The Board of Directors and the Managing Director of. SenseAir AB Submit the following. Annual Report

Transcription

1 The Board of Directors and the Managing Director of SenseAir AB Submit the following Annual Report Table of Contents Administration report 1 Income statement 8 Balance sheet 9 Cash flow statement 11 Income statement SenseAir AB 12 Balance sheet SenseAir AB 13 Cash flow statement SenseAir AB 15 General accounting principles 16 Notes to the financial statements 22 Signatures of the annual report 34

2 1 Administration report The Board of Directors and the Managing Director of SenseAir AB, presents the following annual report for The company is applying calendar year as its fiscal year. All amounts are in ksek if otherwise is not specifically stated. General information about the business SenseAir is performing research and development as well as production in the area of infra-red gas measurements. The headquarters as well as production is located in Delsbo, municipality of Hudiksvall, Sweden. The company has developed a world leading technology for air and gas measurement and among other things offer solutions for measurement of air bound carbon dioxide, carbon monoxide and alcohol. The sensor technology is produced for both low and high- volume applications. Senseair holds a large market share in the HVAC segment, where the sensor-technology brings energy savings and improved indoor air quality. The company also manufactures sensors for alarm applications and for monitoring and steering of some bio-related processes where carbon dioxide is an important parameter. Senseair is exporting 90% of produced sensors to other European countries, Asia and North America. SenseAir s vision is to make a difference in people s lives through world leading gas sensing technology, aiming for a safer, healthier and more sustainable environment. The group consists of the parent company SenseAir AB (publ) and the fully owned subsidiaries SenseAir North America Inc., based in Portland Oregon, USA and SenseAir Chengdu Gas Sensors Co.,Ltd in Chengdu, China. The subsidiaries business is mainly sales of the products produced in Delsbo, Sweden. The parent company SenseAir AB (publ) is a public company where shares can be traded at Alternativa aktiemarknaden. The ownership of the company is concentrated to a few individuals/ companies. Listed below are the owners with votes exceeding 10%. Calectro Holding AB, 29,5% Hans Martin, 24,6% Arvid Egeland, 14,9% Inlandsinnovation AB, 11,3%

3 2 Business development and financial results Net sales, ksek R & D expenses, ksek Other operating income, KSEK Operating profit, ksek Net profit after tax, ksek Balance sheet total, ksek Net margin, % 16 8 neg neg Solidity, % Number of employees Net sales for the SenseAir reached KSEK ( KSEK) during the fiscal year, an increase with 26%. The demand for our sensor technology has been very strong during the fiscal year. 95% of the increase in sales comes from an increase in demand and 5% comes from the weaker Swedish krona. Sales to the Asian market reached ksek ( ksek), an increase with 45%. The strongest development in Asia comes from the Chinese market. Net sales to North America reached ksek ( ksek), an increase with 12%. The European market is also growing and net sales for the fiscal year ended at ksek ( ksek), an increase with 39%. The growth largely comes from the HVAC segment and sales of our world leading carbon dioxide sensor, S8. Other external income has increased with 39% and totaled ksek ( ksek). Sales of research and development services reached ksek ( ksek) and the external funds from Vinnova and EU totaled ksek (5 236kSEK). During the fiscal year we have increased our investments in research and development. The research and development expenses totaled ksek ( ksek). During the year 57% (58%) of the expenses was funded by external parties. The operating profit for the group totaled ksek ( ksek). Net sales of products have increased during the fiscal year while the expenses have increased in a slower pace, which explains the positive development of operating profit. The net results for the group totaled ksek (8 312 ksek). The cash flow for the fiscal year totaled ksek ( ksek). The reason for the positive development of the cash flow is the improvement in operating profit.

4 3 SenseAir AB Net sales, ksek R & D expenses, ksek Other operating income, ksek Net profit after financial items, ksek Net profit after tax, ksek Balance sheet total, ksek Net margin, % 14 6 neg neg neg Solidity, % Number of employees Definitions of KPI s are described under accounting principles. In the parent company the net sales totaled ksek ( ksek), a 24% increase. The operating income in the parent company totaled ksek (9 334 ksek). In addition to what is mentioned above about the group results, it can be added that the parent company during the fiscal year has increased the number of employees to 96 (88). The increase is due to the increase in production volume and increased activity in research and development. The administration costs added up to ksek ( ksek) during the year. The increase can be explained by the reclassification of one employee, project costs for the new IT platform and new human resource software. The sales costs totaled ksek ( ksek) during the fiscal year. The increased costs is due to increased sales activities and investments in exhibitions and a new website. The asset investments during the fiscal year totaled ksek (1 313 ksek) and are related to improvements in machinery and tools for current production. Major events during the fiscal year and the time thereafter The board of directors has during the fiscal year signed an agreement with a new CEO for Senseair, Peter Lageson. The contract with the interim CEO was canceled on December 1 st, 2016.

5 4 Research and development There is a strong focus on the future at Senseair, and the development of our world leading sensor technology is continuing with full speed. The awareness of the importance of measuring and understanding air quality around us is increasing. That also generates a greater interest for the solutions we offer to the market. There is a great interest for the company s technology and we cooperate with a number of different universities all around the world. Together we are focusing on analyzing and testing new approaches in the area of air and gas measurement, valuable for Senseair and the whole society. During the fiscal year we have participated in projects in the wireless technology and environmental measurements area. The work performed during the year by our research team, is essential for our future long term strategy and direction. The demand for products with low energy consumption in increasing. To meet this market we have during the year developed and released a low power product that can be operated wireless. The market for wireless solutions and in many cases battery driven applications with low power consumption is expected to grow rapidly and the reactions from the customers have been very positive in regards to our efforts. We see a continued strong interest from the automotive industry when it comes to sensor solutions for carbon dioxide as well as applications for alcohol measurement. The development of the HPP (high precision platform) that among other things can measure the alcohol level in exhaled air have continued during the year. The technology has been released as a control measure of alcohol at some workplaces, and we are starting to see some sales coming in. We have also during the fiscal year released a product for measurement of carbon dioxide in more extreme environments. Expected future development, major risks and other factors of uncertainty Net sales for the group increased during the year with 26%, which is very gratifying. The society is becoming more aware of the different environmental challenges that we are facing in the world. The environmental issues are more often prioritized and the technology that we offer fits right in to the needs of air and gas measurement going forward. The world leading technology is well suited for measurements of green-house gases, alcohol and methane. The ambition of the company is to increase investments in product development the coming years to meet this market need. Senseair is exposed to some commercial risks such as fluctuations in business cycles, increased competition from China and other low cost countries and the fluctuating currency. The demand for sensor technology for air and gas measurements is strong as a result of the increased focus on measurements of environmental issues globally. The risks are evaluated and actions are taken on a continuous basis when it comes to market strategy. The company s strategy is to offer the customer

6 5 world leading products, competence, service and high class quality. The group is showing the best financial result ever with a net profit margin of 16%. The company has exceeded set targets for net sales and profit and is leaving this fiscal year with a very strong liquidity. The company is now facing a number of years with high investments in research and development where we will try to make use of the great possibilities we have. The goal is to strengthen our sales organization internationally the coming years by increased presence out in the different markets. The future looks very exciting where we see really good opportunities for growth.

7 6 Equity Share capital Other equity including net profit of the year Equity assignable to the share owners Change of equity - Share capital Non restricted equity Total Equity Net profit of the year Exchange rate differences Total Restricted equity Share capital Reserve fund Revaluation fund Total At beginning of the year Change during the fiscal year Restricted equity Non restricted equity At beginning of the year Net profit for the year Non restricted equity

8 7 Proposed appropriations of profits The board of directors proposes that accumulated profits of SEK are disposed as follows: Amount in SEK Accumulated profits Net Profit for the year SEK The Board of Director proposes that the profits are brought forward as follows: For more detailed information about the financial results, please see the following income statement, Balance sheet and the adherent notes.

9 8 Income Statement -SenseAir Amounts in SEK thousand Note Net sales Cost for goods sold Gross profit Sales expenses Administrative expenses Research & Development expenses Other operating income Other operating expenses Operating income 5, Income from financial items Result from other securities and receivables accounted for as fixed assets Interest incomes and other similar profit/ loss items Interest expenses and other similar profit/ loss items Net income after financial items Net Income before taxes Income taxes Net profit for the year

10 9 Balance Sheet - SenseAir Amounts in SEK thousand Note ASSETS Fixed Assets Material Assets Land and buildings Leasehold improvments Plant and machinery Equipment, tools, fixtures and fittings Construction i progress and advance payments for tanginle fixed assets Financial Assets Minority interests Deferred taxes Other long term receivables Total fixed Assets Current Assets Inventory Inventory Goods in production Goods for Sale Prepaid to suppliers Short term receivables Accounts receivables Other short term receivables Prepaid expenses Short term investments Cash and bank 19, Total Current Assets TOTAL ASSETS

11 10 Balance Sheet - SenseAir Amounts in SEK thousand Note EQUITY AND LIABILITIES Equity Restricted equity Owners equity Other equity including profit of the year Provisions Deferred taxes Provisions for warranties Short term liabilities Invoiced but not recognized income Pre-payments from customers Account payables Tax liabilities Other short term liabilities Accruals and deferred income TOTAL EQUITY AND LIABILITIES

12 11 Cash flow statement - SenseAir Amounts in SEK thousand Note Cash flow from operations Result after financial items Adjustment for items not requiring an outflow of cash Income tax paid Cash flow from operating activities before changes in working capital Cash flows from changes in working capital Increase (-)/decrease (+) in inventories Increase (-)/decrease (+) in current receivables Increase (+)/decrease (-) current liabilities Cash flow from operating activities Investing activities Acquisition of tangible assets Acquisition of financial assets Cash flow from investments Financing activities Proceeds from borrowing - - Cash flow from financial items - - TOTAL CASH FLOW Cash and cash equivalents at beginning of period Exchange rate differences in cash Cash and cash equivalents at the end of the period

13 12 Income Statement - SenseAir AB Amounts in SEK thousand Note Net sales Cost for goods sold Gross profit Sales expenses Administrative expenses Research & Development expenses Other operating income Other operating expenses Operating income 5, Income from financial items Result from other securities and receivables accounted for as fixed assets Interest incomes and other similar profit/ loss items Interest expenses and other similar profit/ loss items Net income after financial items Net Income before taxes Appropriations, other Income taxes Net profit for the year

14 13 Balance Sheet - SenseAir AB Amounts in SEK thousand Note ASSETS Fixed Assets Material Assets Land and buildings Leasehold improvments Plant and machinery Equipment, tools, fixtures and fittings Construction i progress and advance payments Financial Assets Minority interests Investment in group companies 14, Other long term receivables Total fixed Assets Current Assets Inventory Inventory Goods in production Goods for Sale Accounts receivables Accounts receivables, internal Tax receivables - - Other short term receivables Prepaid expenses Short term investments Cash and bank 19, Total Current Assets TOTAL ASSETS

15 14 Balance Sheet - SenseAir AB Amounts in SEK thousand Note EQUITY AND LIABILITIES Equity Restricted equity Owners equity Reserve fund Non restricted equity Retained surplus (ackumulated) Net Income for the year Total equity Untaxed reserves Accumulated excess depreciation Tax allocation reserve Provisions Provisions for warranties Short term liabilities Invoiced but not recognized income Pre-payments from customers Account payables Tax payables Other short term liabilities Accruals and deferred income TOTAL EQUITY AND LIABILITIES

16 15 Cash flow statement - SenseAir AB Amounts in SEK thousand Note Cash flow from operations Result after financial items Adjustment for items not requiring an outflow of cash Income tax paid Cash flow from operating activities before changes in working capital Cash flows from changes in working capital Increase (-)/decrease (+) in inventories Increase (-)/decrease (+) in current receivables Increase (+)/decrease (-) current liabilities Cash flow from operating activities Investing activities Acquisition of tangible assets Acquisition of financial assets Cash flow from investments Financing activities Proceeds from borrowing - - Cash flow from financial items - - TOTAL CASH FLOW Cash and cash equivalents at beginning of period Cash and cash equivalents at the end of the period

17 16 Notes to the financial statements Amounts in SEK thousand unless otherwise stated General accounting and valuation principles The Annual report has been prepared in accordance with the Annual Accounts Act and the guidelines issued by the Swedish Accounting Standards Board BFNAR 2012:1 concerning annual reports and group consolidation (K3). The accounting principles are the same as previous year. consolidation Senseair AB establishes a group consolidation. More information about group companies can be found in note 16. The subsidiaries are included in the group consolidation from the day when the major control of the subsidiary is transferred to the group. They are excluded from the group consolidation from the day when major control is transferred out of the group. The group consolidation is established by using the acquisition accounting method. The time of acquisition is the time when the major control of the subsidiary is received. Identified assets and debts are valued to real value at the time of the acquisition. The minority s part of the acquired assets is valued to the real value at the time for the acquisition. Goodwill is the difference between the acquired and identified assets at the date of acquisition, and the acquisition value including minority interest and is initially valued to the purchased value. Internal transactions are fully eliminated in the group consolidation. Subsidiaries in other countries are creating their annual report in foreign currencies. Re-evaluation of items in the balance sheet and income statement is done by using closing rate and current rate for the date of the transaction. The exchange rate differences that are calculated are accounted for as a part of the group equity. Recognition of revenue Revenue from sales of goods is recognized upon delivery of goods to the customer, in accordance with the terms of sales. Sales are reported net of VAT and discounts. Revenue from services is recognized at delivery of service to the customer. Income in regards to contractual work out of fixed price contracts are accounted for by calculating the completed percentage of the project. The calculation is done by comparing the actual work completed to the planned total work for the project. State contributions Senseair is receiving state contributions that are associated with future deliverables. They are received in advance and are accounted for as a debt. The debt is decreased and an operating income is accounted for at the time when the results from the projects are delivered. A contribution that is not associated with future deliverables is accounted for under other operating

18 17 income when the term for receiving the contribution is fulfilled. A state contribution that is associated with acquisition of fixed assets, is in the group accounted for as a prepaid income. This item is released linear to the lifespan of the asset and is then accounted for under other operating income. Taxes Current tax in the income statement consists of current tax and deferred tax. Current tax is the income tax calculated on the taxable results for the fiscal year and tax from previous years that has not yet been accounted for. Deferred tax is income tax in regards to future fiscal year(s), coming from transactions from previous year(s). Current tax liabilities/ - assets are valued at what, in its assessment shall be paid to or received from the Swedish Tax Agency. The assessment is made under the tax rules and tax rates enacted, or are announced and are likely to be set. Deferred tax receivables have been valued to the amount that likely, at a maximum will be received based on current and future taxable results. A re-assessment of the valuation is made on each balance day. In the group consolidation the untaxed reserves are split into deferred tax and equity. Untaxed reserves are accounted for including deferred tax debt. Inventories Inventories are stated at the lower of cost or net realizable value, with due consideration for obsolescence. The cost is calculated as weighted average costs. In addition to costs for raw material the expenses for transportation of goods is included. In the standard cost for semi-finished and finished goods, the direct production costs and production overhead costs are included, if not considered insignificant in relation to the total production cost. At valuation normal operating capacity has been considered. Remunerations to employees Short term remunerations in the group are salary, social security contributions, paid vacation, paid sick leave, sick leave and bonus. Short term remunerations are accounted for as a cost and a debt when there is a legal or informal obligation to pay. Remuneration after employment Plans for remunerations after employment has been classified as either fee- or benefit based. The group only holds fee based pension plans. When applying fee based plans, a fixed amount is paid, normally to an insurance company, where the employer has no obligation towards the employee after terminated employment. The size of the payments to the employee after terminated employment depends on the fees that have been paid

19 18 and the return on that capital. The expenses for fee based pension plans are accounted for as a cost in the income statement. Fees not paid, are accounted for as a debt. Other long term remunerations to employees Debt for other long term remunerations to employees is accounted for as current value at the closing date. Remunerations at termination of employment Remuneration at termination of employment, in the case it s not giving any financial benefits for the company, is accounted for as a debt and a cost for the company only when there is a legal or an informal obligation to: a) Terminate an employee or a group of employees before the normal time for the termination of the contract, or: b) Give remuneration offering to promote voluntary termination of employment. Remuneration at termination of employment is first accounted for when the company has a detailed plan for the termination in place and has no possibility to cancel the plan. Financial instruments Financial instruments that are accounted for in the balance sheet include securities, account receivables, other receivables, short term investments, account payables and loans. The instruments are recognized and accounted for on the contractual date. Financial assets are removed from the balance sheet when the group has transferred all risks and benefits associated with owning the instrument. Financial debts are removed from the balance sheet when the liability has been rectified or in any other way been canceled. Account receivables and other receivables Receivables are accounted for as current assets and are valued at the amount that is expected to be paid after deduction of a potential insecure part of the receivable. Loans and account payables Loans and account payables are accounted for at purchasing price after deduction of transaction costs. Foreign currency Transactions in foreign currency Receivables and liabilities denominated in foreign currencies are translated at the closing rate. Nonmonetary transactions are not translated but accounted for at the exchange rate at the time for the

20 19 transaction. Translation of foreign business Assets and debts, including goodwill and other group related valuations are translated to closing rate. Income and expenses are translated at the current rate on each transaction date, if not translated to the actual average rate over the period. Exchange rate differences arriving from the translation are accounted for directly towards equity. Warranty reserve A provision for warranties is recognized in the cases, during the financial year or previously, sold goods are likely to be claimed from one or more customers. The calculation of the provision is based on historical data and/ or experience values. An analysis of possible outcomes in relation to its probability is the basis of the provision. Leasing leaseholder A financial leasing agreement is a contract between two parties where the risks and benefits from owning an asset is transferred from the lease giver to lease holder. An operational leasing agreement is a contract that is not a financial leasing agreement. Operational leasing agreements Leasing fees according to the operational leasing agreements, including additional entry leasing fee but excluding expenses for services as insurance and maintenance, are accounted for as a cost linear over the leasing period. Fixed tangible assets Fixed tangible assets are valued as acquisition cost less accumulated depreciation and devaluations adding potential revaluation. Purchasing price including all other costs related to the purchase is included in the total acquisition cost. Additional expenses Additional expenses that fulfill the prerequisites to be considered an asset are included in the net value of the asset. Expenses for maintenance and reparations are accounted for as a cost directly at the time of the transaction. There is no difference in usage of main components for existing tangible assets and therefore no split has been made for separate depreciation. Depreciation Depreciation is done linear over the period of expected future usage as financial benefits are expected out of this asset during that time. The depreciation is accounted for as a cost in the income statement.

21 20 The following depreciation percentages are applied: Material assets (%/year) SenseAir AB (%/ year) Buildings 2 2 Leasehold improvements 5 5 Plant and machinery Equipment, tools, fixtures and fittings The difference between the depreciations above and taxable depreciations is at any case shown as accumulated extra depreciation in the income statement for the individual companies. Extra depreciation is an untaxed reserve. Cash flow statement The cash flow analysis is established by using the in-direct methodology. Cash flow accounted for include only transactions followed by an in our out payment. The group is classifying cash as the disposables in bank or other credit institutions. Accounting and valuation principles in the parent company The same accounting and valuation principles are valid for the parent company except from what is described below. State contributions State contributions are accounted for applying the same accounting principles as in the group, except from the state contributions related to an acquisition of and asset. Such contributions are in the parent company accounted for as a deduction of the assets purchasing value. The contribution is decreasing the amount that is the base for depreciation by that the depreciation costs. Equity Equity is split in restricted and non- restricted equity, in accordance with Swedish law. Untaxed reserves The untaxed reserves are accounted for in gross values in the balance sheet, including the deferred tax associated with the reserve. Appropriations Changes of the untaxed reserves are accounted as appropriations in the income statement. contributions are accounted for within the appropriations. Shares in subsidiaries

22 21 Shares in subsidiaries are valued as the purchasing value after deduction of depreciations. Included in the purchasing value is the price for the shares and other costs associated with the transaction. Capital injections and group contributions are added to the purchasing value when they occur. Dividend from the subsidiaries is accounted for as an income. Definition of key ratios Net Sales Nets sales is the sales value of goods, added up with the exchange rate differences arising from the sale. Other operating income Other operating income include contributions for research and development, exchange rate profits, profits on sold assets and sales of research and development services. Research and development costs Total expenditure on research and development such as salaries, consultant fees and other development projects, that s consistent with the activities of research and development. Operating profit Profit before financial items and tax Profit after tax Profit after financial items less tax Balance sheet total Total assets Profit margin Profit after financial items/ net sales Solidity Total equity and untaxed reserves deducted by deferred tax (22%)/ Balance sheet total Average number of employees Number of full-time employees the sum of the total number of hours worked per person excluding hours at overtime/ normal annual working hours (1 850 hours)

23 22 Notes Note 1 Assumptions and judgements Inventory Inventories are stated at the lower of cost or net realizable value, with due consideration for obsolescence. The cost is calculated as weighted average costs. In addition to costs for raw material the expenses for transportation of goods is included. In the standard cost for semi-finished and finished goods, the direct production costs and production overhead costs are included, if not considered insignificant in relation to the total production cost. At valuation normal operating capacity has been considered. Accounts receivables The group is monitoring the financial stability of the customers and under with circumstances they operate to see the likeliness of a customer payment associated to a certain receivable. The disposal in regards to insecure receivables is based on assessments made about the solvency of the customer. Warranties The calculation of the provision is based on historical data and/ or experience values. An analysis of possible outcomes in relation to its probability is the basis of the provision. Note 2 Revenue by business and geographic segment Revenue by geographic segment Sweden Europé North America Asia and other Total Revenue by geographic segment Sweden Europé North America Asia and other Total

24 23 Note 3 Audit fees and expenses Audit fees- PWC AB Audit fees - KPMG AB Others Total Audit fees- PWC AB Audit fees - KPMG AB Others Total Note 4 Other operating income Government grants Invoiced R&D Exchange rate profits Others Total Government grants Invoiced R&D Exchange rate profits Others Total Note 5 Employees, personnel costs and remunerations to management Average number of employees Of which men Of which men Sweden Total parent company Subsidiaries USA China Total subsidiaries total

25 24 Distribution of women and men in company management % Women % Women Board of directors - - Other key managment personnel total Board of directors - - Other key managment personnel Salaries, other remunerations and social security costs Board of directors and CEO Other managerial personnel Other employees Total Social security costs (of that pension costs) Subsidiaries Board of directors and CEO Other managerial personnel Other employees Total Social security costs (of that pension costs) - - total Board of directors and CEO Other managerial personnel Other employees Total Social security costs (of that pension costs) Remunerations to the managment group of the parent company relates to 6 (7) persons. Of the parent company's pension costs, 924 ksek (1 264kSEK) is related to the managment group of the company 7 (8) persons. 2. Remunerations to the managment group of the group relates to 7 (8) persons. Of the parent company's pension costs, 924 ksek (1 264kSEK) is related to the managment group of the company 8 (9) persons. Severance packages Notice of termination for the CEO is 6 months. Upon termination by the company, he is entitled to payment in lieu of notice and the right to severance package equivalent to 6 months. Notice of termination for the Sales Director of Asia by the company and the Sales Director of Asia is 6 months. Upon termination by the company, he is entitled to payment in lieu of notice and the right to severance pay equivalent to 12 months.

26 25 Remunerations to Board of Directors and CEO 2016 Salary and Board Variable Other Pensions remuneration remuneration benefits Chairman - Jan Carlsson CEO Lennart Ivarsson (to 30th of November 2016) CEO Peter Lageson (from 1st of December 2016) Board member Bengt-Göran Persson Board member Magnus Jonsson Board member Karl-Johan Pettersén Total Financial Other Total Pension instruments etc remunerations obligations Chairman - Jan Carlsson CEO Lennart Ivarsson (to 30th of November 2016) CEO Peter Lageson (from 1st of December 2016) Board member Bengt-Göran Persson Board member Magnus Jonsson Board member Karl-Johan Pettersén Total Salary and Board Variable Other Pensions remuneration remuneration benefits Chairman - Jan Carlsson (from 20th of May, 2015) CEO - Lennart Ivarsson Board member Bengt-Göran Persson Board member Magnus Jonsson (prev. Chairman) Board member Karl- Johan Pettersén Total Financial Other Total Pension instruments etc remunerations obligations Chairman - Jan Carlsson (from 20th of May, 2015) CEO - Lennart Ivarsson Board member Bengt-Göran Persson Board member Magnus Jonsson (prev. Chairman) Board member Karl- Johan Pettersén Total

27 26 Note 6 Operational leasing - lessee Assets from operational lease agreements Total lease expenses Agreed future minimum lease payments from non cancellable agreements that are due: within a year - - between one and five years after five years Assets from operational lease agreements Total lease expenses Agreed future minimum lease payments from non cancellable agreements that are due: within a year - - between one and five years after five years Note 7 Tax on this years profit or loss Current tax Deferred tax Total Net income before taxes Tax according to actual tax rate (22%) Tax-impact from non deductable costs Tax-impact from non taxable income - -5 Taxable deficit for which no defered tax receivable is accounted for Impact from foreign tax rates Actual tax costs accounted for Current tax Deferred tax - - Total Net income before taxes Tax according to actual tax rate (22%) Tax-impact from non deductable costs Tax-impact from non taxable income 1-5 Taxable deficit for which no defered tax receivable is accounted for Impact from foreign tax rates -1 - Actual tax costs accounted for

28 27 Note 8 Appropriations of profit or loss The board of directors proposes that non restricted equity of SEK are brought forward as follows: Accumulated profits brought forward: Note 9 Land and Buildings Accumulated cost At beginning of the year Accumulated depreciation At beginning of the year Depreciation for the year Net book value at end of year Accumulated cost At beginning of the year Accumulated depreciation At beginning of the year Depreciation for the year Net book value at end of year Note 10 Leasehold improvements Accumulated cost At beginning of the year Write downs by rural support Accumulated depreciation At beginning of the year Depreciation for the year Net book value at end of year Accumulated cost At beginning of the year Write downs by rural support Accumulated depreciation At beginning of the year Depreciation for the year Net book value at end of year

29 28 Note 11 Plant and machinery Accumulated cost At beginning of the year Aquisitions Write downs by rural support Accumulated depreciation At beginning of the year Depreciation for the year Net book value at end of year Parent Company Accumulated cost At beginning of the year Aquistions Write downs by rural support Accumulated depreciation At beginning of the year Depreciation for the year Net book value at end of year Note 12 Equipment, tools, fixtures and fittings Accumulated cost At beginning of the year Acqisitions Disposals Exchange rate differences Write downs by rural support Accumulated depreciation At beginning of the year Disposals Depreciation for the year Net book value at end of year

30 29 Accumulated cost At beginning of the year Acqisitions Disposals Write downs by rural support Accumulated depreciation At beginning of the year Disposals Depreciation for the year Net book value at end of year Note 13 Construction in progress and advance payments for tangible fixed assets At the beginning of the year Reclassifications Acqisitions Value at the end of the year At the beginning of the year Reclassifications Acqisitions Value at the end of the year Note 14 information The company is the parent company to the 100% owned subsidiaries SenseAir Gas Sensors Co,.Ltd (China) and Senseair North America Inc. (USA) Of the total purchases and sales for the parent company, 0% of the purchases and 19% of the sales represents transactions to and from other group companies.

31 30 Note 15 Minority interests Accumulated cost At the beginning of the year - - Acqisitions Depreciations Total - - Accumulated cost At the beginning of the year - - Acqisitions Depreciations Total - - Specification of minority interests Minority company Directly owned Adjusted eqity/ Net profit Share % Minority equity value in Bookvalue in parent company Nova IR Inc. neg 38,3 - - Note 16 Investments in group companies Accumulated cost At beginning of the year Total Specification of parent company's investment in shares and participations in subsidiaries Refers to the share of capital corresponding also to the share of voting rights. Company/ Corp id No/ Registered office No of shares Share % Book value SenseAir Chengdu Gas Sensors Co, Ltd Chengdu, Kina SenseAir North America Inc. Tucson Arizona, USA Note 17 Other long- term receivables Accumulated cost At beginning of the year Value at year end 20 20

32 31 Note 18 Prepaid expenses and accrued income Prepaid rental fees Prepaid leasing fees Prepaid insurances Prepaid project costs Others Total Prepaid rental fees Prepaid leasing fees Prepaid insurances Prepaid project costs Others Total Note 19 Cash and bank The following cash and bank items are included: Cash and bank Other short term investments, equal to cash and bank Parent Company The following cash and bank items are included: Cash and bank Other short term investments, equal to cash and bank The items above have been classified as cash because: - The risk for fluctuations in value is very limited. - They can quickly be transfered into cash. - Their duration time is maximum 3 months from date of acquisition. Note 20 Other information about the cash flow statement Adjustments for items not included in the cash flow etc Depreciation Write down adjustments Other depositions Balance at end of year Depreciation Write down adjustments Other depositions Balance at end of year

33 32 Note 21 Equity and ratio value A shares Number of shares Ratio value 0,04 0,04 B shares Number of shares 0,04 0,04 Ratio value Note 22 Accumulated excess depreciation Machinery, tools and equipment Total Note 23 Tax allocation reserve Tax allocation reserve, reserved fiscal year Tax allocation reserve, reserved fiscal year Total Note 24 Other provisions Warranties Warranties Note 25 Invoiced but not recogzined income Contractual work Accumulated and recognized income Accumulated and recognized contractual expenses and profit Accumulated and recognized income Accumulated and recognized contractual expenses and profit The total contractual costs are expected to exceed the total income for the contractual work with 0 ksek (2 290 ksek). The recognized and invoiced income at the 31st of December 2016 was 0 ksek (3 750 ksek). Income from contractual work in regards to fixed price contracts is accounted for by calculating the completed percentage of the project. The calculation is done by comparing the completed work to date to the total planned work.

34 33 Note 26 Accruals and deferred income Parent compan Accrued holiday allowances Accrued social security fees Other personell debt Prepaid income for sales of services Prepaid income for state/eu contributions Others Accrued holiday allowances Accrued social security fees Other personell debt Prepaid income for state/eu contributions Others Note 27 Pledged assets and contingent liabilities Debts to credit institutions Chattel mortages in regards to credit institutions Other pledged assets and contingent liabilities Chattel mortages in regards to state contributions Total Contingent liabilities On the closing date the contingent liabilities of the group leveled 14kSEK ( 77kSEK). Note 28 Pledged assets and contingent liabilities - Debts to credit institutions Chattel mortages in regards to credit institutions Other pledged assets and contingent liabilities Chattel mortages in regards to state contributions Total Contingent liabilities On the closing date the contingent liabilities of the parent company leveled 14kSEK ( 77kSEK).

35 34