Annual Report

Annual Report PDF

Nordic Panorama Plc
Annual Report and Accounts 2007
1
DIRECTORS AND ADVISERS 2
CHAIRMAN’S STATEMENT 3 – 4
DIRECTORS’ REPORT 5 – 6
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 7
INDEPENDENT AUDITORS’ REPORT 8 – 9
CONSOLIDATED INCOME STATEMENT 10
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 11
CONSOLIDATED BALANCE SHEET 12
CONSOLIDATED CASH FLOW STATEMENT 13
COMPANY BALANCE SHEET 14
COMPANY STATEMENT OF CHANGES IN EQUITY 15
COMPANY CASH FLOW STATEMENT 15
NOTES TO THE FINANCIAL STATEMENTS 16 – 36
NOTICE OF ANNUAL GENERAL MEETING 37 – 38
FORM OF PROXY 39 – 40
CONTENTS
2
DIRECTORS AND ADVISERS
DIRECTORS G Kjaernes
N A C Lott
P Johnsen
K Johnsen
P C Voss
SECRETARY Guy Neely
REGISTERED OFFICE 4th Floor
7 Cork Street
London
W1S 3LJ
BANKERS Barclays Bank Plc
One Churchill Place
London
E14 5HP
AUDITORS Nexia Smith & Williamson
Registered Auditors
Chartered Accountants
25 Moorgate
London
EC2R 6AY
NOMINATED ADVISER Shore Capital & Corporate Ltd
Bond Street House
14 Clifford Street
London
W1S 4JU
BROKER Shore Capital Stockbrokers Limited
Bond Street House
14 Clifford Street
London
W1S 4JU
SOLICITORS Lewis Silkin LLP
5 Chancery Lane
Clifford’s Inn
London
EC4A 1BL
COMPANY’S REGISTERED NUMBER 148798
3
INTRODUCTION
Nordic Panorama Plc (“the Company”), the Norwegian leisure resort operator and developer, is pleased to announce
its results for the period to 31 December 2007. The consolidated financial statements have been prepared using reverse
acquisition accounting and therefore represent a continuation of the financial statements of Vradal Panorama Eiendom
AS (“VPE”) and Vradal Panorama Skisenter AS (“VPS”) (the “Vradal companies”), the subsidiaries acquired in
January 2007. The comparative figures comprise only VPE and VPS.
RESULTS
Group revenue for the year to 31 December 2007 amounted to £5.284m, which generated a gross profit of £3.367m
and an adjusted operating profit of £0.797m. In calculating adjusted operating profit, operating profit is shown before
exceptional charges arising from the reverse acquisition of £0.868m. These charges comprise impairment of goodwill
arising from the reverse acquisition and incorporate all the fees that were directly attributable. The earnings per share
amounted to a loss of 0.05p.
REVIEW OF THE PERIOD
2007 turnover was marginally down on 2006 despite stronger sales in the second half of the year. Sales of cabins and
plots increased substantially from the first half of 2007 and whilst this was partly as a result of the better selling season
it was also reflective of the increase in marketing efforts whereby significant success was achieved from advertising
in the national newspapers. It also represented a substantial increase on the same period last year. The marketing push
has also laid very good foundations for 2008.
Following the opening of a road to the upper part of the mountain in 2006 the Company negotiated a block sale of
plots, which represented the bulk of the 49 plot sales in 2006. Plot sales of £2.495m represented a significant portion
of the 2006 turnover of £5.568m and their contribution this year was significantly lower at £0.513m representing 9 plot
sales. The next stage in the natural development of the resort is the concentration on cabin sales, which enhances and
feeds the expansion of the resort itself. As a result of this emphasis on promoting cabin construction, cabin sales have
increased from £2.092m in 2006 to £3.649m in 2007. Despite the poor snow conditions experienced at the start of 2007
the turnover generated from the ski resort itself still managed to exceed 2006 levels.
For the full year financial statements revenue relating to cabin sales is recognised when the purchaser takes delivery
of the cabin. This differs from the policy adopted previously and in producing the interim results, in which revenue
was recognised on partially completed cabins with reference to the stage of completion. However, the adoption of the
new policy at the interims would have had no effect on the results.
The higher level of plot sales within the sales mix together with the higher margins achieved by plot sales (81%)
compared with Cabin sales (19%) in 2006 sustained overall margins in 2006 at a level of 59%. However, following a
significant increase in the average price of cabins in 2007 the margins on cabin sales improved from 19% in 2006 to
over 50%. As a result of this the overall margins achieved in 2007 at 63% exceeded the 2006 levels.
Administrative costs have risen considerably during 2007 as a result of the Vradal companies having to gear up due to
being part of a quoted group, and the Group incurring additional costs in establishing an active and operational UK
plc; it has strengthened its management team and operational staff and has increased its marketing spend in the latter
part of the year. The strengthening of the Norwegian Krone against the pound also helped to swell the administrative
costs for the year. However, the marketing and promotion efforts in the second half of 2007 have already had an
immediate impact on cabin sales and will help underpin sales targets for 2008.
CHAIRMAN’S STATEMENT
4
CHAIRMAN’S STATEMENT
The Group has more than sufficient inventories in terms of finished cabins and orders in the pipeline, which will in
turn swell receivables and eventually generate cash. The current working capital facilities the Group has in place are
sufficient to enable this cycle to be achieved comfortably and will generate more cash to support the cabin building
and sales expansion programme.
CURRENT TRADING AND OUTLOOK
2008 has started positively with encouraging orders for cabins and indeed cabin sales have been boosted by the carry
forward of orders taken in 2007 and the completion of these contracts in the early part of this year. Cabin sales have
already exceeded levels achieved in the first half of 2007.
P C Voss
Chairman
15 May 2008
5
DIRECTORS’ REPORT f o r t h e p e r i o d e n d e d 3 1 De c emb e r 2 0 0 7
The directors present their report and the financial statements for the period ended 31 December 2007
PRINCIPAL ACTIVITIES
Nordic Panorama Plc is the holding company of Vradal Panorama Skisenter AS and Vradal Panorama Eiendom AS,
two companies involved in the operation and development of an all seasons holiday destination in Telemark, Norway.
The principal activities of the Group comprise the operation of the Vradal Panorama ski resort and property
development in terms of plot sales and the construction and sales of chalets and cabins within the resort area.
BUSINESS REVIEW
A review of the business of the Group is set out in the Chairman’s statement on pages 3 to 4.
STRATEGY AND KEY PERFORMANCE INDICATORS
The Group’s key performance indicators are linked in with its strategic and commercial objectives.
Currently the emphasis is on the building and selling of cabins and the directors’ strategy is to increase the speed of
sales and the building process. Rather than selling plots and cabins before they are built, the plan is to build new cabins
continuously and sell them according to availability. The directors also plan to acquire additional land adjoining the
existing Vradal Panorama resort.
Property development plays a dominant part in the overall business of the Group and represents approximately 80%
of its turnover. The profit margin and absolute profit generated from selling plots and cabins are key performance
indicators. As noted in the Chairman’s statement the contribution made by cabin sales in 2007 represented a marked
improvement on 2006 both in terms of the revenue produced and the margins achieved, mainly as a result of a
significant increase in the average price of the cabins sold. It is the Company’s intention to concentrate its efforts in
this area. In addition, property development has an indirect effect on the ski resort by increasing the number of visitors
to the resort year round, thus providing growth in the resort business as a whole.
PRINCIPAL RISKS AND UNCERTAINTIES
The success of the Vradal companies to date has depended on the growth market for second and holiday homes in
Norway, however, the failure of such market growth to continue could have an adverse impact on the Group’s business
and prospects. To help reduce this dependency management are developing the resort to make it more attractive to
visitors throughout the summer months which should provide a broader based income stream.
Whilst Vradal can be used for most of the year, the business has seasonal peaks. Uncharacteristic weather for the time
of the year could shorten the season thereby impacting on the Group’s revenues from operating the ski resort in any
particular year. However, the fact that management is developing Vradal as an all year round resort helps mitigate
against this risk.
The Group mitigates against the risk that lower revenues than budgeted could give rise to a shortage of cash by close
management of its working capital. This aspect is kept under review by the directors and in addition to information on
cash balances being available, rolling cash flow projections are prepared on a monthly basis using sensitivity analysis
to monitor the situation.
FINANCIAL RISK MANAGEMENT
Details of the Group’s financial instruments and its policies with regard to financial risk management are given in note
31 to the financial statements.
CORPORATE GOVERNANCE
The directors acknowledge the importance of the revised Combined Code issued by the Financial Reporting Council
(2006 FRC Code) in June 2006 and have applied the Code as appropriate to the Company given its size and nature.
Regular Board Meetings are held with a formal schedule of matters reserved for the Board’s decision and regular
management information is provided.
6
SUPPLIER PAYMENT POLICY AND PRACTICE
It is the Group’s policy that payments to suppliers are made in accordance with those terms and conditions agreed
between the Group and its suppliers, provided that all trading terms and conditions have been complied with.
At 31 December 2007, the Group had an average of 58 (2006: 36) days’ purchases owed to trade creditors.
RESULTS FOR THE YEAR AND DIVIDENDS
The results for the Group are set out in the Chairman’s statement on page 3.
The directors do not recommend the payment of a dividend (2006: £Nil).
DIRECTORS
The directors who served during the period were:
H Da Gama Rose (resigned 4 January 2007)
M H Khan (resigned 31 January 2008)
A H Drummon (resigned 1 December 2006)
T Svendsen (appointed 5 January 2007 and resigned 8 May 2007)
G Kjaernes (appointed 8 May 2007)
N A C Lott (appointed 5 January 2007)
P Johnsen (appointed 5 January 2007)
K Johnsen (appointed 5 January 2007)
P C Voss — non-executive (appointed 5 January 2007)
J E A Mocatta — non-executive (appointed 1 December 2006 and resigned on 28 September 2007)
DIRECTORS’ INTERESTS
The beneficial interests in the shares of the company of the directors at the year-end were:
Ordinary shares of 1p each
31 December 2007 31 December 2006
P Johnsen 538,865,546 —
M H Khan 1,278,200 —
MAJOR INTERESTS IN SHARES
As at 31 December 2007 T Stykket Eiendom AS was beneficially interested in 179,621,849 ordinary shares of 1p in
the Company representing 21.85% of the current issued ordinary share capital (note 23).
DISCLOSURE OF INFORMATION TO THE AUDITORS
In the case of each person who was a director at the time this report was approved:
• so far as that director was aware there was no relevant available information of which the company’s auditors were
unaware; and
• that director had taken all steps that the director ought to have taken as a director to make himself or herself aware
of any relevant audit information and to establish that the company’s auditors were aware of that information.
This information is given and should be interpreted in accordance with the provisions of s234ZA of the Companies
Act 1985.
AUDITORS
A resolution to re-appoint the auditors, Nexia Smith & Williamson, will be proposed at the next Annual General
Meeting.
Approved by the board of directors and signed on behalf of the board
G D Neely
Secretary
15 May 2008
DIRECTORS’ REPORT f o r t h e p e r i o d e n d e d 3 1 De c emb e r 2 0 0 7
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
7
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable United Kingdom law and the International Financial Reporting Standards (IFRS) as adopted by the
European Union.
The Directors are required to prepare financial statements for each financial year which present fairly the financial
position of the Company and of the Group and the financial performance and cash flows of the Group for that period.
In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable
users to understand the impact of particular transactions, other events and conditions on the entity’s financial
position and financial performance; and
• state that the Company and the Group have complied with IFRS, subject to any material departures disclosed and
explained in the financial statements.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of the Company and of the Group and enable them to ensure that the financial statements
comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that they have complied with these requirements and, having a reasonable expectation that the
Company and the Group has adequate resources to continue in operational existence for the foreseeable future,
continue to adopt the going concern basis in preparing the financial statements.
8
INDEPENDENT REPORT OF THE AUDITORS
Independent auditors’ report to the shareholders of Nordic Panorama Plc
We have audited the Group and Company financial statements (the ‘financial statements’) of Nordic Panorama Plc for
the period ended 31 December 2007 which comprise the Consolidated Income Statement, the Consolidated Statement
of Changes in Equity, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement, the Company Balance
Sheet, the Company Statement of Changes in Equity, the Company Cash Flow Statement and the related notes 1 to 31.
These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the Company’s members, as a body, in accordance with Section 235 of the Companies
Act 1985. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with
applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union applied in
accordance with the provisions of the Companies Act 1985 are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements
and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared
in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in
the Directors’ Report is consistent with the financial statements. The information given in the Directors’ Report
includes that specific information presented in the Chairman’s Statement that is cross referred from the Business
Review section of the Directors’ Report.
We also report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received
all the information and explanations we require for our audit, or if the information specified by law regarding
Directors’ remuneration and transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited
financial statements. This other information comprises only the Directors’ Report and the Chairman’s Statement. We
consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies
with the financial statements. Our responsibilities do not extend to any other information.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made
by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate
to the Group’s and Company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are
free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the financial statements.
9
INDEPENDENT REPORT OF THE AUDITORS
OPINION
In our opinion:
• the financial statements give a true and fair view, in accordance with IFRS as adopted by the European Union
applied in accordance with the provisions of the Companies Act 1985, of the state of the Group’s and Company’s
affairs as at 31 December 2007 and of the Group’s loss for the period then ended;
• the financial statements have been properly prepared in accordance with the Companies Act 1985; and
• the information given in the Directors’ Report is consistent with the financial statements.
Nexia Smith & Williamson
Chartered Accountants
Registered Auditors
15 May 2008
25 Moorgate
London
EC2R 6AY
10
CONSOLIDATED INCOME STATEMENT f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
2007 2006
Notes £000 £000
CONTINUING OPERATIONS
Revenue 5,284 5,568
Cost of sales (1,917) (2,309)
GROSS PROFIT 3,367 3,259
Administrative costs (3,438) (1,593)
9 Exceptional impairment of goodwill arising on reverse acquisition (868) —
Other administrative costs (2,570) (1,593)
2 OPERATING (LOSS)/PROFIT (71) 1,666
6 Finance income 18 22
6 Finance costs (171) (108)
(LOSS)/PROFIT BEFORE TAXATION (224) 1,580
7 Taxation (171) (497)
(LOSS)/PROFIT FOR THE YEAR (395) 1,083
(LOSS)/EARNINGS PER SHARE
8 Basic (0.05p) 0.13p
8 Diluted (0.05p) 0.13p
11
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
Foreign
Share Share Other exchange Retained Total
capital premium reserves reserve earnings equity
£000 £000 £000 £000 £000 £000
AT 1 JANUARY 2006 33 — — — 1,159 1,192
Profit for the period and total
recognised income and expenses — — — — 1,083 1,083
AT 31 DECEMBER 2006 33 — — — 2,242 2,275
Loss for the period — — — — (395) (395)
Exchange differences on translation
of foreign operations — — — 320 — 320
Total recognised income and expenses
for the period — — — 320 (395) (75)
Reversal of issued shares in the
Vradal companies (33) — — — — (33)
Recognition of shares and reserves
of Nordic Panorama Plc on reverse
acquisition 238 345 (7,963) — — (7,380)
New shares issued 7,984 — — — — 7,984
AT 31 DECEMBER 2007 8,222 345 (7,963) 320 1,847 2,771
12
2007 2006
Notes £000 £000
NON-CURRENT ASSETS
10 Property, plant and equipment 4,253 3,437
22 Deferred tax asset 136 198
12 Other non-current assets 50 39
Total non-current assets 4,439 3,674
CURRENT ASSETS
14 Inventories 2,025 1,248
15 Trade and other receivables 1,498 1,186
17 Cash and cash equivalents 118 52
Total current assets 3,641 2,486
TOTAL ASSETS 8,080 6,160
Current liabilities
20 Trade and other payables 1,335 947
Current tax liabilities 109 684
19 Borrowings 1,867 626
Total current liabilities 3,311 2,257
NON-CURRENT LIABILITIES
19 Borrowings 1,806 1,439
22 Deferred tax liabilities 192 189
Total non-current liabilities 1,998 1,628
TOTAL LIABILITIES 5,309 3,885
NET ASSETS 2,771 2,275
EQUITY
23 Share capital — Issued and fully paid 8,222 33
Share premium account 345 —
24 Other reserves (7,963) —
24 Foreign exchange reserve 320 —
24 Retained earnings 1,847 2,242
TOTAL EQUITY 2,771 2,275
The financial statements were approved by the Board of Directors on 15 May 2008 and were signed on its behalf by:
N A C Lott
Director
CONSOLIDATED BALANCE SHEET a s a t 3 1 De c emb e r 2 0 0 7
13
2007 2006
Notes £000 £000
25 NET CASH USED IN OPERATING ACTIVITIES (246) (467)
INVESTING ACTIVITIES
Interest received 18 22
Fees attributable to reverse acquisition (473) —
Net cash arising on acquisition 191 —
Purchases of property, plant and equipment (598) (1,248)
Purchase of other non-current assets (7) (29)
NET CASH USED IN INVESTING ACTIVITIES (869) (1,255)
FINANCING ACTIVITIES
Repayments of borrowings (27) (3)
Proceeds from borrowings 1,368 600
Interest paid (171) (108)
NET CASH GENERATED FROM FINANCING ACTIVITIES 1,170 489
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 55 (1,233)
Cash and cash equivalents at beginning of year 52 1,285
Foreign exchange gain on cash and cash equivalents 11 —
17 CASH AND CASH EQUIVALENTS AT END OF YEAR 118 52
CONSOLIDATED CASH FLOW STATEMENT f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
14
COMPANY BALANCE SHEET a s a t 3 1 De c emb e r 2 0 0 7
31 December 31 August
2007 2006
Notes £000 £000
NON-CURRENT ASSETS
11 Property, plant and equipment 2 —
13 Investments in subsidiaries 8,293 —
Total non-current assets 8,295 —
CURRENT ASSETS
16 Trade and other receivables 12 6
18 Cash and cash equivalents 3 211
Total current assets 15 217
CURRENT LIABILITIES
21 Trade and other payables 425 33
Total current liabilities 425 33
NET CURRENT (LIABILITIES)/ASSETS (410) 184
NET ASSETS 7,885 184
EQUITY
23 Share capital 8,222 340
Share premium 345 524
Retained earnings (682) (680)
7,885 184
The financial statements were approved by the Board of Directors on 15 May 2008 and were signed on its behalf by:
N A C Lott
Director
15
COMPANY STATEMENT OF CHANGES IN EQUITY f o r t h e p e r i o d e n d e d 3 1 De c emb e r 2 0 0 7
Share Share Retained Total
capital premium earnings equity
£000 £000 £000 £000
AT 1 SEPTEMBER 2005 340 524 (576) 288
Loss for the year and total recognised income and expenses — — (104) (104)
AT 31 AUGUST 2006 340 524 (680) 184
Loss for the period and total recognised
income and expenses — — (283) (283)
Capital reduction (102) (179) 281 —
New shares issued 7,984 — — 7,984
AT 31 DECEMBER 2007 8,222 345 (682) 7,885
COMPANY CASH FLOW STATEMENT f o r t h e p e r i o d e n d e d 3 1 De c emb e r 2 0 0 7
31 December 31 August
2007 2006
Notes £000 £000
26 NET CASH GENERATED FROM/(USED IN) OPERATING ACTIVITIES 101 (120)
INVESTING ACTIVITIES
Interest received 3 8
Fees attributable to reverse acquisition (310) —
Purchases of property, plant and equipment (2) —
NET CASH (USED IN)/GENERATED FROM INVESTING ACTIVITIES (309) 8
NET DECREASE IN CASH AND CASH EQUIVALENTS (208) (112)
Cash and cash equivalents at beginning of period 211 323
18 CASH AND CASH EQUIVALENTS AT END OF PERIOD 3 211
16
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
1 ACCOUNTING POLICIES
The principal accounting policies are summarised below. They have all been applied consistently throughout the
period covered by these financial statements.
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”)
as adopted by the European Union applied in accordance with the provisions of the Companies Act 1985. Reverse
acquisition accounting has been applied and the comparative consolidated figures are based on those of the Vradal
companies for the year to 31 December 2006, which have been extracted from the audited accounts of the two
companies, which were produced in accordance with Norwegian GAAP. This financial information has been converted
and presented in accordance with IFRS. The Company previously had a year end of 31 August which was extended to
31 December as a result of the reverse acquisition. Therefore the financial statements of the Company are for the 16
month period ended 31 December 2007 and the comparative figures are for the year ended 31 August 2006.
The presentational currency of the Group is sterling and the functional currency of the Vradal companies is Norwegian
Krone.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with generally accepted accounting practice requires
management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the
disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and
expenses during the reporting period.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Property, plant and equipment
The costs of building the road to the upper part of the mountain together with the related costs of the infrastructure
supporting that area of the resort have been capitalised within property, plant and equipment. The Group’s economic
benefit from the infrastructure arises from the sale of plots and cabins in the area serviced by the infrastructure. It is
estimated that this infrastructure will service 500 plots for cabins. As a result the Company has taken the view to
depreciate the cost over 500 units, and the charge is released to the cost of sales for each plot or cabin sold in this area.
Judgement is required in estimating the useful life of certain plant and equipment relating to the ski resort. The lives
used are kept under review and in December 2005 the remaining useful economic life of the ski lifts and snow making
machinery was extended to 2015.
New standards and interpretations
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not
been applied in these financial statements were in issue but not yet mandatorily effective:
• IAS 1: Presentation of Financial Statements (Revised)
• IAS 23: Borrowing Costs (Amended)
• IAS 27: Consolidated and Separate Financial Statements (Amended)
• IAS 32: Financial Instruments (Amendments)
• IFRS 2: Shared Based Payment: Vesting Conditions and Cancellations (Amendments)
• IFRS 3: Business Combinations (Revised)
• IFRS 8: Operating Segments
• IFRIC Interpretation 12: Service Concession Arrangements
• IFRIC Interpretation 13: Customer Loyalty Programmes
• IFRIC Interpretation 14: IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and
their Interaction
17
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
1 ACCOUNTING POLICIES continued
The Directors do not anticipate that the adoption of these statements and interpretations will have a material impact on
the Group’s financial statements except for additional disclosures.
Basis of consolidation
The business combination between the Company and VPE and VPS has been accounted for using reverse acquisition
accounting and therefore represents a continuation of the financial statements of VPE and VPS, the legal subsidiaries
acquired. VPE and VPS were, prior to their reverse acquisition of the Company, not part of a legal group but were
under common control and business combinations between entities under common control are outside the scope of
IFRS 3. Accordingly, the bringing together of VPE and VPS has been accounted for under the principles of merger
accounting and as a result, the assets and liabilities of the two entities are recorded at book value, goodwill and
intangible assets are recognised only to the extent that they were previously recognised and no goodwill was
recognised on the merger.
The reverse acquisition of the Company by the combined entities is accounted for as a business combination under
IFRS3 with the combined entities as the acquirer and the Company as the acquiree.
The reverse acquisition of the Company by VPE and VPS took place on 4 January 2007.
Business combinations
On acquisition, the assets and liabilities and contingent liabilities of the Company were measured at their fair values
at the date of acquisition. The excess of cost of acquisition over the fair values of the identifiable net assets acquired
was recognised as goodwill.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of the acquisition over the Group’s interest in the
fair value of the identifiable assets and liabilities of the acquiree at the date of acquisition. Goodwill arising on
consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised
immediately in profit or loss and is not subsequently reversed.
Revenue recognition
Cabin sales are recognised at the point at which the customer takes delivery of the cabin.
Plot sales are recognised at the point title is passed on.
Sales revenue relating to the ski resort such as lift passes and equipment rental is recognised over the period to which
it relates and revenue from the sale of ancillary goods is recognised at title transfer.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-line
method, on the following bases:
Land and buildings — 5-10%
Plant, machinery & equipment — 5-25%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate at each financial year-end.
18
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
1 ACCOUNTING POLICIES continued
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first in first out (FIFO)
method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other
direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net
realisable value represents the estimated selling price in the ordinary course of business, less all estimated costs of
completion and applicable variable selling expenses.
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at
amortised cost using the effective interest method. A provision is established when there is objective evidence that the
Group will not be able to collect all amounts due. The amount of any provision is recognised in the income statement.
Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other financial
institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value.
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using
the effective interest rate method.
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity
instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans are recognised at fair value. Finance costs are accounted for on
an accruals basis in the income statement using the effective interest method.
Foreign currency
Foreign currency transactions of the Company are translated at the rates ruling when they occurred. Foreign currency
monetary assets and liabilities are translated at the rates ruling at the balance sheet dates. Any differences are taken to
the profit and loss account.
The results of overseas subsidiaries are translated at the average rates of exchange during the year and the balance
sheets are translated into sterling at the rate of exchange ruling on the balance sheet date. Exchange differences, which
arise from translation of the opening net assets and results of foreign subsidiary undertakings, are taken to reserves.
Taxation
The tax expense represents the sum of the tax currently payable and any deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net 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 substantially enacted by the balance sheet date.
19
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
1 ACCOUNTING POLICIES continued
Deferred tax is the tax expected to be payable or recoverable 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 balance sheet 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.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except
where the Group is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet 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 are expected to apply in the period when the liability is settled or the asset
realised. Deferred tax is charged or credited to profit or loss, 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 Group intends
to settle its current assets and liabilities on a net basis.
Pensions
The company makes contributions on behalf of its employees to a money purchase pension scheme. The cost of
providing pensions is charged to the profit and loss account as incurred.
Operating leases
Operating lease rentals are charged on a straight line basis over the term of the lease.
2 OPERATING (LOSS)/PROFIT FOR THE YEAR IS STATED AFTER CHARGING:
2007 2006
£000 £000
Cost of inventories recognised as an expense (1,879) (2,206)
Bad debt provision 63 16
Depreciation 220 259
Impairment of goodwill 868 -
Staff costs (see note 5) 904 639
Operating lease rentals 147 60
The Company has taken advantage of the exemption provided under section 230 of the Companies Act 1985 not to
publish its individual income statement and related notes. The loss for the 16 months ended 31 December 2007 in the
financial statements of the parent Company was £283,000 (year ended 31 August 2006: £104,000).
20
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
3 AUDITORS’ REMUNERATION
2007 2006
£000 £000
Audit services 30 7
Other services payable to associated companies of the auditors
– the auditing of financial statements of the legal subsidiaries
pursuant to such legislation 31 —
– all other services 4 1
35 1
The 2006 auditors’ remuneration relates to the Company only as the Vradal Companies were not part of the Group.
4 BUSINESS AND GEOGRAPHICAL SEGMENTS
For management purposes, the Group is currently organised into three operating divisions: Cabin sales, plot sales and
ski centre sales. These divisions are the business segments for which the Group reports its primary segment information.
The Group’s operations are predominantly in one geographical segment, Norway.
Cabin Plot Ski Unsales
sales centre allocated Total
YEAR ENDED 31 DECEMBER 2007 £000 £000 £000 £000 £000
External revenue 3,649 513 1,122 — 5,284
TOTAL REVENUES 3,649 513 1,122 — 5,284
Segment result before exceptional charge 570 70 157 — 797
Exceptional charge* — — — (868) (868)
SEGMENT RESULT 570 70 157 (868) (71)
Investment income and finance costs — — — (153) (153)
Profit/(loss) before tax 570 70 157 (1,021) (224)
Tax — — — (171) (171)
PROFIT/(LOSS) FOR THE YEAR 570 70 157 (1,192) (395)
Segment assets 2,999 — 2,466 2,615 8,080
TOTAL ASSETS 2,999 — 2,466 2,615 8,080
Segment liabilities 2,743 — 107 2,459 5,309
TOTAL LIABILITIES 2,743 — 107 2,459 5,309
Other segment items:
Capital expenditure 476 — 186 — 662
Depreciation and amortisation 61 — 159 — 220
* The exceptional charge relates to the impairment of goodwill arising on the reverse acquisition.
21
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
4 BUSINESS AND GEOGRAPHICAL SEGMENTS continued
Cabin Plot Ski Unsales
sales centre allocated Total
YEAR ENDED 31 DECEMBER 2006 £000 £000 £000 £000 £000
External revenue 2,092 2,495 981 — 5,568
TOTAL REVENUES 2,092 2,495 981 — 5,568
SEGMENT RESULT (228) 1,538 356 — 1,666
Investment income and finance costs — — — (86) (86)
(Loss)/profit before tax (228) 1,538 356 (86) 1,580
Tax — — — (497) (497)
(LOSS)/PROFIT FOR THE YEAR (228) 1,538 356 (583) 1,083
Segment assets 1,503 — 4,657 — 6,160
TOTAL ASSETS 1,503 — 4,657 — 6,160
Segment liabilities 3,520 — 260 105 3,885
TOTAL LIABILITIES 3,520 — 260 105 3,885
Other segment items:
Capital expenditure 1,006 — 269 — 1,275
Depreciation and amortisation 104 — 145 — 259
22
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
5 STAFF COSTS
The average number of persons, including executive directors, was: 2007 2006
Number Number
Ski centre 16 17
Selling and distribution 2 2
Administration 7 3
25 22
Staff costs for the above persons were: £000 £000
Wages and salaries 817 568
Social security costs 81 68
Pension costs 6 3
904 639
Directors’ emoluments: £000 £000
Aggregate emoluments 256 115
Company pension contributions 4 2
260 117
Highest paid director, amounts included above: £000 £000
Aggregate emoluments 70 49
Company pension contribution 1 1
71 50
23
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
6 FINANCE INCOME AND COSTS
2007 2006
£000 £000
Interest payable on bank loans and overdrafts 77 76
Other interest payable 75 2
Other financial expenses 19 30
171 108
Bank interest receivable 11 17
Other interest receivable 6 4
Other financial income 1 1
18 22
7 TAXATION
2007 2006
£000 £000
Current tax 106 676
Deferred tax 65 (179)
Total tax expense for the period 171 497
The difference between the total tax expense shown above and the amount calculated by applying the standard rate of
UK corporation tax to the loss before tax is as follows:
2007 2006
£000 £000
(Loss)/profit before taxation (224) 1,580
Tax on (loss)/profit on ordinary activities at standard UK corporation tax rate of 30% 67 (474)
Effects of:
UK costs in relation to reverse acquisition not allowable (212) —
Unrelieved tax losses of the Company (81) —
Other differences 42 (60)
Effect of lower tax rates in Norway 13 37
Total tax expense for the period (171) (497)
24
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
8 (LOSS)/EARNINGS PER SHARE
2007 2006
£000 £000
Earnings
Earnings for the purposes of basic and diluted earnings per share has been
calculated based on the (loss)/profit after taxation (395) 1,083
Number of shares
Weighted average number of ordinary shares for the purposes of
basic earnings per share 822,162,575 822,162,575
Number of dilutive shares under option — —
Weighted average number of ordinary shares for the purposes of
dilutive earnings per share 822,162,575 822,162,575
The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, however
as no share options have been granted there is no dilution.
Adjusted earnings per share
An adjusted earnings per share has also been calculated using the same number of shares as above, but excluding the
exceptional charges arising from the reverse acquisition amounting to £0.868m from the result after taxation.
2007 2006
£000 £000
Adjusted earnings 473 1,083
Adjusted basic earnings per share 0.06p 0.13p
25
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
9 GOODWILL — GROUP
£000
Cost and net book amount at 1 January 2006 and 1 January 2007 —
Additions 868
Impairment loss - exceptional charge arising from reverse acquisition* (868)
Net book amount at 31 December 2007 —
* The goodwill arose on the reverse acquisition of the Company by VPE and VPS and impairment was immediately
recognised.
Fair value
Book value adjustments Fair value
£000 £000 £000
Net assets acquired
Cash and cash equivalents 191 - 191
Trade and other payables (20) - (20)
171 - 171
Goodwill 868
Total consideration 1,039
Satisfied by:
Fair value of shares* 566
Directly attributable fees 473
Total cost of combination 1,039
* The deemed cost of combination is based on 23,843,247 ordinary 1p shares of Maisha Plc (now Nordic Panorama
Plc) in issue prior to the combination and a fair value of 2.38p per share, the prevailing market price.
Net cash flow arising on acquisition
Cash and cash equivalents acquired 191
26
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
10 PROPERTY, PLANT AND EQUIPMENT — GROUP
Land and Plant and
buildings equipment Total
£000 £000 £000
COST
At 1 January 2006 1,194 2,782 3,976
Additions 1,083 192 1,275
Disposals (5) (31) (36)
At 1 January 2007 2,272 2,943 5,215
Additions 476 186 662
Disposals — (37) (37)
Foreign exchange difference on translation of foreign operations 264 321 585
At 31 December 2007 3,012 3,413 6,425
DEPRECIATION
At 1 January 2006 275 1,244 1,519
Charge for the year 120 139 259
On disposals — — —
At 1 January 2007 395 1,383 1,778
Charge for the year 61 159 220
On disposals — (21) (21)
Foreign exchange difference on translation of foreign operations 45 150 195
At 31 December 2007 501 1,671 2,172
NET BOOK AMOUNT
At 31 December 2007 2,511 1,742 4,253
At 31 December 2006 1,887 1,560 3,437
27
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
11 PROPERTY, PLANT AND EQUIPMENT — COMPANY
Land and Plant and
buildings equipment Total
£000 £000 £000
COST
At 1 September 2005 — — —
Additions — — —
At 1 September 2006 — — —
Additions — 2 2
At 31 December 2007 — 2 2
DEPRECIATION
At 1 September 2005 — — —
Charge for the year — — —
At 1 September 2006 — — —
Charge for the period — — —
At 31 December 2007 — — —
NET BOOK AMOUNT
At 31 December 2007 — 2 2
At 31 August 2006 — — —
12 OTHER NON-CURRENT ASSETS — GROUP
Other non-current assets represent pre-paid leases on plant and equipment. These costs are released to the income
statement over the period of the lease ranging from 3 to 5 years.
13 INVESTMENT IN SUBSIDIARIES — COMPANY
£000
Cost and net book amount
At 1 September 2005 and 1 September 2006 —
Additions 8,293
At 31 December 2007 8,293
Details of the investments in which the Company holds 20% or more of the nominal value of any class of share capital
are as follows:
Name of Country of Nature of % voting rights
company incorporation business Holding and shares held
Vradal Panorama Skisenter AS Norway Ski resort operation Ordinary 100
Vradal Panorama Eiendom AS Norway Property development Ordinary 100
28
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
14 INVENTORIES — GROUP
2007 2006
£000 £000
Finished goods and goods for resale 2,025 1,248
2,025 1,248
15 TRADE AND OTHER RECEIVABLES — GROUP
2007 2006
£000 £000
Trade receivables 1,279 633
Less: provision for impairment of trade receivables (Note 31) 107 44
1,172 589
Other receivables 326 597
1,498 1,186
The Group and Company’s credit risk is primarily attributable to its trade and other debtors. The Group’s policy is to
provide for all debts, which are over 90 days old and as a result of this provision the directors consider the carrying
amount of these assets approximates their fair value.
16 TRADE AND OTHER RECEIVABLES — COMPANY
2007 2006
£000 £000
Prepayments 4 2
Other receivables 8 4
12 6
17 CASH AND CASH EQUIVALENTS — GROUP
2007 2006
£000 £000
Cash at bank and in hand 118 52
The directors consider that the carrying amount of these assets approximates to their fair value. The credit risk on liquid
funds is limited because the counter-party is a bank with a high credit rating.
29
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
18 CASH AND CASH EQUIVALENTS — COMPANY
2007 2006
£000 £000
Cash at bank and in hand 3 21
Short term bank deposits — 190
3 211
19 FINANCIAL LIABILITIES — BORROWINGS
2007 2006
£000 £000
SHORT-TERM BORROWINGS
Bank overdraft 866 62
Bank loans 129 26
Other borrowings 872 538
1,867 626
LONG-TERM BORROWINGS
Bank loans 1,806 1,413
Other loans — 26
1,806 1,439
The other principal features of the Group’s borrowings are as follows:
The long term bank loan has been taken out by Vradal Panorama Skisenter AS which is secured on the assets of the
Vradal companies. Repayment of the loan is due to start in 2008 over a 15 year period. The interest rate on the loan is
the 3 month NIBOR plus 2%.
The other borrowings relate to loans from shareholders which are repayable on demand. The interest rate on these loans
is 7.5%.
The directors consider that the carrying amount of the bank loans, other borrowings and overdrafts approximates to
their fair value.
20 TRADE AND OTHER PAYABLES — GROUP
2007 2006
£000 £000
Trade payables 836 425
Other tax and social security payable 148 100
Other creditors 10 105
Accruals and deferred income 341 317
1,335 947
30
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
21 TRADE AND OTHER PAYABLES — COMPANY
2007 2006
£000 £000
Amounts owed to group undertakings 237 —
Trade payables 136 24
Accruals and deferred income 52 9
425 33
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
22 DEFERRED TAX ASSET — GROUP
2007 2006
£000 £000
At 1 January 198 5
(Charged)/credited to profit and loss account (79) 193
Foreign exchange difference on translation of foreign operations 17 —
At 31 December 136 198
The deferred tax asset relates to taxable temporary differences between the accounting profit and taxable profit.
A deferred tax asset at 31 December 2007 of £203,000 (2006: £122,000) in respect of the trading losses of the
Company has not been provided for on the basis that it is unlikely that there will be sufficient future taxable profits
available against which the losses can be utilised.
DEFERRED TAX LIABILITY — GROUP
2007 2006
£000 £000
At 1 January 189 175
Credited to profit and loss account (14) (14)
Foreign exchange difference on translation of foreign operations 17 28
At 31 December 192 189
The deferred tax liability mainly relates to the cumulative tax deductions in excess of depreciation having been
received in relation to ski lifts and snow making machinery.
31
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
23 CALLED UP SHARE CAPITAL
2007 2007 2006 2006
Number £000 Number £000
Authorised
Ordinary shares of 1p each 1,900,000,000 19,000 133,989,835 1,340
Allotted, called up and fully paid
Ordinary shares of 1p each
At beginning of the period 23,843,247 238 34,061,783 340
Cancellation of shares — — (10,218,536) (102)
Shares issued on acquisition 798,319,328 7,984 — —
At end of the year 822,162,575 8,222 23,843,247 238
On 11 October 2006, approval by the High Court for the capital reduction approved by shareholders at an
Extraordinary General Meeting of the Company on 20 July 2006 was given. This adjustment resulted in the
cancellation of 10,218,536 ordinary shares of 1p each held by S Mahmood and Gamma Ventures Limited and a credit
of £0.281m to reserves on 30 October 2006.
On 4 January 2007 the Company issued 798,319,328 ordinary shares of 1p each at 2.38p per share in exchange for 100%
of the share capital of the Vradal companies, valued at £19m. The Company now has in issue 822,162,575 ordinary
shares of 1p. These shares were admitted to trading on the AIM market operated by the London Stock Exchange Plc on
5 January 2007 and the name of the Company was changed from Maisha Plc to Nordic Panorama Plc.
At an extraordinary meeting held on 8 May 2007 a resolution was passed increasing the authorised share capital of the
Company to £19m by the creation of an additional 750,000,000 new ordinary shares of 1p each.
24 OTHER RESERVES
The following describes the nature and purpose of each reserve
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Other reserves An adjustment for the difference between the legal parent’s and the legal
subsidiaries’ equity.
Foreign exchange reserve Exchange differences on translation of foreign operations.
Retained earnings Cumulative net profits recognised in the consolidated income statement.
32
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
25 CASH USED IN OPERATIONS — GROUP
2007 2006
£000 £000
Operating (loss)/profit (71) 1,666
Goodwill impairment 868 —
Depreciation charge 220 259
Changes in working capital
— inventories (623) (757)
— trade and other receivables (332) (594)
— trade and other payables 425 (795)
Cash generated from/(used in) operations 487 (221)
Tax paid (733) (246)
(246) (467)
26 CASH GENERATED FROM/(USED IN) OPERATIONS — COMPANY
2007 2006
£000 £000
Operating loss (286) (112)
Depreciation charge 1 —
Changes in working capital
— inventories — —
— trade and other receivables (6) 6
— trade and other payables 392 (14)
Cash generated from/(used in) operations 101 (120)
Tax paid — —
101 (120)
27 OPERATING LEASE COMMITMENTS — GROUP
At the year-end date the Group has lease agreements in respect of properties and equipment for which the payments
extend over a number of years.
2007 2006
£000 £000
Payments under these leases are due:
Within one year 125 41
Within two to five years 360 79
485 120
33
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
28 PENSION COMMITMENTS
2007 2006
£000 £000
Pension costs for defined contribution scheme are as follows:
Defined contribution scheme 6 3
29 RELATED PARTY TRANSACTIONS
Key management are those persons having authority and responsibility for planning, controlling and directing the
activities of the Group. In the opinion of the Board, the Group’s key management are the directors of Nordic Panorama
plc. Information regarding their compensation is given below in aggregate for each of the categories specified in IAS
24 Related Party Disclosures:
2007 2006
£000 £000
Short-term employee benefits 277 128
Other long term benefits 4 2
281 130
Other related party transactions are as follows:
Interest charged Balance owed
Related Type of 2007 2006 2007 2006
party relationship transaction £000 £000 £000 £000
P Johnsen (Director) Provision of loan (Note 1) 33 — 519 —
T Stykket Invest AS
(Major shareholder) Provision of loan (Note 2) 27 — 353 —
Note 1 — The provision of the loan to the Vradal companies is through JP Invest AS, which is owned by P Johnsen.
Interest is charged at 7.5% and the loan is repayable on demand.
Note 2 — Interest is charged at 7.5% and the loan is repayable by the Vradal companies on demand.
During 2007 the Vradal companies loaned £237,000 (2006: £Nil) to Nordic Panorama Plc, the parent company and the
balance owing at 31 December 2007 was £237,000 (2006: £Nil). No interest was charged.
30 POST-BALANCE SHEET EVENTS
On 31 January 2008 the Company issued the following options over new ordinary shares: options over 55,249,353
shares to Geir Kjaernes, the Chief Executive Officer and options over 18,416,451 shares to Per Christian Voss, nonexecutive
Director. These options represent the total interests of Geir Kjaernes and Per Christian Voss respectively in
the issued share capital of the Company.
The options have been issued under the Nordic Panorama plc 2007 Share Option Plan and are exercisable at 1.875p
per share. One third of the options are exercisable at any time after 1 May 2008, one third at any time after 1 May 2009
and the final third at any time after 1 May 2010. The options expire if not exercised by 30 April 2017.
34
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
31 FINANCIAL INSTRUMENTS
The Group's financial instruments comprise cash and cash equivalents, bank borrowings and items such as trade
payables and trade receivables, which arise directly from its operations. The main purpose of these financial
instruments is to raise finance for the Group's operations.
The Group’s operations expose it to a variety of financial risks that include the effects of changes in credit risk,
liquidity risk, interest rate risk and foreign currency exchange rate risk. Given the size of the Group, the directors have
not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies
set by the board of directors are implemented by the company’s finance department.
Credit risk
Credit risk arises principally from the Group’s trade receivables. Credit risk in relation to the sale of cabins and plots
does not arise as title transfer is on completion, which requires all outstanding moneys to have been settled.
Amounts presented in the balance sheet are stated net of allowances for doubtful recovery.
There is no concentration of credit risk within trade receivables. The Group has no significant exposure to large or key
customers with the largest customer not exceeding 5% of Group revenues. The carrying amount of financial assets
represents the maximum credit exposure. The maximum credit exposure to credit risk at the reporting date was:
2007 2006
£000 £000
Trade receivables 1,172 589
Cash and cash equivalents 118 52
1,290 641
Where overdue accounts are still unpaid 3 months or more after invoice date the amount is provided for as a bad debt
provision in the accounts. At 31 December 2007 the amount provided was £107,000 (2006: £44,000). These provisions
are released if the amounts due are subsequently collected or a credit note is issued to the customer.
The movements on the bad debt provision during the year are summarised below:
2007 2006
£000 £000
At 1 January 44 28
Increase in provisions 63 16
31 December 107 44
35
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
31 FINANCIAL INSTRUMENTS continued
Foreign currency exchange rate risk
The reporting currency of the Group is pound sterling and the functional currency of the Vradal companies is
Norwegian Krone. Fluctuations in the value of the Norwegian Krone compared with sterling could result in material
transaction or translation differences, which may have a material effect on the Group’s trading performance.
As at 31 December 2007, if the Norwegian Krone had weakened 10% against sterling with all other variables held
constant, post-tax profit would have reduced by £61,000 (2006: £99,000). Conversely, if the Norwegian Krone had
strengthened 10% against sterling with all other variables held constant, post-tax profit would have increased by
£75,000 (2006: £120,000).
If the Norwegian Krone had weakened 10% against sterling with all other variables constant, the exchange gain on the
translation of foreign operations taken directly to reserves would have reduced by £285,000. Conversely, if the
Norwegian Krone had strengthened 10% against sterling with all other variables held constant, the exchange gain taken
directly to reserves would have increased by £347,000.
Liquidity risk
The Group actively maintains a mixture of long-term and short-term debt finance that is designed to ensure it has
sufficient available funds for operations and planned expansions. The Group monitors its levels of working capital to
ensure that it can meet its debt repayments as they fall due.
The following table shows the contractual maturities of the Group’s financial liabilities.
Trade Bank Other
payables Accruals borrowings borrowings Total
£000 £000 £000 £000 £000
AT 31 DECEMBER 2007
6 months or less 836 341 930 872 2,979
6–12 months — — 70 — 70
1–2 years — — 145 — 145
2–5 years — — 510 — 510
More than 5 years — — 2,884 — 2,884
Total contractual cash flows 836 341 4,539 872 6,588
CARRYING AMOUNT OF
FINANCIAL LIABILITIES 836 341 2,801 872 4,509
36
NOTES TO THE FINANCIAL STATEMENTS f o r t h e y e a r e n d e d 3 1 De c emb e r 2 0 0 7
31 FINANCIAL INSTRUMENTS continued
Trade Bank Other
payables Accruals borrowings borrowings Total
£000 £000 £000 £000 £000
AT 31 DECEMBER 2006
6 months or less 425 317 62 — 804
6–12 months — — — — —
1–2 years — — 140 26 166
2–5 years — — 468 — 468
More than 5 years — — 1,698 — 1,698
Total contractual cash flows 425 317 2,368 26 3,136
CARRYING AMOUNT OF
FINANCIAL LIABILITIES 425 317 1,501 26 1,952
Interest rate risk
The Group has both interest bearing assets and interest bearing liabilities. Interest bearing assets include only cash
balances on current or on short term deposits at floating rates of interest determined by the relevant bank’s prevailing
base rate. The Group has an overdraft facility and a long-term bank loan at a variable interest rate, which tracks the
bank’s prevailing base rate and 3 month NIBOR respectively. The directors will revisit the appropriateness of this
policy should the Group’s operations change in size or nature.
If interest rates were 1% higher in 2007 the finance costs would have increased by £19,000 (2006: £14,000). If interest
rates were 1% lower in 2007 the finance costs would have decreased by £19,000 (2006: £14,000).
The Group has not entered into derivatives transactions and has not traded in financial instruments during the period
under review.
The Group’s cash and cash equivalents earned interest at a variable rate of 1% during the year (2006: 0.75%).
Details of the terms of the Group’s borrowings are disclosed in note 19.
Capital risk management
The Group considers its capital to comprise its ordinary share capital, share premium and accumulated retained
earnings. In managing its capital the Group’s primary objective is to ensure its continued ability to provide a consistent
return for its equity shareholders through a combination of capital growth and distributions. The Group has a heavy
capital commitment to maintaining the resort and as such considers a mixture of equity and debt funding, both short
term and long term, as the most appropriate form of funding for the Group. However this policy is kept under constant
review bearing in mind the risks, costs and benefits to equity shareholders of introducing debt finance.
37
NORDIC PANORAMA PLC (Re g i s t e r e d i n En g l a n d a n d Wa l e s , c omp a n y n umb e r 1 4 8 7 9 8 )
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting (the “AGM”) of Nordic Panorama Plc (the “Company”) will
be held at Lewis Silkin LLP, Clifford’s Inn, 5 Chancery Lane, London EC4A 1BL on 20 June 2008 at 11.00 am for
the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Ordinary
Resolutions:
1. Reports and Accounts
To receive the audited financial statements for the Company for the year ended 31 December 2007, together
with the Directors’ report and the auditors’ report on those financial statements.
2. Reappointment of auditors and auditors’ remuneration
To reappoint Nexia Smith & Williamson as auditors of the Company to hold office until the conclusion of the
Company’s next AGM and to authorise the Directors to fix the remuneration of the auditors.
3. Election of director
To elect as a director Geir Kjaernes.
4. Election of director
To elect as a director Norman Lott.
5. Election of director
To elect as a director Petter Johnsen.
6. Election of director
To elect as a director Kjetil Johnsen.
7. Election of director
To elect as a director Per Christian Voss.
Dated: 19 May 2008 Registered Office:
By order of the Board 7 Cork Street
Guy Neely London
Company Secretary W1S 3LJ
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Notes:
1. Holders of ordinary shares are entitled to attend this meeting, subject to note 6 below. Any member entitled to
attend and vote at the meeting may appoint one or more proxies to attend, to speak and to vote on his behalf at
the meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares
held by the member. A proxy need not be a member of the Company but must attend the meeting to
represent him.
2. A Form of Proxy is enclosed for holders of ordinary shares. To be valid, the Form of Proxy (together with the
power of attorney or other authority (if any) under which it is signed or a duly certified copy of such power of
attorney or other authority) must be received, duly completed and signed, by the registrars of the Company,
Capita Registrars, Proxies Department, 34 Beckenham Road, Beckenham, Kent, BR3 4TU not later than 11.00
am on 18 June 2008. Forms of Proxy and such powers of attorney or other authority or such copies may be
sent by fax to 01252 719 232, provided that the fax is received by that time and date, but this fax number may
not be used for any other purpose. Completion of a Form of Proxy will not preclude a member from attending
and voting in person.
3. In the case of joint shareholders the vote of the senior who tenders a vote, whether in person or by proxy, will
be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be
determined by the order in which their names stand in the register of members in respect of their joint holding.
The names of all joint shareholders should be stated on the Form of Proxy, but the signature of one holder will
be sufficient.
4. The resolutions will be decided on a show of hands unless a poll is demanded in accordance with the
provisions of the articles of association of the Company and of the Companies Act 2006.
5. Any question relevant to the business of the AGM may be asked at the meeting by anyone permitted to speak
at the meeting.
6. The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only
those holders of ordinary shares registered in the register of members of the Company as at 6.00 pm on 18
June 2008 shall be entitled to attend and/or to vote at the meeting in respect of the number of shares registered
in their name at that time. Changes to entries on the register of members after that time will be disregarded in
determining the rights of any person to attend and/or vote at the meeting.
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For use at the Annual General Meeting of the Company to be held at the offices of Lewis Silkin LLP,
Clifford’s Inn, 5 Chancery Lane, London EC4A 1BL on 20 June 2008 at 11.00 am.
I/We . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(in BLOCK CAPITALS please)
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .being a
shareholder(s) of the above-named Company, appoint the Chairman of the Meeting or . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to act as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be
held at the offices of Lewis Silkin LLP, Clifford’s Inn, 5 Chancery Lane, London EC4A 1BL on 20 June 2008 and at
every adjournment thereof and to vote for me/us on my/our behalf as directed below.
Please indicate with an ‘X’ in the spaces below how you wish you vote to be cast. If no indication is given your proxy
will vote for or against the resolutions or abstain from voting as he thinks fit.
Resolutions For Against Abstain
1. To receive the audited financial statements for the Company for the
year ended 31 December 2007, together with the Directors’ report and
auditors’ report on those financial statements.
2. To re-appoint Nexia Smith & Williamson as auditors of the Company
to hold office until the conclusion of the Company’s next AGM and
authorise the Directors to fix their remuneration.
3. To elect G Kjaernes as a Director of the Company.
4. To elect N A C Lott as a Director of the Company.
5. To elect P Johnsen as a Director of the Company.
6. To elect K Johnsen as a Director of the Company.
7. To elect P C Voss as a Director of the Company.
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Date . . . . . . . . . . . . . . . . . . . . . .2008
NORDIC PANORAMA PLC
FORM OF PROXY
Notes
1. If any other proxy is preferred, strike out the words “Chairman of the Meeting” and add the name and address of
the proxy you wish to appoint and initial the alteration. The proxy need not be a member.
2. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the
number of shares in relation to which they are authorized to act as your proxy (which, in aggregate, should not
exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple
instructions being given. All forms must be signed and should be returned together in the same envelope.
3. If the appointer is a corporation this form must be completed under its common seal or under the hand of some
officer or attorney duly authorised in writing.
4. The signature of any one of joint holders will be sufficient, but the names of all the joint holders should be stated.
In the case of joint holders of a share the vote of the senior who tenders a vote whether in person or by proxy
shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be
determined by the order in which the names stand in the register of members in respect of the share.
5. To be valid, this form and the power of attorney or other authority (if any) under which it is signed, or a notarially
certified copy of such power must reach the registrars of the Company at Capita Registrars, Proxies Department,
34 Beckenham Road, Beckenham, Kent, BR3 4TU not less than forty-eight hours before the time appointed for
holding the General Meeting of adjournment as the case may be.
6. The completion of this form will not preclude a member from attending the Meeting and voting in person.
7. Any alteration of this form must be initialled.
􀀀
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BUSINESS REPLY SERVICE
Licence No. MB122
Capita Registrars
Proxy Dept.
PO Box 25
BECKENHAM
Kent
BR3 4BR
Third fold and tuck in
Second fold
First fold
1
Nordic Panorama Plc
Geir Kjaernes, CEO
Telephone: 00 47 23 133027
Norman Lott, FD
Telephone: 020 7153 4920
Shore Capital
Telephone: 020 7408 4090
Alex Borrelli
Threadneedle Communications
Telephone: 020 7936 9605
Graham Herring
Josh Royston