
requirements that apply to the activities carried out by the
group, and may also have an adverse effect in the future on the
level of activity in the market in general. Future changes in EU
regulation may affect the group’s future revenues.
price or the share price of any of the companies in the same
group. With effect from 2013, managers are required to use
part of any bonus entitlement to purchase shares in Oslo Børs
VPS Holding ASA.
Reporting for 2013
The companies in the group carry out annual salary adjustments
through a combined process with increases coming into effect
on 1 July.
The annual increase in 2013 in fixed salaries for senior employees
(members of the Group Senior Management) other than the
Group CEO, with effect from 1 July 2013, was on average 3.3%
as compared to approximately 3.6% for other employees.
Senior employees (members of the Group Senior Management) other than the Group CEO received bonus payments for
2013 that averaged 19% of fixed salary at the end of 2013.
The equivalent payments to other employees represented
approximately 10% of fixed salary.
All aspects of material exposure to operational risk are
monitored and reviewed using risk evaluation procedures that
are standardised across the group, and risk-reducing measures
are documented and monitored as appropriate. No material
risks that might threaten the operations of Oslo Børs VPS have
been identified. Standby and disaster recovery procedures are
in place and are tested routinely, including remote secondary
operating locations for critical systems. Reference is also
made to the description of risk management and internal
control provided in the Board’s statement on corporate
governance.
The annual increase in 2013 in fixed salary for the Group CEO,
with effect from 1 July 2013, was 3.2%. The Group CEO
received a bonus payment for 2013 equivalent to 22.5% of
fixed salary.
The guidelines were applied to the recruitment of senior
employees in 2013. No changes were made to existing
employment contracts entered into prior to 2013, and no
material changes were made to the guidelines for the remuneration of senior employees. Further information on the salary
and other remuneration of senior employees for 2013 can be
found in Note 6 to the annual accounts.
Exposure to financial risk arises in respect of liquidity, foreign
currency, market and interest rate risk. These areas are
monitored continuously. The Board is of the opinion that the
regular cash flow from operations, combined with the scale of
liquid assets held, ensures that exposure to liquidity risk is at a
low level. Foreign currency exposure is reduced since the large
majority of contracts entered into stipulate payment in
Norwegian kroner. Net pension liabilities and other financial
investments are exposed to market risk in that their value can
be affected by changes in profits, dividends and interest rates.
Oslo Clearing is a central counterparty for transactions in
equity and derivative instruments. This business involves
exposure to market risk and credit risk. Steps are taken to
reduce risk exposure by requiring the provision of collateral,
the operation of a default fund for clearing of equity instruments, the provisions of the clearing rules and routine credit
evaluation of counterparties. Oslo Clearing carries out routine
stress tests and monitoring of its risk exposure in accordance
with international standards.
Environmental report
The activities carried out by Oslo Børs VPS do not have any
material adverse effect on the external environment. The
group’s business activities are not subject to any environmental licences or restrictions. VPS runs a campaign to encourage
more investors to elect to receive electronic messages
through VPS Investor Services rather than receiving printed
communications by post.
Research and development
Oslo Børs VPS does not carry out any research or development
activity. However, the group does develop its own IT systems.
Risk factors and areas of uncertainty
The key systems operated by Oslo Børs maintained a generally
high level of availability in 2013. Availability of the trading
system for equities and fixed-income instruments, Millennium
Exchange, was 100%. The Sola trading system for derivatives
also achieved availability of 100%.
Structural changes in the international capital market cause
continuous changes in the competitive outlook. Failure to
adapt to changes may have adverse consequences for the
group’s domestic and international position. On a medium-term
20
closing conditions, the sale is expected to close in the second
quarter of 2014.
Overall availability in 2013 for the central counterparty
systems for equities and derivatives operated by Oslo Clearing
was 99.96% and 99.91% respectively.
Operating expenses for 2014 before capitalisation of internal
resources, depreciation and amortisation of excess value are
expected to be in the order of NOK 450 - 470 million. Comparable expenses in 2013 were just over NOK 440 million (after
adjusting for non-recurring items and changes in the composition
of the group).
Overall availability for the key products and services operated
by VPS was on average 99.97% in 2013.
Oslo Børs, VPS and Oslo Clearing have implemented and
operate internal control procedures in accordance with the
‘Internal Control regulation’ issued by the Financial Supervisory
Authority of Norway. Work on risk management and internal
control is a continuous process of implementing measures to
improve identified areas and monitoring their effectiveness.
The acquisition of Burgundy accounted for revenue of NOK 60
million in 2013, not including the recognition of negative
goodwill of NOK 84 million. Revenue from Burgundy in 2014 is
expected to be NOK 8 million.
The Board of Directors is not aware of any particularly
significant risk factors in relation to the operations of Oslo Børs
VPS other than as mentioned above. The Board recognizes the
importance of continuing to develop services in close collaboration with customers in order to ensure that the risk of losing
business volume is minimised.
Oslo Børs VPS has the solidity and liquidity needed to take an
aggressive approach to carrying out the projects it plans and
meeting the challenges it faces in 2014. The group expects
that operating costs in 2014 will be somewhat higher than in
2013 as a result of continuing work on the development of a
new funds system and renewal of the IT platform used by VPS.
Prospects for 2014
After adjusting for non-recurring items, costs for 2013 before
capitalisation of internal resources, depreciation and amortisation of excess value were NOK 448 million. It was stated in
the annual report for 2012 that, before allowing for the
consolidation of Burgundy AB and Fish Pool ASA, costs for
2013 before capitalisation of internal resources, depreciation
and amortisation of excess value were expected to be in the
order of NOK 470 – 480 million.
The turbulent conditions in financial markets over recent years
and increasing competition continue to cause uncertainty over
the future level of transaction volumes and activity.
Oslo Børs VPS strives to offer a range of products with a
pricing structure that is competitive and that promotes active
use of the services the group offers. The group expects competition from other venues for trading in listed securities to
continue to be intense, and it now also expects growing
competition for post-trade processing. Oslo Børs VPS will
again in 2014 consider changes in certain fees/prices and
measures to improve the efficiency of services to the benefit
of its customers.
The Annual Accounts have been prepared on the going concern
assumption, and the Board confirms that this assumption is
appropriate. No events have occurred between the date of the
accounts and the signing of this report of material significance
for the accounts reported for 2013.
Oslo Børs VPS Holding has agreed to sell 100% of Oslo
Clearing to Swiss SIX group. Subject to satisfaction of the
Oslo, 26 March 2014
Benedicte Schilbred Fasmer
Chair
Wenche Agerup Board member
Harald Espedal Board member
Ottar Ertzeid Christian Fredrik Falkenberg Kjøde
Board member
Board member
21
Sissel Bakker
Board member
Bente A. Landsnes
Group CEO
Statement pursuant to Section 5-5 of the Securities Trading Act
The Board of Directors confirm that to the best of their knowledge, the annual accounts for the period 1 January 2013 to
31 December 2013 have been prepared in accordance with the current accounting standards and that the information in
the accounts gives a true and fair view of the group’s assets, liabilities, financial condition and earnings as a whole, and that
the Directors’ annual report gives a true and fair view of the performance, results and commercial position of the company
and of the group as a whole, as well as providing a true and fair view of the most relevant risk factors and uncertainties that
the company and group face.
Oslo, 26 March 2014
Benedicte Schilbred Fasmer
Chair
Wenche Agerup Board member
Harald Espedal Board member
Ottar Ertzeid Christian Fredrik Falkenberg Kjøde
Board member
Board member
22
Sissel Bakker
Board member
Bente A. Landsnes
Group CEO
Oslo Børs VPS Holding ASA - GROUP
Statement of comprehensive income
(Figures in NOK 1,000)
Note201320122011
OPERATING REVENUES
Operating revenues
2
986 911 830 309 921 894
TOTAL OPERATING REVENUES
986 911
830 309
921 894
OPERATING COSTS
Salaries and related costs
4,5,6
278 750 225 193 263 788
13,14
91 761 66 139 71 217
Amortisation of excess value
15
80 904 93 766 109 061
Write-down of excess value
15
5 372 -
Depreciation
Other operating costs
4
258 009 193 019 181 828
TOTAL OPERATING COSTS
709 424
583 489
625 894
OPERATING PROFIT
277 487
246 821
296 001
Income from investments in joint ventures
3,4
678 1 497 -459
Financial income
4
24 423 22 154 26 678
Financial expense
4
-1 918 -1 142 -1 402
NET FINANCIAL ITEMS
4
23 183
22 509
24 817
ORDINARY PRE-TAX PROFIT
300 670
269 330
320 818
-86 560
-75 296
-87 773
Income tax expense
9
PROFIT/-LOSS FOR THE YEAR
214 110
194 034
233 045
Items that will not be reclassified to profit and loss:
Actuarial gains/losses on defined benefit pension scheme
5
22 986 19 007 -19 135
Tax effect
9
-6 206 -5 322 5 358
COMPREHENSIVE INCOME
230 890
207 719
219 268
Earnings per share
10
4.98 4.51 5.42
Diluted earnings per share
10
4.98 4.51 5.42
23
Oslo Børs VPS Holding ASA - GROUP
Statement of financial position at 31 Dec
(Figures in NOK 1,000)
Note
20132012
FIXED ASSETS
Intangible assets
IT systems
Customer relationships
11,14
179 649 245 701
14
15 477 30 969
Licences
14
13 500 10 000
Goodwill
14,15
498 381 464 233
Total intangible assets
707 007 750 903
9
59 320 69 619
Property
13
15 125 16 784
Fittings, IT equipment, vehicles etc.
13
43 781 48 913
Total tangible assets
58 906 65 697
Deferred tax assets
Tangible assets
Financial fixed assets
Investment in joint ventures
3
13 039 12 910
Investment in bonds
3
84 869 339 300
Bank deposits
32 107
Net pension assets
Other long-term receivables
5
81 3 246
12
2 525 405
Total financial fixed assets
100 514 387 968
Total fixed assets
925 747
1 274 187
CURRENT ASSETS
Receivables
Accounts receivable
Market value of outstanding derivatives positions
Other receivables
17
71 511 48 605
16,19
290 336 134 689
12
31 203 28 204
Total receivables
393 050
211 498
Investments
Bank deposits
3,16
278 043 20 057
16
1 571 290 1 303 533
Total current assets
2 242 383
1 535 088
TOTAL ASSETS
3 168 130
2 809 275
24
Oslo Børs VPS Holding ASA - GROUP
Statement of financial position at 31 Dec
(Figures in NOK 1,000)
Note
20132012
EQUITY
Paid-in equity
Share capital
18
86 008 86 008
Own shares
18
-40 -57
Other paid-in equity
1 295 579 1 364 920
Total paid-in equity
1 381 547 1 450 871
Non-controlling interest
1 123 Total equity
1 382 670 1 450 871
LIABILITIES
Long-term liabilities
Pension liabilities 5,11
146 507 9
29 205 47 621
Total long-term liabilities 175 712 216 830
12
19 895 12 037
9
103 430 89 203
Payroll tax and other deductions 25 387 24 133
Deferred tax liability 169 209
Current liabilities
Trade creditors Tax payable Cash collateral 16
1 090 075 814 386
16,19
290 336 134 689
12
80 626 67 126
Total current liabilities 1 609 749 1 141 574
Total liabilities 1 785 461 1 358 404
TOTAL LIABILITIES AND EQUITY 3 168 130
2 809 275
Market value of outstanding derivatives positions
Other current liabilities Oslo, 26 March 2014
Benedicte Schilbred Fasmer
Chair
Wenche Agerup Board member
Harald Espedal Board member
Ottar Ertzeid Christian Fredrik Falkenberg Kjøde
Board member
Board member
25
Sissel Bakker
Board member
Bente A. Landsnes
Group CEO
Oslo Børs VPS Holding ASA - GROUP
Statement of changes in equity
(Figures in NOK 1,000)
Share Own
capital shares
Other paid-in Other equity equity Noncontrolling Total
interest equity
Equity capital at 31 December 2010
86 008 -48 1 540 059 0 1 626 019
Consolidated profit at December
- Actuarial gains/losses applied directly to equity after tax
Comprehensive income
- 233 045 -13 777 219 268 233 045
-13 777
219 268
Transactions with owners
Buy-back of own shares
-1 Dividend for 2010
-124 688 Total transactions with owners
-1 -124 688 -118 -219 150 -219 268 -119
-343 838
-343 957
Equity capital at 31 December 2011
86 008 -49 1 415 366 0 1 501 325
Consolidated profit at December
Actuarial gains/losses applied directly to equity after tax
Comprehensive income
- - - 194 034 13 685 207 719 194 034
13 685
207 719
Transactions with owners
Buy-back of own shares
-8 Dividend for 2011
-50 446 Total transactions with owners
-8 -50 446 -287 -207 432 -207 719 -295
-257 878
-258 173
Equity capital at 31 December 2012
86 008 -57 1 364 920 0 1 450 871
Consolidated profit at December
Actuarial gains/losses applied directly to equity after tax
Comprehensive income
- - - Transactions with owners
Buy-back of own shares
17 Dividend for 2012
Non-controlling interest
Translation effects
Total transactions with owners
17 214 110 16 780 230 890 214 110
16 780
230 890
483
-69 936 -230 890 - 1 123 113 -69 340 -230 890 1 123 500
-300 826
1 123
113
-299 090
Equity capital at 31 December 2013
86 008 -40 1 295 579 0
1 123 1 382 670
26
Oslo Børs VPS Holding ASA - GROUP
Cash flow statement
(Figures in NOK 1,000)
Note
201320122011
Cash flow from operational activities
Ordinary pre-tax profit
300 670
269 330
320 818
Tax paid in the period
-89 203 -128 731 -124 649
Gain/loss on sale of fixed assets
- -324 -88
Depreciation of fixed operating assets
13
91 761
66 139
71 217
Amortisation and write-downs of excess value
14,15
80 904
99 138
109 061
Recognition of negative goodwill
-83 485
Receiavbles/liabilities received in acquisitions of subsidiaries
7 786
Net financial items
4
-23 183
-22 509
-24 817
Change in accounts receivable
-22 906
6 518
20 566
Change in trade creditors
7 858
-3 342
-6 570
Change in pension liabilities
5
3 449
-33 728
15 196
Change in other accruals
43 653
6 034
-12 362
Net cash flow from operational activities
317 304
258 525
368 373
Cash flow from investment activities
Payments for subsidiaries
-57 700
Cash received in acquisitions of subsidiaries
62 462
Investment in/sale of shares
3
-20 057
14 832
Investment in/sale of bonds
3
-3 555
-309 057
Cash collateral from members
275 689
781 290
-30 243
Interest income
4
21 797
22 154
26 678
Dividends received
550650655
Receipts from sale of fixed assets
60
516
40
Payments for purchase of fixed assets
13
-46 606
-64 043
-40 943
Net cash flow from investment activities
252 697
411 453
-28 981
Cash flow from financing activities
Payment on purchase of own shares
18
500
-295
-119
Interest expense
4
-1 918
-1 142
-1 290
Dividend paid
10
-300 826
-257 878
-343 838
Net cash flow from financing activities
-302 244
-259 315
-345 247
Net change in cash and liquid assets
Cash and liquid assets at start of the period
Cash and liquid assets at end of the period
16
267 757
1 303 533
1 571 290
410 663
892 870
1 303 533
-5 855
898 726
892 870
The cash flow analysis has been prepared in accordance with the indirect method. Cash and liquid assets comprise cash and bank deposits.
Cash and liquid assets include blocked deposits amounting to NOK 13,055k (NOK 13,755k in 2012 and NOK 12,915k in 2011). Cash and liquid
assets included as of 31.12.12 a balance of NOK 2,444k on the company’s settlement account due to be transferred to members on the following
settlement day (NOK 0 in 2013 and 2011). A guarantee of NOK 27,516k (NOK 32,107k in 2012 and NOK 32,343k in 2011) in respect of future
pension payments were at 31.12.12 and 31.12.11 classified as fixed assets and not included in the holdings shown above.
During 2012 Oslo Clearing received NOK 781,290k in cash collateral from clearing members. In connection with this, investments of
NOK 329,114k was done in treasury bills and bonds. Cash collateral received, but not invested in treasury bills or bonds, is included
in cash and liquid assets. Net increase in cash collateral in 2013 was NOK 275,689k.
27
Oslo Børs VPS Holding ASA
Notes - GROUP
Accounting principles
Consolidation principles
The consolidated accounts of Oslo Børs
VPS Holding for 2013 were approved
by the Board of Directors on 26 March
2014.
The group comprises Oslo Børs VPS
Holding ASA and the subsidiary companies Oslo Børs ASA, Verdipapirsentralen
ASA, Oslo Clearing ASA and Oslo Market
Solutions AS. Oslo Børs VPS Holding
ASA holds 100% of the share capital of
these companies. Oslo Børs ASA owns
94% of the shares in Fish Pool ASA.
Verdipapirsentralen ASA owns 100%
of the shares in Evolution Software
Sweden AB. Oslo Børs VPS Holding ASA,
Oslo Børs ASA and Oslo Clearing ASA
operate from offices at Tollbugata 2,
0152 Oslo, Norway. Verdipapirsentralen
ASA and Oslo Market Solutions AS
operate from offices at Fred Olsens gate
1, 0152 Oslo, Norway. Non-controlling
interests are included in the company’s
equity.
Oslo Børs VPS Holding ASA is a public
limited liability company registered in
Norway. The company’s registered office
is Tollbugata 2, 0152 Oslo, Norway.
The group’s business activities are the
operation of marketplaces for trading in
securities and other stock exchange
listed financial instruments, settlement
of trading in financial instruments,
clearing of derivatives and equities, and
sales of financial market data and
related systems. The group prepares its
accounts in Norwegian kroner (NOK),
which is the functional currency for all
companies in the group.
The accounts have been prepared in
accordance with the International
Financial Reporting Standards (IFRS)
as approved by the EU. Oslo Børs VPS
Holding ASA has not been admitted to
stock exchange listing, and the preparation of consolidated accounts in
accordance with IFRS is therefore on
a voluntary basis.
The consolidated accounts are based on
historic cost, save for financial assets
available for sale and financial assets
and liabilities (including derivatives)
which are valued at fair value through
profit and loss.
Comparable figures
For comparison with previous years,
comparable figures are provided for
balance sheet items for the last two
years, while for profit and loss items
comparable figures are provided for the
last three years.
The consolidated accounts show the
financial condition of the group when the
companies making up the group are
consolidated as a single commercial
entity. The subsidiaries are consolidated
in accordance with the purchase value
method. This means that the historical
purchase price of shares in the subsidiary is replaced by the actual value of
assets and liabilities in the subsidiary at
the time of purchase. Companies that are
purchased or sold during the course of
the year are included in the consolidated
accounts from the time that the group
takes over control and until such time as
the group ceases to exercise control.
Changes in ownership interests in
subsidiaries that do not cause loss of
controlling influence are accounted for
as equity transactions. The consideration
is recognised at fair value, and the
difference between consideration and
the book value of the ownership interest
is applied directly to the controlling
interest’s equity. Verdipapirsentralen
ASA, Oslo Clearing ASA and Oslo Market
Solutions AS are included in the
28
consolidated accounts with effect from
27 November 2007. Burgundy AB, Fish
Pool ASA and Evolution Software
Sweden AB are included in the consolidated accounts with effect from 27
January 2013, 15 February 2013 and
5 July 2013 respectively. All internal
transactions, including internal services
and unrealised gains and losses as well
as receivables and liabilities between the
parent company and subsidiaries, are
eliminated on consolidation.
Any deficit or uncovered loss in a
subsidiary company is also allocated to
the non-controlling interest, even if this
causes the non-controlling interest to be
shown with a negative amount in the
company’s equity. This treatment
represents a change with effect from
1 January 2010 as a result of the implementation of the amendments to IAS 27.
In the event of a change in ownership
interest in a subsidiary that causes loss
of control, the consideration is measured
at fair value. The book value of assets
and liabilities in the subsidiary and
non-controlling interests are derecognised
from the time of loss of control. The
difference between the consideration
and the book value of the assets is
recognised to profit or loss as a gain or
loss. Any remaining investment is
measured at fair value, and any gain or
loss is recognised to profit or loss as part
of gains/losses on sale of subsidiaries.
Any amounts recognised as other income
and costs form part of profit or loss,
except where such amounts are applied
directly to equity as a result of other
IFRS standards.
Investments in joint ventures are
accounted for in accordance with IAS 31.
A joint venture is a business over which
the group has shared control through a
contractual agreement between the
parties. Such an investment is recognized
in accordance with the equity method.
Notes - GROUP
Associated companies are undertakings
where the group has significant influence, but not control, over financial and
operational management (normally
involving an ownership interest between
20% and 50%). The consolidated
accounts include the group’s share of the
profit or loss from associated companies
recognised in accordance with the equity
method from such time as the group first
exercises significant influence until such
time as this influence ceases.
When the group’s share of losses in an
associated company exceeds the value
of its investment, the group’s capitalised
value is reduced to zero and any further
losses are not recognised to profit and
loss unless the group has a liability to
meet such losses.
Business combinations and goodwill
Business combinations are recognised in
accordance with the acquisition method.
Transaction costs are recognised to
profit and loss as they are incurred. Prior
to 1 January 2010, such costs were
added to the cost price.
The consideration for the acquisition of a
business is recorded at fair value at the
date of acquisition and can include cash,
shares issued and conditional consideration. Conditional consideration is
classified as a liability in accordance with
IAS 39 and is recognised at fair value in
subsequent periods with changes in
value applied through profit and loss.
In the case of acquisitions carried out
before 1 January 2010, conditional
consideration was included as consideration if it was more likely than not that the
amount would be paid. In addition,
changes in deferred consideration were
treated as changes to acquisition cost
and adjusted against goodwill.
Upon the acquisition of the business, all
assets and liabilities are reviewed for
classification and allocation in accordance with the contractual terms and
conditions, commercial circumstances
and other relevant matters at the time of
acquisition. Assets and liabilities
acquired are recognised at fair value in
the opening balance sheet.
The difference between the consideration paid for acquisition and fair value of
net identifiable assets at the time of
acquisition is classified as goodwill. In
the case of investments in joint ventures,
goodwill is included in the balance sheet
value of the investment. Goodwill is
recognised in the balance sheet at
acquisition cost, less any accumulated
write-downs. Goodwill is not amortised,
but is tested at least annually for
impairment. If the impairment test
shows that book value is in excess of fair
value, goodwill is written down to fair
value. Assets and liabilities acquired as a
result of a business combination are
capitalised at fair value in the opening
consolidated balance sheet. In the case
of each acquisition, a decision is made on
whether to recognise non-controlling
interests at fair value, or on the basis of
the non-controlling interests’ share of
identified asset and liability items.
Investments where the group does not
have a controlling interest are accounted
for in accordance with IFRS 3. Goodwill
in such cases is recognised only for the
non-controlling interest’s share. Goodwill
is calculated as the difference between
the acquisition cost and the controlling
interest’s share of the fair value of
identifiable net assets measured at the
time of acquisition.
Goodwill is tested annually for impairment. In connection with this, goodwill is
allocated to cash generating units or
groups of cash generating units that are
expected to benefit from the synergy
effects of the business combination. If
29
the fair value of equity acquired through
a business combination exceeds its
acquisition cost, the excess value is
recognized to profit immediately at the
time of acquisition.
In the case of step acquisition, assets
and liabilities are measured at fair value
at the time they are acquired. Changes in
the value of the earlier ownership
interest are recognised to profit and
loss. In the case of acquisitions carried
out before 1 January 2010, the earlier
ownership interest was not adjusted to
fair value upon acquiring additional
ownership interest. For such acquisitions, goodwill was the estimated total
of goodwill associated with each
acquisition transaction.
Cash and cash equivalents
Cash includes cash held in the tills and
bank deposits. Bank deposits with a
fixed term of one year or longer are
classified as fixed assets. Cash equivalents are short-term liquid investments
with a maximum term of three months
that can readily be converted to a certain
cash amount. Liquid assets held as
deposits with a fixed term in excess
of three months but not exceeding
12 months are not classified as cash
and cash equivalents in the cash flow
analysis.
Collateral pledged in relation to
clearing of equity instruments
and derivatives
Members of Oslo Clearing are required
to pledge collateral for their participation in settlement. Following changes in
September 2012 to the clearing model
applied by Oslo Clearing, members can
pledge collateral in the form of financial
instruments or liquid assets (cash). Cash
collateral must be transferred to Oslo
Clearing (transfer of title). Oslo Clearing
invests these funds in accordance with
the Investment Policy issued by its board
Notes - GROUP
of directors. In the balance sheet, the
asset entries for these funds are shown
as bank deposits and financial fixed
assets while the liability entries are
shown as ”Cash collateral from members”.
Accounts receivable
Accounts receivable are recorded at
their nominal value less provisions for
expected losses.
Financial derivatives that are not
hedging instruments
Financial derivatives that are not
accounted for as hedging instruments
are valued at fair value. Changes in fair
value are recognised to profit and loss as
they occur.
As part of its normal business, the
subsidiary Oslo Clearing ASA is a formal
counterparty in derivative transactions
traded on Oslo Børs and in derivative
transactions or securities borrowing and
lending transactions notified for clearing.
Counterparty risk is measured using
models designed under international
standards. Counterparty exposure is
covered through individual collateral
provided by each customer. In accordance with IFRS, the clearing business is
required to recognise in its balance sheet
the commitments borne by the company
as a central counterparty in derivative
contracts. The estimated market value of
the positions is recognised as a current
liability, with a matching entry under
current receivables. Claims and liabilities
that can be assigned to outstanding
derivative positions are netted against
each other to the extent that such
offsetting is permitted.
Financial instruments
In accordance with IAS 39 ‘Financial
Instruments: Recognition and Measurement’, financial instruments that fall
within the scope of IAS 39 are classified
into the following categories: at fair
value through profit or loss (held for
trading purposes), hold to maturity, loans
and receivables, available for sale and
other commitments.
In 2011, 2012 and 2013 the group held
instruments in the categories ‘financial
instruments at fair value through profit
or loss’, ‘loans and receivables’ and
‘available for sale’. Loans and receivables
are valued at amortised cost. Financial
instruments classified as available for
sale are valued at fair value.
Gains or losses that arise from changes
in the fair value of financial investments
classified as available for sale are
recognised as part of other income and
expenses in comprehensive income.
In 2010, Oslo Clearing became a clearing
house for trading in equity instruments.
The accounts apply the settlement date
for the recognition of income. In practical
terms, this means that sales and
purchases take place simultaneously. If a
member firm defaults on its settlement
obligations, Oslo Clearing may have to
carry a position for a short period.
Derivatives and hedging
Derivatives are recognised in the balance
sheet at fair value at the time the
derivative contract is entered into, and
are subsequently recognised at fair
value. Changes in fair value are recognised to profit and loss.
Tangible operational fixed assets
and intangible assets
Tangible operational fixed assets are
valued at acquisition cost less accumulated depreciation and any write-downs.
Expenses incurred after an operational
fixed asset comes into use, such as
routine maintenance, are charged to
profit and loss, while costs of improvements that are expected to produce
future economic benefits are capitalised.
30
Intangible assets are recognised in the
balance sheet if it is likely that the
expected future commercial benefits
arising from the asset will be received by
the company, and the acquisition cost of
the asset can be reliably measured.
Acquisition cost includes the cost of
internal and/or external development
resources, as well as the purchase of
off-the-shelf software. Costs are
capitalised from the time of the decision
to implement the project. Costs of
preparatory work for a project, marketing and training are not capitalised.
Intangible assets with defined commercial
life are valued at acquisition cost less
accumulated amortisation and writedowns. Amortisation starts when the
project is complete, or when a clearly
defined subsystem goes into production.
Tangible operational fixed assets and
intangible assets are subject to linear
depreciation using the following periods
for expected commercial life:
IT systems acquired
through merger
3 - 7 years
(changed from 9 years in 2011)
Other IT systems 3-10 years
(IT systems etc.)
Customer relationships
7 years
(changed from 9 years in 2011)
Licences
Real estate
Vehicles, fixtures and
fittings etc.
8-50 years
3-10 years
The depreciation period for real estate
reflects different depreciation periods
for the different technical installations
and building elements included in this
balance sheet item. Depreciation method
and the periods used are evaluated
annually. This also applies to the
remaining value. In the event of a change
in the estimated remaining commercial
life of an asset, the book value at the
Notes - GROUP
start of the accounting period is
depreciated over the new remaining
commercial life.
Operational assets that are leased on
terms that transfer the major part of
financial rights and liabilities to the
group are treated as tangible operational
assets at the current value of the
minimum rental payments, or at fair
value if this is lower. The lease payment
liability is included as a long-term
liability. For other leasing agreements,
lease rental payments are treated as
operating costs and are allocated
systematically over the same period.
Provisions
A provision is recognised in the accounts
when the group has a liability (contractual or self-imposed) as a result of
previous events and it is likely (more
likely than not) that a financial settlement will arise as a result of the liability
and the amount of the liability can be
measured reliably. If the effect is
significant, the provision is calculated by
discounting expected future cash flows
using a pre-tax discount rate that
reflects the market valuation of the time
value of money and, where appropriate,
specific risks associated with the liability
in question.
Equity
Financial instruments are classified as
liabilities or equity on the basis of the
underlying financial reality. Distributions
made to holders of financial instruments
that are classified as equity are charged
directly to equity.
If the company buys back own shares,
the purchase price including directly
attributable costs is charged directly to
equity. Holdings of own shares are
reported as a reduction in equity. Losses
or gains on transactions in own shares
are not recognised to profit and loss.
Transaction costs directly attributable to
equity transactions are charged directly
to equity after making a deduction for
tax. The reserve for unrealised gains
includes the total net change in fair value
of financial instruments classified as
available for sale, until an investment is
disposed of or is deemed to be of no value.
monetary items measured at historic
prices denominated in foreign currency
are translated to Norwegian kroner by
using the exchange rate on the transaction date. Currency valuation differences
are recognised as they occur in the
accounting period.
Employee benefits
Revenue
Fees charged for services provided on a
daily basis and fixed annual and monthly
fees represent the group’s principal
source of revenue.
Annual fixed fees are invoiced in advance
at the start of the year, and are recognised to income over the course of the year
(deferred income recognition). Other
trading fees are mainly invoiced in
arrears, and are recognised to income in
the month to which they apply (income
recognition in advance). Certain types of
revenue, for example the monthly
terminal fees charged for access to
financial market data from Oslo Børs, are
invoiced in arrears on the basis of the
reported number of users and are
recognized to income in the month to
which the fees apply (income recognition
in advance). If information on the number
of users is not received prior to the end
of an invoicing period, the income
recognised is based on a best estimate
of the number of users. Where invoices
are issued at a later date as a result of
errors in the information provided for
monthly invoicing, payments received
are recognised as revenue in the period
they are received.
Monetary items denominated in
foreign currency
Transactions denominated in foreign
currency are translated to NOK at the
exchange rate on the transaction date.
Monetary items denominated in foreign
currency are translated at the exchange
rate on the balance sheet date. Non31
The group’s pension arrangements
comprise a defined benefit scheme and
a defined contribution scheme. The net
pension liability for the defined benefit
scheme is calculated on the basis of the
current value on the balance sheet date
of the future pension benefits to which
employees are entitled, less the fair
value of pension fund assets. The
calculations are based on the linear
model for the accrual of pension
benefits. Actuarial gains and losses are
applied directly to comprehensive
income. For the defined contribution
scheme, payments into the scheme are
recognized as a cost as they are incurred.
The group has no further obligations in
respect of the defined contribution
scheme. The group terminated its
defined benefit group pension arrangements on 31 December 2012. Employees who were members of the defined
benefit scheme were transferred to the
existing defined contribution scheme
with effect from 1 January 2013.
Income taxation
Tax expense is made up of tax payable,
changes in deferred tax assets and
changes in deferred tax. Deferred tax
assets and deferred tax in the balance
sheet are calculated on all differences
between accounting and taxation values
of assets and liabilities, with the
exception of timing differences that
relate to investments in subsidiaries,
associated companies or joint ventures,
where the group controls when the
timing difference will be reversed and
this is not expected to take place in the
Notes - GROUP
foreseeable future. Provision is made
for deferred tax assets in respect of
goodwill items for which goodwill
amortisation is tax deductible.
Deferred tax assets are capitalised in the
balance sheet to the extent that it is
likely that the group will have sufficient
taxable surpluses in subsequent periods
to make use of the tax asset. The group
capitalises deferred tax assets that have
not previously been capitalised to the
extent that it has become likely that the
group can make use of the deferred tax
asset. Similarly, the group will reduce a
capitalised deferred tax asset to the
extent that the group can no longer
assume that it is likely to make use of the
deferred tax asset. Deferred tax assets
are measured on the basis of the future
tax rate payable by the companies in the
group in which the differences have
arisen. Deferred tax and deferred tax
assets are recognised at nominal value,
and are classified in the balance sheet as
financial fixed assets and long-term
liabilities respectively.
Taxes related to items recognized as
part of other income and expense in comprehensive income or directly to equity
(equity transactions), are similarly
recognized to other income and expense
in comprehensive income or directly to
equity.
Borrowing costs
Transaction costs are recognised as part
of the loan to which they relate when
interest and other costs (“borrowing
costs”) in relation to the loan are
recognised to the accounts over the life
of the loan on the basis of effective interest (amortised cost). Borrowing costs
are capitalised to the extent that they
relate directly to the purchase or
manufacture of a fixed asset.
Write-down of financial assets
Financial assets valued at amortised
cost are written down by the difference
between the book value of the asset and
the present value of the estimated
future cash flows, discounted by the
original effective interest rate of the
financial asset, if there is objective
evidence that it is likely that the
instrument’s cash flow has been impaired
by one or more events that occurred
after the initial recognition of the asset.
The amount of the write-down is the
difference between the book value of the
asset and the present value of the
estimated future cash flows, discounted
by the original effective interest rate of
the financial asset. The amount of the
write-down is charged to profit and loss.
If, in a subsequent period, the reason for
the impairment ceases, and this change
can objectively be related to an event
occurring after the impairment was
originally recognised, the previously
recognised write-down is reversed.
The amount of the reversal must not
cause the book value of the financial
asset to exceed the amortised cost that
would have applied if the original
write-down had not been taken into
account at the time of the reversal.
Reversals of earlier write-downs are
reported as part of net financial items.
Segmental information
The Oslo Børs VPS Holding ASA group
has four segments: Oslo Børs, VPS, Oslo
Clearing and Oslo Market Solutions.
Segment information has been prepared
in accordance with IFRS 8.
Contingent liabilities and assets
Contingent liabilities are not recognised
in the annual accounts. Information is
provided on any material contingent
liabilities, excluding contingent liabilities
where the likelihood of the liability
materialising is low. Contingent assets
32
are not recognised in the annual
accounts, but information is provided if
there is a reasonable degree of likelihood
that the group will receive such a benefit.
Events after the date of
the balance sheet
The annual accounts include information
on any new information that has arisen
since the date of the balance sheet in
respect of the company’s financial
condition on the balance sheet date.
Events after the date of the balance
sheet that do not affect the company’s
financial condition on the balance sheet
date, but that would affect the
company’s future financial condition, are
disclosed to the extent they are material.
Use of estimates in preparing
the annual accounts
Management has used estimates and
made assumptions that have affected
assets, liabilities, income, costs and
information on potential liabilities. This
is particularly the case for estimates
made in connection with acquisitions,
estimates in respect of depreciation of
tangible fixed assets and amortisation of
intangible assets, estimates of the value
of goodwill, evaluating whether development costs should be capitalised or not,
and the calculation of pension liabilities.
Future events may cause changes in
estimates. Estimates and underlying
assumptions are kept under continuous
review. Changes in accounting estimates
are recognised in the accounts in the
period the change occurs. If the changes
also affect future periods, the effect is
allocated over the current and future
periods. See note 11.
Financial items
Financial items relating to daily settlement of derivatives and equity instruments are recognised as operating
revenue and operating costs. Other
Notes - GROUP
financial items are recognised as
financial income or financial expense.
New accounting standards that
have been implemented
The following new accounting standards
were implemented with effect from the
2013 financial year:
Changes to IAS 1 Presentation of
Financial Statements in relation to the
statement of comprehensive income.
The changes involve dividing the items
making up comprehensive income into
two groups, i.e. items that are subsequently reclassified to profit and loss and
items that are not reclassified. The
changes do not affect which items are
included in comprehensive income.
Changes to IAS 19 Employee benefits
require that all actuarial gains and losses
must now be recognised in full as part of
a comprehensive income when they arise,
and interest expense on pension
liabilities and expected return on pension
assets are replaced by a net interest
amount calculated by applying a discount
rate to net pension liabilities.
IFRS 13 Fair Value Measurement is
intended to improve consistency and
reduce complexity by giving a clear
definition of fair value, and represents
a unified approach to the measurement
of fair value and the information to be
provided in the notes to the accounts in
relation to all standards that use the fair
value concept. The standard does not extend the scope of the fair value concept,
but provides guidance for the determination of fair value when this is required or
permitted by other IFRS standards.
New accounting standards and
interpretations that have not yet
been implemented
The group’s intention is to implement the
relevant changes at the time the changes
come into effect, subject to the EU
having approved the changes before the
time at which the consolidated accounts
are issued. In accordance with this
intention, the group has not elected early
implementation of any new or changed
IFRS standards or IFRIC interpretations.
IFRS 9 Financial Instruments regulates
the classification, measurement and
accounting treatment of financial assets and financial liabilities. IFRS 9 was
issued in November 2009 and October
2010, and replaces the sections of IAS
39 deal with the accounting treatment,
classification and measurement of
financial instruments. IFRS 9 stipulates
that financial assets shall be divided into
two categories based on the method of
measurement: assets measured at fair
value and assets measured at amortised
cost. The classification must be made on
first recognition. The classification will
depend on the company’s business model
for managing its financial instruments
and the characteristics of the contractual cash flows generated by the instrument in question. The requirements for
financial liabilities are largely the same
as in IAS 39. The main change, in relation
to cases where fair value recognition has
been selected for financial liabilities, is
that the part of the change in fair value
that is result of changes in the company’s
credit risk is recognised to comprehensive income rather than the profit and
loss account, subject to this not causing
a recognition inconsistency. The group
has not assessed the full consequences
of the revised standard on the accounts,
but intends to apply IFRS 9 once the
standard has come into force and has
been approved by the EU. It is not yet
known when this standard will come into
effect. The group will also consider the
consequences of the remaining subphases of IFRS 9 when these have been
completed by IASB.
33
IFRS 10 Consolidated Financial
Statements is based on the current
principles of using the concept of control
as the decisive criterion for deciding
whether a company should be included in
the consolidated accounts of the parent
company. The standard provides additional
guidance in assessing whether control
is in place in circumstances where this
is difficult to assess. The group has not
assessed the full consequences of IFRS
10. The group intends to apply IFRS 10
with effect from 1 January 2014.
IFRS 11 Joint Arrangements replaces
IAS 31 Interests in Joint Ventures and
SIC 13. IFRS 11 removes the opportunity to apply proportionate consolidation
for joint ventures. A joint arrangement
according to this standard is classified
either as a joint operation or as a joint
venture. Accounting recognition of a joint
operation requires the parties to recognise their rights to assets and liabilities
on the balance sheet and to recognise
their share of income and costs arising
from the operation through profit and
loss. The equity method is to be used
for the accounting recognition of joint
ventures. These changes come into
effect from the accounting year commencing on or after 1 January 2014.
This standard is not expected to be of
material significance for the group.
IFRS 12 Disclosures of Interest in
Other Entities stipulates information
requirements for financial interests in
subsidiaries, joint ventures, associated
companies, special-purpose entities
and other non-consolidated structured
entities. The group has not assessed the
full consequences of IFRS 12. The group
intends to apply IFRS 12 with effect
from 1 January 2014.
Notes - GROUP
Note 1 Business combinations
No business combinations were carried out in 2012 or 2011. In 2013, Oslo Børs ASA purchased 100% of the shares in Burgundy
AB and 94% of the shares in Fish Pool ASA. In addition, Verdipapirsentralen ASA purchased 100% of the shares in Evolution
Software Sweden AB. Burgundy AB was merged into Oslo Børs ASA in June 2013.
All of these acquisitions were carried out following agreement on contractual terms with the former owners of the businesses
acquired.
Burgundy, Fish Pool and Evolution were consolidated with effect from 27 January 2013, 15 February 2013 and 7 July 2013
respectively. Excess value analyses were carried out for all three acquisitions. The goodwill that arose in connection with these
acquisitions relates to factors including the employees, expected future earnings and expected synergy gains. The excess value is
not tax deductible.
The following table provides a summary of the acquisition analysis.
(Figures in NOK 1,000)
IT systems
Licences
Goodwill
Deferred tax assets
Other fixed assets
Bank deposits
Other current assets
Total assets
Equity
Non-controlling interests
Long-term liabilities
Current liabilities
Toatl liabilities and equity
Balance at time of Allocation of acquisition excess value 28 459 - - 2 035 1 407 57 396 10 925 100 222 -5 737 3 500 33 624 - - - - 31 387 94 979 - - 5 243 -32 825 1 489 4 238 58 485 100 222 31 387 Fair value after allocating Step
excess values aquisition Fair value
after effect of
step acquisition
22 722 3 500 33 624 524 2 035 1 407 57 396 10 925 131 609 524 22 722
3 500
34 148
2 035
1 407
57 396
10 925
132 133
62 154 1 114 1 489 -590 4 238 63 728 63 268
899
4 238
63 728
131 609 524 132 133
Burgundy had equity of NOK 83 million at the time of acquisition. The acquisition involved negative goodwill of NOK 83 million.
Negative goodwill was recognised to profit and loss, and write-downs totalling NOK 25 million and provisions of NOK 58 million
were also recognised at the same time. These allocations are reflected in the column ”Allocation of excess values”.
The consolidated accounts for 2013 include ordinary operating revenue from the three businesses totalling NOK 80 million. In
addition, NOK 84 million of negative goodwill was recognised to profit and loss at the time of acquisition. Ordinary operating
costs reported by the businesses acquired and included in the consolidated accounts for 2013 total NOK 42 million. In addition
to this, write-downs totalling NOK 25 million and provisions totalling NOK 58 million were recognised at the same time as the
recognition of negative goodwill.
The three businesses are expected to report ordinary operating revenue in 2014 in excess of NOK 40 million. Ordinary operating
costs are expected to be in the order of NOK 30 million.
For the period from 1 January 2013 until the dates on which they were consolidated, the businesses generated NOK 15 million of
revenue and incurred NOK 10 million of costs.
34
Notes - GROUP
Note 2 Segment information
Following the merger of Oslo Børs Holding and VPS Holding, the business of Oslo Børs VPS Holding has four segments: Oslo Børs,
VPS, Oslo Clearing, and Oslo Market Solutions.
The business activity of Oslo Børs is to operate marketplaces for trading in securities and other listed financial instruments. The
business activity of VPS is the registration of rights over financial instruments and settlement of trading in financial instruments.
Oslo Clearing carries out clearing for trading in derivatives contracts and equity capital instruments. The business activity of Oslo
Market Solutions is the development and sale of solutions for Internet-based share trading and presentation of market data. Fish
Pool and Evolution are included in the Oslo Børs and VPS segments respectively.
The identification of segments is based on the organisational structure of the group and its management reporting. The segments
are based on the three units subject to statutory authorisation: Oslo Børs ASA, Verdipapirsentralen ASA and Oslo Clearing ASA.
Oslo Market Solutions is included in its own segment, while Oslo Børs VPS Holding is included in the segment ’Other’.
Oslo Børs VPS Holding ASA entered into an agreement in December 2012 to sell 100% of the shares in Oslo Clearing ASA to the
Swiss company SIX. The sale is conditional on approval by the relevant authorities and certain other matters, and is expected to be
completed in the second quarter of 2014. Oslo Clearing is included in segmental reporting for 2013.
Segment information is based on the unconsolidated accounts of Oslo Børs ASA, Verdipapirsentralen ASA, Oslo Clearing ASA and
Oslo Market Solutions AS, with the addition of each company’s share of excess value, and on the current agreements between the
companies on charges for products and services. Internal transactions are priced on an arm’s length basis.
Oslo Børs VPS Holding only operates in Norway. The group has customers in a number of geographic areas, but it does not
consider that the geographic location of customers gives rise to any material differences in risk and return. The group’s largest
customer accounts for 15% of total revenue. The next largest customer accounts for just over 10% of total revenue. The group’s
largest customer carries out trading in all the group’s segments.
(Figures in NOK 1,000)
2013
Oslo Børs VPS Oslo Clearing
Operating revenue - external 513 968
405 223
54 035
Operating revenue - internal 7 559
11 975
504
Oslo Market Solutions Other/ netting Total
13 686
986 911
6 903
-26 941
0
Depreciation 55 817
Amortisation of excess value 34 645
2 132
241
-1 074
91 761
80 904
80 904
Write-down of excess value 0
Other operating costs 273 503
224 436
40 229
17 528
-18 937
536 759
Total operating costs 329 320
339 985
42 361
17 769
-20 011
709 424
Operating profit 192 207
77 213
12 178
2 820
-6 930
277 488
Income from joint ventures 427
251
678
Financial income 20 062
9 852
4 033
172
-9 696
24 423
Financial expense -1 384
-22
-310
-5
3 639
1 918
Investment in joint ventures 8 359
4 680
13 039
Other assets 665 611
640 041
1 252 254
10 638
586 547
3 155 091
Liabilities 177 022 151 391
1 105 387
4 357
347 304
1 785 461
12 284
20 089
7 284
91
39 748
Investment in the period The entry for netting in respect of other assets includes netting of shareholdings in subsidiaries and intercompany payables and
receivables between subsidiaries.
35
Notes - GROUP
(Figures in NOK 1,000)
2012
Oslo Børs VPS Oslo Clearing
Operating revenue - external 382 888
Operating revenue - internal 7 328
380 270
51 612
15 506
Oslo Market Solutions Other/
netting Total
15 540
830 309
5 509
-28 343
0
Depreciation 25 580
-1 663
66 139
88 390
5 376
93 766
Write-down of excess value 5 372
5 372
Amortisation of excess value 35 548
6 208
465
Other operating costs 170 711
198 751
49 021
17 619
-17 890
418 212
Total operating costs 196 291
322 689
55 229
28 832
-19 553
583 489
Operating profit 193 925
73 087
-3 617
-7 783
-8 790
246 821
Income from joint ventures Financial income Financial expense Investment in joint ventures 647
850
1 497
14 222
12 088
4 171
246
-8 573
22 154
-574
-325
-122
-10
-111
-1 142
8 481
4 429
12 910
Other assets 646 502
1 256 477
1 130 045
10 159
-246 818
2 796 365
Liabilities 199 908 190 522
963 546
5 021
-593
1 358 404
8 308
55 225
151
357
64 041
Investment in the period The entry for netting in respect of other assets includes netting of shareholdings in subsidiaries and intercompany payables and
receivables between subsidiaries.
(Figures in NOK 1,000)
2011
Oslo Børs VPS Oslo Clearing
Operating revenue - external 447 390
383 917
69 107
Operating revenue - internal 6 949
18 016
17
Oslo Market Solutions Other/
netting Total
21 480
921 894
3 601
-28 583
0
Depreciation 27 230
-1 645
71 217
5 376
109 061
Write-down of excess value 0
Amortisation of excess value 38 772
6 204
103 685
656
Other operating costs 184 277
219 547
44 395
19 987
-22 590
445 616
Total operating costs 211 507
362 004
50 599
26 019
-24 235
625 894
Operating profit 242 832
39 929
18 525
-938
-4 348
296 001
Income from joint ventures Other assets Financial expense Investment in joint ventures -674
215
15 949
13 650
-513
-137
8 484
4 934
-459
339
-8 194
26 678
-371
-381
-1 402
3 579
12 063
Other assets 680 867
1 342 138
625 860
24 079
-248 340
2 424 604
Liabilities 245 506 257 133
427 227
8 137
-2 661
935 342
3 772
36 954
68
149
40 943
Investment in the period 36
Notes - GROUP
Note 3 Investments in joint ventures, shares etc.
Oslo Børs purchased 50% of the share capital of NOTC AS on 15 August 2006. Based on the shareholder agreement between
the Norwegian Securities Dealers Association and Oslo Børs, the company is judged to be a joint venture. The ownership interest
in this company is recognised in the consolidated accounts using the equity method. The proportion of profit recognised, less
dividend, is transferred to the reserve for valuation differences to the extent that fair value exceeds acquisition cost. Further
information on the company, the book value of the ownership interest and the calculation of the share of profit is as follows
(Figures in NOK 1,000):
Company
Date of
acquisition
Registered
office
NOTC AS
2006
Oslo
Ownership
Proportion of
interest voting shares held
50 %
50 %
2013
Balance sheet value at 31.12.2012
Share of profit for the year
Dividend received
Balance sheet value at 31.12.2013
8 481
428
-550
8 359
Share of balance sheet and profit and loss items at 31.12.2013:
Current assets
1 644
Long-term assets
3
Current liabilities
272
Revenue
1 331
Costs739
FinansNett Norge AS was incorporated in 2004 by VPS and the Norwegian Securities Dealers Association. The company has
been in operation since the fourth quarter of 2005. The company offers data communications through a metropolitan area (MAN)
network in Oslo. This network provides communication services with the appropriate speed and interface for use by backup and
disaster recovery solutions as used by brokers and other participants in the financial sector. Further information on the company,
the book value of the ownership interest and the calculation of the share of profit is as follows (Figures in NOK 1,000):
Company
Date of
acquisition
Registered
office
Ownership
interest
Proportion of
voting shares held
FinansNett Norge AS
2007
Oslo
50 %
50 %
2013
Balance sheet value at 31.12.2012
Share of profit for the year
Balance sheet value at 31.12.2013
4 429
251
4 680
Share of balance sheet and profit and loss items at 31.12.2013:
Current assets
Long-term assets
Current liabilities
4 377
497
597
Revenue
2 349
Costs
1 794
37
Notes - GROUP
NAC AS was incorporated in 2007 and has share capital of NOK 200k. The company did not carry out any activities in the period
2010-2013. The company’s business is to develop and operate databases. The cost price of the shares was NOK 112k. On the basis of
the company’s performance since it was incorporated, the value of the shares held in the company was written down to zero in 2011.
Company
Date of
acquisition
Registered
office
Ownership
interest
Proportion of
voting shares held
NaC AS
2007
Sandnes
50 %
50 %
Investments – Bonds
Oslo Clearing changed its clearing model in 2012 so that members that provide collateral in the form of cash are now required to
transfer the cash holdings to Oslo Clearing (’transfer of title’).
In accordance with the Investment Policy issued by its board of directors, the company allocates its own funds between cash and
interest-bearing instruments in the ratio of 70/30, and the average rating on its investments must be “A” or better. The maximum
exposure to any one counterparty is 20% of own funds.
Oslo Clearing has placed part of these holdings, NOK 363 million, in bonds and certificates (short-term fixed income instruments)
issued by various issuers in order to comply with its Investment Policy. NOK 10.0 million of these bonds are pledged as collateral
in favour of Norges Bank (the Norwegian central bank).
Holdings of Norwegian Treasury Bills that are classified as current assets are treated as an available for sale asset, and are
recognised in the accounts at fair value with any unrealised change in value applied to other income and costs in comprehensive
income. The book value of the investment is the fair value at 31 December 2013 as determined by the prices on Oslo Børs at
31 December 2013. Holdings of bonds that are classified as long-term fixed assets recognised in the accounts at the lower of
acquisition cost and fair value.
Nominal
Final
value
Current assets
Ticker Rating maturity NOK 1,000
Book value
NOK 1,000
Norske Stat
NST22
AAA
19.03.14
110 000 Norske Stat
NST23
AAA
18.06.14
50 000 49 685 Norske Stat
NST24
AAA
17.09.14
70 000 69 321 Norske Stat
NST25
AAA
17.12.14
50 000 49 345
Total 280 000 278 043
109 692
NominalLast quarterly
Final
value
Book value interest date
Long-term fixed assets
Ticker Rating maturity NOK 1,000
NOK 1,000
in 2013
BKK AS 10/15 FRN
BKK01
12.02.15
20 000 19 938 12.11.13
2.94 % 2.39 %
Eiendomskreditt AS 12/17 FRN COVD EIKRN05 PRO AA-
15.06.17
30 000 30 069 16.12.13
3.29 % 2.95 %
FLEKKEFJORD SPAREBANK 12/16 A
21.03.16
20 000 19 808 23.12.13
3.22 % 2.95 %
Sparebanken Vest Boligkreditt AS
AAA
18.08.17
15 000 15 054 18.11.13
2.68 % 2.23 %
Total
85 000 84 869 SBVB05
A-
Average
interest
rate Coupon
The average interest rate is calculated on the basis of interest accrued over the period that Oslo Clearing has held the bond.
Coupon rates are as reported on the Oslo Børs website (January 2014).
38
Notes - GROUP
Note 4 Specification of profit and loss items
(Figures in NOK 1,000)
Salaries and related costs 2013
2012
2011
Salaries
217 821 203 783 200 017
Pension cost
17 724 -10 841 26 645
Employer’s social security contributions
37 598 31 950 33 987
Other benefits
6 004 7 572 7 459
Restructuring costs
6 667 757 4 696
Activated internal resources
-7 066 -8 028 -9 016
Total salaries and related costs
278 750
225 194
263 788
Other operating costs
2013
2012
2011
Use of external contractors
49 991 58 702 44 132
IT equipment/maintenance
138 635 81 163 80 531
Marketing and communications
2 698 1 215 4 418
Training and personnel benefits
11 313 11 072 11 938
Office expenses and rental
35 047 22 516 22 792
Travel and entertainment
6 983 4 402 4 926
Other costs
13 338 13 946 13 092
Other operating costs
258 009
193 019
181 828
Oslo Børs and VPS terminated their defined benefit group pension arrangements in 2012, resulting in a reduction in pension costs
of NOK 42.3 million.
Financial items
2013
2012
Share of profit in joint ventures
678 1 497 2011
-459
Interest income
17 143 21 787 25 875
Other financial income
990 367 801
Interest expense
6 291 -333 -138
Other financial expense including currency losses
-1 919 -808 -1 262
Net financial items
23 183
22 509
24 817
Note 5 Pension costs and pension liabilities
Insured schemes
The boards of directors of companies in the group resolved in 2012 to terminate the insured defined benefit group pension
schemes and transfer employees to the established defined contribution pension scheme. As a result, the defined benefit
schemes were terminated at 31 December 2012 and members were transferred to the existing agreement for defined
contribution pensions on 1 January 2013. Employees who were members of the defined benefit schemes received a paid-up
policy in respect of their accrued rights as at 31 December 2012. Employees suffering a disability at the time of the termination
of the scheme remain in this scheme until they are declared fit or receive a disability pension.
In connection with the transfer to the defined contribution pension scheme, a compensation scheme has been established which,
subject to certain conditions, gives employees who are affected by the termination of the defined benefit schemes compensation for
the change in their pension arrangements. The provision recognised for compensation at 31 December 2013 totals NOK 59,188k
including employer’s social security contributions.
39
Notes - GROUP
The liabilities in respect of the defined contribution pension schemes are limited to the payment of contributions and paying
the associated costs. The schemes involve a contribution equivalent to 5% of salary between 1 times and 6 times the National
Insurance base amount (G) and 8% of salary between 6G and 12G. Risk insurance is equivalent to that offered by the closed
defined benefit scheme, except that the closed defined benefit scheme also provided for a surviving partner’s pension. The
collective pension schemes and the defined contribution scheme now provided by the group satisfy the requirements of the
Mandatory Occupational Pensions Act.
Uninsured schemes
The group has one defined benefit scheme in force that was not terminated at 31 December 2013. This is a voluntary early retirement
scheme established by Oslo Børs ASA in 1997, which offered retirement at 64 years for all employees. The scheme offered a
pension equivalent to 60% of gross salary. This scheme was closed to new members in 2003. For one manager, the scheme
offers retirement at age 60 based on seniority and the management position in question. Further details of the pension liabilities
involved are provided below. The expected cost for 2014 including employers’ social security contributions is NOK 1,576k.
Bente A. Landsnes took up her appointment as President and CEO of Oslo Børs on 2 January 2006. Her employment contract
gives her the right to a lifetime pension of 70% of salary at retirement age (62 years of age) or on any earlier retirement due to
disability, reduced by an amount corresponding to the benefits received from the National Insurance Fund and the benefits
received from previous employers. Under the terms of her employment contract, her pension entitlement also includes the right
to a widower’s pension of 55% of retirement salary. The CEO is contractually entitled to a full pension contribution period at
Oslo Børs and full pension from Oslo Børs at retirement age (62 years). She is therefore deemed to have 16 out of 30 years of
contribution upon joining Oslo Børs. Under the terms of an agreement entered into in 2012, the basis for pension with effect
from 1 January 2012 will be the employee’s salary at 1 January 2011, i.e. NOK 3,225k. The basis for pension will be increased in
accordance with the agreement when she leaves her employment or upon reaching 62 years of age. The agreement with the Group
CEO/ President and CEO of Oslo Børs includes partial compensation for the change in her pension agreement, which will be paid
as cash compensation together with salary. A liability of NOK 28,806k was recognized in the balance sheet at 31 December 2013
The cost recognised in the accounts for 2013, including employers’ social security contributions, was NOK 2,236k. Actuarial
losses of NOK 8,144k that arose in connection with changes to the assumption used for calculating this pension liability have
been recognized as part of other income and costs in arriving at comprehensive income for the year. The expected cost for 2014
is NOK 2,303k including employer’s social security contributions.
John-Arne Haugerud was appointed as CEO of Verdipapirsentralen ASA in November 2011. His agreed retirement age is 63 years
of age, and he is entitled to an early retirement pension from his agreed retirement age until age 67. The early retirement pension
assuming a full pension service period will be equivalent to 70% of salary. A full pension service period requires employment of
at least 30 years. His normal retirement pension, from the age of 67, will be linked to the rights accrued in the company’s group
defined contribution pension scheme, together with the company’s supplementary pension scheme financed from operations
for the CEO. His employment contract also provides for a 50% spouse’s pension. A liability of NOK 2,091k was recognized in
the balance sheet at 31 December 2013. The cost recognised in the accounts for 2013 including employers’ social security
contributions was NOK 1,145k. The expected cost for 2014 is NOK 1,091k including employer’s social security contributions.
Former CEOs of Oslo Børs and of VPS have the benefit of agreements for future pension payments. These agreements give the
individuals in question the right to a pension from the date of leaving service, reduced by an amount corresponding to the benefits
received from the National Insurance Fund and any benefits received from previous employers. In addition, the pension entitlements include the right to a widow’s pension. The total cost in respect of former CEOs in 2013 was NOK 754k, and the total
provision at 31 December 2013 was NOK 36,246k including employer’s social security contributions. The expected cost for
2014 including employers’ social security contributions is NOK 1,486k.
40
Notes - GROUP
Pension cost and pension liabilities
The net pension cost for the period is included in salaries and other personnel expenses, and for defined benefit schemes consists
of the net discounted present value of pension rights accrued for the year, the interest accrued on pension liability, the expected
return on pension fund assets, and the accrued liability for employer’s social security contributions. The expected cost in 2014
for the discontinued defined benefit schemes is NOK 945k including employer’s social security contributions. Pension cost for
defined contribution plans comprises the cost of contributions for the period and related costs. Contributions made for 2013
totalled NOK 9,458k excluding employer’s social security contributions.
Employer’s social security contributions in respect of payments to the collective pension scheme are capitalised to the extent
that the payments increase pension assets. The provision made for uninsured pension liabilities includes employer’s social
security contributions. Actuarial gains or losses are recognized as part of other income and costs in arriving at comprehensive
income for the year. Total pension liabilities, both insured and uninsured, decreased in 2013 by NOK 22,904k. This caused
an increase in equity of NOK 16,720k and deferred tax assets decreased by NOK 6,184k as result of changes in actuarial
estimates. Total pension liabilities decreased in 2012 by NOK 19,007k while equity increased by NOK 13,685k as result of
changes to actuarial estimates. Deferred tax assets decreased by NOK 5,322k in 2011.
Composition of pension assets:
Sub portfolio
Proportion
Shares8%
Bonds20%
Bonds held to maturity
41%
Real estate
11%
Other20%
The following assumptions are applied in calculating pension liability:
Group
2013 2012
2011
Expected return on pension funds
4.10 %
2.20 %
3.60 %
Discount rate
4.10 %
2.20 %
2.60 %
Expected rate of increase in salaries
3.50 %
3.00 %
3.50 %
Expected rate of increase in the National Insurance base amount (G)
3.50 %
3.00 %
3.25 %
Expected rate of increase in pension benefits - G increase
3.50 %
3.00 %
3.25 %
Expected rate of increase in pensions - minimum increase
0.60 %
0.10 %
0.50 %
Average rate for employer’s social security contributions
14.10 %
14.10 %
14.10 %
Mortality table used
K2013
K2005 Expanded
K2005 Expanded
The discount rate is determined on the basis of observed yields on Norwegian corporate bonds of sufficiently high quality. The corporate
bonds used are covered bonds with maturities of up to 15 years. The average maturity of pension liabilities is calculated to be 30 years.
The expected rates of increase in salaries, pensions and benefits and the National Insurance base amount (G) are based on historic
observations for the company, assuming expected long-term inflation of 2.0%.
Actuarial assumptions are based on risk tables. The mortality table K2013 was used in 2013. A summary of the tables used is shown
below. The table shows life expectancy and the likelihood of disability and death respectively over the next 12 months for different age
groups.
41
Notes - GROUP
Life expectancy
2013
2012 and2011
At age
Men
Women
Men
20
89 93 81 85
40
87 91 82 85
60
86 94 83 86
80
89 91 88 90
Women
Men
Mortality rates
2013
Women 2012 and 2011
At age
Men
20
0.02 %
0.01 %
40
0.06 %
0.04 %
0.08 %
0.10 %
60
0.45 %
0.30 %
0.48 %
0.42 %
80
4.43 %
3.06 %
5.27 %
4.09 %
Likelyhood of disability
2013
Women 2012 and 2011
At age
Men
Women
Men
20
0.13 %
0.16 %
0.13 %
Women 0.16 %
40
0.21 %
0.35 %
0.21 %
0.35 %
60
1.48 %
1.94 %
1.48 %
1.94 %
80NANA NA
NA
Sensitivity analysis
The table below shows the effects on pension liabilities of changes in the assumptions applied.
Liability
IncreaseDecrease
Discount rate (1% change)
-11 560
13 713
Future salary growth (1% change)
2 561
-2 366
Future pension growth (1% change)
8 499
-8 365
-65
65
Future mortality (1% change)
Summary of all pension liabilities:
(Figures in NOK 1,000)
2013
Total
Insured scheme Uninsured scheme
Uninsured
for salaries under for salaries over early retirement
12 G
12 G
scheme
Liability at 1.1.
-3 246
4 011
20 374
Group CEO
Oslo Børs
management
35 162 Current/former Compensation OB and VPS
for closed
management
DB scheme
36 045
Total
73 619 165 965
Charged to profit and loss in 2013 362
Contributions 2013
Payments 2013
Actuarial gains/losses 2013
Liability at 31.12.
Assets at 31.12.
2 236
1 899
1 560
-718
88
1 592
0
0
-717
-448
-3 243
-6 194
-3 491
-9 797
-22 986
6 394 -2 762
-1 470
-4 448
-8 144
3 635
30
2 629
17 518
28 806
38 337
59 188 146 507
0
42
7 736
0
Notes - GROUP
Insured defined benefit scheme for salaries under 12 times the National Insurance base amount
2013
2012
2011
No. of members at 31.12.
4
3
99
Pension costs and pension liabilities of the group are as follows:
Net pension costs:
2013 20122011
Present value of pension rights accrued for the year
336 13 354 10 384
Interest on pension liabilities
258 5 468 6 631
-324 -4 235 -5 444
Expected return on pension fund assets
Administrative expenses
47 Gain due to scheme closure
Net pension costs excluding employer’s social security contributions
317
Accrued employer’s social security contributions
Net pension costs including employer’s social security contributions
Financial condition of the pension scheme:
-89 100 -74 513
11 571
45 -10 506 1 632
362 -85 019 13 202
2013 20122011
Calculated gross pension liability at 1.1.
-11 773
-211 250
-179 914
Cost of pension rights accrued for the year
-336
-13 354
-10 383
Interest cost
-258
-5 468
-6 631
3 569
9 542
-15 948
Pensions paid/paid-up policies
1 857
1 627
Actuarial gains and losses
Increase in future liabilities due to demographic changes
-146
Reduction in previuos liabilities due to scheme closure
89 100 Reduction in pension liabilities due to staff leaving
Reduction in pension liabilities due to change in scheme
117 800 Calculated gross pension liability at 31.12.
-11 773
-8 944
-211 250
2013 20122011
Pension fund assets at 1.1.
14 618
113 876
115 018
Expected return on pension fund assets
324
4 235
5 444
Premium payments
629
10 497
3 430
Administrative expenses
-47
Actuarial gains and losses
-1 002
5 668
-8 388
Pensions paid/paid-up policies
-1 857
-1 627
Reduction in pension fund assets due to staff leaving
-5 605
-117 800
0
Pension fund assets at 31.12.
8 916
14 618
113 876
Net pension assets before employer’s social security contributions
-26
Accrued employer’s social security contributions
Net pension liabilities
2 846
-97 373
-4
401
-13 730
-30
3 246
-111 103
Changes in the insured scheme liabilities:
2013 20122011
Net capitalised liability at 1.1.
3 246
-111 103
-74 047
-362
85 019 -13 202
718
11 978 3 913
Pension cost charged to profit and loss
Premium payments
Payments
-6 394
Actuarial gains/losses
Net capitalised liability(-)/assets(+) 31.12.
43
2 762
17 355 -27 769
-30
3 246
-111 103
Notes - GROUP
Uninsured defined benefit scheme
The summary includes the Oslo Børs and VPS uninsured defined benefit schemes for salaries over 12 times the National Insurance base
amount (G), and the Oslo Børs early retirement pension scheme.
2013 20122011
Number of members in the scheme for salaries over 12 G included at 31.12.
0
2
13
Number of members in the Oslo Børs early retirement scheme at 31.12.
22
26
28
Expected drawings under the scheme - employees under 40 years
25 %
25 %
25 %
Expected drawings under the scheme - employees 40-50 years
50 %
50 %
50 %
Expected drawings under the scheme - employees over 50 years
100 %
100 %
100 %
Additional assumptions for the early retirement scheme:
Pension costs and pension liabilities for the group are as follows:
Net pension costs:
2013 20122011
Present value of pension rights accrued for the year
1 002 Interest on pension liabilities
470 Gain due to staff leaving
Net pension costs before employer’s social security contributions
- 1 472
3 128 3 198
911 1 200
-6 700 -
-2 661
4 399
Accrued employer’s social security contributions
208
-375
620
Net pension costs including employer’s social security contributions
1 680
-3 036
5 019
Financial condition of the pension scheme:
2013 20122011
Calculated pension liability at 1.1.
-21 371 -35 509
-33 147
Cost of pension rights accrued for the year
-1 002 -3 128 -3 198
Interest cost
-470 -911 -1 200
Actuarial gains and losses
5 186 4 356 1 136
Pensions paid/paid-up policies
- 901
Reduction in pension liabilities due to staff leaving
- Reduction in pension liabilities due to change in scheme
Calculated pension liability at 31.12.
- -17 657
7 119
6 700
-21 372
-35 509
Accrued employer’s social security contributions
-2 490
-3 012
-5 007
Net pension liabilities
-20 147
-24 383
-40 513
Change in the insured scheme liabilities:
2013 20122011
Net capitalised liability at 1.1.
-24 383 -40 513
-37 821
Pension cost charged to profit and loss
-1 680 -4 608
-5 018
0
1 028
Pension payments
- Actuarial gains/losses 5 917 20 738
1 296
Net capitalised liability at 31.12.
-20 147
-24 383
-40 513
44
Notes - GROUP
Note 6 Remuneration of officers, executive personnel, the auditor etc.
20132012
Variable Pension Pension
TotalPension
(Figures in NOK 1,000) Salary Fees salaryBenefits
cost
liability remunerationliability
Chair of the Board Oslo Børs VPS Holding/
Oslo Børs/Member of the Board VPS Leiv Askvig
557 542 Deputy Chair Oslo Børs VPS Holding/Oslo Børs Benedicte Schilbred Fasmer
293 271 Member of the Board Oslo Børs VPS Holding
(to May 2012)
Svein Støle
- 46 Member of the Board Oslo Børs VPS Holding Ottar Ertzeid 118 115 Giséle Marchand
- 105 Harald Espedal
237 228 Benedikte Bettina Bjørn
- 92 and Oslo Børs (from May 2012)
Wenche Agerup
237 135 Member of the Board Oslo Børs (from May 2013)
Øyvind G. Schanke
Member of the Board Oslo Børs VPS Holding
and Oslo Børs (to May 2012)
Member of the Board Oslo Børs VPS Holding
and Oslo Børs
Member of the Board Oslo Børs VPS Holding
and Oslo Børs (to May 2012)
Member of the Board Oslo Børs VPS Holding
70 Chair of the Board VPS
Kim Dobrowen
222 Deputy Chair of the Board VPS (to May 2012)
Anne Johnsrud Hagen
- 215 48 Deputy Chair of the Board VPS (from May 2012)
Gunn Oland
120 116 Member of the Board VPS
Knut Erik Robertsen
120 116 Member of the Board VPS
Audun Bø
120 116 Member of the Board VPS (from May 2012)
Anne Lise Kristiansen
120 77 Employee representative VPS and
Oslo Børs VPS Holding
Sissel Bakker
795 120 51 84 45 IA 1 093 Morten Nordby
949 120 77 88 46 IA 1 242 Employee representative VPS and deputy
employee representative Oslo Børs VPS Holding
Employee representative Oslo Børs and
Oslo Børs VPS Holding
Christian Falkenberg Kjøde
844 118 169 36 53 IA 1 135 Ingvild Resaland 713 118 109 31 38 IA 908 Employee representative Oslo Børs and deputy
employee representative Oslo Børs VPS Holding
Chair of the Nomination Committee
Oslo Børs VPS Holding
Leif Teksum 13 13 Ida Espolin Johnsen - 11 Christian Berg - 11 Toril B. Ressem
11 - Ola Wessel-Aas
11 - Member of the Nomination Committee
Oslo Børs VPS Holding (to May 2012)
Member of the Nomination Committee
Oslo Børs VPS Holding (to May 2012)
Member of the Nomination Committee
Oslo Børs VPS Holding (from May 2012)
Member of the Nomination Committee
Oslo Børs VPS Holding (from May 2012)
Chair of the Control Committee VPS and Oslo Clearing Håkon Persen Søderstrøm 120 116 Member of the Control Committee VPS and Oslo Clearing Vegard Østlien
78 76 Member of the Control Committee VPS and Oslo Clearing Kjell Sverre Hatlen
- Member of the Control Committee VPS and Oslo Clearing Jan Henriksen
78 76 Member of the Control Committee VPS and Oslo Clearing Cecilie Kvalheim
78 76 Group CEO
Bente A. Landsnes
3 538 781 254 2 306 28 807 Executive Vice President
John-Arne Haugerud
2 584 554 203 1 216 2 091 2 691 Executive Vice President (to January 2013)
Per Anders Brodin
2 219 168 205 640 8 795 4 156 15 286
Executive Vice President
Geir Heggem
1 364 252 180 127 2 862 Executive Vice President (to September 2012)
Christian Sjøberg
45
50 4 189 35 162
2 167 1 661 1 287
2 761
Notes - GROUP
The above remuneration amounts are entered as expenses in the accounts for 2013 of the companies that make up the group.
Salaries include a provision for the holiday allowance to be disbursed in 2014 relative to the holiday allowance disbursed in 2013.
Bonuses consist of a variable salary portion for 2013, which is provided for in the annual accounts for 2013 for disbursement
in February 2014. Benefits in kind comprise established benefits such as a company car, free telephone etc. The amounts are
exclusive of employer’s social security contributions. Pension costs and pension commitments are calculated based on the
assumptions specified in Note 6. Pension cost and pension liability include both the insured and uninsured schemes, and the
figures are reported inclusive of employer’s social security contributions.
The employment contract of Group CEO and Oslo Børs CEO Bente A. Landsnes provides for an annual salary of NOK 3,473k plus
a fixed company car benefit as well as free telephone and newspapers. She is entitled to a lifetime pension from 62 years of age,
or on any earlier retirement due to disability, of 70% of salary at retirement, reduced by an amount corresponding to the benefits
received from the National Insurance Fund and the benefits received from previous employers. Under the terms of her employment contract, her pension entitlement also includes the right to a widower’s pension of 55% of retirement salary. Changes were
made to the pension entitlement in 2012, see Note 5 for further information. In the event that employment is terminated by either
party, she is entitled, subject to certain conditions, to full salary and other benefits for 24 months. Such payments will be reduced
by 50% of any amounts received from other employment during this period.
John-Arne Haugerud, CEO of VPS, took up his appointment on 1 November 2011. He is entitled to six months’ notice of termination
of employment and twelve months’ salary after termination of employment. His agreed retirement age as CEO is 63 years, see
Note 5 for further information.
Ole-Wilhelm Meyer left his position as CEO of VPS on 14 February 2011. He received salary and other benefits in accordance with
his contract of employment for the six-month notice period. In addition, he received salary for 12 months following the termination of
employment. This period expired on 31 August 2012. Ole-Wilhelm Meyer had no accrued rights other than the right to salary for
12 months following the termination of employment. The pension liability in respect of Ole-Wilhelm Meyer was discharged by a
transfer payment in 2012.
The employment contract of Anders Brodin, Executive Vice President of Oslo Børs, provides for early pension from 60 years of
age at 60% of final salary until reaching 67 years of age.
Other than the benefits described above and the general scheme for early retirement described in Note 5, there are no other
agreements for payment upon termination or change to employment or board appointments. No company in the group has entered
into any personal contracts with any member of its board of directors, managing director or any other employees on bonuses,
profit sharing, share options or similar. However, all companies in the group operate an incentive scheme for all employees. The
Board of Oslo Børs considers whether to award a bonus to the Group CEO annually. A share purchase program for employees was
carried out in 2013. Shares were sold at fair value, but with a discount of 20% on purchases up to NOK 7,500.
Loans to employees totalled NOK 562k at year-end. Interest is charged on loans totalling NOK 437k at normal rates of interest.
No interest is charged on the remaining balance of loans. There were no loans to members of the board or the Group CEO.
Auditor
A fee of NOK 887k paid to the auditor (KPMG) for ordinary audit services was expensed in 2013. Fees expensed in 2013 for other
services amounted to NOK 100k for advice on taxes and duties.
Ernst & Young has been elected as the internal auditor for Oslo Børs, VPS and Oslo Clearing. Costs totalling NOK 648k were
recognised in the 2013 accounts in respect of fees payable to Ernst & Young and PWC for internal audit services in 2013.
All figures exclude value added tax.
46
Notes - GROUP
Note 7 No. of employees
2013 20122011
Number of employees at 31.12.
250 235
248
Note 8 Leasing contracts
Annual lease rental of operational assets not capitalised on the balance sheet (Figures in NOK 1,000):
Remaining lease period
Annual lease payment
Up to 19 years
13 134
Operational asset
Rental of premises
In April 2009, Oslo Børs entered into an agreement with the London Stock Exchange Group (LSEG) for the rental of a trading
system for derivatives, equities, and fixed income instruments. The rental period is 7 years. The fee payable for use of the system
is linked to revenue, but is subject to a minimum fee. Oslo Børs rents premises under the terms of a lease contract that expires in
March 2032, but the contract can be terminated any time by giving 12 months’ notice.
Fish Pool rents premises in Bergen. The lease contract terminates in 2019. Evolution Software Sweden AB rents premises in
Stockholm. The lease contract can be terminated with effect from start of 2016. If the lease is not terminated at that time, it will
then continue until the start of 2019.
Oslo Clearing has a contract with OMX Technology for operating services for the clearing system. The contract was renegotiated
in 2011. Oslo Clearing now pays a new fixed annual fee. This contract terminates in 2014.
VPS rents premises at three locations in Oslo. One lease contract expires in September 2018, with an option to extend for a
further five years. The second lease contract runs from April 2012 to March 2032, with the right to terminate the lease on the
5th, 10th or 15th anniversary of the start of the lease. The third lease contract runs from April 2013 to March 2023. The rental
payable under all these contracts is adjusted annually in accordance with the consumer price index published by Statistics Norway.
VPS has sub-let space in these premises to three tenants. These sub-leases run for five years, and expire in September 2014. All
three sub-leases are linked to the consumer price index published by Statistics Norway.
VPS had a leasing agreement for production equipment that expired in December 2013.
The group incurred costs in relation to these lease agreements totalling NOK 38,106k in 2013.
The minimum future lease rental payments are as follows (NOK 1,000):
20132012
Up to 1 year
39 825 41 300
2 to 5 years
113 640 128 675
Over 5 years
58 731 59 900
Minimum future lease rental payments
212 196 229 875
47
Notes - GROUP
Note 9 Taxation
(Figures in NOK 1,000)2013 2012
2011
Pre-tax profit
300 670 269 330 320 818
Non-tax-deductible costs/non-taxable income
112 1 444 1 244
Write-down of shares
- - 112
Income from joint ventures
-427 -647 459
Change in temporary differences
-35 087 29 554 156 716
Pensions applied to comprehensive income
22 985 19 007 -19 135
Other
- Tax base for the year
288 253
-24 -100
318 664
460 114
Tax charge:
2013
2012
2011
Tax payable at 28%
103 429 89 227
128 830
Change in deferred tax assets
3 691 13 853
-9 931
Change in deferred tax liabilities
-22 653 -27 758
-30 541
Effect of changed tax rate
2 242 Other
-149 Classification error in respect of previous years
- Tax charge for the year
86 560
24 0
0
-589
75 344
87 773
Tax payable in 2012 as shown in the summary above is NOK 24k higher than shown in the balance sheet. The difference relates to the
SkatteFunn scheme for R&D tax relief, and represents relief available to Oslo Market Solutions at the close of 2012.
Reconciliation of tax charge:
20132012
2011
Total tax charge for the year
28.79 %
27.97 %
27.36 %
Nominal tax rate
28.00 %
28.00 %
28.00 %
Difference caused by non-tax-deductible costs etc.
-0.03 %
0.08 %
0.16 %
Change in temporary differences not giving rise to deferred tax asset
-0.03 %
-0.04 %
-0.03 %
Changed tax rate
0.75 %
Other
-0.05 %
-0.57 %
0.00 %
The following table provides an analysis of deferred tax assets and deferred tax liabilities and the asset or liability with which they
are associated (Figures in NOK 1,000).
31.12.201331.12.2012
Goodwill
Profit and loss effect
2013
2012
Comprehensive income
2013
2012
7 912
10 256
2 345
2 564
Tangible fixed assets
11 496
19 393
7 898
1 540
Pension liabilities
38 395
46 173
1 572
8 558
0
-909 -909
1 518
-5 295
-4 995
59 320
69 619
5 911
Pension assets
Other
Total deferred tax asset
6 206
282
13 853
6 206
IT systems
22 172
36 149
18 315
23 421
Customer relationships
4 334
8 671
4 338
4 338
Licences
2 700
2 800
Deferred tax liabilities
29 205
47 621
22 653
(Figures in NOK 1,000)
Actuarial gains or losses on pensions
48
5 322
909
5 322
27 758
Gross
Tax effect
Net
22 986
-6 206
16 780
Notes - GROUP
Deferred tax liabilities in respect of excess values arising from the business combination with VPS Holding in 2007 and the
acquisition of Evolution Software Sweden in 2013 are not netted in the balance sheet against deferred tax assets associated
with other assets. The amount in question at 31 December 2013 was NOK 29,205k. The tax positions that were applied as other
income and costs in arriving at comprehensive income for 2013 shown in the table below. The investments in joint ventures do not
give rise to any temporary differences.
Note 10 Earnings and dividend per share, diluted earnings per share
Earnings per share is calculated as follows (Figures in NOK 1,000):
2013 2012
2011
Profit after tax
214 110
194 034
233 045
Average number of shares
43 004
43 004
43 004
Earnings per share (NOK)
4.98
4.51
5.42
Diluted earnings per share (NOK)
4.98
4.51
5.42
Dividend:
Dividend proposed
301 028 Dividend distributed
Number of shares (1,000)
Proposed dividend per share (NOK)
43 004 301 028 344 032
43 004 43 004
7.00 Distributed dividend per share (NOK)
7.00 6.00
Dividends shown as paid in 2011 and 2012 were distributed in 2012 and 2013 respectively. Distribution of dividend to the
parent company’s shareholders does not affect the company’s tax payable or deferred tax.
Note 11 Uncertainty associated with estimates used
The most significant accounting estimates used by the company relate to the following items:
- Fair value of assets and liabilities acquired by acquisition, including amortisation and impairment of goodwill and other intangible
assets. Book value at 31.12.2013 was NOK 527 million (excluding IT systems).
- Evaluating whether to capitalise costs incurred in the development of IT systems. Book value of IT systems at 31.12.2013 was
NOK 180 million.
- Net pension liabilities, with book value at 31.12.2013 of NOK 147 million.
Estimating values requires management to make significant judgements in selecting the method used, making estimates and
deciding on assumptions. The material categories of intangible assets capitalised to the balance sheet are customer relationships,
software and licences. The assumptions used in valuing intangible assets include, inter alia, the estimated useful life of customer
relationships based on the rate of customer turnover, and the remaining period of licences and the replacement cost, adjusted for the
technology aspects of software and for technological and market developments in general. The assumptions used for valuing tangible
assets include, inter alia, the replacement cost of tangible assets. Management’s estimates of fair value are based on assumptions
that are believed to be reasonable, but these assumptions of necessity involve uncertainty, and it is according the case that the actual
values in the future may differ from the estimated values. The company’s capitalised goodwill, IT systems and the value of licences
are tested annually for impairment, and also for any need to reverse any earlier write-downs in respect of the value of licences. The
company’s business activities are affected by economic conditions, and this causes fluctuations in revenue and earnings, which in turn
cause fluctuations in the value of its businesses. The annual evaluation is based on assumptions that are believed to reasonable, but
these assumptions of necessity involve uncertainty, and it is according the case that the actual values in the future may differ from
the estimated values. See Notes 14 and 15 for further information.
49
Notes - GROUP
Costs incurred in the development of IT systems are capitalised in the balance sheet if it is likely that the expected future commercial
benefits arising from the asset will be received by the company, and the acquisition cost of the asset can be reliably measured. The
company’s business activities are affected by economics conditions, and this causes fluctuations in revenue and earnings, which in
turn cause fluctuation in the value of its IT systems. The company is also affected by technology and commercial changes. Projects
not yet in production are tested for loss in value. The valuation is based on assumptions that are believed to be reasonable, but these
assumptions of necessity involve uncertainty.
The valuation of net pension liabilities is based on a number of commercial and actuarial assumptions, including the discount rate
used, future salary growth, life expectancy of employees, annual pension increases and the future return on pension fund assets.
Changes to these assumptions can have a significant effect on net liability and cost. The company has to a large extent followed
the guidance on pension assumptions issued by the Norwegian Accounting Standards Board. The group’s defined benefit pension
schemes were terminated in 2012, and in connection with the transfer of employees to a defined contribution scheme, a
compensation scheme has been established that is included in the provision for pension liability.
Note 12 Specification of balance sheet items
(Figures in NOK 1,000)2013
2012
Other long-term receivables
Loans to joint ventures
- 0
Other long-term receivables
2 525
405
Other long-term receivables
2 525
405
Other current receivables
Loans to employees
564 533
Prepayments and accrued income
23 554 22 454
Other receivables
7 085
5 217
Other current receivables
31 203
28 204
Other current liabilities
Salaries due, holiday pay etc.
47 347 43 688
Accrued costs
31 763 17 356
Restructuring costs
- 1 997
Settlement payments due to members
1 516 Other current liabilities
0
3 355
733
Other current liabilities
80 626
67 126
The terms for trade creditors and other current liabilities are as follows:
- Trade creditors are not normally interest bearing, and normally fall due for payment within 30 days from receipt of the invoice.
- Salaries due, holiday pay etc are not interest bearing and normally fall due for payment within six months.
-Accrued costs/prepaid income are normally not interest bearing. Accrued costs normally fall due for payment within 30 days
from receipt of the invoice. Prepaid income normally becomes earned income within 12 months of the balance sheet date.
50
Notes - GROUP
Note 13 Fixed assets
(Figures in NOK 1,000)
Property
Acquisition cost 1.1.2013
161 040
Operating assets not
depreciated
Total 2013
317
205 789
222
16 312
16 534
Disposals during the year
32 494
32 494
Additions during the year
44 432
Fixtures,
IT equipment, vehicles etc.
Acquisition cost 31.12.2013
44 654
144 858
317
189 827
Acc. ordinary depreciation 1.1.2013
27 647
112 442
0
140 089
21 444
23 326
Ordinary depreciation for the year
1 882
Accumulated ordinary depreciation for assets sold
32 494
32 494
Accumulated ordinary depreciation 31.12.2013
29 529
101 392
0
130 921
Book value 31.12.2013
15 125
43 463
317
58 906
8-50
3-10
I/A
Linear
Linear
I/A
Expected economic life (years)
Depreciation plan
The group had no commitments to purchase fixed assets at 31 December 2013.
(Figures in NOK 1,000)
Property
Acquisition cost 1.1.2012
44 432
Fixtures,
IT equipment, vehicles etc.
150 601
Operating assets not
depreciated
Total 2012
317
195 350
Additions during the year
39 553
39 553
Disposals during the year
29 113
29 113
Acquisition cost 31.12.2012
44 432
161 041
317
205 788
Accumulated ordinary depreciation 1.1.2012
25 715
118 296
0
144 011
1 932
23 068
25 000
Accumulated ordinary depreciation for assets sold
28 922
Ordinary depreciation for the year
28 922
Accumulated ordinary depreciation 31.12.2012
27 647
112 442
0
140 090
Book value 31.12.2012
16 784
48 596
317
65 697
8-50
3-10
I/A
Linear
Linear
I/A
Expected economic life (years)
Depreciation plan
51
Notes - GROUP
Note 14 Intangible assets - including assets developed in-house
Of which not Customer
(Figures in NOK 1,000)
IT systems
completed relationships
Goodwill
Acquisition cost 1.1.2013
841 720
Licences
Total 2013
10 000
2 870 355
-8 949
0
8 949
Completed in 2013
87 468
0
1 931 167
Additions during the year - including in-house developments
67 699
Disposals during the year
41 211
34 148
3 500
105 347
41 211
Acquisition cost 31.12.2013
868 208
0
87 468
1 965 315
13 500
2 934 491
Accumulated ordinary depreciation 1.1.2013
596 019
0
56 499
1 466 934
0
2 119 452
Ordinary depreciation for the year
65 204
65 204
Amortisation for the year
65 412
15 492
80 904
3 231
0
3 231
Write-down for the year
Accumulated ordinary depreciation/write downs for assets sold 41 307
Accumulated ordinary depreciation 31.12.2013
688 559
0
71 991
1 466 934
0
41 307
2 227 484
Book value 31.12.2013
Expected economic life (years)
179 649
0
15 477
498 381
13 500
707 007
3-10
7
I/A
I/A
Linear
Linear
I/A
I/A
Of which not Customer
(Figures in NOK 1,000)
IT systems
completed relationships
Goodwill
Licences
Total 2012
10 000
2 913 159
Depreciation plan
Acquisition cost 1.1.2012
884 524
17 295
Completed in 2012
87 468
1 931 167
-17 295
Additions during the year - including in-house developments
24 488
8 949
24 488
Disposals during the year
67 293
67 293
Acquisition cost 31.12.2012
841 719
8 949
87 468
1 931 167
10 000
2 870 354
Accumulated ordinary depreciation 1.1.2012
538 530
41 006
1 466 933
2 046 469
Ordinary depreciation for the year
41 136
41 136
Amortisation for the year
78 274
93 766
Write-down for the year
15 492
5 372
5 372
Accumulated ordinary depreciation/write downs for assets sold 67 293
67 293
Accumulated ordinary depreciation 31.12.2012
596 020
0
56 498
1 466 933
0
2 119 451
Book value 31.12.2012
245 701
8 949
30 969
464 233
10 000
750 903
Licences comprise the authorisations held by Verdipapirsentralen ASA, Oslo Clearing ASA and Fish Pool ASA to carry on business
as a securities register, a clearing house and an exchange respectively. The licences have no definite time limit, and are therefore
not amortised.
IT systems include both development of in-house systems and in-house work on customising systems supplied or rented by third
parties. Of the total balance outstanding for IT systems, NOK 38 million relates to systems at Oslo Børs. Oslo Børs implemented
the Millennium Exchange trading system in November 2012. The migration to the Millennium trading system has not caused any
material changes to the existing agreement between Oslo Børs and LSEG. Additions for the year totalled NOK 32 million, and
include systems acquired through the purchase of Burgundy (NOK 29 million).
52
Notes - GROUP
Oslo Clearing started work in 2013 on the development of a new system for derivatives clearing. This represented book value at
31 December 2013 of NOK 7 million.
Oslo Market Solutions did not make any material investments in IT systems in 2013. Of the total balance outstanding for IT
systems, NOK 0 million relates to Oslo Market Solutions.
VPS capitalises costs involved in developing in-house systems where the system in question has a clearly defined future income
stream. Project costs are disaggregated in terms of the expected commercial life, and capitalised system costs are reviewed
regularly. Capitalised costs include both development of in-house systems and/or in-house work on customising commercial
systems, infrastructure systems and administration systems. Individual projects for in-house developed systems that have a cost
price of less than NOK 2.5 million are charged directly to profit and loss. Additions in 2013 totalled NOK 9 million. Of the total
balance outstanding for IT systems, NOK 116 million relates to VPS.
In connection with the purchase of Evolution Software Sweden AB in July 2013, NOK 19 million of the purchase price was
allocated to the company’s IT system Cairo. The book value of the system in the consolidated balance sheet at 31 December 2013
was NOK 18 million.
The group recognised to profit and loss costs in relation to development projects of NOK 10 million in 2013 as compared to
NOK 2 million in 2012.
Brief history of IT development work carried out by VPS over recent years:
VPS Investor Services was developed to support account operators in administering customer accounts and providing advice to
customers.
Some aspects of the Issuer business area have been renewed, with the development of a new solution for managing fixed income
instruments in VPS. This application is known as VPS Fixed Income and is used by new issue managers, account operators, Norsk
Tillitsmann AS (loan trustee) and Oslo Børs.
VPS approved a new IT strategy in 2010. In accordance with the strategy, VPS has carried out a number of projects that are
designed to modernise the company’s IT platform, including the applications used in the mutual funds area. The mutual funds
project was completed by the close of 2013.
Information on the remaining amortisation periods for intangible assets:
Oslo Børs amortises assets associated with the rental of the trading systems Millennium Exchange and Sola from the London
Stock Exchange Group (LSEG) over the remaining life of the contract for these systems. The contract expires in 2017. Other
intangible assets are amortised over a five-year period, and will to all practical purposes be amortised in full by the end of the first
quarter of 2015.
VPS has developed a system known as VPS Investor Services that supports account operators in managing and advising their
customers. This system was fully amortised by the close of 2013. The system used by the Issuers business area, which is used
by managers, account operators, issuers and Norsk Tillitsmann AS to manage fixed income instruments in VPS, will be fully
amortised by the end of the third quarter of 2014. VPS has carried out a number of projects since 2010 intended to modernise
the company’s IT platform, including applications used in the Funds area, comprising three subprojects that will be fully amortised
in 2016 and 2017. The new mutual funds solution, which came into production in part in 2012 and in part in 2013, will be fully
amortised by the end of 2019.
In connection with the merger in 2007, excess value was allocated in relation to the VPS systems. The amortisation period for
excess value associated with systems that were not fully amortised by the end of 2011 and for customer relationships was
reduced from nine years to seven years in 2011, and this excess value will be fully amortised during the course of 2014.
53
Notes - GROUP
Oslo Clearing amortises the clearing system developed in-house for equity capital instruments over three years. The system
was fully amortised by mid-2013. The new clearing system for derivatives went into production in February 2014, and will be
amortised over three years from this date.
In connection with the merger in 2007, excess value was allocated in relation to the Oslo Market Solutions systems. Additional
amortisation of excess value relating to the Oslo Market Solutions systems was recognised in 2012. Following this, the excess
value relating to these systems has been fully amortised.
The remaining period for excess values was reduced in 2011 as a result of a general reduction in the expected useful life of the
excess value items.
Information on fully amortised systems that are still in use:
Oslo Børs:
Oslo Børs does not currently have any material systems in use that are fully amortised.
VPS:
VPS has worked on the development of its securities settlement system over many years. The Central Securities Settlement
System (VPO) is used by VPS to carry out multilateral netting and clearing of trades notified for an agreed settlement date. The
results of this netting and clearing are then used to allow monetary settlement between settlement participants to be carried out
through Norges Bank and securities settlement between settlement participants to be carried out in VPS. The related payments
between settlement participants and their customers take place outside VPO. VPO runs two cycles each working day at 06:00 and
12:00. The costs of developing this system have been fully amortised.
VPS developed the Corporate Action System (CAS), between 1999 and 2002. The system is used by issuer account operators to
provide a service for companies or their managers to carry out corporate actions involving changes in ownership or share capital.
Examples of corporate action include dividends, return of share capital, distribution from share premium reserves, new issues,
acquisitions and mergers. This system is still in use but is fully amortised.
VPS Investor Services was developed to support account operators in managing their customers’ accounts and providing advice
and assistance. The application was fully amortised in 2013.
Oslo Clearing:
Oslo Clearing has used the Secur system for derivative clearing. The system was written down to NOK 0 in 2008, but continued to
be in use until February 2014.
For information on goodwill, see Note 15.
Note 15 Goodwill
Capitalised goodwill in the consolidated accounts totalled NOK 498 million at 31 December 2013.
Goodwill in relation to VPS arose as a result of the merger between Oslo Børs Holding and VPS Holding in 2007. The subsidiary
companies Verdipapirsentralen ASA, Oslo Clearing ASA and Oslo Market Solutions AS are deemed to be the cash generating units
in the group, and goodwill was allocated to these units in the amounts of NOK 1,818 million, NOK 81 million and NOK 33 million
respectively, totalling NOK 1,931 million, at 31 December 2007.
Goodwill in relation to Fish Pool and Evolution Software Sweden arose as the result of the acquisition of these companies in
2013. The companies are owned by Oslo Børs and VPS respectively, but are treated as separate cash generating units.
54
Notes - GROUP
Goodwill was tested for impairment in 2013, most recently at 30 September 2013, and the results showed no need for further
write-downs. The recoverable value is determined on the basis of an evaluation of the unit’s total value. Total value is calculated on
the basis of the discounted present value of expected future cash flows after tax, applying the appropriate post-tax discount rate
that takes into account the useful life and risk.
The interest rate applied to discount cash flows was 10.5% (9.7% at 31 December 2012). This is based on the risk-free return
at the close of 2013 of 2.9% (2.1%), and an equity risk premium of 8.3% (8.3%). The required return on equity is determined
post-tax. Applying this together with an equity ratio of 90% and assuming the post-tax cost of borrowed capital at 3.6% (2.9%)
gives a weighted average cost of capital of 10.5% (9.7%). The forecast period is from 2013 to 2018. The terminal value is calculated by projecting forward cash flow from the last year of the forecast period using an average cost of capital adjusted
for inflation (2.0%).
Summary of the book value of goodwill at 31 December 2013:
(Figures in NOK million)
Book goodwill 31.12.2013
Verdipapirsentralen
Fish Pool
Evolution Software Sweden
Total
464
12
23
498
The assumptions made for cash generating units were as follows:
The impairment test for VPS assumed a decline in operating revenue and an increase in costs in 2014 relative to 2013. An
average annual increase in operating revenue of just under 1% was assumed for the period 2013 to 2018. The test was based on
approved budgets and business plans. It was assumed that operating costs (before amortisation and write-downs) in 2018 will be
in line with 2013. Costs are assumed to reach a higher level over the course of the period. In an alternative scenario with no growth
in revenue, an increase in investment of NOK 20 million for the years 2014-2018 and a 1-percentage point increase in discount
rate, there would still be no need for a write-down.
The impairment tests for Fish Pool and Evolution Software Sweden assumed a 5% annual increase in revenue and a 3% increase
in costs. In an alternative scenario with growth in revenue reduced to 3% and a 1% increase in the discount rate, there would still
be no need for any write-downs.
Note 16 Financial instruments
The group has exposure to financial instruments such as derivatives, bonds, loans, accounts receivable and accounts payable. In
connection with these items, the group is exposed to credit risk, interest rate risk, liquidity risk, currency risk and market risk.
Credit risk
The group’s largest single customer accounted for approximately 12% of total revenues in 2013 and 9% of accounts receivable
and other receivables in the balance sheet as at 31 December 2013. Losses on receivables have historically been at a low level. The
group has guidelines in place to avoid making sales to customers who have had significant problems in making payments in the past.
Oslo Clearing acts as the central counterparty to all parties, becoming the buyer for all sellers and the seller for all buyers. In
respect of financial instruments that use the central counterparty model for clearing, Oslo Clearing accordingly takes over the
counterparty risk between its members. Counterparty exposure is covered through individual collateral provided by each
customer. The maximum risk exposure in respect of counterparty risk is reported as the capitalised value of outstanding
derivative positions and the value of positions in equity instruments that is not recognised in the accounts.
The calculated market value of outstanding derivative positions to which Oslo Clearing is a counterparty and which are not marked
to market on a daily basis totalled NOK 290 million at 31 December 2013. The fair value of derivative positions is determined on
the basis of the market value of the derivative contracts in question on the balance sheet date. Receivables and liabilities that can
55
Notes - GROUP
be assigned to outstanding derivative positions are netted to the extent that set-off can be applied. The fair value of outstanding
positions in respect of equity instruments that are not yet due for settlement amounted to NOK 3.2 billion at 31 December 2013.
Positions are netted for each member firm in respect of trades carried out in the same ISIN for the same settlement date. The
figures for the outstanding position show the amount to which Oslo Clearing is exposed in respect of counterparty risk on both
buyers and sellers.
As the formal counterparty in transactions in equities, ETFs and equity capital instruments, the amounts that Oslo Clearing
undertakes to pay or receive as a counterparty in the event that the financial instruments in question are not transferred on the
settlement date are included in its balance sheet with liquidity effect with an offsetting entry in the form of a current liability or
receivable due as appropriate. As at 31 December 2013, the current liability totalled NOK 0.8 million.
As part of the process of establishing central counterparty clearing of equity capital instruments, Oslo Clearing has established
a default fund that holds collateral in the form of cash, bank guarantees or interest-bearing instruments. The value of the default
fund at 31 December 2013 was NOK 201 million. The contribution each member fund makes to the default fund is a function of
the average exposure it represents for Oslo Clearing, subject to a minimum contribution dependent on the type of membership
(General Clearing Member (GCM) NOK 15 million, Direct Clearing Member (DCM) NOK 8 million or as a DCM only for the securities
lending scheme NOK 2 million).
Oslo Clearing invests its assets in accordance with the Investment Policy issued by its board of directors. These guidelines
stipulate that Oslo Clearing can only invest its own funds in instruments with extremely low credit risk, and that Oslo Clearing
must not invest more than 20% of its assets with any single counterparty. The sole exception to this is the Norwegian state, for
which there is no limit. Duration must be between zero and six months.
Other receivables totalling NOK 270k are classified as fixed assets and are secured by charges over real estate.
The maximum credit risk is equivalent to the book value of receivables, which totalled NOK 393 million at 31 December 2013.
Liquidity risk – general
The group’s strategy is to maintain cash sufficient for at least six months’ operating costs at anytime. The minimum requirement
for VPS will be higher because of its primary capital requirements. The group has a drawing facility available for the settlement
activities of Oslo Clearing ASA. Surplus liquidity is placed in deposits with a number of banks. VPS is permitted to place surplus
liquidity in interest-bearing instruments issued by the Norwegian state, and in certain specified circumstances surplus liquidity
can be placed in money market funds with low risk. Following changes to its clearing model, Oslo Clearing invested in 2013 in
bonds issued by various borrowers. A holding of NOK 10 million of bonds issued by Eiendomskreditt was pledged in favour of
Norges Bank as collateral for settlement of transactions in equity capital instruments. The table on page 34 shows the group’s
financial liabilities and their maturity structure. With the exception of the market value of derivative positions and equity capital
transactions not recognised in the accounts, the liabilities reported represent unconditional claims on the group.
Liquidity risk – clearing
The market value of derivative positions represents the fair value of derivative positions for which Oslo Clearing is the central
counterparty. The group is exposed to the risk that a counterparty does not have sufficient liquidity to settle its liabilities. This risk is
reduced in that settlement takes place through a settlement system that fully complies with international recommendations.
The company (group) manages its capital structure and makes necessary changes to its structure on the basis of regular reviews of
the economic conditions in which its businesses operate, and of future prospects in both the short term and medium term.
Oslo Clearing is required by the provisions of the Securities Trading Act to have sufficient capital to cover its risk exposure. The
company’s primary capital must be at least NOK 50 million, and an amount equivalent to at least half the primary capital must be
available at any time either on deposit with a financial institution or by way of unconditional drawing rights with a financial institution.
56
Notes - GROUP
Surplus liquidity is managed in order to maintain the lowest possible risk exposure. Oslo Clearing has a policy of investing part of its
primary capital as bank deposits in a number of ‘A’ rated banks. These assets are classified as liquid assets in the balance sheet. In
addition, surplus liquidity is placed in holdings of securities where the issuer is rated at least BBB- (S&P). These securities are classified
as available for sale in the balance sheet.
Members have pledged collateral for their settlement activities in the form of cash collateral that is transferred to Oslo Clearing
(’transfer of title’). These holdings are included in the group’s bank deposits. Oslo Clearing also invests part of these holdings in bonds in
accordance with the company’s investment policy. Collateral pledged is matched by an offsetting item in current liabilities identified as
cash collateral from members in the amount of NOK 1,090 million at 31 December 2013.
Market risk
With the exception of clearing activities, the group’s assets and liabilities are only exposed market risk to a very limited extent.
The value of shares and investments in joint ventures is exposed to market risk.
The group is exposed to currency risk since certain costs are payable in foreign currencies. It is group policy that the consideration
for significant purchases must be denominated and paid in Norwegian kroner. If agreement is reached to make payment in another
currency, consideration is given to acquiring the currency in question in order to meet future contractual payments. Accordingly,
exposure to currency risk and the consequences for earnings and equity of changes in exchange rates are not material. The group
was not party to any forward foreign exchange contracts at the close of 2011. The group entered into forward foreign exchange
contracts in 2012. These contracts are for cash flow hedging of future fixed costs denominated in foreign currency. The contracts
are for five forward periods with the first maturity in March 2013 and the last maturity in March 2014.
Oslo Clearing is exposed to currency risk to the extent that members pledge cash collateral that is denominated in a permitted
foreign currency. Where cash collateral is denominated in foreign currencies, the collateral requirement is calculated in the same way
as for other forms of collateral where the price can vary, i.e. Oslo Clearing calculates a margin to cover currency risk and calls for
additional collateral if the balance pledged is not sufficient to meet the margin requirement calculated by Oslo Clearing at any time.
Oslo Clearing:
Oslo Clearing’s Investment Policy stipulates that its investments shall have an average duration of between 0 and 6 months.
Cash is allocated in the form of bank deposits with floating interest rates held with a number of credit institutions. Investments in
interest-bearing instruments are allocated to floating rate securities, generally with 3-monthly interest rate fixings, and zerocoupon Treasury bills. Some of the interest-bearing instruments held have remaining maturity in excess of 12 months, but interest
rate risk on these instruments is limited to approximately 3 months. The average duration of Oslo Clearing’s assets under
management at the close of 2013 was 1/2 months.
At the close of 2013, Oslo Clearing had pledged a holding of bonds issued by Eiendomskreditt (NOK 10 million) in favour of
Norges Bank as collateral for settlement of transactions in equity capital instruments.
The group other than Oslo Clearing:
The group placed part of its surplus liquidity in 2013 in fixed-rate term deposits for periods of up to three, six or 12 months.
Other bank deposits are on floating rate terms.
A change of one percentage point in the level of interest rates would have affected earnings and equity by approximately NOK 14
million. This calculation includes revenue arising from collateral pledged in the form of cash collateral transferred to Oslo Clearing.
Market risk – clearing activities
The group is exposed to the risk that the value of a portfolio for clearing changes as a result of movements in prices/rates in the
financial markets. Oslo Clearing acts to reduce this risk by calculating margin requirements that must be covered by permitted
57
Notes - GROUP
forms of margin collateral. The model used for calculating margin requirements takes into account expected fluctuations in the
market price, as well as the number of days that Oslo clearing considers will be required to close a defaulted position.
Determining fair value
Fair value of financial assets classified as ‘available for sale’ is determined by the following methods:
• Fair value of financial assets that are traded in active markets is based on the market price on the balance sheet date.
• Fair value of financial assets that are not traded in an active market is determined by using recognised valuation methods.
In such cases, observable market data will be used to the maximum extent possible.
The fair value of derivative positions is determined on the basis of market value of the derivative contract in question on the
balance sheet date. Fair value is calculated as the last traded price * number of underlying contracts. The fair value of equity
capital instrument positions is determined on the basis of the market value as quoted on Oslo Børs on the balance sheet date. Fair
value recognition is not applied to cash, accounts receivable, other current receivables and interest-bearing borrowings. The book
value of cash and bank deposits is virtually equivalent to fair value given that these instruments have short maturities. Similarly,
the book value of accounts receivable and accounts payable is virtually the same as fair value since these transactions are entered
into on ‘normal’ terms.
Financial strategy
Oslo Børs VPS Holding ASA will strive to maintain a level of equity appropriate to its strategy and risk profile. In parallel with this,
the group will seek to limit the level of capital it needs. If the group has liquidity in excess of the level needed taking into account
the amount of capital it needs for its current operations, acquisitions, or investments, or the requirements for satisfactory
liquidity and solidity, including the level of capital needed to satisfy the requirements imposed by the authorities, it will seek to
distribute the surplus to its shareholders.
Norwegian legislation requires that a clearing house must maintain capital at a level prudent to the scale of business carried out.
Primary capital must be at least NOK 50 million. An amount equivalent to at least half the undertaking’s primary capital must be
available at any time either on deposit with a financial institution or by way of unconditional drawing rights with a financial institution.
Stock exchange and securities depository operations are required to maintain a prudent level of primary capital. In this context,
primary capital comprises equity after deducting items including intangible assets such as system development costs and deferred
tax asset. In the case of VPS, Finanstilsynet has ruled that VPS must maintain primary capital equivalent to at least nine months’
operating costs plus a prudent buffer amount. Dividend payments by VPS require approval by the Ministry of Finance. Primary capital
must be available to a large extent as holdings of liquid assets. The group satisfies all external requirements for capital adequacy.
The group had equity of NOK 1,383 million at the end of 2013. The group did not have any interest-bearing borrowings at
31 December 2013.
Maturity structure of financial instruments (Figures in NOK 1,000):
2013
On demand
< 3 months
3-12 months
1-5 years
>5 years
Total
Derivatives Market value of derivative
positions outstanding 221 849 68 487 290 336
Total derivatives 221 849 68 487 - 290 336
19 895 19 895
Items other than derivatives
Accounts payable Cash Collateral 1 090 075 1 090 075
Total other than derivatives 1 109 970 - 1 109 970
Overall total 1 331 819 - 1 400 306
- 68 487 58
Notes - GROUP
Maturity structure of financial instruments (figures in NOK 1,000):
2012
On demand
< 3 months
3-12 months
1-5 years
>5 years
Total
Derivatives Market value of derivative
positions outstanding 84 570 50 029 90 134 689
Total derivatives 84 570 50 029 90 134 689
17 12 037
Items other than derivatives
Accounts payable 12 020 Cash collateral 814 386 814 386
Total other than derivatives 826 406 17 0 826 423
Overall total 910 977 50 046 90 961 112
The fair value of derivatives will not differ materially from the remaining normal contractual value since there is only a short period
to maturity. Liabilities in respect of items other than derivatives are expected to be settled from existing liquid assets.
Note
Overview 31.12.2012
Held for Designated at
trading
fair value Recievables
Other fin.
liabilities
Total Level 1
Level 2 Level 3
Total
Financial assets measured at fair value
Securities available for sale
11
Outstanding derivatives positions
20
Total financial assets measured at fair value
359 357 359 357 134 689 134 689 0
359 357 359 357 359 357
134 689 134 689 134 689
0 494 046 0 494 046 0 494 046
Financial assets not measured at fair value
Trade and other receivables
17,12
Bank deposits
76 809 16
Total financial assets not measured at fair value
0 76 809 1 303 533 1 303 533 0 1 380 342 0 1 380 342 0
0
0
0
Financial liabilities measured at fair value
Outstanding derivatives positions
20
Total financial liabilities measured at fair value
0 134 689 134 689 134 689 134 689
134 689 134 689 0
0
0 134 689 0 134 689
Financial liabilities not measured at fair value
Trade payables
12
Total financial liabilities not meaured at fair value
0
0
59
0 12 037 12 037 12 037 12 037 0
0
0
0
Notes - GROUP
Note
Overview 31.12.2013
Held for Designated at
trading
fair value Recievables
Other fin.
liabilities
Total Level 1
Level 2 Level 3
Total
Financial assets measured at fair value
Securities available for sale
11
Outstanding derivatives positions
20
Total financial assets measured at fair value
362 912 362 912 362 912 362 912 362 912
290 336 290 336 290 336 290 336
290 336 653 248 0 0
0 653 248 0 653 248
Financial assets not measured at fair value
Trade and other receivables
17,12
Bank deposits
102 714 16
Total financial assets not measured at fair value
0 102 714 1 571 290 1 571 290 0 1 674 004 0 1 674 004 0
0
0
0
Financial liabilities measured at fair value
Outstanding derivatives positions
20
290 336 Contigent considerations
21
8 246 Total financial liabilities measured at fair value
0 298 582 0 290 336 290 336 290 336
8 246 0
298 582 0 290 336 8 246 8 246
8 246 298 582
Financial liabilities not measured at fair value
Trade payables
Total financial liabilities not meaured at fair value
12
0 0
0
19 895 19 895 19 895 19 895 0
0
0
0
Note 17 Accounts receivable/Losses on receivables
Accounts receivable are recorded at their nominal value less provisions for expected losses. Provisions are made on the basis of
case-by-case evaluation of amounts due. Losses on accounts receivable are recognized as other operating costs.
Specific
General
provisionprovision
The provision for losses has developed as follows (figures in NOK 1,000):
31.12.2011
Total
0300
300
Provided for during the year
138
138
Provision applied in the year
-138
-138
Provision written-back
31.12.2012
Provided for during the year
Provision applied in the year
0
0300
300
2
200
202
-2
-2
Provision written-back
31.12.2013
0
0500
500
Ageing of customer receivables is as follows:
Total 2013
72 011
Total 2012
48 905
Not yet due
< 30 days
30-60 days
60-90 days
>90 days
63 963 5 776 611 82 1 579
Not yet due
< 30 days
30-60 days
60-90 days
>90 days
43 833
2 998
852
423
797
60
Notes - GROUP
Note 18 Share capital and shareholder information
The share capital of Oslo Børs VPS Holding at 31 December 2013 was as follows:
No. of shares Par value (NOK) Own shares Total
Shares
43 004 000 2
19 797 NOK 85 968 406
Total
43 004 000 2
19 797 NOK 85 968 406
All shares have the same rights in respect of voting and dividends.
In 2013, Oslo Børs VPS Holding purchased 6,000 of its own shares at NOK 55.50 and sold 14,891 shares at NOK 56.00. In 2012,
the company purchased 18,600 of its own shares at NOK 41.00 and sold 14,308 shares at NOK 41.00. There were no other
changes in share capital or own shares in the period.
In the Notice of the Annual General Meeting to be held on 26 May 2014, the Board has proposed that the company should pay a
dividend of NOK 7 per share for the 2013 financial year.
Shares held by Board Members, senior employees and related parties:
Name
Office
Shares owned
Leiv Askvig
Shares held
by associates
Chair of Oslo Børs VPS Holding/Oslo Børs/Board member VPS (to 24 January 2014)
Benedicte Schilbred Fasmer Board member Oslo Børs VPS Holding/Oslo Børs
Harald Espedal
Board member Oslo Børs VPS Holding/Oslo Børs
325 000 Wenche Agerup
Board member Oslo Børs VPS Holding/Oslo Børs
Ottar Ertzeid
Board member Oslo Børs VPS Holding
Øyvind G. Schanke
Board member Oslo Børs ASA
Kim Dobrowen
Chair of VPS
3500
Gunn Oland
Board member VPS
Knut Erik Robertsen
Board member VPS
Anne-Lise Kristiansen
Board member VPS
Audun Bø
Board member VPS
Sissel Bakker
Employee representative VPS and Oslo Børs VPS Holding Morten Nordby
Employee representative VPS and deputy representative Oslo Børs VPS Holding Christian Falkenberg Kjøde
Employee representative Oslo Børs and Oslo Børs VPS Holding Ingvild Resaland
Employee representative Oslo Børs and deputy representative Oslo Børs VPS Holding 20 365 3 816 198 Sissel Heramb Tangen
Deputy employee representative VPS
400 Even Flugstad
Deputy employee representative VPS
2 887 Eirik Høiby Ausland Deputy employee representative Oslo Børs Leiv Askvig is the CEO of Sundt AS. Sundt AS holds 657,500 shares.
Ottar Ertzeid is a Group Executive Vice President of the DNB group, which includes DNB Livsforsikring.
DNB Livsforsikring holds 8,522,045 shares.
61
Notes - GROUP
Name
Office
Shares owned
Shares held
by associates
Bente A. Landsnes
Group CEO/CEO Oslo Børs/Board member VPS
28 516
Anders Brodin
SVP Secondary Market, Oslo Børs
1 955
Øivind Amundsen
SVP Legal Affairs and Primary market, Oslo Børs
1 880
Per Eikrem
SVP Corporate Communications and Staff, Oslo Børs
2 820
Thomas Borchgrevink
SVP Surveillance and Operations, Oslo Børs
2 169
Kjetil Nysæther
SVP IT, Oslo Børs
1 588
Øyvind Skar
SVP Information Services, Oslo Børs
Bodil Østby
SVP Strategy and Product Development, Oslo Børs
Tom Kristoffersen
SVP Client Relations Secondary Market, Oslo Børs
John-Arne Haugerud
CEO, VPS
Harald Næss
EVP Development and IT VPS
Jorunn Blindheim Øystese
EVP Legal/Compliance VPS
Geir Heggem
CFO Oslo Børs VPS
1 946
Sveinung Dyrdal
EVP Securities Services, VPS
4 583
Leif Arnold Thomas
EVP Fund Services, VPS
Arne Adli
EVP Head of Strategy and Business Analyses, VPS
774
7 315
840
51
25 Name
Office
Shares owned
Shares held
by associates
Anne Kristin Hildrum
Board Secretary Oslo Børs VPS Holding ASA
Heidi Magnussen Brandt
Board Secretary VPS
3 206
Cecilie Kvalheim
Control Committee VPS
Håkon Persen Söderstrøm
Control Committee VPS
Jan Henriksen
Control Committee VPS
Vegard Østlien
Control Committee VPS
Lars Inge Pettersen
Auditor (KPMG)
51
16 400
62
Notes - GROUP
The 20 largest shareholders at 31 December 2013 were:
Nationality
Ownership
No. of shares Percentage
DNB LIVSFORSIKRING ASA NOR
8 522 045 19.8 %
KOMMUNAL LANDSPENSJONSKASSE NOR
4 300 200 10.0 %
PARETO AS NOR
3 662 230 8.5 %
JP MORGAN CLEARING CORP. (NOM) USA
2 184 309 5.1 %
ARENDALS FOSSEKOMPANI ASA NOR
1 996 000 4.6 %
ARMOR QUALIFIED, LP USA
1 769 102 4.1 %
THE NORTHERN TRUST CO. (NOM) GBR
1 643 219 3.8 %
ARMOR CAPITAL PARTNERS, LP USA
1 511 149 3.5 %
ORKLA ASA NOR
1 285 700 3.0 %
MSF-MUTUAL FINANCIAL
BEL
911 000 2.1 %
ARMOR CAPITAL OFFSHORE MASTER
USA
865 823 2.0 %
MORGAN STANLEY & CO INT. (NOM) GBR
775 895 1.8 %
NORDEA NORDIC SMALL CAP FUND GBR
718 841 1.7 %
MUST INVEST AS NOR
708 520 1.6 %
SUNDT AS NOR
657 500 1.5 %
FRANKLIN TEMPLETON EXCLUSIVE GBR
622 000 1.4 %
HSBC TRINKAUS & BURKHARDT AG (NOM) DEU
500 000 1.2 %
MP PENSJON PK NOR
465 000 1.1 %
SPAREBANKEN VEST NOR
450 000 1.0 %
STATE STREET BANK AND TRUST CO. (NOM)
USA
Total
447 478 1.0 %
33 996 011 79.1 %
Note 19 Outstanding derivatives position
As part of its normal business, the subsidiary Oslo Clearing ASA is a formal counterparty in derivative transactions traded on Oslo
Børs and in derivative transactions or securities borrowing and lending transactions notified for clearing. Since VPS Clearing is
acting as a formal counterparty, the positions are not regarded as own-account trading, but are a documentation of counterparty
risk. Counterparty risk is measured using models designed under international standards. Counterparty exposure is covered
through individual collateral provided by each customer in the form of financial instruments, bank guarantees and cash. In
accordance with IAS 39 and IAS 32, the clearing business is required to recognise in its balance sheet the commitments borne by
the company as a central counterparty in derivative contracts. The estimated market value of the positions at 31 December 2013
of NOK 290,336k is recognised as a current liability, with a matching entry under current receivables. Claims and liabilities that
can be assigned to outstanding derivative positions are netted against each other to the extent that such offsetting is permitted.
Setoff is applied for positions relevant to recognition that are related to the same clearing representative, are in the same
derivative series and with the same maturity date.
20132012
Gross outstanding derivatives positions 505 779 Set-offs
215 443 78 565
Net outstanding derivatives positions 290 336 134 689
63
213 254
Notes - GROUP
Note 20 Related parties
The consolidated accounts for the group comprise the annual accounts of Oslo Børs VPS Holding ASA and the annual accounts of
the following subsidiary companies:
2013
Ownership
2012
Consolidated
from and including
Oslo Børs ASA
100 %
100 %
May 2001
Verdipapirsentralen ASA
100 %
100 %
November 2007
Oslo Clearing ASA
100 %
100 %
November 2007
Oslo Market Solutions AS
100 %
100 %
November 2007
Fish Pool ASA
94.3 %
15 February 2013
Evolution Software Sweden AB
100 %
1 July 2013
The following table shows the totals for transactions with related parties:
2013
Sales of
Purchases of
services services ReceivablesLiabilities
Joint ventures
- NOTC
- FinansNett Norge
944
60 76 568 1
- Nac
The following table shows the totals for transactions with related parties:
2012
Sales of
Purchases of
services services ReceivablesLiabilities
Joint ventures
- NOTC
- FinansNett Norge
939
54 49 649 2
- Nac
The group owns 50% of the shares in each of the joint ventures. Transactions with related parties are carried out on normal
commercial terms.
Note 21 Contingent liabilities
As part of the purchase of the entire share capital of Evolution Software Sweden AB, it was agreed that additional consideration
will be paid if earnings in 2013, 2014 or 2015 exceed a certain level. No additional consideration is payable for 2013.
The accounts make provision for total additional consideration of NOK 8 million.
Note 22 Other liability
Under the terms of the Securities Register Act of 5 July 2002, VPS is liable for losses resulting from errors that occur in connection
with registration activities. The statutory liability only applies to direct losses and is limited to NOK 500 million per claim. For
losses that are due to circumstances unrelated to registration activities, VPS is subject to normal liability that is not limited.
The Act assumes that losses will be covered through insurance or other guarantees. Oslo Børs VPS Holding ASA has taken out
errors and omissions insurance for the parent company and its subsidiaries, with an annual limit of NOK 1 billion and a deductible
of NOK 10 million per claim. VPS shares this insurance with the other companies in the group up to a limit of NOK 300 million, and
is the sole insured for NOK 700 million. With effect from 2012, additional insurance cover of NOK 300 million has been arranged
for Oslo Børs as the sole insured. No compensation was paid in 2013.
64
Oslo Børs VPS Holding ASA
Profit and loss account
(Figures in NOK 1,000)
Note201320122011
OPERATING REVENUES
Operating revenues
0
0
0
TOTAL OPERATING REVENUES
0
0
0
OPERATING COSTS
Salaries and related costs
7, 8
167
Depreciation
Other operating costs
9
7 837 10 407 5 951
TOTAL OPERATING COSTS
8 004
10 407
5 951
OPERATING PROFIT
-8 004
-10 407
-5 951
Income from investment in subsidiaries
1,3
318 283 300 433 362 965 2 211
Financial expense from subsidiaries
6
-8 208 -9 580 -10 447
Financial expense
6
-196 -14 110 -3 982
310 241
277 708
263 019
ORDINARY PRE-TAX PROFIT
302 237
267 301
257 068
Financial income
NET FINANCIAL ITEMS
Tax expense
2
-149 - 275 237
-
PROFIT FOR THE YEAR
4
302 386
267 301
257 068
Earnings per share
5
7,03 6,22 5,98
Diluted earnings per share
5
7,03 6,22 5,98
Dividend
301 028
301 028
258 024
Transfer from/to other paid-in equity
-33 727
-956
ALLOCATIONS
Transfer from/to other equity
1 358
TOTAL ALLOCATIONS
302 386
65
267 301
257 068
Oslo Børs VPS Holding ASA
Balance sheet, at 31 Dec
(Figures in NOK 1,000)
Note
20132012
FIXED ASSETS
Intangible assets
Total intangible assets
0
0
Financial fixed assets
Investment in subsidiaries
1
1 223 962
1 223 962
Total financial fixed assets
1 223 962
1 223 962
Total fixed assets
1 223 962
1 223 962
CURRENT ASSETS
Receivables
Dividends and group contribution receivable
3
Other intragroup receivables
318 283
300 433
3
0
0
Other receivables
316
138
Total receivables
318 599
300 571
Bank deposits 2 457
21 580
Total current assets
321 056
322 151
TOTAL ASSETS
1 545 018
1 546 113
66
Oslo Børs VPS Holding ASA
Balance sheet, at 31 Dec
(Figures in NOK 1,000)
Note
20132012
EQUITY
Paid-in equity
5
85 968
85 951
Other paid-in equity
Share capital
890 352
889 668
Total paid-in equity
976 320
975 619
4
Other equity
Other equity
Total other equity
1 358
0
4
1 358
0
Total equity
977 678
975 619
LIABILITIES
Long-term liabilities
Intragroup liabilities
3
264 829
264 830
Total long-term liabilities
264 829
264 830
Current liabilities
Trade creditors
3
1 228
1 009
301 028
301 028
3
255
255
Provision for dividend
Intragroup balances
Other current liabilities
0
3 372
Total current liabilities
302 511
305 664
Total liabilities
567 340
570 494
TOTAL LIABILITIES AND EQUITY 1 545 018
1 546 113
Oslo, 26 March 2014
Benedicte Schilbred Fasmer
Chair
Wenche Agerup Board member
Harald Espedal Board member
Ottar Ertzeid Christian Fredrik Falkenberg Kjøde
Board member
Board member
67
Sissel Bakker
Board member
Bente A. Landsnes
Group CEO
Oslo Børs VPS Holding ASA
Cash flow analysis, at 31 Dec
(Figures in NOK 1,000)
201320122011
Cash flow from operational activities
Ordinary pre-tax profit
302 237
267 301
257 068
Income from subsidiaries
-318 283
-300 433
-275 237
Tax paid in the period
149 -111 994
Write-down of financial fixed assets
- 14 000 3 713
Dividends and group contribution received
300 433
275 237
433 833
Change in accounts receivable
0
0
60
Change in trade creditors
219
251
450
Change in other accruals
-3 552
3 350
116
Net cash flow from operational activities
281 203
259 706
308 009
Cash flow from investment activities
Group contribution to Oslo Clearing ASA
-1 059
Net cash flow from investment activities
0
0
-1 059
Cash flow from financing activities
Net payment on purchase of own shares
500
-296
-119
Dividend paid
-300 826 -257 878 -343 837
Net cash flow from financing activities
-300 326
-258 174
-343 956
Net change in cash and liquid assets
Cash and liquid assets at start of the period
Cash and liquid assets at end of the period
-19 123
21 580
2 457
1 532
20 048
21 580
-37 006
57 054
20 048
The cash flow analysis has been prepared in accordance with the indirect method. Cash and liquid assets comprise cash and bank deposits.
68
Oslo Børs VPS Holding ASA
Notes
Principles applied for the parent
company accounts
Classification of assets and
liabilities in the balance sheet
Oslo Børs Holding ASA was incorporated
in April 2001. At the end of May 2001
the entire assets, undertaking and liabilities of the self-owning institution Oslo
Børs were transferred to Oslo Børs ASA
with shares in Oslo Børs ASA as consideration. The shares in Oslo Børs ASA were
transferred to Oslo Børs Holding ASA
with shares in Oslo Børs Holding ASA as
consideration. The shares in Oslo Børs
Holding ASA were sold through a Public
Share Offer in May 2001.
Assets which are to be held or used
over the long term are classified as
fixed assets in the balance sheet. Other
assets are classified as current assets.
Receivables due for payment within one
year are also classified as current assets.
Liabilities that fall due for repayment in
their entirety within one year are classified as current liabilities. Where any part
of provisions for liabilities falls due for
payment within the current year, this is
not reclassified as a current liability.
The merger of Oslo Børs Holding ASA
and VPS Holding ASA was registered on
26 November 2007. Oslo Børs Holding
ASA simultaneously changed its name to
Oslo Børs VPS Holding ASA.
Revenue and costs
Revenue
Revenue is recognised to income in the
period the revenue is earned.
Accounting principles
The accounts have been prepared in
accordance with Norwegian legislation
and generally accepted accounting practice in Norway. The accounting principles
set out below have been applied in a
uniform and consistent manner in the
accounts presented.
Classification of revenue and
expenditure in the profit and loss
statement
Revenues and costs that are related to
normal operations are classified as
operating revenues and operating costs
and are included in the calculation of
operating profit. Financial items are
taken into account following the calculation of operating profit but before
arriving at ordinary pre-tax profit. The
allocation of the profit for the year is
shown in the annual accounts.
Costs
Costs are recognised to profit and loss in
the same period as the income to which
they relate. Costs that cannot be directly
related to income items are recognised
to profit and loss as they are incurred.
Valuation of assets and liabilities
in the balance sheet
Current assets are valued at the lower of
acquisition price and true value, and current
liabilities are valued at the higher of their
value when created and fair value.
Fixed assets are initially valued at
acquisition cost. If there are indications
that a fixed asset may have fallen in
value, investigations are carried out to
see whether there is any need to write
down the book value to the recoverable
amount (the higher of net sales value and
value in use).
69
With effect from the 2007 financial
year, investments in subsidiaries are
recognised in the parent company’s
accounts in accordance with the cost
method. Under the cost method, dividends and group contribution proposed
by subsidiaries are recognized as income
to the extent that they result from
profits earned during the parent
company’s period of ownership.
Tax liability arises in respect of the
accounting profit, and is made up of tax
payable and changes in deferred tax.
Deferred tax and deferred tax assets
in the balance sheet are calculated at
the nominal rate of tax on the basis of
temporary differences between accounting and taxation values. Differences
that relate to fixed assets and that will
be reversed at a distant future date are
not included in the calculation of deferred
tax assets. Net deferred tax assets are
capitalised on the balance sheet to the
extent that it is likely that they will be
capable of use in the future.
In the case of uncertainty over specific
assets and liabilities, estimated values
are used. Changes in amounts estimated
in previous periods are recognised to
profit and loss in the period in which the
changes are made.
Notes
Note 1 Shares in subsidiary companies
Shares in subsidiary companies are recognized in accordance with the cost method.
Shares in Verdipapirsentralen ASA, Oslo Clearing ASA and Oslo Market Solutions AS were acquired in connection with the merger
with VPS Holding ASA in 2007.
(Figures in NOK 1,000)
Selskap
Oslo Børs ASA
Date
acquired
Registered
office
Ownership/
voting interest
Acquisition
cost
Book
value
Equity at
31.12.12
2001
Oslo
100 %
123 003
123 003 300 371
Verdipapirsentralen ASA
2007
Oslo
100 %
2 580 712
1 010 635 365 291
Oslo Clearing ASA
2007
Oslo
100 %
245 145
80 824 148 868
Oslo Market Solutions AS
2007
Oslo
100 %
70 161
9 500 3 281
1 223 962 Total
Note 2 Tax expense/deferred tax assets
(Figures in NOK 1,000)
Oslo Børs VPS Holding ASA
2013
2012
2011
Pre-tax profit
302 386
267 301 257 068
Dividend from subsidiaries (permanent difference)
-302 386
-281 301 -260 781
Write-down of shares (permanent difference)
0
14 000 3 713
Tax base for the year
0
0
-
Tax payable
0
0
Tax payable previous years
-149
0
-
Tax charge for the year
-149
0
-
There were no temporary differences in the company at 31 December 2013 and accordingly no deferred tax/deferred tax asset.
70
-
Notes
Note 3 Receivables and payables between companies in the same group
Current receivables relate principally to dividend and group contribution due. Trade receivables relate principally to the onward
invoicing of costs that are to be recognised in accounts of the various group companies as appropriate. Supplier credits relate to
purchases of accounting, administrative and legal services. Services are priced in accordance with the arm’s length principle. Longterm liabilities include loans and costs that arose in connection with the merger.
(Figures in NOK 1,000)
20132012
2011
Current receivables
Oslo Børs ASA - dividend/group contribution due
196 577 142 590 154 048
Verdipapirsentralen ASA - dividend/group contribution due
118 706 123 000 85 489
3 000 1 000 5 700
Oslo Market Solutions AS - dividend/group contribution due
Oslo Clearing ASA - dividend due
- Oslo Børs ASA - intragroup balances
Total
33 843 30 000
19 963 19 963 19 963
338 246 320 396 295 200
Long-term liabilities
63 240 63 241 63 241
Oslo Børs ASA - trade creditors
Verdipapirsentralen ASA - trade creditors
201 589 201 589 201 589
Total
264 829 264 830 264 830
Current liabilities
Oslo Børs ASA - intragroup balances
20 218 20 218 20 218
Total
20 218 20 218 20 218
916
694 758
0
253 916 947 Trade creditors
Oslo Børs ASA
Verdipapirsentralen ASA
Total
758
In the accounts, current receivables and current liabilities towards Oslo Børs are netted against each other.
Purchases 2013
Oslo Børs VPS
Oslo Clearing Oslo Market Solutions
4 223
0
0
42
0
0
0
0
Sales 2013
Purchases 2012
3 739
0
0
42
0
0
0
0
Sales 2012
71
Notes
Note 4 Equity
Other
equity
Total
-8
-288
-296
Dividend received on holdings of own shares
146
146
Profit
267 301
267 301
Dividend proposed
-301 028
-301 028
Equity at 31 December 2012
889 669 975 619
(Figures in NOK 1,000)
Share capital
Holdings of own shares
Holdings of own shares
Share premium
reserve
85 951 - Other paid-in
equity
- 17
482
Dividend received on holdings of own shares
202
499
202
Profit
302 386
302 386
Dividend proposed
-301 028
-301 028
1 358 977 678
Equity at 31 December 2013
85 968 - 890 352 The company has carried out the following transactions in its own shares over the last two years in connection with its share
purchase program for employees:
In 2013, the company purchased in total 6,000 shares at a price of NOK 55.50 per share and sold 14,891 shares at a price of
NOK 56.00 per share. In 2012, the company purchased in total 18,600 shares at a price of NOK 41 per share and sold
14,308 shares at a price of NOK 41 per share.
Note 5 Share capital and shareholder information
The company’s share capital at 31 December 2013 was as follows:
No. of shares Par value (NOK) Shares
43 004 000 2
19 797 NOK 85 968 406
Total
43 004 000 2
19 797 NOK 85 968 406
72
Own shares Total
Notes
Shares held by Board Members, senior employees and related parties:
Name
Office
Shares owned
Leiv Askvig
Shares held
by associates
Chair of Oslo Børs VPS Holding/Oslo Børs/Board member VPS (to 24 January 2014)
Benedicte Schilbred Fasmer Board member Oslo Børs VPS Holding/Oslo Børs
Harald Espedal
Board member Oslo Børs VPS Holding/Oslo Børs
325 000 Wenche Agerup
Board member Oslo Børs VPS Holding/Oslo Børs
Ottar Ertzeid
Board member Oslo Børs VPS Holding
Øyvind G. Schanke
Board member Oslo Børs ASA
Kim Dobrowen
Chair of VPS
3500
Gunn Oland
Board member VPS
Knut Erik Robertsen
Board member VPS
Anne-Lise Kristiansen
Board member VPS
Audun Bø
Board member VPS
Sissel Bakker
Employee representative VPS and Oslo Børs VPS Holding Morten Nordby
Employee representative VPS and deputy representative Oslo Børs VPS Holding Christian Falkenberg Kjøde
Employee representative Oslo Børs and Oslo Børs VPS Holding Ingvild Resaland
Employee representative Oslo Børs and deputy representative Oslo Børs VPS Holding 20 365 3 816 198 Sissel Heramb Tangen
Deputy employee representative VPS
400 Even Flugstad
Deputy employee representative VPS
2 887 Eirik Høiby Ausland Deputy employee representative Oslo Børs Leiv Askvig is the CEO of Sundt AS. Sundt AS holds 657,500 shares.
Ottar Ertzeid is a Group Executive Vice President of the DNB group, which includes DNB Livsforsikring.
DNB Livsforsikring holds 8,522,045 shares.
Name
Office
Shares owned
Shares held
by associates
Bente A. Landsnes
Group CEO/CEO Oslo Børs/Board member VPS
Anders Brodin
SVP Secondary Market, Oslo Børs
28 516
1 955
Øivind Amundsen
SVP Legal Affairs and Primary market, Oslo Børs
1 880
Per Eikrem
SVP Corporate Communications and Staff, Oslo Børs
2 820
Thomas Borchgrevink
SVP Surveillance and Operations, Oslo Børs
2 169
Kjetil Nysæther
SVP IT, Oslo Børs
1 588
Øyvind Skar
SVP Information Services, Oslo Børs
Bodil Østby
SVP Strategy and Product Development, Oslo Børs
Tom Kristoffersen
SVP Client Relations Secondary Market, Oslo Børs
John-Arne Haugerud
CEO, VPS
Harald Næss
EVP Development and IT VPS
774
7 315
840
Jorunn Blindheim Øystese
EVP Legal/Compliance VPS
Geir Heggem
CFO Oslo Børs VPS
1 946
51
Sveinung Dyrdal
EVP Securities Services, VPS
4 583
Leif Arnold Thomas
EVP Fund Services, VPS
Arne Adli
EVP Head of Strategy and Business Analyses, VPS
73
25 Notes
Name
Office
Shares owned
Anne Kristin Hildrum
Board Secretary Oslo Børs VPS Holding ASA
Shares held
by associates
3 206
Heidi Magnussen Brandt
Board Secretary VPS
Cecilie Kvalheim
Control Committee VPS
51
Håkon Persen Söderstrøm
Control Committee VPS
Jan Henriksen
Control Committee VPS
Vegard Østlien
Control Committee VPS
Lars Inge Pettersen
Auditor (KPMG)
16 400
The 20 largest shareholders at 31 December 2013 were:
Nationality
Ownership
No. of shares Percentage
DNB LIVSFORSIKRING ASA NOR
8 522 045 19.8 %
KOMMUNAL LANDSPENSJONSKASSE NOR
4 300 200 10.0 %
PARETO AS NOR
3 662 230 8.5 %
JP MORGAN CLEARING CORP. (NOM) USA
2 184 309 5.1 %
ARENDALS FOSSEKOMPANI ASA NOR
1 996 000 4.6 %
ARMOR QUALIFIED, LP USA
1 769 102 4.1 %
THE NORTHERN TRUST CO. (NOM) GBR
1 643 219 3.8 %
ARMOR CAPITAL PARTNERS, LP USA
1 511 149 3.5 %
ORKLA ASA NOR
1 285 700 3.0 %
MSF-MUTUAL FINANCIAL
BEL
911 000 2.1 %
ARMOR CAPITAL OFFSHORE MASTER
USA
865 823 2.0 %
MORGAN STANLEY & CO INT. (NOM) GBR
775 895 1.8 %
NORDEA NORDIC SMALL CAP FUND GBR
718 841 1.7 %
MUST INVEST AS NOR
708 520 1.6 %
SUNDT AS NOR
657 500 1.5 %
FRANKLIN TEMPLETON EXCLUSIVE GBR
622 000 1.4 %
HSBC TRINKAUS & BURKHARDT AG (NOM) DEU
500 000 1.2 %
MP PENSJON PK NOR
465 000 1.1 %
SPAREBANKEN VEST NOR
450 000 1.0 %
STATE STREET BANK AND TRUST CO. (NOM)
USA
Total
447 478 1.0 %
33 996 011 79.1 %
Earnings per share is calculated as follows:
2013 2012
2011
Profit after tax
302 386 267 301 257 068
Average number of shares (1,000)
43 004 43 004 43 004
Earnings per share (NOK)
7.03 6.22 5.98
Diluted earnings per share (NOK)
7.03 6.22 5.98
74
Notes
Note 6 Financial expense
(Figures in NOK 1,000)2013 2012
2011
Financial expense from group companies:
Interest expense - group
-8 208 -9 538 -10 405
Other financial expense - group
- -42 -42
Total financial expense from group companies
-8 208 -9 580 -10 447
- Financial expense:
Write-down of shares in subsidiaries
-14 000 -3 601
Write-down of shares in associated companies
-112
Other financial expense
-196 -110 -269
Total financial expense
-196 -14 110 -3 982
Note 7 Remuneration of executive personnel
The company has no employees. The Chief Executive Officer does not receive any payment or other remuneration for her duties
from Oslo Børs VPS Holding ASA, but she does receive remuneration from another company in the group.
Note 8 Pension costs and pension liabilities
The company has no liability to operate a pension scheme under the terms of the Occupational Pensions Act.
Note 9 Auditor
A fee of NOK 150k paid to the auditor for ordinary audit of the 2012 accounts was expensed in 2013. In addition, an interim
payment of NOK 120k was expensed in 2013 for the audit of the 2013 accounts. All figures exclude value added tax.
75
Auditor´s Report
KPMG AS
P.O. Box 7000 Majorstuen
Sørkedalsveien 6
N-0306 Oslo
Telephone
Fax
Internet
Enterprise
+47 04063
+47 22 60 96 01
www.kpmg.no
935 174 627 MVA
To the Annual Shareholders’ Meeting of Oslo Børs VPS Holding ASA
INDEPENDENT AUDITOR’S REPORT
Report on the Financial Statements
We have audited the accompanying financial statements of Oslo Børs VPS Holding ASA, which
comprise the financial statements of the parent company Oslo Børs VPS Holding ASA and the
consolidated financial statements of Oslo Børs VPS Holding ASA and its subsidiaries. The parent
company’s financial statements comprise the balance sheet as at 31 December 2013, the income
statement and cash flow statement for the year then ended, and a summary of significant
accounting policies and other explanatory information. The consolidated financial statements
comprise the balance sheet as at 31 December 2013, and the statement of comprehensive income,
statement of changes in equity and cash flow statement for the year then ended, and a summary
of significant accounting policies and other explanatory information.
The Board of Directors and the Managing Director’s Responsibility for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation and fair
presentation of the parent company financial statements in accordance with the Norwegian
Accounting Act and accounting standards and practices generally accepted in Norway and for the
consolidated financial statements in accordance with International Financial Reporting Standards
as adopted by the EU, and for such internal control as the Board of Directors and the Managing
Director determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with laws, regulations, and auditing standards and practices
generally accepted in Norway, including International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial
statements 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 entity’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Offices in:
KPMG AS, a Norwegian member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity.
Statsautoriserte revisorer - medlemmer av Den norske Revisorforening.
76
Oslo
Alta
Arendal
Bergen
Bodø
Elverum
Finnsnes
Grimstad
Hamar
Haugesund
Knarvik
Kristiansand
Larvik
Mo i Rana
Molde
Narvik
Røros
Sandefjord
Sandnessjøen
Stavanger
Stord
Straume
Tromsø
Trondheim
Tønsberg
Ålesund
Independent auditor's report 2013
Oslo Børs VPS Holding ASA
Opinion on the separate financial statements
In our opinion, the parent company’s financial statements are prepared in accordance with the
law and regulations and give a true and fair view of the financial position of Oslo Børs VPS
Holding ASA as at 31 December 2013, and of 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.
Opinion on the consolidated financial statements
In our opinion, the consolidated financial statements are prepared in accordance with the law and
regulations and give a true and fair view of the financial position of Oslo Børs VPS Holding ASA
and its subsidiaries as at 31 December 2013, and of its financial performance and its cash flows
for the year then ended in accordance with International Financial Reporting Standards as
adopted by the EU.
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report and the statements on Corporate Governance and
Corporate Social Responsibility
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 and in the statements on Corporate
Governance and Corporate Social Responsibility concerning the financial statements, the going
concern assumption and the proposal for the allocation of the profit is consistent with the
financial statements and complies with the law and regulations.
Opinion on Accounting 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 the 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, 28 Mars 2014
KPMG AS
Lars Inge Pettersen
State Authorized Public Accountant
[Translation has been made for information purposes only]
p. 2
77
/2
OSLO BØRS VPS HOLDING ASA
Box 460 Sentrum
0109 Oslo
Norway
www.osloborsvps.no
twitter.com/osloboers

Info - Agroplas

BULLETIN - Nordia 2014

Interim Report Q3 and YTD 2014 (pdf)

Camareros/as de pisos. Inglés. (Housekeepers). Noruega.

Document 1442747

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here - Saphila 2014

Setup summary for new members to the Diamond

Vengeance Producer Suite Tapestop

 HYOP AS is an independent company dedicated to bring