ANNUAL REPORT CL Intressenter AB

Transcription

1 ANNUAL REPORT 2014 CL Intressenter AB

2 Operating companies in the Group CL Intressenter AB CL Intressenter AB is the parent company of a Group with eight operating subsidiaries: Cibes Lift AB, Kalea Lifts AB, NTD Lifts AB, Aesy Liften B.V., Aesy Lift België B.V.B.A., Axess4All Ltd, Cibes Lift Norge AS and Hissipörssi Yhtiöt OY. The Group is one of Europe s leading manufacturers of screw-driven platform lifts. Our business concept is accessibility for everyone by developing, manufacturing and selling high-quality products and solutions within the field of platform lifts and stairlifts. The company s business concept is based on its vision of accessibility for everyone and accessibility everywhere. We shall be the market-leading company in our niche. We have focused on a few unique products and solutions which we market through various brands. We reach the market through our own direct sales to end customers and via an international network of distributors. Cibes Lift AB The company is located in Gävle, Sweden. Cibes Lift AB is a leading manufacturer of designed platform lifts for public and private environments. Cibes Lift develops, sells and distributes platform lifts worldwide. The company also manufactures firerated and non-rated hinged doors as well as door locks for lifts. Kalea Lifts AB The company is located in Gävle, Sweden. Its product range includes platform lifts and stairlifts. NTD Lifts AB The company s operation is based in Gävle, Sweden. Its product range includes both standard and specially-manufactured platform lifts. Aesy Liften B.V. The company is located in Zevenaar, the Netherlands. It sells platform lifts on the Dutch market and has its own service and installation team. Aesy Lift België B.V.B.A. The company is located in Antwerp, Belgium. It sells platform lifts on the Belgian market and has its own service and installation team. Axess4All Ltd The company is located in Leicester, the UK. In addition to Cibes Lift s platform lifts, Axess4All s product range also includes stairlifts. Cibes Lift Norge AS The company is located in Bergen, Norway. It sells platform lifts on the Norwegian market and has its own service and installation team. Hissipörssi Yhtiöt OY The company is located in Hyvinkää, Finland. It sells platform lifts on the Finnish market and has its own service and installation team.

3 Contents Administration Report 4 Multi-Year Review 7 Group Income Statement 8 Statement of Comprehensive Income 8 Balance Sheet 9 Change in Equity 11 Cash Flow Statement 12 Parent Company Income Statement 13 Balance Sheet 14 Change in Equity 16 Cash Flow Statement 17 Notes 18 Auditors Report 38 Definitions 39

4 Administration Report The Board of Directors and Chief Executive Officer of CL Intressenter AB, registered office and head office in Gävle, Sweden, hereby submit the Annual Report for the financial year 1 January December The figures relate to the Group unless otherwise stated. The figures in parentheses refer to the previous year. All amounts are in thousands of Swedish kronor, SEK thousand, unless otherwise stated. The business The Group develops, manufactures and sells platform lifts, stairlifts and special lifts based on the rules in the EU Machinery Directive. Our vision is accessibility for everyone everywhere. The Group s business concept is accessibility for everyone by developing, manufacturing and selling high-quality products and solutions within the field of platform lifts, stairlifts and special lifts. We shall be the market-leading company in our niche. We have focused on a few unique products and solutions which we market through various brands. We reach the market through our own direct sales to end customers and via an international network of distributors. The business is run via the subsidiaries Aesy Liften B.V., Axess4All Ltd, Cibes Lift AB, Kalea Lifts AB, Aesy Lift België B.V.B.A., NTD Lifts AB, Cibes Lift Norge AS and Hissipörssi Yhtiöt OY.. The 2014 financial year In 2014 the business has been characterized by an increasingly strong focus on the commercial aspects of the Group such as the establishment of our own sales company in Norway. There has also been a focus on continued consolidation follow-ing the relocation of the operation and production to Gävle, Sweden, in Assiduous work has been carried out to further streamline our production flows to ensure stability in the production process regarding both quality and delivery reliability. Several product development projects have been under way during the year. Launches of new and improved products and a review of the product mix have produced results and will continue to produce results in future years. The Group s main markets have shown slightly positive development, a consequence partly of improvements in the economy but also of increased distribution sales. Furthermore, the Group has signed a cooperation agreement with a Spanish company in connection with establishment in Spain. The business as a whole, both operationally and financially, is well equipped for future opportunities and expansion. CL Intressenter Cibes Lift Holding AB 100% Cibes Lift Norge AS (NO) 100% Kalea Lifts AB 100% Cibes Lift AB 100% Aesy Liften (NL) 100% Hissipörssi Yhtiöt OY (FI) 100% NTD Lifts AB 100% Axess4All Ltd (UK) 100% Aesy Lift België (BE) 80% Administration report 4

5 Invoiced sales and financial results SEK Million EBIT, % Investment During the financial year investment totalled SEK 15.1 (20.1) million, of which SEK 10.3 (4.4) million refers to investment in property, plant and equipment. SEK 4.0 (2.8) million refers to investment in capitalized development expenditure and SEK 0.8 (2.9) million to other intangible assets. Acquisitions of subsidiaries amounted to SEK 0.0 (9.9) million /08 08/09 09/10 10/ M Employees The average number of employees in the Group was 221 (210), of whom 44 (40) were women. The distribution per country was 148 (144) in Sweden, 48 (46) in the Netherlands, 10 (10) in the UK, 3 (2) in Belgium, 10 (8) in Finland and 2 in Norway. Further information is available in Note 7 of the Annual Report. Risks and uncertainties Operating margin excluding restructuring costs Invoiced sales Net sales amounted to SEK 500 million compared to SEK 457 million last year, an improvement, therefore, in sales compared with The slightly higher revenue can be attributed partly to a positive development in the Group s operating companies and to the related distribution network. Operating expenses amounted to SEK 449 (424) million. Operating profit amounted to SEK 47.5 (29.3) million and the operating margin to 9.5% (6.4%). EBITDA amounted to SEK 56 (37) million and the EBITDA margin to 11.2% (8.1%). Depreciation/ amortization amounted to SEK 8.7 (7.9) million. Net financial items totalled SEK (-16.9) million, of which interest expenses comprised SEK 14.8 (14.6) million. Profit after financial items amounted to SEK 30.1 (12.4) million. Profit for the year amounted to SEK 25.8 (12.3) million. The Group develops, manufactures and sells lifts which naturally entails certain risks. The Group actively strives to minimize the risks in every stage of the operation and has satisfactory insurance cover. To sum up, the risks for the Group s operation are limited from a technical, market and financial perspective. A more detailed description of the Group s risks and measures to limit them can be found under Accounting principles. Environmental impact The companies do not currently have any operations that require a permit. Development In 2014 the Group continued its work to coordinate development activities in the Group. The market has developed through active dialogue with the network of distributors and subsidiaries as well as active participation in the European Platform and Stairlift Association (EPSA). Employee benefit expenses, 30% Depreciation/Amortization, 2% Raw materials and consumables, 48% Legislation and articles of association CL Intressenter AB complies with the Swedish Companies Act. It also follows the rules set out in CL Intressenter s articles of association. The articles of association are available from the Swedish Companies Registration Office. Other external costs, 16% Goods for resale, 4% Administration report 5

6 The Board and its procedures During the year the Board of Directors comprised five members. Eight Board meetings were held during the financial year including one inaugural meeting. The Board s work follows the adopted formal work plan which also includes instructions for the Chief Executive Officer. Parent company The operation in the parent company comprises Group management, Group reporting and financial management. The parent company s net sales amounted to SEK 4.8 (4.8) million and the loss after financial items amounted to SEK (-17.9) million. Important events after the closing day The company has formed two new sales companies, one in Hong Kong, Cibes Lift Asia Ltd in April 2015, and one in Spain, Cibes Lift Ibérica S.L. in May Furthermore, work to improve the company s product range progressed and in April 2015 two new cabin lifts were launched, the A60 and A61. Financial position Cash flow from operating activities amounted to SEK 44.7 (23.2) million during the financial year. The increased cash flow from operating activities mainly comes from the improved profit in 2013 and Cash flow for the year, after investing and financing activities, was SEK 1.5 (3.5) million. The Group s net debt, i.e. interest-bearing liabilities less liquid funds, decreased by SEK 35.2 million to SEK 95.0 (130.2) million. The Group s definition of net debt does not include liabilities to owners, which amount to SEK (115.9) million. The equity ratio was 29.8% (25.3%). Estimates and assessments The preparation of financial statements in accordance with IFRS requires the Board of Directors and management to make accounting estimates and assessments and make assumptions which affect the application of the accounting principles and the recognized amounts for assets, liabilities, income and expenses. The actual outcome may deviate from these estimates and the assumptions are reviewed regularly. Changes to estimates are reported in the period in which the change is made if the change affects that period only, or in the period in which the change is made and in future periods if the change affects both the current period and future periods. Appropriation of profits Profit of the parent company at the disposal of the Annual General Meeting (SEK): Share premium reserve 73,017,026 Profit brought forward 31,405,759 Profit for the year 15,527,878 Profit for appropriation 119,950,663 The Board of Directors proposes that the accumulated profit of SEK 119,950,663 be carried forward. Outlook The Group has created a platform for growth and for productivity and efficiency improvements through the factory in Gävle and the newly established subsidiaries. Product development work has continued during the year which means we have launched new products during the year and will continue to do so in future. We currently have sales on most continents and will continue to focus on certain markets where we have identified the potential to increase our volumes. As a sub-strategy we want to move up the value chain and we are striving to achieve this both organically and through acquisitions. We want to supplement our distribution sales and we see benefits in reaching the end customer directly. Our aim is to continue to develop our strategy on other markets where appropriate. Administration report 6

7 Multi-Year Review IFRS IFRS 31 Dec 2014 IFRS 31 Dec 2013 IFRS 31 Dec 2012 IFRS 31 Dec 2011 (8 months) IFRS 30 April 2011 Net sales 500, , , , ,470 Operating profit excluding restructuring costs 47,480 29,265 48,303 n/a n/a EBITDA excluding restructuring costs 56,202 37,133 54,441 n/a n/a Operating profit/loss including restructuring costs 47,480 29,265-7,533 10,512 35,660 EBITDA including restructuring costs 56,202 37,133-1,395 17,524 42,811 Profit/loss after financial items 30,142 12,356-24, ,028 Profit/loss for the period 25,843 12,335-23,922 1,007 16,024 Investment in non-current assets (excl. goodwill) 15,130 7,211 19,031 5,206 8,272 Operating margin excluding restructuring costs 9.5% 6.4% 10.4% 3.4% 7.8% EBITDA margin excluding restructuring costs 11.2% 8.1% 11.8% 5.7% 9.3% Depreciation/amortization -8,722-7,867-6,138-7,012-7,151 Cash flow, SEK thousand Cash flow from operating activities 44,738 25,427 1,626 11,598 25,360 Cash flow from investing activities -20,839-19,328-23,149-14,891-8,272 of which acquisition of subsidiaries 0-9,410-7,742-10,197 - Cash flow from financing activities -22,412-2,600 23, ,435 Change in liquid funds 1,655 3,784 1,935-4,134-7,242 Returns Return on equity, % 18.3% 10.3% neg. 0.9% 15.3% Return on capital employed, % 19.4% 11.8% neg. 5.0% 14.7% Financial indicators at the end of the period, SEK thousand Interest coverage ratio, % Equity ratio, % 29.8% 25.3% 22.3% 22.4% 25.1% Interest-bearing liabilities/balance sheet total, % 21.2% 28.6% 30.5% 29.7% 30.8% Net debt 94, , , , ,314 Debt/equity ratio, times 61% 103% 128% 125% 112% Capital employed at the end of the period 265, , , , ,418 Average capital employed 268, , , , ,286 Interest-bearing liabilities 110, , , , ,399 Closing equity 155, , , , ,019 Average equity 141, , , , ,549 Balance sheet total 521, , , , ,916 Share data per share, SEK Profit/loss after tax, before dilution Equity, before dilution Number of shares Total number of shares issued 539, , , , ,996 Average number of shares before dilution 539, , , , ,996 Personnel Average number of employees Multi-year review 7

8 GROUP INCOME STATEMENT SEK thousand Note 31 Dec Dec 2013 Net sales 500, ,253 Other operating income 4 3,364 3,674 Total income 503, ,927 Operating expenses Raw materials and consumables -221, ,589 Goods for resale -19,220-19,400 Other external costs 5, 6-69,514-69,198 Employee benefit expenses 7-137, ,608 Depreciation of property, plant and equipment and amortization of intangible assets 8-8,722-7,867 Operating profit 47,480 29,265 Profit from financial investments Financial income 9 4,695 2,713 Financial expenses 9-22,033-19,623 Profit after financial items 30,142 12,356 Tax on profit for the year 10-4, Profit for the year 25,843 12,335 of which attributable to shareholders of CL Intressenter AB 25,635 12,517 of which attributable to holdings with a non-controlling interest Earnings per share 11 Average number of shares 539, ,228 Number of shares 539, ,228 Average number of shares after dilution 556, ,928 Earnings per share before dilution, SEK ¹) Earnings per share, SEK, after dilution ¹) Proposed dividend per share, SEK ¹) Earnings per share is calculated based on the weighted average number of shares during the period. Based on the shareholders of CL Intressenter AB s proportion of profit for the period. GROUP STATEMENT OF COMPREHENSIVE INCOME 31 Dec Dec 2013 Profit for the year 25,843 12,335 Other comprehensive income Net investment hedge -4,631-2,443 Translation differences 7,590 3,552 Other comprehensive income 2,959 1,109 Comprehensive income for the year 28,802 13,444 Of which items which can later be transferred to the income statement 2,959 1,109 Of which attributable to: Parent company shareholders 28,594 13,626 Holdings with a non-controlling interest Group income statement 8

9 GROUP BALANCE SHEET SEK thousand Note 31 Dec Dec 2013 NON-CURRENT ASSETS Intangible assets Goodwill , ,686 Capitalized development expenditure 13 11,339 9,645 Site leasehold 14 5,957 6,216 Other intangible assets Property, plant and equipment Buildings and land 16 44,341 46,186 Construction in progress 17 6, Machinery and equipment 17 14,143 13,742 Financial assets Deferred tax assets 2,464 1,268 Other financial assets 24 1,295 - TOTAL NON-CURRENT ASSETS 376, ,963 CURRENT ASSETS Inventories 20 55,201 53,612 Accounts receivable 21 62,492 67,227 Current tax receivables 1,420 2,961 Other receivables 5,983 3,007 Prepaid expenses and accrued income 22 4,756 5,758 Liquid funds 23 15,325 13,670 TOTAL CURRENT ASSETS 145, ,234 TOTAL ASSETS 521, ,197 Group balance sheet 9

10 GROUP BALANCE SHEET CONTD. SEK thousand Note 31 Dec Dec 2013 EQUITY Share capital 3,752 3,752 Other contributed capital 126, ,162 Translation reserve -1,173-4,132 Profit brought forward including profit for the year 26,697 1,061 Total equity attributable to parent company shareholders 155, ,843 Holdings with a non-controlling interest TOTAL EQUITY 155, ,811 NON-CURRENT LIABILITIES Deferred tax liability 18 6,816 5,536 Long-term borrowing interest bearing 24 65,034 73,187 Provisions 26 6,064 4,155 Liabilities to parent company , ,916 Total non-current liabilities 208, ,794 CURRENT LIABILITIES Short-term borrowing interest bearing 24 45,284 70,658 Accounts payable 33,981 38,622 Current tax liabilities 29 2,039 - Advance payments from customers 21,066 32,288 Other liabilities 28 16,791 7,522 Accrued expenses and deferred income 30 38,542 27,501 Total current liabilities 157, ,592 TOTAL LIABILITIES 365, ,386 TOTAL EQUITY AND LIABILITIES 521, ,197 Memorandum items PLEDGED ASSETS , ,037 CONTINGENT LIABILITIES Group balance sheet contd. 10

11 GROUP CHANGE IN EQUITY SEK thousand Share capital Other contributed capital Translation Profit/loss reserve brought forward Total Holdings with a non-controlling interest Opening balance, 1 January , ,162-5,241-11, , ,368 Profit/loss for the year 12,517 12, ,335 Other comprehensive income Net investment hedge ,443-2,443-2,443 Translation differences - - 3,552 3,552 3,552 Other comprehensive income - - 1,109-1,109-1,109 Comprehensive income for the year - - 1,109 12,517 13, ,444 Closing balance, 31 December 2013 /Opening balance, 1 January , ,162-4,132 1, , ,812 Profit for the year 25,635 25, ,842 Other comprehensive income Net investment hedge , , ,631 Translation differences - - 7,590 7,590-7,590 Other comprehensive income - - 2, ,959-2,959 Comprehensive income for the year - - 2,947 25,637 28, ,801 Closing balance, 31 December , ,162-1,173 26, , ,613 Total equity Group change in equity 11

12 CASH FLOW STATEMENT GROUP SEK thousand Note 31 Dec Dec 2013 Operating activities Profit after financial items 30,142 12,356 Adjustments for items not included in cash flow 33 17,143 10,096 Paid taxes ,688 Cash flow from current activities before change in working capital 47,067 18,764 Cash flow from change in working capital Increase(-)/Decrease(+) in inventories ,745 Increase(-)/Decrease(+) in operating receivables 1,580 24,416 Increase(+)/Decrease(-) in operating liabilities -2,972-20,498 Cash flow from operating activities 44,738 25,427 Investing activities Acquisition of subsidiaries - -9,410 Purchase of intangible assets -10,463-5,582 Purchase of property, plant and equipment -10,376-4,371 Sale of property, plant and equipment - 35 Cash flow from investing activities -20,839-19,328 Financing activities Borrowings 17,298 24,894 Repayment of debt -39,710-27,494 Cash flow from financing activities -22,412-2,600 Cash flow for the year 1,487 3,499 Opening liquid funds 13,670 9,886 Exchange rate differences in liquid funds LIQUID FUNDS AT THE END OF THE YEAR 15,325 13,670 Additional disclosures for cash flow statement Interest received Interest paid -14,778-14,587 Interest-bearing net debt Liquid funds 15,325 13,670 Interest-bearing liabilities -110, ,845 Interest-bearing net debt -94, ,175 Cash flow statement group 12

13 PARENT COMPANY INCOME STATEMENT SEK thousand Note 31 Dec Dec 2013 Net sales 4,800 4,800 Total income etc. 4,800 4,800 Operating expenses Other external costs 5, 6-4,178-4,759 Employee benefit expenses 7-5,719-4,011 Depreciation of property, plant and equipment and amortization of intangible assets Operating loss -5,183-4,088 Profit from financial investments Other interest income and similar profit (loss) items 9-13 Interest expenses and similar profit (loss) items 9-15,419-13,824 Loss after financial items -20,602-17,899 Appropriations 34 38,885 35,300 Tax on profit for the year 10-2,755 - Profit for the year 15,528 17,401 The parent company otherwise has no comprehensive income transactions, which is why profit for the year corresponds to comprehensive income. Parent company income statement 13

14 PARENT COMPANY BALANCE SHEET SEK thousand Note 31 Dec Dec 2013 NON-CURRENT ASSETS Property, plant and equipment Machinery and equipment Financial assets Participations in Group companies , ,709 Deferred tax assets Receivables from Group companies 123, ,799 Other long-term receivables 1,295 - TOTAL NON-CURRENT ASSETS 322, ,594 Current assets Current tax receivables Other receivables Prepaid expenses and accrued income Cash and bank balances TOTAL CURRENT ASSETS 798 1,805 TOTAL ASSETS 322, ,399 Parent company balance sheet 14

15 PARENT COMPANY BALANCE SHEET CONTD. SEK thousand Note 31 Dec Dec 2013 EQUITY Share capital 3,752 3,752 Statutory reserve 11,365 11,365 Total restricted equity in parent company 15,117 15,117 Share premium reserve 73,017 73,017 Profit brought forward 31,406 17,617 Profit for the year 15,528 17,401 Total non-restricted equity in parent company 119, ,035 TOTAL EQUITY 135, ,152 UNTAXED RESERVES 35 21,669 17,369 NON-CURRENT LIABILITIES Long-term borrowing interest bearing 24 16,100 27,000 Liabilities to subsidiaries - 47,578 Provisions 26 1,637 - Liabilities to parent company , ,916 Total non-current liabilities 147, ,494 CURRENT LIABILITIES Short-term borrowing interest bearing 24 8,050 12,000 Liabilities to Group companies 4,159 3,463 Current tax liabilities 29 2,735 - Other liabilities 307 1,136 Accrued expenses and deferred income 30 2,952 1,785 Total current liabilities 18,203 18,384 TOTAL LIABILITIES 166, ,878 TOTAL EQUITY AND LIABILITIES 322, ,399 Memorandum items PLEDGED ASSETS , ,709 CONTINGENT LIABILITIES ,495 98,072 Parent company balance sheet contd. 15

16 PARENT COMPANY CHANGE IN EQUITY Restricted equity Non-restricted equity SEK thousand Share capital Statutory reserve Share premium reserve Profit brought forward Total equity Closing equity, 31 December ,752 11,365 73,017 17, ,751 Profit for the year 17,401 17,401 Total change in assets excluding transactions with the company s owners ,401 17,401 Closing equity, 31 December ,752 11,365 73,017 35, ,152 Exchange rate difference for subsidiary acquisition loan attributable to previous years -3,612-3,612 Profit for the year 15,528 15,528 Total change in assets excluding transactions with the company s owners. 11,916 11,916 Closing equity, 31 December ,752 11,365 73,017 46, ,068 Parent company change in equity 16

17 CASH FLOW STATEMENT PARENT COMPANY SEK thousand Note 31 Dec Dec 2013 Operating activities Loss after financial items -20,602-17,899 Adjustments for items not included in cash flow 33 1, Paid taxes Cash flow from operating activities before change in working capital -18,875-17,015 Cash flow from change in working capital Increase(-)/Decrease(+) in operating receivables 22,094-17,040 Increase(+)/Decrease(-) in operating liabilities -32,247 13,902 Cash flow from operating activities -29,028-20,153 Financing activities Buy-back of options - -14,185 Repayment of debt -14,850 - Group contributions received 43,185 35,300 Cash flow from financing activities 28,335 21,115 Cash flow for the year Opening liquid funds LIQUID FUNDS AT THE END OF THE YEAR Additional disclosures for cash flow statement 31 Dec Dec 2013 Interest received - 13 Interest paid -10,759-10,340 Cash flow statement parent company 17

18 Notes NOTE 1 ACCOUNTING AND VALUATION PRINCIPLES Introductory information CL Intressenter AB (the parent company) and its subsidiaries (the Group as a whole) are one of Europe s leading manufacturers of screw-driven platform lifts. The parent company CL Intressenter AB, with company registration number , has its registered office in Gävle, Sweden. The company s address is Utmarksvägen 13, SE Gävle, Sweden. On 18 May 2015 the Board of Directors authorized these consolidated accounts for the financial year 1 January December 2014 for issue. Compliance with standards and legislation The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) as approved by the European Commission for application within the EU. Furthermore, the Annual Accounts Act and RFR 1 Supplementary Accounting Regulations for Groups have been applied. The parent company s accounting principles are described under the header Parent company accounting principles below. Foundations for preparing the financial statements The consolidated accounts and the parent company s annual accounts have been authorized for issue by the Board of Directors on 18 May The Group and parent company income statements and balance sheets will be submitted to the Annual General Meeting for adoption. The parent company s functional currency is the Swedish krona which is also the reporting currency for the parent company and Group. This means the financial statements are presented in Swedish kronor (SEK). All amounts are in thousands of Swedish kronor, SEK thousand, unless otherwise stated. Assets and liabilities are measured at their historical cost, except for certain financial assets and liabilities which are measured at fair value via the income statement. The preparation of financial statements in accordance with IFRS requires senior management to make estimates and assessments and make assumptions which affect the application of the accounting principles and the recognized amounts for assets, liabilities, income and expenses. The estimates and assumptions are based on historical experiences and a number of other factors which appear reasonable under the prevailing conditions. The results of these estimates and assumptions are then used to assess the carrying amounts of assets and liabilities which would otherwise not be evident from other sources. The actual outcome may deviate from these estimates and assessments. The estimates and assumptions are reviewed regularly. Changes to estimates are reported in the period in which the change is made if the change affects that period only, or in the period in which the change is made and in future periods if the change affects both the current period and future periods. Assessments made by senior management in applying IFRS which have a significant impact on the financial statements, and estimates made which could entail significant adjustments in the following year s financial statements are described in more detail below. Events after the closing day refer to both favourable and unfavourable events that take place between the closing day and the day at the beginning of the following year when the financial statements are signed by the Board members. Information is provided about important events after the closing day which has not been taken into account when the balance sheets and income statements were adopted. Only events that confirm the conditions on the closing day are taken into account when the balance sheets and income statements are adopted. The accounting principles for the Group provided below have been applied consistently to all the periods presented in the Group s financial statements, unless otherwise stated below. The Group s accounting principles have been applied consistently when reporting and consolidating subsidiaries. Receivables and liabilities, and income and expenses are only offset if this is required or expressly permitted in an accounting recommendation. Amended accounting principles in 2014 Below is a description of the amended accounting principles applied by the Group as of 1 January Other amendments to IFRS that apply as of 2014 have not had a material effect on the consolidated accounts. As of 1 January 2014 the Group applies IFRS IFRS 10 Notes 18

19 Consolidated Financial Statements replaces the parts of IAS 27 relating to the rules on consolidated accounts and the parts of SIC-12 relating to when a company shall be included in the consolidated accounts. IFRS 10 includes a model to use when assessing whether or not there is a controlling interest. There is a controlling interest if the parent company has influence over the investment object, is exposed or entitled to variable returns from its commitment and can use its influence over the investment to affect the return. When assessing whether or not there is a controlling interest, potential shares with voting rights are taken into account along with whether or not there is de facto control. IFRS 11 Joint Arrangements mainly entails two changes: an assessment of whether a joint arrangement is a joint operation or a joint venture and the disappearance of the proportional method for joint ventures. The amended IAS 28 Investments in Associates and Joint Ventures, which is an effect of IFRS 11, is applied. IFRS 12 Disclosure of Interests in Other Entities entails disclosures for more types of holdings in other companies in the consolidated accounts, further disclosure requirements for subsidiaries, joint arrangements and associates and regarding so-called structured companies which are not consolidated. CL Intressenter s assessment is that the Group s investments in joint arrangements shall not be classified as subsidiaries in accordance with IFRS 10. Neither IFRS 10, 11 nor 12 have entailed any significant effects to the accounts or extended disclosure requirements. The Group complies with IFRIC 21 Levies which provides guidance on when to recognize a liability for a public levy triggered by an obligating event. IFRIC 21 has a very small effect on the CL Intressenter Group s financial statements. Furthermore, a number of changes have been carried out in IFRS within the framework of IASB s annual improvement project. None of these changes have affected the Group s financial statements. Amended accounting principles in 2015 and onwards A number of new or amended standards and interpretations come into effect in 2015 and onwards and they have not been applied prospectively on preparing these financial statements. New standards or amendments that will apply as of the financial year after 2015 and onwards are not planned to be applied prospectively. Where the expected effects on the financial statements from applying new or amended standards and interpretations are not described below, CL Intressenter has made the assessment that they will not have any significant effect on the consolidated accounts. IFRS 15, the new revenue standard that comes into effect in 2018, will affect CL Intressenter s financial reporting with an increased disclosure requirement. An analysis of how the financial statements will be affected is being carried out in 2015 and Consolidated accounts Subsidiaries are any company (including structured companies) over which the Group has a controlling interest. The Group controls a company when it is exposed or entitled to variable returns from its holding in the company and has the ability to affect the return through its influence in the company. Subsidiaries are included in the consolidated accounts from the day the controlling interest is transferred to the Group. They are excluded from the consolidated accounts from the day the controlling interest ceases. The acquisition method is used to report the Group s business combinations. The purchase price for the acquisition of a subsidiary comprises the fair value of transferred assets, liabilities incurred by the Group to former owners of the acquired company and the shares issued by the Group. The purchase price also includes the fair value of all assets or liabilities resulting from a contingent consideration agreement. Identifiable acquired assets and assumed liabilities in a corporate acquisition are initially measured at fair value on the acquisition date. For each acquisition i.e. acquisition by acquisition the Group determines whether holdings with a non-controlling interest in the acquired company are measured at fair value, or at the holding s percentage of the carrying amount of the acquired company s identifiable net assets. Acquisition-related costs are expensed as they arise. If the acquisition is carried out in several stages, the former equity percentages in the acquired company are re-measured at their fair value at the time of acquisition. Any gain or loss arising from the re-measurement is reported under income. Each contingent consideration to be transferred by the Group is recognized at fair value at the time of acquisition. Subsequent changes in fair value of a contingent consideration that is classified as an asset or liability are recognized in accordance with IAS 39 either in the income statement or as other comprehensive income. Contingent consideration classified as equity is not remeasured and subsequent settlement is recognized under equity Intra-Group transactions, balance sheet items and non-realized gains and losses on transactions between Group companies are eliminated. Where applicable, the accounting principles for subsidiaries have been changed to guarantee consistent application of the Group s principles. Operating income Income comprises the fair value of goods sold, excluding value added tax and discounts, and after eliminating intra-group sales. Income is usually recognized when the buyer has accepted delivery and installation and checks have taken place. However, income is recognized as soon as delivery has taken place if the installation and checks are of insignificant value and after reserves for assessed remaining costs. Estimated costs for product guarantees burden operating costs when the products are sold and are based on historic outcomes. Notes 19

20 Income tax Income tax is recognized in accordance with IAS 12. The recognized income tax comprises tax that is to be paid or received for the year in question, adjustments to previous years current taxes and changes in deferred tax. All tax liabilities and tax receivables are valued at nominal amounts and in accordance with the tax rules and at the tax rates that have been decided or, if announced, will almost certainly be approved. Tax effects relating to items in the income statement are also recognized in the income statement. Deferred tax is calculated in accordance with the balance sheet method on all temporary differences that arise between the carrying amount and value for tax purposes of assets and liabilities. Deferred tax assets attributable to loss carry-forwards or other future tax deductions are recognized to the extent that there are factors that convincingly indicate that the deduction can be used against future surpluses. Foreign currencies Functional currency and reporting currency Items in the financial statements for the various Group units are measured in the currency used in the economic environment in which each company primarily operates (functional currency). In the consolidated accounts the Swedish krona is used, which is the parent company s reporting currency. Transactions and balance sheet items Transactions in foreign currencies are translated into the functional currency using the exchange rates in force on the transaction date. Exchange rate gains and losses arising upon payment of such transactions and upon translating monetary assets and liabilities in foreign currencies at the closing day exchange rate are recognized in the income statement. Group companies The figures and financial position of all Group companies (none of which has a high-inflation currency as its functional currency) with a functional currency different to the reporting currency, are translated into the Group s reporting currency as follows: (a)assets and liabilities for each of the balance sheets are translated at the closing day rate; (b) income and expenses for each of the income statements are translated at the average exchange rate (provided this average exchange rate is a reasonable approximation of the accumulated effect of the rates in force on the transaction date, otherwise income and expenses are translated at the rate in force on the transaction date); and (c) all currency differences which arise are recognized in other comprehensive income. Goodwill and adjustments of fair value arising upon acquisition of a foreign operation are treated as assets and liabilities in the operation in question, and are translated at the closing day rate. Currency differences are recognized in other comprehensive income. The following table shows the exchange rates, in relation to the Group s reporting currency (SEK), of the currencies in the Group as weighted averages and on the closing day respectively. Currency 31 Dec Dec 2013 Closing day rate Average rate Closing day rate Average rate GBP EUR NOK n/a n/a Intangible assets Goodwill Goodwill is the value by which the acquisition price exceeds the fair value of the net assets acquired by the Group in connection with an acquisition. Goodwill on acquisitions of subsidiaries is recognized under intangible assets. Goodwill on acquisitions of associated companies is included in the value of the holding in the associated company. Goodwill is tested annually to determine any write-down requirement and recognized at cost less accumulated write-downs. An impairment review is also carried out if there are any indications of a decrease in value. Gains or losses from the divestment of a unit include the remaining carrying amount of the goodwill relating to the divested unit. The company is of the opinion that it has only one cashgenerating unit and goodwill is, therefore, tested at an overall level only. Other intangible assets Other intangible assets mainly comprise expenses for developed products. These assets are recognized at cost less accumulated amortization. Expenditure on research and the majority of the Group s expenditure on development are recognized as a cost on an ongoing basis. Expenditure on developing well-defined development projects is only set up as an intangible asset if it is probable that the future economic benefits associated with the assets will accrue to the Group and the cost can be measured in a reliable way. This in turn requires that there is deemed to be a market for the new product and that the Group has the technical and financial resources to complete the development. Expenditure is only set up as an intangible asset following a thorough preliminary study. Interest on capital borrowed to finance a development project is not included in the cost. Capitalized expenditure for product development is recognized at cost less accumulated amortization according to plan and any write-down. Amortization according to plan is Notes 20

21 based on the assets original cost and the estimated useful lives. In cases where the carrying amount of the asset exceeds its estimated recoverable amount, the asset is written down to its recoverable amount. Intangible assets that are not completed are the subject of an annual impairment review. Linear amortization is applied for all categories of asset as follows: Amortization of intangible assets Year Capitalized development expenditure 5 Site leasehold 20 Financial instruments The Group classifies its financial instruments as follows: Loan receivables and accounts receivable Loan receivables and accounts receivable are non-derivative financial assets which have determined or determinable payments and are not listed on an active market. They are included under current assets with the exception of items with a due date more than 12 months after the closing day, which are classified as non-current assets. The Group s loan receivables and accounts receivable comprise Accounts receivable, Other receivables and Other financial assets. Accounts payable and borrowing Accounts payable and borrowing are non-derivative financial liabilities with determinable payments. They are included under current liabilities with the exception of items with a due date more than 12 months after the closing day, which are classified as non-current liabilities. Accounts payable and borrowing are recognized at the amortized cost. See also Note 3 Financial Risk Factors for further information. Derivative instruments and hedges Derivative instruments are reported in the balance sheet on the contract date at fair value, both initially and upon subsequent revaluations. The method for reporting the gain or loss arising upon revaluation depends on whether the derivative has been identified as a hedging instrument and, if that is the case, the character of the item being hedged. The Group identifies certain derivatives as: a) hedging of fair value of a recognized asset or liability or a firm commitment (fair value hedge), b) hedging of a special risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge), or c) hedging of a net investment in a foreign operation (net investment hedge). When the transaction is entered into, the Group documents the relationship between the hedging instrument and the hedged item, as well as the Group s goal with the risk management and the risk management strategy behind the hedge. The Group also documents, at the beginning of the hedge and continuously thereafter, its assessment of whether the derivative instruments used in the hedging transactions are effective in mitigating changes in the fair value or cash flows attributable to the hedged items. Changes in the hedging reserve in equity are shown in the Group s reconciliation of equity. The entire fair value of the derivative that constitutes the hedging instrument is classified as a non-current asset or non-current liability if the hedged item s remaining term is longer than 12 months, and as a current asset or current liability if the hedged item s remaining term is less than 12 months. Derivative instruments held for trading are always classified as current assets or current liabilities. The Group does not currently have any derivative instruments in this category. Liquid funds Liquid funds include cash, bank balances and investments in securities etc. Investments in securities etc. comprise temporary investments of surplus liquidity which can be sold or converted into liquid funds in some other way within three months. The investments have been measured at market value. Gains and losses are recognized in the income statement. The Group does not currently have any investments in securities etc. Financial assets and liabilities by category in the balance sheet The tables below show financial assets and liabilities by category in the balance sheet. 31 Dec 2014 Assets in the balance sheet Loan receivables and accounts receivable Total Accounts receivable and other receivables excluding interim receivables 68,475 68,475 Liquid funds 15,325 15,325 Total 83,799 83, Dec 2014 Liabilities in the balance sheet Other financial liabilities Total Borrowing (excluding liabilities related to financial leasing) 110, ,318 Liabilities to owners 130, ,213 Accounts payable and other liabilities excluding non-financial liabilities 50,772 50,772 Total 291, ,302 Notes 21

22 31 Dec 2013 Assets in the balance sheet Loan receivables and accounts receivable Total Accounts receivable and other receivables excluding interim receivables 70,234 70,234 Liquid funds 13,670 13,670 Total 83,904 83, Dec 2013 Liabilities in the balance sheet Other financial liabilities Total Borrowing (excluding liabilities related to financial leasing) 143, ,845 Liabilities to owners 115, ,916 Accounts payable and other liabilities excluding non-financial liabilities 46,144 46,144 Total 305, ,905 Property, plant and equipment Owned assets Property, plant and equipment are recognized as an asset in the balance sheet if it is probable that future economic benefits will accrue to the company and the cost of the asset can be calculated in a reliable way. Depreciation takes place over the useful life. The cost includes the purchase price as well as costs directly attributable to the asset such as costs for delivery and handling, installation, land registration, consultancy services and legal services. Leased assets The majority of lease contracts have been judged to be operating leases, whereby the risks and benefits are retained by the lessor which means that the lease charges are recognized as a cost linearly over the lease period. In cases where the Group has judged the lease contracts to be finance leases, the leases in question are recognized as the purchase of property, plant and equipment and as liabilities. Depreciation is carried out in the same way as if the company owned the asset. With finance leases the ongoing lease charges are divided into an interest portion, which is expensed, and a repayment portion. There are minor finance lease contracts. They are insignificant in terms of amounts which is why they have been recognized as operating leases. Depreciation principles Property, plant and equipment are recognized at cost less accumulated depreciation and write-down. Depreciation takes place linearly over the estimated useful life and is based on the assets cost. Land is not depreciated. Leased assets are also depreciated over the estimated useful life or, if it is shorter, over the contracted term of the lease. Linear depreciation is applied for all categories of asset as follows: Type of asset Buildings Land improvements Site leasehold Machinery Office equipment Useful life years 20 years 20 years 5 years 5 years Computers 3-5 years The company applies component depreciation for buildings. Cash flow statement The cash flow statement is prepared using the indirect method. The recognized cash flow only includes transactions that involve receipts or disbursements. Financial income and expenses Financial income and expenses comprise interest income on deposit money and receivables and interest-bearing securities, interest expenses on loans, exchange rate gains and losses on financial assets and liabilities, non-realized and realized gains on financial investments as well as derivative instruments used in the financial operation. Interest income on receivables and interest expenses on liabilities are calculated using the effective interest method. Effective interest is the interest rate at which the present value of all future receipts and disbursements during the fixed-interest period is equal to the carrying amount of the receivable or liability. Interest income includes transaction costs allocated to the period and any discounts, premiums and other differences between the original value of the receivable and the amount received on maturity. Pensions and other remuneration to employees The Group s pension commitment is classified as defined contribution. The ITP 2 plan s defined benefit pension commitment for retirement and family pensions for salaried employees in Sweden is secured through insurance in Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 3 Classification of ITP plans financed by insurance in Alecta, this is a defined benefit plan covering several employers. The company has not had access to information for the 2014 financial year to enable it to report its proportional share of the plan s obligations, plan assets and costs which meant it has not been possible to recognize the plan as a defined benefit plan. The ITP 2 pension plan secured through insurance in Alecta is therefore recognized as a defined contribution plan. The premiums for the defined benefit retirement and pension plan are calculated individually and are dependent on factors such as salary, previously earned pension and expected remaining period of service. The expected ordinary charges for the next reporting period for ITP 2 insurances signed with Alecta amount to SEK 3.0 million (2013: SEK 2.7 million). Notes 22

23 The company has a bonus programme which covers senior management in the Group. The performance-related pay for the CEO is based on the Group s financial and operational goals and can be a maximum of 6 months pay. The performance-related pay for other members of senior management is based on the Group s financial goals and can be a maximum of 3-4 months pay, depending on the individual contract. The bonus is recognized in the period it is earned. The recognized bonus payments for the financial year are shown in Note 7. Inventories Inventories are measured at the lower of cost or net realizable value and cost is measured in accordance with the first-in firstout (FIFO) principle. This means that inventories are entered at the lower of cost and fair value. Deductions are made in the consolidated accounts for internal gains that arise from deliveries between Group companies. Receivables Accounts receivable and other receivables are initially recognized at fair value and then at amortized cost using the effective interest method, less any reserve for reduction in value. Provisions Provisions are recognized when the Group has a legal or constructive obligation as a result of an event which has taken place and it is probable that an outflow of resources will be necessary in order to settle the obligation, and the amount can be calculated in a reliable way. Provisions are measured at the present value of the amount which is expected to be necessary to settle the obligation. A discount rate is used here before tax which reflects a current market assessment of the time-value of money and the risks associated with the provision. The increase in the provision relating to time elapsing is recognized as an interest expense. No such interest expenses have been recognized for 2014 or Equity Equity in the Group is distributed as follows: Share capital corresponds to the parent company s share capital in nominal amounts. Other capital contributed comprises all capital contributed by shareholders in addition to share capital. Any issue costs are recognized as a reduction. Reserves comprise amounts that are entered directly under equity as a result of the rules in IFRS. Reserves include hedging reserve and translation difference. Profit brought forward comprises accumulated profit from the Group s operation. In the parent company equity is classified in accordance with the rules in the Annual Accounts Act and divided into restricted and non-restricted equity. Key accounting estimates and assessments Important sources of uncertainty in estimates In order to prepare the financial statements the senior management and Board of Directors must make assessments and assumptions which affect the recognized asset and liability items and the income and cost items respectively in the accounts as well as other information submitted, including information about contingent liabilities. The accounting estimates and assessments dealt with in this section are those that are considered the most important in understanding the financial statements taking into account the degree of significant assessments and uncertainty. CL Intressenter s conditions for operation change gradually, which means these assessments also change. Impairment review of non-current assets CL Intressenter s tangible and intangible assets are measured at cost less accumulated depreciation/amortization and any write-down. CL Intressenter does not recognize any goodwill amortization because the asset is judged to have an indefinite useful life. Amortization is carried out over the calculated useful life to an assessed residual value. Both the useful life and the residual value are reviewed at the end of every accounting period at the minimum. For assessments regarding write-down requirements on goodwill, see Note 12. The carrying amount of the Group s non-current assets is reviewed at any time events or changes in circumstances indicate that the carrying amount is not recoverable. The carrying amount of intangible assets is reviewed every year. If such an analysis indicates too high a value, the asset s recoverable amount is established, which is the higher of net realizable value and value in use. Value in use is measured as the expected future discounted cash flow from the asset, or the cash-generating unit to which the asset belongs. Assessment of accounts receivable On the closing day CL Intressenter has SEK 340 (838) thousand in a provision for doubtful receivables. Management makes the assessment and determines the size of the provision based on the probability that the receivables will be paid taking into account confirmed losses in previous years, current payment patterns and the customers creditworthiness. If economic development in general, or for the industry specifically, were to worsen compared with the management s assessments, an increased provision, with a negative impact on results, may become necessary. Further disclosures about the provision for doubtful receivables, Notes 23