Ironman Denmark ApS. Hannovergade 8, 2300 København S. Annual report for the period 1 October December 2013 (15 months)

Transcription

1 Ironman Denmark ApS Hannovergade 8, 2300 København S CVR No Annual report for the period 1 October December 2013 (15 months) Approved at the annual general meeting of shareholders on 17 June 2014 As chairman:... Thomas Veje Olsen

2 Contents Management's review 1 Management's review 1 Statement by management on the annual report 2 Independent auditor's reports 3 Financial statements Income statement 5 Balance sheet 6 Statement of changes in equity 8 Notes Accounting policies 9 Uncertainty as to going concern 12 Staff costs 12 Amortisation/depreciation and impairment of intangible assets and property, plant and equipment 12 Financial income 12 Financial expenses 12 Tax for the year 13 Intangible assets 13 Property, plant and equipment 14 Share capital 14 Security for loans 14 Contingent liabilities and other financial obligations 14 Contingent assets 15 Related parties /

3 Management's review Management's review The company's business review The companys main purpose is to organise sports events and related business. Unusual matters having affected the financial statements In the year, the company merged with its affiliated companies before it was sold to World Triathlon Corporation. As a result of the sale, the fiscal year was extended by three months, so the reporting period covered by the income statement is 15 months, ending at 31 December 2013 in accordance with the group's financial year. As the merger is an intra-group restructuring, it is presented in accordance with the pooling-of-interests method as if the four entities had always been combined. The company had lost more than half of its share capital at the end of the fiscal year. Management expects the capital to be restored through own earnings within the coming years. Financial review The income statement for 2012/13 shows a loss of -3,804,312 against 181,766 last year, and the balance sheet at 31 December 2013 shows a deficit on equity of -2,952,537. Management considers the result for 2013 satisfactory given that the year was affected by extraordinary transition costs. Looking into 2014 and 2015, management expects equity to be restored through enhanced revenue and profits, driven by increased sports events activity. Also, the ultimate parent company, World Triathlon Corporation, has issued a letter of subordination agreeing to let all other creditors take precedence over payables to the parent company and entities fully controlled by the parent company until at least 3 June Against this background, management has presented the financial statements on a going concern assumption. Post balance sheet events No significant events have occurred subsequent to the financial year-end. 1

4 Statement by management on the annual report Today, management has discussed and approved the annual report of Ironman Denmark ApS for the financial year 1 October December The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the company's financial position at 31 December 2013 and of the results of the company's operations for the financial year 1 October December In our opinion, the management's review includes a fair review of the matters dealt with in the management's review. We recommend the adoption of the annual report at the annual general meeting. Copenhagen, 17 June 2014 Executive board: Thomas Veje Olsen Supervisory board: Steven Louis Johnston James Patrick Gramling Thomas Günther Dieckhoff Andrew Lawrence Messick 2

5 Independent auditor's reports To the shareholders of Ironman Denmark ApS Report on financial statements We have audited the financial statements of Ironman Denmark ApS for the financial year 1 October December 2013, which comprise an income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. Management's responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act. Further, management is responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with international standards on auditing and additional requirements according to Danish audit regulations. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including an assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view. The purpose is to design audit procedures that are appropriate in the circumstances, but not to express an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used, the reasonableness of accounting estimates made by management as well as the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit has not resulted in any qualification. 3

6 continued - Independent auditor's reports Opinion In our opinion, the financial statements give a true and fair view of the company's financial position at 31 December 2013 and of the results of its operations for the financial year 1 October December 2013 in accordance with the Danish Financial Statements Act. Statement on the management's review In accordance with the Danish Financial Statements Act, we have read the management's review. We have not performed any further procedures in addition to the audit of the financial statements. On this basis, it is our opinion that the information provided in the management's review is consistent with the financial statements. Copenhagen, 17 June 2014 Ernst & Young Godkendt Revisionspartnerselskab Peter Jensen state authorised public accountant 4

7 Income statement for the period 1 October December 2013 Notes 2012/13 15 months 2011/12 12 months Gross margin Staff costs Amortisation/depreciation and impairment of intangible assets and property, plant and equipment Operating profit/loss Financial income Financial expenses Pre-tax profit/loss Tax for the year Profit/loss for the year Recommended appropriation of the profit/loss for the year Retained earnings/accumulated loss

8 Balance sheet at 31 December Notes 31/ / Assets Fixed assets Acquired intangible assets Intangible assets Leasehold improvements Plant and machinery Other fixtures and fittings, tools and equipment Property, plant and equipment Other receivables Investments Total fixed assets Current assets Raw materials and consumables Inventories Trade receivables Receivables from group entities Income taxes receivable Prepayments Other receivables Receivables Cash Total current assets Total assets

9 Balance sheet at 31 December Notes 31/ / Equity and liabilities Equity 10 Share capital Retained earnings/accumulated loss Total equity Liabilities Prepayments received from customers Trade payables Payables to group entities Income taxes payable Other payables Short-term liabilities Total liabilities Total equity and liabilities

10 Statement of changes in equity () Share capital Retained earnings/accumulated loss Total Balance at 1/ Profit/loss for the year, cf. appropriation of profit/loss Equity at 1/ Profit/loss for the year, cf. appropriation of profit/loss Equity at 31/

11 Notes 1. Accounting policies The annual report of Ironman Denmark ApS has been presented in accordance with the provisions of the Danish Financial Statements Act as regards reporting class B enterprises. The accounting policies applied by the company are consistent with those of last year. Reporting currency The financial statements are presented in Danish kroner. Intra-group business combinations Ingra-group mergers are accounted for in accordance with the pooling-of-interests method, implying that the acquirer recognises the acquiree's assets and liabilities at former carrying amounts. Comparatives are restated as if the four entities had always been combined. As a result of the intra-group mergers and the inclusion into World Triathlon Corporation, the financial year has been extended to cover a period of 15 months, ending at 31 December Currency translation Transactions denominated in foreign currencies are translated into Danish kroner at the exchange rate at the date of the transaction. Receivables, payables and other monetary items denominated in foreign currencies are translated into Danish kroner at the exchange rate at the balance sheet date. Realised and unrealised exchange gains and losses are recognised in the income statement as financial income/expenses. Income statement Revenue Income from the rendering of services, comprising registration fees for participation in sports events, is recognised as revenue as the services are rendered, implying that revenue corresponds to the market value of the services rendered in the year (production method). Revenue is measured net of all types of discounts/rebates granted. Also, revenue is measured net of VAT and other indirect taxes charged on behalf of third parties. Gross margin With reference to section 32 of the Danish Financial Statements Act, the items 'Revenue', 'Cost of sale', 'Other external expenses' and 'Other operating income' are consolidated into one item designated 'Gross margin'. Other external expenses Other external expenses include the year's expenses relating to the entity's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs Staff costs include wages and salaries, including compensated absence and pensions, as well as other social security contributions, etc. made to the entity's employees. The item is net of refunds made by public authorities. 9

12 Notes 1. Accounting policies - continued Amortisation/depreciation and impairment of intangible assets and property, plant and equipment The item comprises amortisation/depreciation and impairment of intangible assets and property, plant and equipment. The estimated useful lives and the residual value for intangible assets are as follows: Useful life (year) Residual value Completed development projects 3 0 Property, plant and equipment are depreciated on a straight-line basis over the expected useful life of each individual asset. The depreciation basis is the cost and less expected residual value. The expected useful lives and the residual value of the assets are as follows: Useful life (year) Residual value Leasehold improvements 5 0 Plant and machinery 5 0 Other fixtures and fittings, tools and equipment 3 0 Financial income and expenses Financial income and expenses are recognised in the income statements at the amounts that concern the financial year. Net financials include interest income and expenses as well as allowances and surcharges under the advance-payment-of-tax scheme, etc. Tax Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity. Balance sheet Intangible assets Other intangible assets include development projects and other acquired intangible rights, including software licences, distribution rights and development projects. Other intangible assets are measured at cost less accumulated amortisation and impairment losses. Development projects are capitalised if they are clearly defined and identifiable and the following recognition criteria can be satisfied: the technical feasibility of completing the project can be demonstrated, plans are to produce and market the product or to use the product or the process, sufficient technical and financial resources to complete and use or sell the project are available, it is probable that the project will generate future economic benefits and that a potential, future market or possibility of internal use in the entity exists, the cost can be made up reliably. Development costs not satisfying the above criteria are expensed in the income statement as incurred. The cost of development projects is measured at direct costs incurred as well as a portion of costs indirectly attributable to the individual development projects. 10

13 Notes 1. Accounting policies - continued Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Impairment of fixed assets Intangible assets and property, plant and equipment as well as investments in subsidiaries and associates are reviewed for impairment on an annual basis. Where there is indication of impairment, each individual asset or group of assets generating independent cash flows is tested for impairment. The carrying amount of impaired assets is reduced to the higher of the value in use and the net selling price (recoverable amount). Where an impairment loss is recognised on a group of assets, a loss is first allocated to goodwill and then to the other assets on a pro rata basis. Receivables Receivables are measured at amortised cost, which usually corresponds to the nominal value. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired, in which case the carrying amount is reduced to the net realisable value. Prepayments Prepayments comprise prepaid expenses regarding subsequent financial reporting years. Cash and cash equivalents Cash comprises cash balances and bank balances. Equity Proposed dividend Dividends proposed for the financial year are presented as a separate item under Equity'. Income tax Current tax payables and receivables are recognised in the balance sheet as the estimated tax charge in respect of the taxable income for the year, adjusted for tax on prior years' taxable income and tax paid on account. Provisions for deferred tax are calculated, based on the liability method, of all temporary differences between carrying amounts and tax values, with the exception of temporary differences occurring at the time of acquisition of assets and liabilities neither affecting the results of operations nor the taxable income, as well as temporary differences on non-amortisable goodwill. Deferred tax is measured according to the taxation rules and taxation rates in the respective countries applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the value at which they are expected to be utilised, either through elimination against tax on future earnings or through a set-off against deferred tax liabilities within the same jurisdiction. Liabilities Financial liabilities are recognised on the raising of the loan at the proceeds received net of transaction costs incurred. Interest-bearing debt is subsequently measured at amortised cost, using the effective interest rate method. Borrowing costs, including capital losses, are recognised as financing costs in the income statement over the term of the loan. Other liabilities are measured at net realisable value. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. 11

14 Notes 2. Uncertainty as to going concern The company has lost its equity and must, according to the Danish Companies Act, adopt measures to restore it. The company's budget for 2014 shows a profit based on higher revenue from increased sports events activity. Furthermore, management expects a significant reduction in expenses compared to 2012/13 as the company is now fully integrated in the group. Moreover, the ultimate parent company, World Triathlon Corporation, has issued a letter of subordination agreeing to let all other creditors take precedence over payables to the parent company and entities fully controlled by the parent company until at least 3 June Against this background, management has presented the financial statements on a going concern assumption. 2012/13 15 months 2011/12 12 months 3. Staff costs Analysis of staff costs: Wages/salaries Other social security costs Amortisation/depreciation and impairment of intangible assets and property, plant and equipment Amortisation of intangible assets Impairment of intangible assets Depreciation of property, plant and equpiment Impairment of property, plant and equipment Financial income Other financial income Financial expenses Other financial expenses

15 Notes 2012/13 15 months 2011/12 12 months 7. Tax for the year Estimated tax charge for the year Tax adjustments, prior years Intangible assets () Acquired intangible assets Cost Balance at 1/ Additions in the year Disposals in the year Cost at 31/ Amortisation and impairment losses Balance at 1/ Amortisation in the year Impairment losses in the year Reversal of amortisation and impairment losses, disposals Amortisation and impairment losses at 31/ Carrying amount at 31/

16 Notes 9. Property, plant and equipment () Leasehold improvements Plant and machinery Other fixtures and fittings, tools and equipment Total Cost Balance at 1/ Additions in the year Cost at 31/ Depreciation and impairment losses Balance at 1/ Depreciation in the year Impairment losses in the year Depreciation and impairment losses at 31/ Carrying amount at 31/ / / Share capital Analysis of the company's share capital, : 80 share(s) of each The company's share capital has remained 80,000 over the past 4 years. 11. Security for loans No assets had been pledged as collateral or otherwise charged at 31/ Contingent liabilities and other financial obligations Other financial obligations Rent and lease liabilities include a rent obligation totalling 107,886, which is equal to six months' rent. Payables to group entities of 1,720,923 rank after all other creditors until at least 3 June

17 Notes 13. Contingent assets The company has tax loss carry-forwards totalling 3,857,611, resulting in a deferred tax asset. This has not been recognised in the balance sheet due to uncertainty about utilisation of the tax losses. 14. Related parties Information about consolidated financial statements: Parent World Endurance Holdings, Inc World Endurance B.V. Domicile Florida, USA Amsterdam, The Netherlands Requisitioning of the parent's consolidated financial statements Information about shareholders holding 5% or more of the share capital or the voting rights Name World Endurance B.V. Domicile Amsterdam, the Netherlands 15

18 Ernst & Young P/S - Gyngemose Parkvej Søborg, Denmark - ey.copenhagen@dk.ey.com