ibm finans norge as financial statements 31 december 2012

IBM Finans Norge AS Financial Statements 31 December 2012

IBM Finans Norge AS

Financial Statements

As at 31 December 2012

Contents Page Directors’ Report 2 Independent Auditors’ Report 4 Statement of Comprehensive Income 6 Statement of Financial Position 7 Statement of Changes in Equity 8 Statement of Cash Flows 9 Notes to the Financial Statements 10

IBM Finans Norge AS

Directors’ Repor t

For the Year Ended 31 December 2012

Page 2

The Nature and Location of the Operations IBM Finans Norge AS was established October 27, 2009 and is a fully owned subsidiary of International Business Machines AS (IBM) located in IBM’s localities in Rosenholmveien 25, 1414 Trollåsen, Norway. IBM Finans Norge AS’ objective is to finance invoices (factoring) and inventory for IBM and IBM Business Partners. The nature of the business requires concession from Norwegian Credit Authorities (no: Finanstilsynet) and until start up in October 2009 the business operated through IBM Credit Norge NUF under the Swedish company IBM Global Financing AB. This company was dissolved in October 2009 necessitating a subsidiary of IBM in Norway. All necessary concessions from authorities are in place and IBM Finans Norge AS has also obtained exception from capitalisation for large engagements from “Finanstilsynet” and the Norwegian Ministry of Finance. The general capitalisation requirements apply. The company has the following employees at YE 2012: Kristin Mellbye: Account mgr. 100% Petter Kimmestad: CEO 20% All infrastructure support is in the IBM CoE Budapest including credit and accounting. Working Environment The working environment is good and no occupational accidents have occurred in 2012. The work force consists of one full time female employee and a 20% part time male employee. The total sick leave in 2012 was less than 1.0%. Diversity and Equality The company practices an equal opportunity policy. There is currently a predominance of female employees in the company, and the company is in compliance with all gender equality requirements. External Environment IBM Finans Norge AS does not cause any harm to the environment or health. 2012 results and future prospects The Financial Statement for 2012 covers the total calendar year of 2012. IBM Finans Norge AS had a total credit engagement YE 2012 of MNOK 237 including unused but committed credits. Equity was MNOK 57.3 which is comfortably within the general capitalisation requirement. EBT was MNOK 8.8. The company expects to have stable portfolio in 2013 with profit on the same level as in 2012.

IBM Finans Norge AS

Statement of Comprehensive Income


The notes on pages 10 to 23 form par t of these financial statements.

Page 6

2012 2011

Notes NOK’000 NOK’000 Finance income 3 9 222 9 510 Finance cost 4 (308) (1 237) Net finance income 8 914 8 273 Other expense and income Other income - 68 Other expense 5 (139) (2 878) Total expense and other income (139) (2 810) Profit before income tax 8 775 5 463 Income tax expense 6 (2 455) (1 525)

Profit for the year /Total comprehensive income 6 320 3 938 All operations are classified as continuing.

IBM Finans Norge AS

Statement of Changes in Equity



Page 8

Issued capital

Other paid-in capital

Retained earnings

Total

equity NOK’000 NOK’000 NOK’000 NOK’000 At 1 January 2011 45 000 - 5 143 50 143

Profit for the period/Total comprehensive income

- - 3 938 3 938

Total contribution by and distribution to owners of the company -

-(5 051) (5 051)

At 31 December 2011 45 000 -

4 030 49 030 Profit for the period/Total comprehensive income

- - 6 320 6 320

Total contribution by and distribution to owners of the company - 7 133 (5 136) 1 997

At 31 December 2012 45 000 7 133 5 214 57 347

IBM Finans Norge AS

Statement of Cash Flows

As at 31 December 2012


Page 9

Cash flows from financing activities Capital increase 7 133 - Group contribution (7 133) (7 016) Net cash flow from financing activities - (7 016) Net increase in cash and cash equivalents (1 634) 1 634 Cash and cash equivalents at beginning of the period 1 634 - Cash and cash equivalents at end of the per iod 14 - 1 634

2012 2011 Notes NOK’000 NOK’000 Profit for the per iod 6 320 3 938 Adjustments for

Income tax 2 455 1 525 Changes in operating assets and liabilities

Decrease / (Increase) in receivables from related parties 14 10 602 62 968 Decrease / (Increase) in factored receivables 7 47 661 (77 517) (Decrease) / Increase in borrowing 9 28 843 (90 592) (Decrease) / Increase in payables to related parties 14 (96 591) 110 414 (Decrease) / Increase in other payables (924) (2 086)

Net cash flow from operating activities (1 634) 8 650

IBM Finans Norge AS

Notes to the Financial Statements


Page 10

1. Accounting policies

General information IBM Finans Norge AS (the ‘company’ ) is a limited company incorporated in Norway. The company’s immediate parent entity is International Business Machines AS, a company incorporated in Norway. The company’s ultimate parent entity is International Business Machines Corporations (‘ IBM Corporation’ ), a company registered in the United States of America. Basis of preparation These financial statements have been prepared on a historical cost basis, and in accordance with International Financial Reporting Standards (‘ IFRS’ ) as adopted by the European Union (‘EU’ ), and interpretations issued by the International Financial Reporting Interpretations Committee (‘ IFRIC’ ).

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been applied consistently to all years presented, unless otherwise stated. The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the company’s accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements are disclosed in the notes to these financial statements. The financial statements have been prepared on a going concern basis. New and amended standards and interpretations At the date of authorisation of these financial statements, the following standards and interpretations were in issue but not yet effective and have not been applied in these financial statements; IAS 19 Employee Benefits (amendment) IAS 27 Consolidated and Separate Financial Statements (amendment) IAS 28 Investments in Associates (amendment) IAS 32 Financial Instruments: Presentation (amendment) IFRS 1 First-time Adoption of International Financial Reporting Standards (amendment) IFRS 7 Financial Instruments: Disclosures (amendment) IFRS 9 Financial Instruments (amendment) IFRS 10 Consolidated Financial Statements (effective 1 January 2013) IFRS 11 Joint Arrangements (effective 1 January 2013) IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013) IFRS 13 Fair Value Measurement (effective 1 January 2013) Amendments to other Standards and Interpretations resulting from Annual Improvements to IFRSs issued in 2012

The company’s management anticipate the application of these Standards and Interpretations in future periods will have no material effect on the financial statements of the company.

IBM Finans Norge AS



1. Accounting policies (continued)

Page 11

Revenue Recognition The company recognises revenue only if probable that future economic benefits will flow to the entity and these benefits can be measured reliably. The primary source of revenue for the company is finance income. Finance income represents interest and fee income on factored and other receivables, cash and deposits and is recognised on an accruals basis using the effective interest rate method. Other expenses Other expenses are recognised in the income statement as incurred. Other expenses include selling expenses, salaries, office supplies, non-income taxes, insurance and office rental. Finance costs Finance costs represent interest on bank overdrafts and short term borrowings. Foreign cur rencies The financial statements of the company are presented in Norwegian Krone which is the functional currency of the company. Transactions denominated in foreign currencies are translated at the rate prevailing at the transaction date. Foreign exchange differences are recognised in the income statement in the year on settlement of these items. At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the reporting date. The resulting foreign exchange differences are recognised in the income statement for the year.

Taxation Income tax expense represents the current tax calculated on taxable profits for the year, any adjustments in respect of prior periods and any deferred tax charge or credit for the year. The current tax is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

IBM Finans Norge AS




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Taxation (continued) The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that have been enacted and that are expected to apply in the year when the liability is settled or the asset realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company intends to settle its current tax assets and liabilities on a net basis. Financial instruments Categories of financial instruments The company has the following categories of financial assets and liabilities: loans and receivables and financial liabilities at amortised cost. Financial assets and financial liabilities are recognised initially at fair value, plus directly attributable transaction costs, in the company’s statement of financial position when the company becomes party to the contractual provisions of the instrument. In determining the fair value of its financial instruments, the company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. For the majority of financial instruments, standard market conventions and techniques such as discounted cash flow analysis, replacement cost and termination cost are used to determine fair value. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realised. Loans and receivables Loans and receivables are measured on initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables include ‘cash and cash equivalents’ , ‘ factored receivables’ and ‘ receivables from related parties’ in the balance sheet (notes 7 and 14). Cash and cash equivalents comprise cash on hand and demand deposits and other short term, highly liquid investments that are readily convertible to a known amount of cash ad are subject to an insignificant risk of changes in value.

IBM Finans Norge AS




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Financial instruments (continued) Loans and receivables (continued)

An allowance for impairment of loans and receivables is recorded based on a combination of write-off history, ageing analysis, and any specific, known impairment losses. Below are the methodologies the company uses to calculate its impairment reserves, which are applied consistently to its different portfolios. The company reviews all loans and receivables on a regular basis. The review consists primarily of an analysis based upon current information available about clients, such as financial statements, news reports and published credit ratings, as well as the current economic environment, collateral net of repossession cost and prior history. Additionally, analysis is performed on its different collectively assessed portfolios, based upon credit ratings, probability of default, term, asset characteristics, and loss history to determine if there is objective evidence of impairment. Objective evidence of impairment includes:

• significant financial difficulty of the issuer or counterparty; or • default or delinquency in interest or principal payments; or • it becoming probable that the borrower will enter bankruptcy or financial

re-organisation. If there is objective evidence that loans and receivables are impaired, the company calculates an impairment loss by comparing the asset’s carrying amount and the present value of the expected future cash flows. Any resulting impairment loss is recognised in the income statement. The carrying amount of the impaired receivable is reduced through the use of a specific allowance account. Losses incurred on trade and other receivables are charged against the allowance when management believes the uncollectibility of the receivable is confirmed. Subsequent recoveries, if any, are credited to the allowance. Derecognition of financial assets The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership of a transferred financial asset, the company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. Financial liabilities at amortised cost Financial liabilities are recognised when the company becomes obliged to make future payments resulting from the purchase of goods or services. Amounts are unsecured and usually settled on standard commercial trade terms.

IBM Finans Norge AS




Page 14

Financial instruments (continued) Financial liabilities at amortised cost (continued) Financial liabilities recognised at amortised cost include ‘borrowing’ , ‘payables to related parties’ and ‘other payables’ (note 9 and 14). Trade and other payables, and borrowings are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. Derecognition of financial liabilities The company derecognises financial liabilities when, and only when, the company’s obligations are discharged, cancelled or they expire. Debt and equity instruments Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. Interest and dividends Interest and dividends are classified as expenses or as distributions of profit consistent with the statement of financial position classification of the related debt or equity instruments or component parts of compound instruments.

IBM Finans Norge AS



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2. Significant accounting estimates and assumptions The application of accounting standards and policies requires the company to make estimates and assumptions about future events that directly affect its reported financial condition and operating performance. The accounting estimates and assumptions discussed are those that the company considers to be most critical to its financial statements. An accounting estimate is considered critical if both (a) the nature of estimates or assumptions is material due to the level of subjectivity and judgement involved, and (b) the impact within a reasonable range of outcomes of the estimates and assumptions is material to the company's financial condition or operating performance. Revenue recognition Application of the accounting principles in IFRS related to the measurement and recognition of revenue requires that the company make judgements and estimates. Income taxes During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. As a result, the company recognises tax liabilities based on estimates of whether additional taxes and interest will be due. To the extent that new information becomes available which causes the company to change its judgement regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact income tax expense in the period in which such determination is made. Deferred tax assets Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future crystallisation of the underlying temporary differences can be deducted. An assessment of future profits is prepared based on current market and economic conditions, and an estimate of future market and economic conditions. Factors that could result in actual future profits being lower than estimated future profits relate to significant changes in the economy, or a significant change in the economic health of a particular client or industry segment that represents a concentration in the company’s client base.

IBM Finans Norge AS



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3. Finance income

2012 2011 NOK’000 NOK’000Factoring fees 7 338 5 549Income from factoring 1 387 3 383Interest on deposit with group undertakings (note 14) 489 562Other interest income 8 16 9 222 9 510 Interest on amounts owed by parent undertaking and by fellow subsidiary undertakings are charged at variable rates based on NIBOR.

4. Finance costs

2012 2011 NOK’000 NOK’000Interest on loans from group undertakings (note 14) 308 1 237 Interest on loans from parent undertaking and from fellow subsidiary is charged at variable rates based on NIBOR.

5. Other expenses

2012 2011 NOK’000 NOK’000Charges from parent undertaking (note 14) 1 209 1 129Insurance expenses (150) 305Impairment / (Release of impairment) of factored receivables (1 020) 1 309Other expenses 19 3Audit services (statutory audit) 81 132Total other expenses 139 2 878

The employees at IBM Finans Norge AS have double employment agreement with IBM AS and IBM Finans Norge AS. Any payment and benefit is given by IBM AS. Number of man-year employed in 2012 was 1.2 (2011: 1.2 man-year). Managing director and members of the Control Committee and Board of Directors are not compensated separately.

6. Income tax expense

(a) Analysis of charge / (credit) in the year

In respect of the period: 2012 2011 NOK’000 NOK’000Current tax 2 170 1 997Deferred tax (note 8) 285 (472)Income tax expense /(credit) 2 455 1 525

IBM Finans Norge AS



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6. Income tax expense (continued)

(b) Factors affecting tax charge / (credit) The tax assessed on the profit for the year is the same as the standard rate of corporation tax in Norway of 28%.

2012 2011 NOK’000 NOK’000Profit before income tax 8 775 5 463

Tax at the domestic income tax rate of 28% (2011: 28%) 2 457 1 530Non- taxable income (2) (5)Total income tax expense (note 6(a)) 2 455 1 525

7. Factored receivables

2012 2011 NOK’000 NOK’000

Current Factored receivables 208 570 257 251 Less: provision for impairment of receivables (668) (1 688) 207 902 255 563

8. Deferred tax asset

Charged to Income

Statement At 1 January 2011 -

Provision for impairment of receivables 472 At 31 December 2011 472

Provision for impairment of receivables (285) At 31 December 2012 187

The deferred tax asset is expected to be recovered within 12 months.

The recognition of deferred tax assets is determined by reference to the company’s estimate of recoverability based on models to forecast future taxable profits.

9. Borrowings

2012 2011 NOK’000 NOK’000

Borrowing from related companies (note 14) 28 843 -

Interest bearing amounts owed to fellow subsidiary undertakings are charged at variable rates based on NIBOR.

IBM Finans Norge AS



Page 18

10. Share capital and shareholder information

2012 2011 NOK’000 NOK’000 Author ised, issued and fully paid shares 45 000 ordinary shares of par value 1 000 NOK each 45 000 45 000 45 000 45 000 All shares have equal rights. Shareholder information IBM Finans Norge AS is a 100% owned subsidiary of International Business Machines AS, Kolbotn, Norway.

11. Contingencies

No material contingent liabilities and commitments existed at 31 December 2012.

12. Events after balance sheet date In March 2013, the Board of Directors proposed distribution of NOK 7 747 000 out of retained earnings to the parent company. There were no other material events after balance sheet date.

13. Financial instruments

Financial risk management The company is exposed to a variety of financial risks as a result of its operations that include the effects of changes in liquidity and interest rate risk, credit risk, market prices, and foreign exchange risk. The company has a strong risk management programme in place aligned to the programmes applied within the consolidated group of the company’s ultimate parent company, International Business Machines Corporation. Capital risk management The company manages its capital to ensure that the company will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the company consists of debt to related parties disclosed in note 14, and equity attributable to equity holders of the parent, comprising issued capital and retained earnings as disclosed in the statement of changes in equity. Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability, and equity instrument are disclosed in note 1 to the financial statements.

IBM Finans Norge AS



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13. Financial instruments (continued) Categories of financial instruments Weighted

average effective

interest rate 2012

Weighted average effective

interest rate 2011 % NOK’000 % NOK’000

Financial assets Loans and receivables

Interest bearing Cash and cash equivalents - 2.73 1 634 Receivables from related parties 1.80 4 419 2.40 13 761

Non-interest bearing Factored receivables 207 902 255 563 Receivables from related parties - 1 260 212 321 272 218Financial liabilities Amortised costs

Interest bearing Borrowing 1.97 28 843 - Non-interest bearing Payables to related parties 124 135 220 725 Other payables 14 938

152 992 221 663

Financial risk management objectives

IBM’s corporate treasury function provides funding and risk management services to the Norway group of companies. Risk management services are provided through the monitoring and management of financial risks relating to the operations of the company through internal risk reports addressing market risk (including currency risk and interest rate risk), credit risk, liquidity risk, and cash flow interest rate risk. This includes performing sensitivity analysis on market risks to determine the effect of changes in foreign exchange and currency rates on the company’s financial performance and position.

Foreign currency risk

The company does not undertake any material transactions denominated in foreign currencies, hence no considerable exposure to exchange rate fluctuations arise.

IBM Finans Norge AS



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13. Financial instruments (continued) Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company. The company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The company carries out credit checks on potential customers before contracts are entered into. This information is supplied by independent rating agencies where available and, if not available, the company uses other publicly available financial information and its own trading records to rate the major customers. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management team annually. Cash balances held with the IBM Treasury Centre and with IBM AS/Nordea bank, which the directors assess as having high credit ratings. The company has significant concentration of credit risk. The top five debtors represent 97 % (2011: 96%) of the company's total loans and receivables. The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the company’s maximum exposure to credit risk. Interest rate risk management

The company is funded by the IBM Treasury Centre in Ireland and IBM AS. As the company

invests or borrows cash balances, it operates in either a receivable or payable position. Interest is paid or earned on the daily balance using the variable one month interest rate as the base.

The company’s exposures to interest rates on financial assets and financial liabilities are detailed in Categories of financial instruments table in this note.

The company performs sensitivity analysis to determine the effects from exposure to interest rates risk. For financial assets and liabilities exposed to interest rate risk, the analysis is prepared assuming the balances at the reporting date was outstanding for the whole year.

At the reporting date, if interest rates had been 50 basis points higher/lower and all other variables were held constant, the company’s net profit would decrease/increase by NOK 122 000 (2011: increase/decrease by NOK 77 000). This is mainly attributable to the company’s exposure to interest rates on borrowings and cash deposits. Liquidity risk management The company is funded internally by the IBM Treasury Centre in Ireland. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities through its agreements with the Treasury Centre.

Liquidity table The company holds financial liabilities with contractual maturity within one year. The contractual maturity is based on the earliest date on which the company may be required to pay. The table below have been drawn up based on the undiscounted contractual cash flows of the financial liabilities including principal cash flows.

IBM Finans Norge AS



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13. Financial instruments (continued)

Liquidity table (continued) 2012 2011

NOK’000 NOK’000Financial liabilities

Interest bearing Borrowing 28 843 - Non-interest bearing Payables to related parties 124 135 220 725 Other payables 14 938

152 992 221 663 Fair value of financial instruments The fair values of financial assets and financial liabilities are determined as follows:

• Financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and

• Other financial assets and financial liabilities, excluding derivative financial instruments, are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

Management consider that the carrying amount of financial assets and financial liabilities in the financial statements approximate their fair values. There are no financial assets and/or liabilities that were already recognised at fair value through profit and loss.

14. Related party transactions

Related parties include parent companies, entities under common control (‘group undertakings’ ), subsidiaries and key management personnel. The company enters into transactions with related parties in the ordinary course of business for the purchase or sale of services provided to and from related parties, purchase of investment from related parties, in relation to group funding arrangements with related parties and in relation to the factoring of trade receivables with related parties. The company's immediate parent undertaking is International Business Machines AS which holds 100% of the shares and is registered in Norway.

The company's ultimate parent undertaking and controlling party is International Business Machines Corporation which is incorporated in the United States of America and is the parent undertaking of the smallest and largest group to consolidate these financial statements. Copies of the financial statements of this undertaking may be obtained from IBM Corporate Headquarters, New Orchard Road, Armonk, New York 10504. The following transactions were carried out with related parties, and were made on commercial terms and conditions:

IBM Finans Norge AS



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14. Related party transactions (continued)

2012 2011Class of related par ty Transaction type NOK’000 NOK’000Other related undertakings Factoring income 4 121 2 234

Interest paid (173) (980) Interest received 166 29

Immediate parent Interest paid (135) (257) Interest received 323 533 Other expenses (1 209) (1 129) Factoring income 3 217 3 315 Group contribution distributed (7 133) (7 016) Capital contribution received 7 133 - Details of the amounts receivable from, payable to and borrowing from related parties are set out below: Cash equivalents

2012 2011 NOK’000 NOK’000

Other related undertaknings - 1 634 Deposits held with immediate parent

2012 2011 NOK’000 NOK’000

At 1 January 13 761 16 475 Deposited/(Withdrawn) during the year (9 342) (2 714) At 31 December 4 419 13 761 Receivable from related par ties

2012 2011 NOK’000 NOK’000

Immediate parent - 1 260 Payable to related par ties

2012 2011 NOK’000 NOK’000

Immediate parent 47 115 30 920 Other related undertakings 77 020 189 805

124 135 220 725

Borrowing from related par ties 2012 2011 NOK’000 NOK’000

Other IBM group undertaking 28 843 -

Interest on amounts owed by fellow subsidiary undertakings are charged at variable rates based on NIBOR.

IBM Finans Norge AS



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14. Related party transactions (continued)

The amounts outstanding on these balances are unsecured and will be settled in cash. No guarantees have been given or received. No expense has been recognised in the current or prior year for bad or doubtful debts in respect of the amounts owed by related parties.

Key management compensation Members of the key management are remunerated by the immediate parent undertaking.

15. Capital coverage

Reporting to the Financial supervisory authority of Norway (no: Finanstilsynet) any asset class is weighted at 100%.

2012 2011Booked value NOK’000 NOK’000 Receivables from related parties 4 419 16 655 Factored receivables 207 902 255 563 212 321 272 218 Responsible capital 57 347 49 030 Capital coverage in % 27.0% 18.0% Requirement for capital coverage is 8% 16 986 21 777 Coverage less requirement 40 361 27 253 Calculation of Responsible capital 2012 2011 NOK’000 NOK’000 Equity 51 027 45 092 Profit for the year 6 320 3 938 57 347 49 030

16. Change in presentation

A reclassification has been made to Cash Equivalents for deposits held by the IBM Treasury Center. This reclassification has been made for all periods presented herein.

Financial statements as at

31 December 2011 Change in

presentation

Financial statements as at

31 December 2011 after presentation

change Cash and cash equivalents - 1 634 1 634 Receivables from related parties 16 655 (1 634) 15 021

ibm finans norge as financial statements 31 december 2012

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