Close-out of the Financial Supervisory Authority of Norway’s Request for Information
15 Apr 2016
Reference is made to the stock exchange notice published on 06 January 2016 in which Polarcus Limited (“Polarcus” or the “Company”) (OSE: PLCS) announced that the Financial Supervisory Authority of Norway (the “FSA”) requested information regarding certain topics in the Company’s financial statements for 2014.
The Company has received the concluding close-out letter from the FSA following their review of certain aspects of the annual 2014, and interim Q2-15 and Q3-15 financial statements of Polarcus (the “Financial Statements”).
The review focused primarily on the going concern assumption, liquidity risk disclosures and vessel impairment testing.
The FSA’s conclusion is that there are no material errors in the numbers previously published. The FSA do suggest, however, that certain information included in the Company’s publicly available presentation materials should have also been included in the going concern notes in the Financial Statements. The Company is of the opinion that it provided progressively more precise and complete information regarding its going concern assumptions in each of its financial statements published from the Q2-15 report onwards. This was consistent with the Company’s economic situation and its assumptions as market conditions evolved over time.
The FSA is furthermore of the opinion that disclosures in the 2014 Annual Report regarding liquidity risk were insufficient, as a maturity profile presenting shorter intervals than the one given by the Company should have been disclosed. The shortest period the Company disclosed a maturity table was for the period within one year. The FSA is of the opinion that the Company should have shown a further split of the maturity profile falling into four separate quarterly periods for the same period within one year. The Company included such shorter intervals in all of its financial statements published for Q2-15 and thereafter, which was consistent with the Company’s economic situation as market conditions evolved over time.
The FSA reviewed the Company’s impairment test performed on the carrying values of its seismic vessels and equipment at 31 December 2014. The FSA supported the methodology used by the Company to perform the test in 2014, which was the fair value less costs to sell method. The FSA did not review the Company’s impairment test performed in Q4 2015. In Q4 2015, the Company’s impairment test was performed using the value-in-use method, as the Company was of the opinion that the fair value less costs to sell method was not supportable in 2015 due to there being insufficient independent market transactions for the type of assets being tested for impairment.
The Company expects the FSA to publish their concluding letter next week.
Hans-Peter Burlid, CFO
+971 50 559 8175
Polarcus (OSE: PLCS) is an innovative marine geophysical company with a pioneering environmental agenda, delivering high-end towed streamer data acquisition and imaging services from Pole to Pole. Polarcus operates a fleet of high performance 3D seismic vessels incorporating leading-edge maritime technologies for improved safety and efficiency. Polarcus offers contract seismic surveys and multi-client projects with advanced onboard processing solutions and employs nearly 500 professionals worldwide. The Company’s principal office is in Dubai, United Arab Emirates. For more information, visit www.polarcus.com
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)