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Notes to the financial statements,
Renewable Energy Corporation ASA
REC Annual Report 2011
WRITE DOWNS AND LOSSES ON FINANCIAL ASSETS
(NOK INMILLION)
2011
2010
Loss on conversion of loans to shares in RECWafer Norway AS
4 578
0
Loss on conversion of loans to shares in REC Solar AS
1 296
0
Loss on conversion of loans to shares in REC ScanCell AS
550
0
Total loss on conversion of loans to shares in subsidiaries
6 424
0
Impairment loss on shares in RECWafer Norway AS
3 198
0
Impairment loss on shares in REC Solar AS
2 112
0
Total impairment loss on shares in subsidiaries
5 310
0
Provisions for loss on loans to RECWafer Norway AS
1 434
0
Provisions for loss on loans to REC Solar AS
1 166
0
Provisions for loss on loans to REC ScanCell AS
4
0
Total provision for loss on loans to subsidiaries*
2 604
0
Impairment loss on shares in Sovello AG
0
64
Impairment loss on loans and other receivables to Sovello AG
0
7
Loss on sale of shares in CSG Solar AG
0
2
Total write downs and losses on financial assets
14 339
72
* See note H.
Sovello AGwas a jointly controlled entity of RECASA. RECASA’s ownershipwas 33.33 percent. In the first quarter of 2010, the owners of
Sovello AG entered into an agreement to sell all the Sovello shares and shareholders loans. The acquirer is a fund under themanagement of
Ventizz Capital Partners. The transactionwas closed on April 22, 2010. No considerationwas received for the shares and shareholders loans.
REC ASA recognized interest income of NOK 7million fromSovello in 2010, that was not received.
In 2010, REC ASA paid NOK 90million in relation to guarantees and undertakings related to Sovello (see note M). NOK 64million of the
payments were in 2010 classified as impairment loss on shares in Sovello AG, with the opposite income as reduction of other financial
expenses, with a net zero effect on the profit before tax in 2010.
RESEARCH AND DEVELOPMENT
REC ASA’s corporate technology department conducts and coordinates research and development within the REC Group, primarily related
to next generation technologies and enhancement of existing technologies. All costs recognized in this department are reported as research
and development expenses. Research and development expenses in REC ASA were NOK 133million in 2011 (NOK 79million in 2010), of
which NOK 20million was invoiced to subsidiaries in 2011 (NOK 24million in 2010).
A technology agreement with SiGen, for which the payments have been capitalized in previous years, was impaired in 2011 (see note B).
The impairment loss of NOK 62million is included in the NOK 133million above.
It is expected that research and development expenses will create future profitability.
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