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FACC AG

Annual Report Jun 30, 2017

743_10-k_2017-06-30_54296aab-98d3-453e-97b3-68ab58b30730.pdf

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ANNUAL FINANCIAL REPORT 2016/17

Pilot. Passion. Partnership.

Pilot. Passion. Partnership.

Group Management Report of FACC AG for the 2016/2017 Financial Year

1. BUSINESS ENVIRONMENT

1.1. MACRO-ECONOMIC CONDITIONS

In 2016, the global economy grew by 2.2% compared with 2.6% in the previous year. The growth momentum was slowed by the weak US economy in the first half of the year coupled with the recession in Russia and Brazil. Growth in the industrialised countries remained sluggish in the year under review, while it stabilised in the emerging economies following a slowdown lasting several years. The US economy grew by 1.6% in 2016 compared with 2.5% in the previous year, with foreign trade mainly bolstering growth. Whereas, investments and private consumption failed to meet expectations. The Eurozone generated moderate growth, with the economy expanding by 1.7% in 2016 compared with 2.0% in 2015. This trend was favoured by the European Central Bank's expansionary monetary policy, continued low oil prices and the depreciation of the euro against other currencies. The economic development in China exceeded expectations in 2016, with growth stabilising at 6.7%. Business activities started to pick up again in the construction, retail and real estate sectors and the weak currency led to a rise in global demand and a higher export volume. The weak economy and oversupply put pressure on oil prices. The EIA averaged the price of a barrel of Brent crude oil at US dollar 43 over the year. At the end of September 2016, the 14 OPEC states agreed on market stabilisation measures aimed at reducing the oversupply and raising the price level.

1.2. INDUSTRY-SPECIFIC CONDITIONS IN THE AVIATION INDUSTRY

The aviation industry was influenced by a number of factors in 2016: Political instability dampened growth, which diverged greatly from region to region. Above all on international routes linking Europe and Asia, demand remained sluggish, while the African, US and Eastern European markets recovered. Global passenger traffic increased by 6.3% in 2016. In Asia, demand rose by 8.9%, in North America by 3.2% and in Europe by 3.8%.

Low fares stimulated demand as falling fuel prices and competitive pressure led airlines to reduce ticket prices. Rising passenger numbers prompted airlines to expand their fleets, with the global fleet growing by 5.2% in 2016.

According to the International Air Transport Association IATA, airlines posted record profits in 2016. The industry's net income reached US dollar 35.6 billion, compared with US dollar 35.3 billion in 2015. This is mainly attributable to low oil prices, which according to the EIA are likely to remain at less than US dollar 60 a barrel through 2020. Furthermore, airlines deployed more efficient aircraft and reaped the benefits of the restructuring measures successfully undertaken in the previous years.

In 2016, Airbus and Boeing delivered a total of 1,436 aircraft compared with 1,397 in the previous year. In the same period, Boeing and Airbus sold a total of 1,419 new aircraft, with the book-to-bill ratio amounting to almost 1:1. At 13,442, the order backlog for aircraft seating 100 or more passengers remained at the same level as at year-end 2015.

From today's perspective, traffic volumes in the aviation industry should continue to show stable growth moving forward. According to the latest market forecasts by Airbus and Boeing, traffic volumes are expected to double again over the next 15 years. According to a market analysis of Airbus and Boeing, a total of 36,300 new airliners will be required up to 2035 based on current estimates.

The main factors driving this development include increasing levels of air travel in countries such as China, India, the US and Europe. Flights per capita are expected to quadruple in the growth markets of China and India up to 2035. In the US and Europe, where air travel is already widespread, the frequency of trips is expected to increase by around 20% up to 2035.

2. GENERAL INFORMATION

The FACC Group, headquartered in Ried im Innkreis, is an Austrian Group, which specialises in the development, production and maintenance of aircraft components.

The company's product range includes "structural components" (body and tail fairings, fan cowls and composite parts for engines, wing components and wingtips) as well as components for the interiors of aircraft (overhead stowage compartments, passenger cabin linings, service units, etc.).

Due to the products' different applications, three operating segments were created. The "Aerostructures" division covers development, manufacture and sales of structural components, the "Interiors" division deals with the development, manufacture and sales of interiors, and the "Engines & Nacelles" division is responsible for the manufacture and sales of engine components. After conclusion of the customer agreements and order processing, the individual orders are manufactured in the five plants of the Group. Apart from these three operating segments, the company includes the central services of finances and controlling, personnel, quality management, purchasing and IT (including engineering services). In the form of a matrix organisation, these central services support the operating segments in the completion of their tasks.

3. DEVELOPMENT OF THE FACC GROUP

The year under review can be seen as the year in which FACC set the course for the future. At the beginning of 2016, the company's management focused mainly on investigating the Fake President Incident and working through the changes that had been introduced as a result. The absolute priority was to guarantee stability and sustainability, fill all vacant management positions, while at the same time making a concerted effort to push ahead with the implementation of the defined corporate targets. In view of market prospects, several series productions were successfully launched in the year under review, numerous projects were ramped up according to plan across all segments and, as a result, the company was able to achieve revenue growth of over 20%. Based on targeted investments, both the company's capacity and efficiency were further increased. One aspect, which is particularly encouraging considering the circumstances, was the improvement of the Group's earnings, with EBIT adjusted for one-off effects increasing by almost half. Against the backdrop of long-term rising global demand for new aircraft, with the latest long-term market analysis confirming the need for over 36.300 new airliners in the period up to 2035, FACC is expected to have an order backlog in excess of USD 5 billion based on current estimates. Based on current market forecasts and the innovation strategy we have been driving forward, the odds are good that we will be able to further consolidate FACC AG's position as a global tier 1 partner for the aviation industry.

2014/15
restated1)
EUR million
2015/16
restated1)
EUR million
2016/2017
EUR million
Revenues 528.9 580.2 705.7
Thereof product revenues 471.4 518.6 646.1
Thereof revenues from development services 57.5 61.6 59.6
EBIT adjusted for one-off effects (4.5) (58.8) 26.9
One-off effects (loss) (41.9) 0.0
EBIT (4.5) (16.9) 26.9
EBIT margin (adjusted) (0.9 %) (10.1 %) 3.8 %
Earnings after taxes (9.6) (52.3) 16.7
Earnings per share (0.22) (1.14) 0.36

During spot checks carried out by the Austrian Financial Reporting Enforcement Panel (FREP), FACC AG's consolidated financial statements as of 29 February, 2016 as well as the company's semi-annual interim reports as of 31 August, 2015 and 31 August, 2016 were selected and subjected to a random review pursuant to section 2 para. 1 no. 2 of the Accounting Control Act (audit without any particular cause). In September 2016, FACC AG was informed that the present audit was going to be carried out by the Austrian Financial Market Authority (FMA).

At the time of publication of the Consolidated Financial Statements as of 28 February 2017, the above-mentioned review process had not yet been concluded. We refer to note 2 in the consolidated financial statements.

In the 2016/17 financial year, the FACC Group generated revenues of EUR 705.7 million. This means an increase of EUR 125.5 million or 21.6% compared to the previous year.

Product revenues increased by 24.6% to EUR 646.1 million. In the year under review, the main drivers of product revenues were the Airbus A320 family, the Airbus A350 XWB, the Boeing 737 and 787 aircraft programmes as well as the Bombardier and Embraer business jet programmes. All other programmes, including the supply of a number of components for engines produced by Rolls-Royce und Pratt & Whitney, developed in line with FACC management's plans, contributing to the growth of the Group.

Revenues from the billing of engineering services remained stable at EUR 59.6 million in the period under review.

In the 2016/17 financial year, the costs of materials increased by EUR 66.1 million from EUR 376.9 million to EUR 443.0 million. This growth is related to the significant increase in production revenues by 24.6%. The costs of materials also include expenses for temporary staff totalling EUR 15.6 million (2015/16: EUR 2.8 million). This considerable increase is entirely related to the recruitment of temporary staff in the course of the year under review to manage production peaks in the Interiors segment.

The materials ratio (costs of materials/ revenues) declined by 2.2 percentage points to 62.8% compared to the previous year (2015/16: 65.0%).

1) Due to an error correction according to IAS 8, previous years' figures have been adjusted retrospectively (see note 2).

The Group's personnel costs increased by EUR 14.7 million from EUR 158.5 million to EUR 173.2 million in the 2016/17 financial year. The Group's staff ratio (personnel costs/revenues) fell by 2.8 percentage points to 24.5% compared to the previous year. This decline is the result of ongoing efficiency measures in connection with learning curve effects and increases in production rates in key programmes.

In the year under review, earnings before interest and taxes (EBIT) amounted to EUR 26.9 million (2015/16: EUR -58.8 million). In the previous year's EBIT, a loss incurred in relation with the "Fake President Incident" in the amount of EUR 41.9 million is recognised in other operating expenses.

REVENUE AND EARNINGS DEVELOPMENT (IN EUR MILLION)

3.1. FINANCIAL SITUATION

The main objectives of financial management are to ensure that the Group always has access to adequate liquidity, to avoid financial risks, and to guarantee financial flexibility. In order to ensure the company's liquidity and reduce risks, FACC makes use of various internal and external funding sources with differing maturities. Longer-term liquidity forecasts are based on the Group's operational planning. The cash flow from operating activities in the operating segments represents the Group's main source of liquidity. This reduces external borrowing requirements and the associated interest expenses. FACC also makes use of a variety of funding instruments to assure its liquidity, including corporate bonds, promissory note loans, loan agreements with banks and lease arrangements.

FINANCING INSTRUMENTS

The banking policy, procedures for the approval of banking relationships, loan agreements, liquidity and financial asset management, and the management of currency and interest rate risks are set down in the treasury principles. It is a basic principle of the Group that its lines of credit are administered at the corporate level by the treasury department.

For information on the company's capacity to raise funds through authorised and conditional capital increases and on funding sources, please refer to notes 4 b) ii) and 12 to the consolidated financial statements. Through these diverse measures, FACC has created a stable and sustainable basis to meet its future funding requirements.

3.1.1. LIQUIDITY ANALYSIS

One of FACC's key performance indicators is free cash flow, which the company determines by combining its cash flow from operating activities with its cash flow from investing activities.

2014/15
restated1)
EUR million
2015/16
restated1)
EUR million
2016/2017
EUR million
Cash flow from operating activities 20.0 (9.3) 7.3
Cash flow from investing activities (34.4) (50.9) (77.8)
Free cash flow (14.4) (60.2) (70.5)
Cash flow from financing activities 6.0 3.9 120.9
Net change in cash and cash equivalents (8.4) (56.3) 50.4
Valuation effects from currency translation differences 0.5 1.5 9.5
Cash and cash equivalents at the beginning of the period 56.2 111.0 51.0
Cash and cash equivalents at the end of the period 48.3 56.2 111.0

CASH FLOW FROM OPERATING ACTIVITIES

The cash flow from operating activities in the 2016/17 financial year amounted to EUR 20.0 million, which corresponds to an

CASH FLOW FROM INVESTING ACTIVITIES

The cash outflow resulting from investing activities in the 2016/17 financial year amounted to EUR -34.4 million compared with EUR -50.9 million in the previous year.

Project investments were mainly driven by development and tooling costs for the Airbus A350-1000, Embraer E2 Jets, Comac C919 Interior aircraft models as well as by investments in the duplication of tools to safeguard future production rates.

Capital expenditures on property, plant and equipment were mainly attributable to the expansion of production capacities increase of EUR 29.3 million compared to the previous year's figure of EUR -9.3 million. The main driver of this positive development was a favourable revenue and earnings development in the year under review.

at the Austrian plant 1 (Ried), plant 2 (St. Martin) and plant 4 (Reichersberg), for the ramp up of new programmes as well as the support of increasing call-up orders within the framework of projects currently underway. In the course of the year under review, new investments were made in production plants for capacity expansion, in additional automation measures, in the optimisation of existing production facilities and infrastructure along with maintenance investments.

1) Due to an error correction according to IAS 8, previous years' figures have been adjusted retrospectively (see note 2).

LONG-TERM DEVELOPMENT OF INVESTMENT ACTIVITIES

Net cash flow from investing activities

Net cash flow from investing activities in % of revenues

CASH FLOW FROM FINANCING ACTIVITIES

In the 2016/17 financial year, cash flow from financing activities amounted to EUR 6.0 million (2015/16: EUR 3.9 million). In the year under review, the cash inflow from financing activities amounted to EUR 24.6 million (2015/16: EUR 21.9 million).

Basically, cash inflows were offset by cash outflows resulting from the repayment of loans totalling EUR 7.8 million as well as the payment of interests on both loans and bonds totalling EUR 10.9 million.

3.1.2. NET DEBT

28 February 2015
EUR million
29 February 2019
EUR million
28 February 2017
EUR million
Promissory note loan 45.0 42.0 42.0
Thereof promissory note loan 2012 to 2015 3.0 - -
Thereof promissory note loan 2012 to 2017 8.0 8.0 8.0
Thereof promissory note loan 2012 to 2019 34.0 34.0 34.0
Bond 2013-20 (ISIN AT0000A10J83) 89.1 89.2 89.4
Bank borrowings 79.4 96.8 113.9
Gross financial liabilities 213.5 228.0 245.3
Less
Financial assets 111.0 56.2 48.3
Net financial debt 102.5 171.8 197.0

At the end at the 2016/17 financial year, net debt amounted to EUR 197.0 million (29 February 2016: EUR 171.8 million). As of the balance sheet date, FACC Group's cash and cash equivalents amounted to EUR 48.3 million 29 February 2016: EUR 56.2 million).

3.2. ASSETS POSITION

The balance sheet total increased by EUR 15.7 million to EUR 680.6 million in the year under review compared to the previous year.

29 February 2016
restated1)
EUR million
28 February 2017
EUR million
Non-current assets 353.6 352.7
Current assets 311.3 327.9
Total assets 664.9 680.6
Equity 267.1 284.0
Non-current liabilities 229.6 219.5
Current liabilities 168.2 177.1
Debt 397.8 396.6
Equity and liabilities 664.9 680.6

3.2.1. ASSETS

In the year under review, non-current assets decreased only slightly by EUR 0.9 million to EUR 352.7 million compared to the balance sheet date as of 29 February 2016.

Group's current assets rose by EUR 16.6 million compared to the previous year. On the one hand, both receivables and inventories rose due to a significant increase in product revenues. On the other hand, cash and cash equivalents declined by EUR 7.9 million to EUR 48.3 million on the balance sheet date as of 28 February 2017.

3.2.2. EQUITY

FACC Group's equity amounted to EUR 284.0 million at the end of the reporting period. This corresponds to an equity ratio of 41.7% (29 February 2016: 40.2%).

3.2.3. LIABILITIES

Within non-current liabilities, other financial liabilities declined by EUR 7.6 million to EUR 67.6 million. The non-current figure reported for the promissory note decreased by EUR 8.0 million to EUR 34.0 million because of the classification of the "promissory note loan 2012 to 2017" tranche as current liabilities.

Within current liabilities, trade payables declined by EUR 12.9 million to EUR 59.8 million. Other financial liabilities increased by EUR 24.7 million to EUR 46.3 million.

4. DEVELOPMENT OF THE BUSINESS SEGMENTS

4.1 AEROSTRUCTURES SEGMENT

Revenues in the Aerostructures segment amounted to

EUR 331.0 million in the 2016/17 financial year (2015/16: EUR 269.2 million). Revenues from product deliveries increased considerably by EUR 72.7 million or 31.0% to EUR 303.9 million. Revenues from development activities declined by 28.0% from EUR 38.1 million to EUR 27.1 million in the period under review.

Earnings before interest and taxes (EBIT) in the Aerostructures segment stood at EUR 51.2 million in the 2016/17 financial year (2015/16 adjusted for one-off effects: totalling EUR 19.5 million: EUR 27.9 million).

This positive development in the Aerostructures segment was mainly influenced by the increasing demand for components for the Airbus A350 aircraft model and the continued rampup of production rates for the Airbus A320 and Airbus A321 products. New projects such as those for the Bombardier C-Series or the Embrear E2 Jet aircraft models started series production in the year under review, which will lead to further growth of the Aerostructures segment in the coming periods.

4.2. ENGINES & NACELLES SEGMENT

Revenues in the Engines & Nacelles segment amounted to EUR 142.0 million in the 2016/17 financial year (2015/16: EUR 113.8 million). This corresponds to an increase of 24.8%. Revenues from product deliveries increased by 25.5% from EUR 105.4 million in the previous year to EUR 133.8 million in the year under review. Revenues from development activities remained stable at EUR 8.2 million in the 2016/17 financial year (2015/16: EUR 8.4 million).

Earnings before interest and taxes (EBIT) in the Engines and Nacelles segment stood at EUR -11.9 million in the 2016/17 financial year (2015/16 adjusted for one-off effects: totalling EUR 8.2 million: EUR -20.8 million).

The development of the Nacelles segment in the year under review continued to be mainly influenced by the ramp-up of

1) Due to an error correction according to IAS 8, previous years' figures have been adjusted retrospectively (see note 2).

serial production of the A350 Translating Sleeve (TRSL) project. Besides, the segment could profit from the constantly increasing demand for components for aircraft engines for the Airbus A320 neo aircraft family. The first delivery of the new products for the Airbus A330neo aircraft model set an important milestone for the future development of the segment.

In the year under review, the Engine Composites segment continued to develop in a positive manner. Also, in the Engine Composites area, the Airbus A350 Trent XWB and PW800 Bypass Duct projects made a pivotal contribution to the development of the business according to plan.

In the Engines & Nacelles division, the earnings contribution from engine programmes could be further increased. However, the ramp up of the A350 TRSL project within the nacelles programmes had a negative impact on the earnings performance of the division. Temporary additional expenses for personnel to ensure the increase in production rates as well as higher freight costs had a negative impact on the company's earnings development especially in the first half of the year. Thanks to progress with series production and the successful adoption of remedial action, the segment achieved a balanced result at the beginning of the third quarter of 2016.

4.3. INTERIORS SEGMENT

Revenues in the Interiors segment amounted to EUR 232.8 million in the 2016/17 financial year (2015/16: EUR 197.2 million), as the division was able to once again achieve a considerable increase compared to the previous year. In the year under review, product revenues stood at EUR 208.5 million (2015/16: EUR 183.1 million). This increase of 13.7% is almost entirely attributable to the new Airbus A350 programmes, whereas revenues from existing series programmes such as the A320, Suchoi Superjet 100 and Embraer Phenom 300 as well as Bombardier C350 remained relatively stable. Revenues from the Embraer Legacy 450 und 500 business jet programmes declined slightly.

Revenues from development activities increased by 72.6% to EUR 24.3 million after EUR 14.1 million in the previous year. This increase is mainly attributable to the mastering of the configuration management process with regard to the cabin interiors of the Airbus A350, increased returns on development costs in connection with rising production rates for the Airbus A350 aircraft model as well as engineering services related to the development of new passenger cabin concepts for the Xi'an MA700 aircraft model.

Earnings before interest and taxes (EBIT) in the Interiors segment amounted to EUR -12.4 million in the 2016/17 financial year (2015/16 adjusted for one-off effects: totalling EUR 14.2 million: EUR -23.9 million).

The earnings situation of the Interiors division in the year under review continued to be influenced by the ramp-up of the new Airbus A350 projects. Additional costs especially in the production area were caused by the increase in staffing levels due to the recruitment of temporary staff, whereas production costs in the business jet manufacturing area were reduced, as planned, compared to the previous year.

5. RISK REPORT

FACC is exposed to unpredictable situations in its daily business operations, which may have potentially negative effects. In order to be adequately prepared and be able to deal with any such situations appropriately, FACC has established a group-wide risk management system.

The main task of a risk management system is to identify, assess and minimise all risks across all company areas. The aim is to implement both strategic and operative plans and to safeguard the continued existence of the company as a going concern.

The respective risk owner is directly responsible for risk management. The risk management director reports directly to the Management Board, which assumes overall responsibility for risk management.

Within the framework of this risk management system, any occurring or potential risks are continuously monitored, assessed and reported by the respective operating units to the Management Board twice a year, once they have been reviewed by management. Exceptional events are reported immediately to the competent risk owner or risk management director, who decides if the Management Board is to be notified straight away. The Management Board, in turn, reports to the Supervisory Board in its meetings. This ensures that significant risks are detected early on and corresponding measures to avoid or mitigate these risks are put in place.

According to the Management Board, potential risks currently identified are deemed manageable and controllable and, therefore, do not jeopardise the company's ability to continue as a going concern.

5.1. MANAGEMENT RISKS

Based on market observations and analyses, a five-year business plan is created, which defines the basic strategy of the company and is reviewed and approved by the Supervisory Board. The specific business objectives for each financial year are derived from this plan, which is updated on an annual basis.

Short-term market changes pose the biggest risk here. Besides, operational success is also continually jeopardised by external factors, which can often scarcely be influenced.

FACC's management is responsible for implementing policy consistently, while promptly responding to short-term changes in line with the defined corporate strategy. This is to ensure that the company's strategic orientation along with the planned revenue and earnings targets are taken into due consideration.

5.2. BUSINESS INTERRUPTION RISK

The company's production sites and plants are constantly maintained and serviced, thus limiting the risk of breakdowns or lengthy production downtimes to a minimum. The business interruption risk is also covered by business interruption insurance with an indemnity period of 24 months.

5.3. FINANCIAL RISK

In this case, risk management falls under the responsibility of the company's treasury department, which reports directly to the Management Board. The treasury department assesses and hedges financial risks in close cooperation with the operating business segments. In order to hedge financial risks, the company uses common derivative financial instruments in addition to putting structured operating measures in place.

5.3.1. INTEREST RATE RISK

The interest rate risk – the possible fluctuation in value of financial instruments due to changes in market interest rates or future cash flows – arises in connection with medium and long-term receivables and liabilities (especially financial liabilities). In this context, particular care is taken to minimise a large part of the interest rate risk through the use of fixed-rate financial liabilities and common derivate financial instruments.

5.3.2. FOREIGN CURRENCY RISK

Sales transactions in the aviation industry are almost exclusively carried out in US dollars (USD). A large part of the expenses is invoiced in US dollars. The remaining expenses are mainly invoiced in euros.

All transaction and currency translation risks are constantly monitored by the treasury department to hedge potential foreign currency risks. In order to reduce the USD risk, 96% of all purchases are currently carried out in USD, thus ensuring a so-called "natural hedging".

Derivative financial instruments (forward foreign exchange contracts) are used to hedge the remaining open USD items (net currency position). The use of derivative financial instruments clearly reduces the risk of exchange rate fluctuations.

5.4. PROJECT MANAGEMENT

FACC's project management is responsible for implementing the objectives defined by the management by way of projects. In this regard, distinctions are made as to whether development responsibility has been assumed or not. Feasibility has to be assessed for each contract and associated risks identified, evaluated as well as closely monitored and analysed during the course of the project in order to initiate and implement appropriate measures, if deemed necessary. The major risks concern the availability of resources of any kind (manpower, equipment, materials, etc.) as well as external factors, which the project team encounters via the company's interfaces or via third parties.

5.5. CUSTOMER RISK

The company pursues a strict credit policy. The creditworthiness of existing customers is constantly monitored, and new customers undergo a credit assessment. In the event of potential defaults, bad debt allowances for trade receivables are recognised, following in-depth assessment of the risk.

5.6. PURCHASE AND SUPPLIER RISK

The purchasing department regularly carries out risk assessments of the company's suppliers to identify potential threats and risks at an early stage. This is done in order to be able to set the priorities for the planning and the execution of audits and support the decision-making process when awarding new contracts. The selection of new suppliers requires the involvement of the "Procurement Quality Assurance" (PQA) department to make sure that the necessary qualifications and approvals are in place and that there are no identifiable risks. When new projects are launched, suppliers are subject to a mandatory first sample test to minimise product risk. The ongoing quality-compliant and timely delivery of materials and of semi-finished and finished products is assessed via SAP on a regular basis. This evaluation is also integral part of the overall risk assessment. Deviations from the targeted component quality and delivery performance are systematically tracked, analysed, evaluated and benchmarked against defined goals. Noticeable variations are reported to the Management Board following the management reviews.

5.7. PRODUCT LIABILITY AND QUALITY RISK

The products designed and manufactured by the company are intended for installation in aircraft or engines. Defects or malfunctions of the manufactured products may, directly or indirectly, jeopardise the property, health or life of third parties. Long-term safety is therefore a top priority. The company is not in a position to reduce or exclude its liability towards customers, consumers or third parties by way of sales agreements. Each product developed and/or manufactured inhouse, which is supposed to leave the company, is subject to thorough scrutiny with regard to its quality and functionality.

As to projects, for which FACC bears development responsibility, a higher risk exists due to the possibility of construction errors. This can, however, be effectively minimised by acting systematically. Regular controls at all stages of development are intended to mitigate risks early on. Besides, FACC operates an archive system with regard to quality records, which are either contractually stipulated or go beyond contractual obligations on a case-by-case basis. This is to demonstrate

that products were manufactured and services rendered according to defined criteria, while keeping in line with the guidelines approved by both customers and the aviation authority/authorities.

Despite the product liability risk being appropriately hedged, the occurrence of any possible quality problems may negatively affect the company's assets and liabilities, financial position and profit and loss.

6. RESEARCH, DEVELOPMENT AND INNOVATION

FACC is committed to constantly investing in research and development with a view to consolidating the company's relationships with its customers, while opening up new business fields. The main focus lies on proprietary developments, which allow the company to use the expertise acquired in this way for both existing and future customers. Besides, the company also enters into cooperation with customers with a view to further optimising products.

In the 2016/17 financial year, FACC invested EUR 10.0 million or 1.4% of total revenues in fundamental research and advanced development. Besides, the company developed additional orders in collaboration with customers. Expenses incurred in these projects were passed on to development partners.

The consistent focus on technology development provides the basis for commercial success. Increasing competition, especially through competitors in low-income countries, can only be tackled through optimised processes and innovative products.

From a company's perspective, active research represents a basic prerequisite for safeguarding FACC's leading position as a dependable development partner and system supplier for its customers. Since FACC is often required to work with proprietary customer patents and processes, proprietary developments help retain contracts and open up new business fields. With the help of a strong network of customers, subcontractors and scientific partners, FACC develops new technologies to be applied in future serial production contracts.

From a developmental perspective, the year under review achieved very positive results. The Airbus A330 fan cowl doors started series production, while structural components for the COMAC C919 and Embraer E2 aircraft models entered the testing phase. FACC's good market position as winglet manufacturer was further consolidated through new developments for the COMAC C919 and Embraer E2 programmes as well as the Airbus A320neo and A350 aircraft models.

At present, the company's long-term development objectives increasingly focus on automation and the improvement of production processes. In the year under review, new manufacturing processes for high-production volumes were developed, which will continue to guarantee a high capacity utilisation of existing production plants moving forward. Besides, within the framework of an Industry 4.0 initiative, the research & development team is working jointly with the production planning and manufacturing units on a virtual factory concept aimed at optimising material flows and further reducing production times.

The development of a brand-new inspection method for composite components was completed in the year under review. FACC is currently the only company qualified by Boeing in the world to use this new technology in series production. The main advantages of this development by FACC are the significant reduction of inspection times and considerable savings with regard to future investment costs. Further customer qualifications are currently being implemented and will be completed in the coming periods.

6.1. PATENTS & PRIZES

FACC strives for the highest degree of independence possible in its process portfolio with a view to safeguarding its technological leadership in the composite area. At the same time, the company seeks to gradually expand its component portfolio to tap into new sales opportunities. Both growth areas are flanked by an extended patent strategy, whose main objective is to guarantee maximum protection of intellectual property.

Over the past year, a total of eleven patent families were registered, which included – among others – new manufacturing technologies, light-weight overhead compartment systems, mechanical linkages and spoiler technologies. At present, FACC owns a total of 53 patent families.

6.2. OUTLOOK

The technology offensive, which FACC has started over the last few years, begins to show the expected positive effects. FACC has established itself as innovative development partner on the market and is viewed as technology benchmark in a number of areas. Technological coordination with key customers takes place on an ongoing basis and within the framework of jointly accomplished projects.

7. EMPLOYEES

As of 28 February 2017, total headcount amounted to 3,393 employees (FTE). As a result of the strong growth in revenues, the number of employees increased by 11% compared to the previous year. The number of white collars rose slightly by 5%, while the number of blue collars increased by 14%.

In Austria, 3,171.1 FTE were working for the company as of 28 February 2017. This corresponds to 93% of the entire workforce, with the proportion of women amounting to 22.2%.

(in FTE) Blue
collar
White
collar
Total
headcount
Central Services 130 287 417
Aerostructures 885 223 1108
Engines & Nacelles 500 129 629
Interiors 732 228 960
Subsidiaries 75 184 259
FACC AG 20 20
Total 2,322 1,070 3,393

With a view to safeguarding the required ramp-up of series production for several projects, a leasing workforce of up to 320 FTE was recruited in the production area in the 2016/17 financial year. As of 28 February 2017, FACC AG's temporary staff declined to 103 FTE.

The international nature of the company is also reflected in its personnel structure. The employees working at the Austrian sites come from over 38 different countries and every continent. 56% of the workforce have Austrian citizenship and 22% are German nationals.

In order to increase the company's attractiveness as an employer as well as improve staff retention, FACC also continued to consistently implement its extensive employer-branding strategy in the year under review. With its "Healthy & Satisfied" project, FACC put in place an additional set of measures aimed at improving employees' motivation. For its commitment to workplace health promotion, the company received the seal of quality in February 2017.

As in previous years, further education and vocational training for staff members were a focus of personnel management measures in the year under review. Therefore, extensive development programmes were implemented within the scope of the FACC Academy, which bundles all Group's vocational training measures under the same roof.

In addition to the continued vocational training of existing employees, the further education of new staff members has always been a top priority at FACC with the objective of guaranteeing that employees' skills and qualifications meet the high requirements of the aviation industry. A total of 604 training courses with 6,370 participants were held in the 2016/17 financial year.

With a view to anchoring FACC's core values such as "performance", "success", "appreciation" and "team spirit" within the company in the long term, the "FACC Leonardo Award" was presented in the period under review for the third year in a row. This prize rewards outstanding team achievements aimed at implementing the company's corporate values or other corporate projects. Following a multi-stage selection process, this award was granted in November 2016.

The award-winning team developed a completely new NDI thermographic inspection method for composite components, which is the only one of its kind in the world in a cost-efficient and time-saving manner. This new inspection method checks whether or not composite components contain any embedded foreign materials and whether or not they are bonded correctly. FACC was the only supplier in the global aviation industry to receive Boeing's qualification for this method and therefore to use it in production. Thanks to this new system, inspection times for complex components could be significantly reduced.

Last but not least, special emphasis continues to be placed on apprentice training at FACC. In the 2016/17 financial year, a total of 42 apprentices were working for the company in the area of plastics technology (26 apprentices), metal technology (1 apprentice), construction (13 apprentices) IT technology (1 apprentice) and IT computer science (1 apprentice). The high quality of FACC's apprentice training was also confirmed by the excellent results achieved by the company's apprentices in the apprentice competition organised by the Chamber of Commerce of Upper Austria for commercial and technical professions in 2016. Of 757 apprentices from 97 Upper-Austrian companies, numerous members of the FACC Future Teams secured once again top positions. In the category "plastics technology" FACC celebrated a triple victory, in the category "construction" the company ranked second and third. In the special category "women in engineering" the company won the first two places. For its commitment to apprentice training, FACC once again received the INEO award for providing exemplary apprenticeships in 2016.

8. ENERGY & ENVIRONMENT

8.1. ENERGY

Since FACC was founded in 1989, the development of the company has been marked by continued growth, which significantly gathered momentum between 2011 and 2015. However, the consumption of both energy and resources did not match this trend. Thanks to a wide range of measures, the development of energy consumption at FACC has been considerably flatter than the overall operating performance of the company. In concrete terms, energy efficiency at FACC plants increased at an annual rate of 10% between 2010 and 2014 and by 7% in 2015. These are peak values, which have been achieved through a set of measures such as energy monitoring, the deployment of control technology and the central monitoring of building technology.

Thanks to targeted energy efficiency measures, energy efficiency could be improved by 12.1% in the 2016/17 financial year. With this peak value, the already very good results in recent years were exceeded. Energy consumption could be reduced by 44.92% compared to 2010.

Concrete measures in this regard include the consistent use of heat recover systems, the optimisation of plants' capacity utilisation as well as the reduction of operating temperatures at the supply level.

In the current 2017/18 financial year, these measures will continue to be implemented and the company will also switch to LED lighting systems.

8.2. ENVIRONMENT

An environmental management system based on ISO 14001 has been successfully introduced by the company and it is constantly adapted to ongoing changes such as new technologies and new legal requirements.

With a view to meeting legal requirements in terms of environment, occupational safety and energy, the company's current legal management system has been expanded to include system support.

The achievement of the company's environmental targets and the implementation of the corporate environmental programme of FACC are supported by an effective key figure system, which provides the basis for the management assessment of the environmental area.

A sustainable waste management system provides the basis for reducing the impact on the environment. This is why FACC strives for continuous improvements. One of the most recent accomplishments in this regard is the recycling of solvents, which represent a considerable part of waste materials in the production area. Currently, the company is focusing on a pilot project, which aims to ensure that solvent-soaked rags can be reused. In future, these rags will no longer be disposed of at a great expense but, thanks to a special washing process, they will be simply reused.

9. REPORT ON BRANCHES

FACC AG does not operate any branches.

10. DISCLOSURES PURSUANT TO SEC. 243A OF THE AUSTRIAN COMPANY CODE (UGB)

10.1. REPORT ON THE KEY FEATURES OF THE GROUP'S INTERNAL CONTROL AND RISK MANAGEMENT SYS-TEMS WITH REGARD TO ACCOUNTING PROCEDURES

Pursuant to Sec. 243a Para. 2 of the Austrian Company Code (UGB), FACC AG is required to describe the key features of the internal control and risk management system with regard to the accounting process. Pursuant to Sec. 82 of the Austrian Stock Corporations Act (AktG), the Management Board of FACC AG has to ensure the establishment of an accounting and internal control system that complies with the company's requirements. Thus, the Management Board of FACC AG bears full responsibility for the implementation of an adequate internal control and risk management system with regard to the accounting process.

The key features of the risk management and internal control systems are laid down in the FACC AG's risk management manual. This manual describes and identifies key finance and controlling processes and their associated risks.

The accounting-related internal control system is designed to guarantee timely, uniform and correct recording of all business processes and transactions, while ensuring that well-founded statements about the company's current business situation can be made at all times.

A comprehensive set of measures and rules includes, amongst others, the separation of functions, the dual control principle, rules governing authorised signatories, joint signatory powers for authorizing payments only, which are restricted to a small number of persons, as well as system-supported checks by the EDP-software in use (SAP).

For more than 10 years, FACC has used SAP in almost all areas across the company. The regularity of the SAP systems has been achieved in all relevant business processes.

In the course of monthly reporting to the Management Board and the second-level management, a comparison was made between actual and budgeted figures. During its quarterly meetings, the Supervisory Board of FACC AG was informed about business performance and forecasts regarding the Group's further course of business. In its meetings, the Audit Committee dealt, amongst others, with topics such as the internal control system, risk management and measures to mitigate internal control risks.

Within the framework of the budgeting process, budget costs are planned for each individual cost centre. Every cost centre manager is responsible for keeping in line with the budgeted costs and planned investments. All investment plans are subject to prior approval by the Management Board. Investments running over budget are also subject to prior approval by the Supervisory Board.

With regard to IT security, measures relating to authorisation concepts, separation of functions and system security were designed and implemented.

In connection with the growing threat potential arising from cybercrime and the loss incurred in the 2015/16 financial year in relation with the "Fake President Incident", FACC AG decided to carry out a comprehensive analysis of the company's internal control system and other key corporate process starting from January 2016, i.e. immediately after the loss was assessed. Besides, further improvement processes and control measures were put in place. The initiated improvement activities focused on the following areas:

  • implementation of an integrated purchase-to-pay process;
  • organisational improvements in the financial area

(accounting, controlling and treasury).

10.2. DISCLOSURES ON CAPITAL, SHARE, VOTING, AND CONTROL RIGHTS AS WELL AS ASSOCIATED OBLIGATIONS

FACC AG's share capital amounted to EUR 45,790,000 as of 28 February 2017 and is divided into 45,790,000 no-par value bearer shares. All the company's shares have been admitted to trading on the prime market segment of the Vienna stock exchange.

Every FACC AG's share entitles the bearer to one vote at the Annual General Meeting.

As of 28 February 2017, FACC International Company Ltd. (Hong Kong) held, either directly or indirectly, 55.5% of the shares of FACC AG. As of the balance sheet date on 28 February 2017, the company's Management Board was unaware of any other shareholders, who held more than 10% of the company's share capital.

44.5% of FACC shares represent free float.

There are no shares with special control rights.

No employee participation programme is currently in place at FACC AG, which shall not entitle the bearers of FACC AG's shares to exercise their voting rights directly.

10.3. AUTHORISED CAPITAL

At the extraordinary general meeting on 23 June 2014, authorised capital was approved. Accordingly, the Management Board is authorised, subject to prior approval by the Supervisory Board and within five years of the date on which the authorised capital was entered in the commercial register, to increase the company's share capital by up to a nominal figure of EUR 19,895,000.00 by issuing up to 19,895,000 new shares against contributions in cash or in kind. New shares can also be issued excluding shareholders' subscription rights.

At the extraordinary general meeting on 23 June 2014, authorised capital was approved. Accordingly, the Management Board is authorised, subject to prior approval by the Supervisory Board and within five years of the date on which the authorised capital was entered in the commercial register, to increase the share capital by up to a nominal figure of EUR 3,000,000.00 by issuing up to 3,000,000 new shares in order to grant share options to employees, executives and members of the Management Board of the company or of one of its affiliated companies. New shares can also be issued excluding shareholders' subscription rights.

10.4. CONDITIONAL CAPITAL

At the extraordinary general meeting on 23 June 2014, the share capital was conditionally increased by up to EUR 15,000,000 by issuing up to 15,000,000 new no-par value bearer shares (conditional capital). This conditional capital serves to grant subscription or conversion rights to creditors of convertible bonds and to prepare the merger of several companies. The amount of capital issued and the conversion ratio are to be established in compliance with the provisions set forth in the convertible bonds. The issue amount of the shares shall not be less than the pro-rata amount of the share capital.

10.5. LEGAL PROVISIONS FOR THE APPOINTMENT OF MEMBERS OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD

As long as FACC International Company Ltd. (Hong Kong) holds a stake in FACC AG of at least 25% of the company's share capital, it will have the right to appoint up to one third of all Supervisory Board members.

The articles of association include no regulations that exceed the legal provisions for the appointment of members of the Management Board and Supervisory Board or the amendment of the articles of association.

10.6. OTHER DISCLOSURES

As of 28 February 2017, FACC AG did not hold any treasury shares.

FACC is unaware of any restrictions regarding the voting rights of FACC shares and any transfer thereof, including any restrictions resulting from agreements between shareholders.

No special compensation agreements exist between FACC AG and the members of the Management and Supervisory Board in the case of a public take-over bid.

Agreements regarding promissory note loans include changeof-control clauses. Lenders shall be entitled to terminate the agreement when:

  • a. the Aviation Industry Corporation of China (AVIC) holds, either directly or indirectly, less than 50% plus one share of the borrower, or
  • b. the Aviation Industry Corporation of China (AVIC) is not en titled, either directly or indirectly, to appoint the majority of the members of the Management or of the Supervisory Board of the borrowers.

11. OUTLOOK

11.1 THE CIVIL AVIATION MARKET

The growth trend in the civil aviation industry is expected to continue moving forward. According to the market analysis of the major OEMs, passenger volumes will show a constant annual growth rate of roughly 5%. Over the next two decades, the global aircraft fleet, which currently amounts to 21,000 large commercial aircraft (source: market outlook Airbus/Boeing 2016), will more than double to roughly 42,500 units by 2035. At the same time, 14,800 airliners from the existing fleet will reach the end of their service life and be replaced by modern aircraft models. Based on these estimates, a total of 36,300 new airliners will be required over the next 20 years.

However, a significant shift to the new growth markets of China and India is also expected moving forward. Traffic volumes (flights per year and per capita) are expected to quadruple in these markets up to 2035. In the US and Europe, where air travel is already widespread, the frequency of trips is expected to increase by an additional 20%. Last year, Airbus and Boeing together delivered 1,436 new aircraft to their customers. In the same period, a total of 1,419 aircraft were sold to airlines, with the book-to-bill ratio thus amounting to almost 1:1.

Robert Machtlinger m. p. Chairman of the Management Board

Aleš Stárek m. p. Member of the Management Board

Yongsheng Wang m. p. Member of the Management Board

11.2. THE FACC GROUP

Moving forward, FACC will continue to pursue a sales target of one billion euros for the 2020/2021 financial year in line with the company's "Vision 2020". For the coming years, the company expects to gradually increase the production rates of its most important programmes. Thanks to FACC's balanced and modern product and customer portfolio, the company can profit from the general growth trend currently underway in almost all aircraft families. From today's perspective, the company expects a moderate growth in revenues for the 2017/18 financial year.

The MRO (maintenance, repair and overhaul) market, and more specifically the maintenance and repair of composite systems, represent a business field with high potential, with composite materials accounting for an ever-increasing proportion of new aircraft components. Based on its extensive experience in the development and manufacture of composite systems, moving forward, FACC is pursuing the ultimate objective of increasingly providing repair and maintenance services to airlines in addition to its core business.

Besides, the management will continue to focus on strengthening the company's earnings power over the long term. Initiatives aimed at increasing the degree of automation, raising productivity and outsourcing the production of simple composite parts to the supply chain should contribute to further strengthening the Group's profitability.

In summary, the FACC Group will continue to strengthen its business activities, ranging from development, manufacturing through to global supply chain management, while further expanding its role as a preferred partner of the aviation industry. The implementation of the "Vision 2020" strategy, especially when it comes to consolidating and expanding the company's standing as a Tier 1 supplier of customers such as Airbus, Boeing, Bombardier, Embraer and all renowned engine manufacturers, is a top priority.

Ried im Innkreis, 11 June 2017

Consolidated Statement of Financial Position

Note 1 March 2015
restated1)
EUR'000
29 February 2016
restated1)
EUR'000
28 February 2017
EUR'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 6 151,659 145,867 149,743
Property, plant and equipment 7 158,251 165,234 166,116
Other non-current financial assets 8 469 451 465
Non-current receivables 10 24,597 29,494 27,866
Deferred taxes 31 1,633 12,536 8,508
Total non-current assets 336,609 353,581 352,698
CURRENT ASSETS
Inventory
9 98,858 107,823 113,379
Trade receivables 10 86,110 92,626 98,875
Receivables from construction contracts 10 21,378 20,242 18,788
Other receivables and deferred items 10 17,507 15,337 20,047
Receivables from related companies 10 35,322 19,060 28,533
Cash and cash equivalents 11 110,955 56,215 48,275
Total current assets 370,129 311,303 327,897
TOTAL ASSETS 706,738 664,883 680,595

1) Due to an error correction according to IAS 8, previous years' figures have been restated retrospectively (see note 2).

Note 1 March 2015
restated1)
EUR'000
29 February 2016
restated1)
EUR'000
28 February 2017
EUR'000
EQUITY
EQUITY ATTRIBUTABLE TO
SHAREHOLDERS OF THE PARENT COMPANY
Share capital 12 45,790 45,790 45,790
Capital reserve 12 220,535 221,459 221,459
Currency translation reserve 12 (170) (250) (145)
Other reserves 12 (24,014) (13,476) (13,350)
Retained earnings 65,841 13,571 30,240
307,982 267,093 283,993
Non-controlling interests 8 17 26
TOTAL EQUITY 307,990 267,110 284,019
LIABILITIES
NON-CURRENT LIABILITIES
Promissory note loans 13 42,000 34,000
Bonds 13 89,067 89,242 89,416
Other financial liabilities 14 66,268 75,213 67,581
Derivative financial instruments 15 10,340
Investment grants 16 11,223 12,385 12,381
Employee benefit obligations 17 10,926 10,759 9,045
Other provisions 20 7,085
Total non-current liabilities 187,824 229,600 219,508
CURRENT LIABILITIES
Trade payables 18 72,087 72,679 59,809
Liabilities towards related companies 19 425 1,813
Other liabilities and deferred items 19 25,007 25,526 27,433
Other financial liabilities 14 13,173 21,634 46,295
Promissory note loans 13 45,000 8,000
Derivative financial instruments 15 48,199 33,476 19,179
Other provisions 20 6,642 13,358 13,373
Investment grants 16 768 904 1,166
Income tax liabilities 49 171
Total current liabilities 210,924 168,173 177,068
TOTAL LIABILITIES 398,748 397,773 396,576
TOTAL EQUITY AND LIABILITIES 706,738 664,883 680,595

1) Due to an error correction according to IAS 8, previous years' figures have been restated retrospectively (see note 2).

Consolidated Statement of Comprehensive Income

Note 2015/16
restated1)
EUR'000
2016/17
EUR'000
REVENUE 5 580,214 705,695
Changes in inventory of finished and unfinished products 21 4,424 6,959
Own work capitalised 22 18,784 11,145
Other operating income 27 27,824 41,024
Cost of materials and purchased services 23 (376,859) (443,027)
Personnel costs 24 (158,510) (173,235)
Depreciation, amortisation and impairment 26 (49,627) (30,798)
Other operating expenses 27 (105,040) (90,857)
Earnings before interest, taxes and fair value measurement of
derivative financial instruments
(58,790) 26,905
Financing expenses 28 (13,587) (11,184)
Interest income from financial instruments 29 444 635
Fair value measurement of derivative financial instruments 30 5,242 5,098
Earnings before taxes (66,691) 21,454
Income taxes 31 14,430 (4,776)
Earnings after taxes (52,261) 16,678
ITEMS SUBSEQUENTLY RECLASSIFIED TO PROFIT OR LOSS
Currency translation differences from consolidation (78) 105
Fair value measurement of securities (after tax) (13) 10
Cash flow hedges (after tax) 12 10,052 283
ITEMS NOT SUBSEQUENTLY RECLASSIFIED TO PROFIT OR LOSS
Revaluation effects of pensions and termination benefits (after tax) 17 499 (167)
Other comprehensive income 10,460 231
Total comprehensive income (41,801) 16,909
INCOME AFTER TAX
ATTRIBUTABLE TO:
Shareholders of the parent company (52,270) 16,669
Non-controlling interests 9 9
CONSOLIDATED COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Shareholders of the parent company (41,810) 16,900
Non-controlling interests 9 9
Earnings per share (in EUR)
Undiluted = diluted 36 (1.14) 0.36

1) Due to an error correction according to IAS 8, previous year's figures have been restated retrospectively (see note 2).

Consolidated Statement of Cash Flows

2015/16
restated1)
EUR'000
2016/17
EUR'000
OPERATING ACTIVITY
Earnings before tax (66,691) 21,454
Plus financing expenses, interest earned from financial instruments and fair value
measurement of derivative financial instruments2)
7,901 5,451
Earnings before interest, taxes and fair value measurement of derivative financial instruments (58,790) 26,905
Plus/minus
Depreciation, amortisation and impairment
Expenses/income from the reversal of investment grants
49,627
1,332
30,798
(805)
Change in other non-current provisions 7,085
Change in employee benefit obligations 499 (1,937)
Changes from consolidation effects (final consolidation) (2,334)
Other non-cash expenses/income (6,558) (4,506)
(16,224) 57,541
Change in working capital
Change in inventory (9,069) (5,956)
Change in trade receivables and other receivables 4,916 (24,926)
Change in trade payables and other liabilities 2,037 (6,540)
Change in current provisions 8,591 15
Cash flow from ongoing activity (9,750) 20,134
Interest received 444 73
Imcome taxes paid (2) (173)
Net cash flow from operating activities (9,308) 20,034
INVESTING ACTIVITY
Payments for the acquisition of intangible assets, plant, property and equipment (50,865) (34,406)
Net cash flow from investing activity (50,865) (34,406)
FINANCING ACTIVITY
Proceeds from promissory note loans
Proceeds from non-current interest-bearing liabilities 21,943
Repayments of promissory note loans (3,000)
Repayments of non-current interest-bearing liabilities (10,936) (7,817)
Change in current interest-bearing liabilities 8,461 24,661
Interest paid (12,562) (10,865)
Net cash flow from financing activity 3,906 5,976
Net changes in cash and cash equivalents (56,266) (8,393)
Cash and cash equivalents at the beginning of the period 110,955 56,215
Changes due to consolidation effects (final consolidation) (8)
Effects from foreign exchange rates 1,534 453
Cash and cash equivalents at the end of the period 56,215 48,275

1) Due to an error correction according to IAS 8, previous year's figures have been restated retrospectively (see note 2).

Consolidated Statement of Changes in Equity

FISCAL YEARS 2015/16 AND 2016/17

Equity reconciliation

Share capital Capital reserves Currency transla
tion reserve
Note EUR'000 EUR'000 EUR'000
As of 1 March 2015 (previous) 45,790 220,535 (170)
Error correction according to IAS 8 2
As of 1 March 2015 (adjusted) 45,790 220,535 (170)
Annual income after tax according to income statement
(adjusted according to IAS 8)
Other comprehensive income/loss 12 (78)
Total comprehensive income (78)
Other adjustments 924
As of 29 February 2016 45,790 221,459 (250)
Note Share capital Capital reserves Currency trans
lation reserve
EUR'000 EUR'000 EUR'000
As of 1 March 2016 45,790 221,459 (250)
Annual income after tax according to income statement
Other comprehensive income/loss 12 105
Total comprehensive income 105
As of 28 Febuary 2017 45,790 221,459 (145)
Equity attribu
table to share
Securities -
available for sale
Chash flow
hedges
Reserves
IAS 19
Retained
earnings
holders of the
parent
Non-controlling
interests
Total equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
(14) (19,779) (4,221) 72,759 314,900 8 314,908
(6,918) (6,918) (6,918)
(14) (19,779) (4,221) 65,841 307,982 8 307,990
(52,270) (52,270) 9 (52,261)
(13) 10,052 499 10,460 10,460
(13) 10,052 499 (52,270) (41,810) 9 (41,801)
924 924
(27) (9,727) (3,722) 13,571 267,093 17 267,110
Securities -
available for sale
Cash flow
hedges
Reserves
IAS 19
Retained
earnings
Equity attribu
table to share
holders of the
parent
Non-controlling
interests
Total equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
(27) (9,727) (3,722) 13,571 267,093 17 267,110
16,669 16,669 9 16,678
10 283 (167) 231 231
10 283 (167) 16,669 16,900 9 16,909
(17) (9,444) (3,889) 30,240 283,993 26 284,019

Notes

TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

The FACC Group with headquarters in Ried im Innkreis is an Austrian enterprise involved in the development, production and maintenance of aeronautical components. Its primary fields of activity include the production of structural components such as parts of engine cowlings, wing claddings or control surfaces, and the production of interior fittings in modern commercial aircraft. The majority of the components are manufactured from composite materials. The Group also integrates metallic components made of titanium, high-alloyed steels and other metals into these composite components, and delivers the ready-to-install components to the manufacturer's assembly lines.

FACC AG has been listed on the Vienna Stock Exchange in the prime market exchange segment (commercial trade) since 25 June 2014.

The consolidated companies in the FACC Group on 28 February 2017 remain unchanged from the consolidated companies in the Consolidated Financial Statements of 29 February 2016.

FACC AG is part of the consolidated companies of the Aviation Industry Corporation of China with headquarters in Beijing (Building 19, A5, Shuguang Xili, Chaoyang District, Beijing), commercial registration number 91110000710935732K.

2. CHANGES IN ACCOUNTING ESTIMATES AND ERRORS

In the course of a random sampling inspection by the Austrian Financial Reporting Enforcement Panel (OePR) the FACC AG Consolidated Financial Statements of 29 February 2016 together with the half-year financial statements of 31 August 2015 and 31 August 2016 were selected for audit in accordance with section 2 par. 1, line 2 of the Financial Reporting Enforcement Act (audit without a particular cause). In September 2016, FACC AG was informed by the Financial Market Authority (FMA) that it would conduct these proceedings itself.

At the time of publication of the Consolidated Financial Statements as of 28 February 2017, these proceedings had not been concluded. The following errors have been corrected in accordance with IAS 8.42.

Corrections

1) Recognition of receivables

The Consolidated Financial Statements of 28 February 2015 and 29 February 2016 recorded trade receivables and receivables from construction contracts. In several cases, FACC was involved in ongoing negotiations with several customers regarding contract interpretations and the amount of additional invoiced sums.

Due to the FACC Group's interpretation of the contract, receivables from these customers were recorded on the basis of the negotiation results.

According to IAS 18.18, IAS 11.13 or IAS 11.14, a sufficient probability of an inflow of economic benefits is a necessary prerequisite for recording receivables or revenue. The fulfillment of these prerequisites was assessed with regard to the existence of written declarations of the customer or other legally binding agreements.

The recognition of receivables or the reduction of revenue had to be corrected for these cases according to IAS 18.9, IAS 11.12 or IAS 39.9.

The following considerations lead to the conclusion that these are presentations in the financial statements of the respective previous periods, which are based on a different evaluation of the information available on the respective financial statement dates.

In the present Consolidated Financial Statements, trade receivables were reduced by kEUR 5,597 and receivables from construction contracts were reduced by kEUR 7,542 on 1 March 2015 (28 February 2015). In the Consolidated Financial Statements on 29 February 2016, trade receivables (accumulated) were reduced by kEUR 14,496, receivables from construction contracts were reduced by kEUR 8,391.

2) Recognition of provisions

In the fiscal year 2015/16 support measures in the FACC manufacturing process were carried out by third parties. No provision, however, was recognised for the remuneration of these measures although they already constituted a current obligation according to IAS 37. A provision in the amount of kEUR 2,965 was therefore recognised in the fiscal year 2015/16 under the item "other operating expenses" according to IAS 37.14.

3) Discounting non-current interest-free customer receivables and overdue receivables

Based on past estimates, FACC has hitherto discounted non-current or overdue customer receivables on a case-bycase basis only.

Discounting of overdue receivables was corrected according to IAS 39.43, 39.58 and 39.AG8 as well as FRS 7.37. The applicable interest rate was determined according to IAS 39.43 in connection with IAS 18.11 and IFRS 13.

Recording present discounting led to write-downs of trade receivables amounting to kEUR 284 on 1 March 2015 (28 February 2015) and write-downs amounting to kEUR 1,309 on 29 February 2016. Thus in the fiscal year 2015/16 financial expenses of kEUR 1,025 were recorded.

4) Impairment testing of development costs and tools

Impairment testing of development projects hitherto took place on the segment level. In order to comply with IAS 36.6, 36.14, 36.22 and 36.66-70 in the course of impairment testing, a lower aggregation level than was hitherto necessary was stipulated for the cash-generating unit in the fiscal year 2016/17. This aggregation level is based on development projects and was aggregated, in the case of development projects relating to the same type of aircraft, on a case-by-case basis. Impairment testing at this lower level of aggregation cannot be done retrospectively for periods preceding the reference year. This is due to the fact that a database is lacking for the allocation of cash outflows at this lower level of aggregation. Reproducing this database ex post is no longer possible or would involve excessive estimations, which does not lead to reliable information. Impairment testing was therefore first applied to the 2015/16 fiscal year according to the new procedure. Taking this procedure into account leads to impairment expenses in the amount of kEUR 20,200 in the case of intangible assets (development costs) and kEUR 3,514 in the case of property, plant and equipment (tools).

5) Adjusting of deferred taxes

The correction according to IAS 8.42 led to an adjustment of the deferred taxes. This was essentially due to changes in the temporary differences concerning development costs and to an increase of deferred tax assets applied to tax loss carry forwards. On 1 March 2015, the surplus of deferred tax liabilities turned into a surplus of deferred tax assets. Offsetting was permissible as the deferred tax receivables and liabilities refer to income taxes which are levied by the same tax authorities. The correction led to an increase of the deferred tax asset surplus on 29 February 2016.

Correction according to IAS 8 of the Consolidated Statement of Financial Position

28 February = 1 March 2015 29 February = 1 March 2016
Topic EUR'000 Previous Correction
EUR'000
Restated
EUR'000
EUR'000 Previous Correction
EUR'000
Restated
EUR'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 4) 151,659 151,659 166,067 (20,200) 145,867
Property, plant and equipment 4) 158,251 158,251 168,748 (3,514) 165,234
Other non-current financial assets 469 469 451 451
Non-current receivables 3) 24,597 24,597 30,232 (738) 29,494
Deferred taxes 1,633 1,633 241 12,295 12,536
Total non-current assets 334,976 1,633 336,609 365,739 (12,158) 353,581
CURRENT ASSETS
Inventories 98,858 98,858 107,823 107,823
Trade receivables 1), 3) 91,707 (5,597) 86,110 106,384 (13,758) 92,626
Receivables from construction contracts 1) 28,920 (7,542) 21,378 28,633 (8,391) 20,242
Other receivables and deferred items 17,507 17,507 15,336 1 15,337
Receivables from related companies 35,322 35,322 19,060 19,060
Cash and cash equivalents 110,955 110,955 56,215 56,215

Total current assets 383,269 (13,140) 370,129 333,451 (22,148) 311,303 TOTAL ASSETS 718,245 (11,507) 706,738 699,190 (34,306) 664,883

28 February = 1 March 2015 29 February = 1 March 2016
Topic EUR'000 Previous Correction
EUR'000
Restated
EUR'000
EUR'000 Previous Correction
EUR'000
Restated
EUR'000
EQUITY
EQUITY ATTRIBUTABLE TO SHAREHOLDERS
OF THE PARENT COMPANY
Share capital 45,790 45,790 45,790 45,790
Capital reserve 220,535 220,535 221,459 221,459
Currency translation reserve (170) (170) (250) (250)
Profit reserve
Other reserves (24,014) (24,014) (13,476) (13,476)
Net income All 72,759 (6,918) 65,841 50,842 (37,271) 13,571
314,900 (6,918) 307,982 304,365 (37,271) 267,093
Non-controlling interests 8 8 17 17
TOTAL EQUITY 314,908 (6,918) 307,990 304,382 (37,271) 267,110
LIABILITIES
NON-CURRENT LIABILITIES
Promissory note loans 42,000 42,000
Bonds 89,067 89,067 89,242 89,242
Other financial liabilities 66,268 66,268 75,213 75,213
Derivative financial instruments 10,340 10,340
Investment grants 11,223 11,223 12,385 12,385
Employee benefit obligations 10,926 10,926 10,759 10,759
Deferred taxes 4,589 (4,589)
Total non-current liabilities 192,413 (4,589) 187,824 229,599 229,600
CURRENT LIABILITIES
Trade payables 72,087 72,087 72,679 72,679
Liabilities towards related companies 425 425
Other liabilities and deferred items 25,007 25,007 25,526 25,526
Other financial liabilities 13,173 13,173 21,634 21,634
Promissory note loans 45,000 45,000
Derivative financial instruments 48,199 48,199 33,476 33,476
Other provisions 2) 6,642 6,642 10,394 2,965 13,358
Investment grants 768 768 904 904
Income tax liabilities 49 49 171 171
Total current liabilities 210,924 210,924 165,209 2,965 168,173
TOTAL LIABILITIES 403,337 (4,589) 398,748 394,808 2,965 397,773
TOTAL EQUITY AND LIABILITIES 718,245 (11,507) 706,738 699,190 (34,306) 664,883

Correction according to IAS 8 of the Consolidated Statement of Comprehensive Income

Fiscal year 2015/2016
Topic Previous
EUR'000
Correction
EUR'000
Restated
EUR'000
REVENUE 1) 587,541 (7,327) 580,214
Changes in inventory of finished and unfinished products 4,424 4,424
Own work capitalised 18,784 18,784
Other operating income 1) 28,986 (1,162) 27,824
Cost of materials and purchased services 2) (373,894) (2,965) (376,859)
Personnel costs (158,510) (158,510)
Depreciation, amortisation and impairment 4) (25,911) (23,715) (49,627)
Other operating expenses 1) (104,808) (232) (105,040)
Earnings before interest, taxes and fair value measurement
of derivative financial instruments
(23,388) (35,401) (58,790)
Financing expenses 3) (12,562) (1,025) (13,587)
Interest income from financial instruments 444 444
Fair value measurement of derivative financial instruments 5,242 5,242
Earnings before taxes (30,264) (36,426) (66,691)
Income taxes Alle 8,357 6,073 14,430
Earnings after taxes (21,907) (30,353) (52,261)
ITEMS SUBSEQUENTLY RECLASSIFIED TO PROFIT OR LOSS
Currency differences from consolidation
Fair value measurement of securities (after tax)
(78)
(13)

(78)
(13)
Cash flow hedges (after tax)
ITEMS NOT SUBSEQUENTLY RECLASSIFIED TO PROFIT OR LOSS
10,052 10,052
Revaluation effects of pensions and termination benefits (after tax) 499 499
Other comprehensive income 10,460 10,460
Consolidated comprehensive income (11,447) (30,353) (41,801)
INCOME AFTER TAX
ATTRIBUTABLE TO:
Shareholders of the parent company (21,916) (52,270)
Non-controlling interests 9 9
CONSOLIDATED COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Shareholders of the parent company (11,456) (41,810)
Non-controlling interests 9 9
Earnings per share (in EUR)
Undiluted = diluted
(0.48) (1.14)

Correction according to IAS 8 of the Consolidated Statement of Cash Flows

Fiscal year 2015/16
Topic Previous
EUR'000
Correction
EUR'000
Restated
EUR'000
Earnings before taxes All (30,264) (36,426) (66,691)
Plus financing expenses, interest income from financial instruments
and fair value measurement of derivative financial instruments
3) 6,876 1,025 7,901
Earnings before interest, tax and fair value measurement
of derivative financial instruments
(23,388) (35,401) (58,790)
Plus/minus
Depreciation, amortisation and impairment 4) 25,911 23,715 49,627
Income from the reversal of investment grants 1,332 1,332
Change in non-current provisions
Change in employee benefit obligations 499 499
Changes from consolidation effects (final consolidation) (2,334) (2,334)
Other non-cash income/expenses 1) (7,953) 1,395 (6,558)
(5,933) (10,291) (16,224)
Change in inventory (9,069) (9,069)
Change in trade receivables and other receivables 1) (2,411) 7,327 4,916
Change in trade payables and other liabilities 2,037 0 2,037
Change in current provisions 2) 5,627 2,965 8,591
Cash flow from ongoing activity (9,749) (9,750)
Interest received 444 444
Income taxes paid (2) (2)
Net cash flow from ongoing business activities (9,308) (9,308)
Investing activity
Payments for the acquisition of intangible assets and property,
plant and equipment
(50,865) (50,865)
Net cash flow from investing activities (50,865) (50,865)
Financing activity
Proceeds from non-current interest-bearing liabilities 21,943 21,943
Repayments of promissory note loans (3,000) (3,000)
Repayments of non-current interest-bearing liabilities (10,936) (10,936)
Changes in current interest-bearing liabilities 8,461 8,461
Interest paid (12,562) (12,562)
Net cash flow from financing activities 3,906 3,906
Net changes in cash and cash equivalents (56,266) (56,266)
Cash and cash equivalents at the beginning of the period 110,955 110,955
Changes due to consolidation effects (final consolidation) (8) (8)
Effects from foreign currency exchange rates 1,534 1,534
Cash and cash equivalents at the end of the period 56,215 56,215

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The essential accounting and valuation policies applied when creating these Consolidated Financial Statements are described in the following. The described policies were applied consistently to the presented reporting periods.

a) Basis of preparation

The Consolidated Financial Statements as of 28 February 2017 have been prepared in accordance with the International Financial Reporting Standards (IFRS) and interpretations of the IFRS IC as applicable in the EU, and in accordance with the statutory regulations of section 245a of the Austrian Commercial Code (UGB).

The Consolidated Financial Statements have been prepared under the historical cost convention, with the exception of financial assets and financial liabilities (including derivative financial instruments) that were measured at fair value. In the balance sheet disclosure, a distinction is made between non-current and current assets and liabilities, which are explained according to their maturity in the Appendix. The Consolidated Statement of Comprehensive Income is structured in accordance with the total cost method.

Compiling Consolidated Financial Statements in compliance with the IFRS requires estimates. Furthermore, application of the company-wide accounting and valuation methods requires valuations from the management. Areas with a higher margin of discretion or a higher level of complexity or areas in which assumptions and estimates are significant for the Consolidated Financial Statements are stated in note 3 b).

Amounts have been rounded for the sake of clarity and, if specified, are indicated in thousands of euros.

New and amended standards applied for the first time in the fiscal year

The following new or amended standards and interpretations were applied for the first time in the 2016/17 fiscal year, but did not result in any significant effects on the Consolidated Financial Statements:

Standard Interpretation Published
by IASB
Mandatory
application in
accordance with
IASB for the fiscal
year from
Endorsement by
the EU on
31 December 2016
IAS 1 Disclosure Initiative December 2014 1 January 2016 Yes
IAS 16, 41 Property, Plant and Equipment; Agriculture:
Reporting bearer plants
July 2014 1 January 2016 Yes
IAS 16, 38 Property, Plant and Equipment; Intangible Assets:
clarification of acceptable methods of depreciation
and amortisation
May 2014 1 January 2016 Yes
IAS 19 Defined Benefit Plans: Employee Contributions November 2013 1 February 2017 Yes
IAS 27 Equity Method in Separate Financial Statements August 2014 1 January 2016 Yes
IFRS 10, 12,
IAS 28
Investment Entities:
Applying the Consolidation Exception
December 2014 1 January 2016 Yes
IFRS 11 Accounting for Acquisitions of Interests in Joint
Operations
May 2014 1 January 2016 Yes
Miscellaneous Amendment of several IFRS as a result of
the improvement process 2010–2012
December 2013 1 July 2014 Yes
Miscellaneous Amendment of several IFRS as a result of
the improvement process 2012–2014
September 2014 1 January 2016 Yes

The International Accounting Standards Board (IASB) is working on a number of projects that will affect fiscal years beginning on 1 January 2017. The following new, revised and/orsupplemented standards and interpretations of the IFRIC, which have already been published by the IASB but are not yet mandatory in the EU, have not been applied early by FACC AG and are therefore not relevant for these Consolidated Financial Statements:

Standard Interpretation Published
by IASB
Mandatory
application in
accordance with
IASB for the fiscal
year from
Endorsement by
the EU on
31 December 2016
IAS 7 Disclosure Initiative January 2016 1 January 2017 No
IAS 12 Recognition of Deferred Tax Assets
for Unrealised Losses
January 2016 1 January 2017 No
IAS 40 Transfers of Investment Property: IAS 40 can also
be applied to properties under construction
December 2016 1 January 2018 No
IFRS 2 Classification and Measurement of Share-based
Payment Transactions
June 2016 1 January 2018 No
IFRS 4 Applying IFRS 9 "Financial Instruments" with
IFRS 4 "Insurance Contracts"
September 2016 1 January 2018 No
IFRS 14 Regulatory Deferral Accounts January 2014 1 January 2016 No
IFRS 15 Revenue from Contracts with Customers May 2014 1 January 2018 Yes
IFRIC 22 Foreign Currency Transactions and
Advance Consideration
December 2016 1 January 2018 No
IFRS 9 Financial Instruments July 2014 1 January 2018 Yes
Miscellaneous Amendment of several IFRS as a result of
the improvement process 2014–2016
December 2016 1 January 2017/
1 January 2018
No
IFRS 16 Leasing January 2016 1 January 2019 No
IFRS 10,
IAS 28
Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
September 2014 n/a No

Standards, interpretations and amendments to published standards which are not yet effective and have not been applied prematurely by the Group

There are new standards and amendments to standards and interpretations which must be applied to future fiscal years. These have not been applied in these financial statements. With the exception of the following standards, no significant effects on the company are expected from the future application of these regulations.

IFRS 9, "Financial Instruments" pertains to the classification, recognition and evaluation of financial assets and financial liabilities. The complete version of IFRS 9, which was developed in multiple project phases, was published by the IASB in July 2014. IFRS 9 replaces the regulations in IAS 39 "Financial Instruments: Recognition and Measurement" which pertains to the classification and measurement of financial instruments. IFRS 9 maintains the mixed evaluation model with simplifications and creates three evaluation categories for financial assets: amortised cost carrying amount, fair value through other comprehensive income (FVTOCI) and fair value through profit or loss (FVTPL). The categorisation is based on the business model of the company and the characteristics of the contractual cash flows of the financial assets. Investments in equity instruments are, in principle, subject to compulsory evaluation at FVTPL. At the outset, however, there is an irrevocable right to choose to report changes in the attributed fair value in other comprehensive income/loss. Furthermore, IFRS 9 introduces a new depreciation model on the basis of expected losses which replaces the model in IAS 39 which is based on incurred losses. With respect to the categorisation and valuation of financial liabilities, IFRS 9 only includes amendments pertaining to liabilities designated FVTPL. As a novelty, IFRS 9 requires changes in own credit risks to be recorded in other comprehensive income/loss. IFRS 9 also makes measuring hedge effectiveness easier since, in accordance with IFRS 9, the quantitative effectiveness test no longer applies. A financial correlation between the secured underlying transaction and the hedging instrument is required. In addition, the hedging relationship must correspond with that which the company management actually utilises for the purposes of risk management. Simultaneous documentation is also required in accordance with IFRS 9, but is different from the current documentation created in accordance with IAS 39. The IASB prescribes an initial, compulsory application of IFRS 9 for reporting periods that start on or after 1 January 2018. The Group is currently analysing the complete effects of the application of IFRS 9. Currently, the Group estimates that IFRS 9 will primarily effect the categorisation of financial assets (trade receivables and receivables from finance leasing amongst others) and their valuation. The change to the expected credit loss model will result in write-downs on receivables to be recorded earlier. The modification of IFRS 7 "Financial Instruments: Disclosures" due to IFRS 9 will result in modified or extended notes disclosures.

IFRS 15 "Revenue from Contracts with Customers" regulates revenue recognition and standardised principles intended to provide the financial statement addressees with decision-making information regarding the type, amount, provisions and uncertainties of revenue. In accordance with IFRS 15, revenues must be recorded when the customer obtains the power of disposition over contractual goods and services and can benefit from them. The new standard for recognising revenue replaces the current regulations of IAS 18 "Revenue" and IAS 11 "Construction Contracts" and corresponding interpretations. The IASB has decided the compulsory initial application to fiscal years that start on or after 1 January 2018.

No significant effects on the recognition of revenue are expected from the sale of serial products. Some contracts are multi-element arrangements which, in addition to the sale of serial products, also contain additional performance obligations. According to IFRS 15, goods and services in exchange for consideration are allocated to the components according to the individual transaction prices, and are recognised as revenue upon fulfillment of the performance obligations. As concerns the revenue recognition of research and development services, the new criteria for period-specific revenue recognition must in future be assessed for each project with due regard to the contractual design.

FACC is active in the supply industry of aeronautical components and offers services related to this industry. The selling of goods and related spare parts and services is regulated either by individual contracts, or by contracts encompassing a bundle of goods and services. If a contract regulates the supply of goods only, revenue is still recognised at a specific point in time. With contracts which, in addition to the supply of goods, also regulate the supply of services, the Group expects changes to revenue recognition due to the new regulations of IFRS 15. Changes are expected to the extent that goods and services in exchange for consideration are now allocated to the individual components on the basis of individual relative transaction prices and that the recognition of revenue resulting from these contracts can be distributed in future over time differently.

Management also currently estimates that changes can occur to construction contracts recognised according to the completed contract method to the extent that the profit margin of these contracts is recognised over time, and is no longer fully recognised at a point in time upon completion of the contract. This would have an early effect on comprehensive income.

Parallel to the complete analysis of the effects, internal processes are adjusted in connection with the application of IFRS 15. Especially regulations regarding changes to contracts and multi-component transactions will be relevant to the FACC Group. Furthermore, extended notes disclosures regarding the recognition of revenue will have to be fulfilled.

IFRS 16 "Leasing Contracts" contains regulations regarding recognition, valuation, disclosure and notes disclosures of leasing contracts. The new leasing standard is to be applied to fiscal years beginning on 1 January, 2019 or after and replaces the previous IAS 17 regulations. Currently, payment obligations resulting from leasing contracts are only to be disclosed in the annex. In the future, rights and obligations resulting from these leasing contracts must be reported in the balance sheet as assets (right to use the leased object) and liabilities (leasing liabilities). The Group expects a substantial increase in the balance sheet to arise from this change upon initial adoption. Moreover, further reference is made to note 33 regarding the future volume of leasing services contracted by the lessee to be reported in the balance sheet. Furthermore, extended notes disclosures in accordance with the IFRS 16 regulations will have to be fulfilled.

There are no further standards, changes to standards or interpretations not yet subject to compulsory application and which might have a significant effect on the Group.

b) Use of assumptions and estimates

When preparing the financial statements, assumptions were made and estimates applied which impacted on the amounts of the reported assets, liabilities, income and expenses. Such assumptions and estimates may result in a significant adjustment to assets and liabilities in the coming fiscal years.

Assumptions and estimates are audited continuously and are based on experiences from the past and other factors, such as expectations regarding future income, which appear reasonable under the circumstances. The resultant accounting assumptions do not necessarily correspond to the actual income. Such assumptions and estimates, which might lead to significant adjustments to the carrying amount of assets and liabilities in the following fiscal year, are discussed below.

i) Employee benefit obligations

Obligations towards employees primarily include retirement benefit obligations and provisions for termination benefits. The obligations towards employees are determined at the present value of the expected future cash outflows based on interest rates determined at the end of the reporting period, taking market yields into account, on the basis of commercial bonds with the highest credit rating, in the currency of the amounts disbursed and which indicate the terms corresponding to the obligations.

Independent actuarial appraisers were employed by management to perform a complete evaluation of the expected obligations towards employees, which must be disclosed and recorded in the financial statement in accordance with IFRS provisions.

Such actuarial appraisers apply assumptions and estimates supplied by management. They evaluate and update these assumptions at least once a year. The ability to make judgments is required when defining the essential actuarial assumptions for determining the cash value of performance-orientated obligations and service costs. Changes to the essential actuarial assumptions can significantly impact on the cash value of the expected obligations and service costs in future periods. A potentially volatile parameter is the discount factor. An increase in discounting of 0.25 percentage points would result in a reduction of the cash value of the performance-orientated obligations by kEUR 307 (29 February 2016: kEUR 144). A reduction of the discount factor of 0.25 percentage points would result in an increase of the cash value of the performance-orientatedobligations by kEUR 322 (29 February 2016: kEUR 153).

Reference is also made to note 17 regarding the carrying amounts of the reported obligations towards employees on 28 February 2017 and 29 February 2016.

ii) Non-current receivables

Non-current trade receivables are discounted at a matched maturity interest rate, for which assumptions are needed, on the relevant balance sheet date (see notes to IAS 8).

In the reporting period 2015/2016 the Group suffered an unlawful outflow of liquid assets amounting to kEUR 52,847 as a result of fraudulent activities organised externally and known as the fake president incident. Action was immediately taken which enabled a sum of kEUR 10,860 in recipient accounts to be blocked. This sum was balanced on 28 February 2017 and on 29 February 2016 as a non-current receivable (please refer to note 9) since the subsidiary FACC Operations GmbH assumes it is the lawful owner of the money, and having sought legal advice that the sum will be remitted. It is to be expected that those sums blocked in recipient accounts will not be refunded in the immediate future.

In addition, in the reporting period 2016/2017 the Management Board sought the services of a law firm which since then has been making intensive efforts to recover the frozen funds. Moreover, a variety of measures have been adopted in consultation with the Chinese proprietor to ensure that the funds are returned promptly.

iii) Scheduled amortisation of development costs

The number of deliverable shipsets is used as the basis for calculating the amortisation of capitalised development costs. This number of shipsets constitutes an assumption based on a substantiated investigative process (see point 3 d) iii) development costs). If the assumed number of shipsets were increased by 10%, this would result in a reduction of the amortisation of kEUR 613 (29 February 2016) and kEUR 814 (28 February 2017). If the assumed number of shipsets were reduced by 10%, this would result in an increase of the amortisation of kEUR 751 (29 February 2016) and kEUR 845 (28 February 2017). Particular reference is made to note 6 with regard to the asset values of development costs entered in the balance sheet of 28 February 2017 and 29 February 2016.

iv) Inventory

For inventory purposes slow-moving items are categorised according to their product group, and evaluated using specific deductions. Slow-moving items are identified in the system as materials demonstrating a storage period of more than 24 months. Particular reference is made to note 9 regarding the asset values of the inventory entered in the balance sheet on 28 February 2017 and 29 February 2016.

v) Trade receivables

In addition to a standardised evaluation of receivables based on empirical values of the period overdue, in the case of an individual value adjustment the probability of incoming payments is evaluated, whereby particular consideration is given to past experience of the customers, their credit rating and possible securities. Write-downs and discounting of receivables are disclosed in the notes 10 and in the details of IAS 8. Irrecoverable receivables are written off.

vi) Receivables from construction contracts

A construction order in accordance with IAS 11 is a contract for the customer-specific production (development) of an asset. Contract costs are recorded as an expense during the period in which they are incurred. Since the results of a construction order cannot be reliably determined on a regular basis, the construction revenue is only recorded to the extent the incurred construction costs can likely be demanded from the customer. No partial profit recognition is performed due to this management estimate. Total profits are in principle recognised upon completion of the construction contract. The valuation of contract revenue is also influenced by various uncertain events depending on future events, and is thus subject to substantial estimation. This can lead to adjustments after events have taken place or uncertainties have been resolved.

Reference is made to note 10 regarding the carrying amount of the receivables from construction contracts reported on 28 February 2017 and 29 February 2016.

vii) Assessment of depreciation and amortisation of goodwill and other non-current assets

When assessing depreciations and amortisations, assumptions must be made, in particular with respect to the following: (1) circumstances that indicate that the respective assets may not be of value; (2) coverage of the carrying amount of an asset by the attainable amount based on the present value of future cash flows; and (3) appropriate, essential assumptions for the creation of cash flow projections, including an appropriate, applicable discount rate.

Further reference is made to note 34 regarding the assumptions and estimates used for the impairment test of the goodwill. If the discount rate employed increased by 50 base points on the balance sheet date, no additional impairment would be necessary. The Group applies the weighted average cost of capital (WACC) as the discount rate, whereby this interest rate was assumed at 7.44% on 28 February 2017 and 7.55% on 29 February 2016.

A change in the estimated EUR/USD exchange rate in the evaluation model by 5 cents (plus or minus) would not result in a need for impairment in the Engines & Nacelles and Aerostructures divisions, but would result in a need for impairment in the Interior division in the amount of kEUR 18,473. The EUR/USD exchange rate used in the valuation model is EUR/USD 1.15. A change to the planned EBIT margin of –2.0 percentage points would not result in any need for impairment in the Engines & Nacelles and Aerostructures divisions, while the Interiors division would require an impairment of kEUR 34,460.

The value in use of the Interiors division exceeds the carrying amount by kEUR 33,244 on 28 February 2017 (29 February 2016: 61,493 kEUR).

The carrying amount of the Interior cash generating unit would be equal to the value in use if the EUR/USD exchange rate decreased by 3.2 cent (2015/16: 6.8 cent), the EBIT margin changed by 98 percentage points (2015/16: 2.02%) or the discount rate increased by 115 base points (2015/16: 198 base points).

In the fiscal year 2016/17, the impairment test of capitalised development projects was, unlike the previous year, carried out at the level of individual projects or interconnected projects to the extent that they generate independent cash flows. All development projects which are not subject to scheduled amortisation on the balance sheet date, or which are expected to incur losses in the multi-year plan were subject to an impairment test. Development projects pertaining to the same type of aircraft were jointly tested for impairment.

The recoverable amount of the development costs was estimated on the basis of the present value of future cash flows which can likely be achieved with the respective development projects (value in use). The cash flows are discounted with a WACC (net of tax) of 7.44%. Estimation of the cash flows is based on the budget approved by the Supervisory Board for the following fiscal year and mediumterm planning of the next 5 years (detailed planning period). For specific development projects extending beyond the detailed planning period, the planning premises of the previous planning year will be continued, limited by the rates of the airline monitor. The maximum term is 20 years.

These values in use are compared to the carrying amount of capitalised development costs as well as assets attributable to the respective development project on the balance sheet date. An impairment requirement for capitalised research and development costs of kEUR 883 (29 February 2016: kEUR 20,200) was established by this assessment on the balance sheet date of 28 February 2017, and was posted under the item depreciation and amortisation to profit or loss in the Consolidated Statement of Comprehensive Income.

Increasing the discount rate applied to development projects which have not yet been amortised as planned, and all development projects which are expected to incur losses in the multi-year plan on the balance sheet date by 50 base points, would not lead to an additional aggregate impairment requirement. When assessing the additional impairment requirement due to variations in the discount rate, development projects pertaining to the same type of aircraft were aggregated in line with impairment testing.

Decreasing the free cash flows of development projects which are not subject to scheduled amortisation on the balance sheet date, and all other development projects which are expected to incur losses in the multi-year plan on the balance sheet date by 10%, would not lead to an additional aggregate impairment requirement. When assessing the additional impairment requirement due to variations in the free cash flows, research and development projects pertaining to the same type of aircraft were aggregated in line with impairment testing.

viii) Other provisions

Warranty provisions are raised by the divisions according to a standardised process. Such risks are calculated by the heads of division at each financial statement date and are reported to Financial Accounting. The risks reported by the heads of division are subject to a final assessment by the CEO and must be finally taken into consideration as risks by Financial Accounting. In the case of a risk to be taken into account, the respective division must estimate the recognised provisions as accurately as possible on the basis of past experiences and individual assessments.

Determining provisions for pending losses from contracts (construction contracts and serial orders) is to a considerable degree dependent on estimates. FACC AG only establishes provisions for pending losses from contracts if the expected construction costs exceed the expected construction revenue. Contracts inducing losses are identified by FACC AG by regularly monitoring and updating the expected construction costs. This requires the substantial use of estimates in order to fulfill certain performance requirements, develop learning curves and estimate warranty expenses. The question whether individual customer agreements can be viewed as a binding contract, or whether there are pending losses is addressed in detail on the basis of the chronological sequence, substantive connection and mutual interdependency of the associated cash flows. Two contracts have been qualified as a contract for assessing pending losses on the basis of this assessment. Due to this qualification, no pending losses were identified.

This approach is the subject of the current Enforcement Procedure, a final assessment by the Austrian Financial Market Authority (FMA) is not yet available. If the final assessment of the supervisory authority ran counter to the accounting methods of FACC AG, the provisions for pending losses would have to be adjusted retroactively by EUR 25 million based on the estimates of 29 February 2016, and provisions would increase to EUR 27 million based on the estimates of 28 February 2017.

ix) Usage duration of property, plant and equipment

The usage duration of group property, plant and equipment is the period during which it is available to the Group for use. The usage duration is estimated based on the management's experience. Regular audits by the management can impact depreciation and thus the future depreciation expense. Reference is made to note 7 regarding the property, plant and equipment on 28 February 2017 and 29 February 2016.

x) Derivative financial instruments

All derivatives are reported at the attributed fair value. Profits and losses resulting from changes to the attributed fair value are recorded depending whether they were designed as a hedging instrument in accordance with IAS 39 and qualify for reporting as a hedging relationship. If derivative financial instruments concluded by the Group fulfill the conditions for reporting a hedge on cash flows, changes to their attributed fair value shall be entered as reserves for cash flow hedges in equity. If derivative financial instruments concluded by the Group do not fulfill the conditions for reporting a hedge on cash flows or reporting as hedging relationships is not applied, changes to their attributed fair value through profit or loss (FVTPL) shall be recorded in the Consolidated Statement of Comprehensive Income. For the preparation of the financial statements of derivative financial instruments, the company in any case starts from the premise that the planned cash flows are actually realised. The sensitivity analysis with respect to derivative financial instruments is included in the explanation below 4 b) i). Particular reference is made to note 15 regarding the carrying amounts of the derivative financial instruments on 28 February, 2017 and 29 February, 2016.

c) Consolidation

The annual financial statements from subsidiaries included in the Consolidated Financial Statement were prepared on the uniform Consolidated Financial Statements date 29 February 2016 and 28 February 2017, and in accordance with IFRS as applied in the EU. The individual financial statements of FACC AG and its subsidiaries are included in the Consolidated Financial Statements whilst taking the accounting and valuation methods applicable to the entire Group into account.

Subsidiaries are all companies controlled by the Group. The Group controls a portfolio company if it has the power of disposition over the portfolio company, there is a risk burden due to or there are entitlements to fluctuating yields from its involvement in the portfolio company and the Group has the ability to utilise its power of disposition over the portfolio company in such a manner that impacts the amount of the yield of the portfolio company.

Subsidiaries are included in the Consolidated Financial Statements from the time at which control was transferred to the Group as part of the full consolidation. They will be deconsolidated at the time at which control ends; the consolidated statement of comprehensive income includes the income and expenses of the subsidiaries up to that time.

All Group companies are included in the Consolidated Financial Statements within the framework of full consolidation.

ii) Consolidated companies

The consolidated companies are defined on the basis of the principles of IFRS 10. The Group has the following subsidiaries as of 28 February 2017 and 29 February 2016:

Issued and fully paid
Company Headquarters nominal capital Direct share Primary activities
FACC Operations GmbH Ried im Innkreis, Development & production
Austria EUR 127,000,000 100% of aircraft components
FACC Solutions (Canada) Inc. Montreal, Canada CAD 10,000 100% Customer service
FACC Solutions Inc. Wichita, Kansas, USA USD 10,000 100% Customer service
FACC Solutions s.r.o. Bratislava, Slovakia EUR 6,639 100% Design & engineering
FACC (Shanghai) Co., Ltd Shanghai, China RMB 2,000,000 100% Design & engineering
ITS digitech PvT. Ltd. Bhau Patil Marg, India INR 20,193,002 100% Design & engineering
CoLT Prüf und Test GmbH St. Martin, Austria EUR 35,000 91% Design & engineering

The non-controlling interests with respect to the subsidiary CoLT Prüf and Test GmbH are classified as non-significant.

There are no restrictions of access to assets and liabilities of the subsidiaries.

ii) Changes to consolidated companies

The consolidated companies of the FACC Group as of 28 February 2017 remained unchanged compared to the consolidated companies as of 29 February 2017.

iii) Consolidation methods

Acquired subsidiaries are reported in accordance with the purchase method. The procurement costs of the purchase correspond to the attributed fair value of the surrendered assets, the issued equity instruments and the incurred or assumed liabilities at the time of the transaction (date of exchange). In the framework of a corporate merger, acquired, identifiable assets, liabilities and contingent liabilities are evaluated upon initial consolidation at their attributed fair values at the time of acquisition. Costs connected to the company acquisition shall be recorded as expenses in the periods during which they were incurred.

For each company acquisition, the Group decides on a caseby-case basis whether the non-controlling interests of the acquired company will be recorded at the attributed fair value or based on the proportionate share of the net assets of the acquired company.

Internal group transactions, balances and significant, unrealised profits and losses from transactions between group companies shall be eliminated.

The accounting and valuation methods of subsidiaries were, if necessary, modified to ensure uniform accounting and valuation throughout the Group.

Transactions with non-controlling interests shall be treated as transactions with equity holders of the Group. A difference between the paid amount and the relevant share of the carrying amount of the net assets of the subsidiary resulting from the acquisition of a non-controlling interest shall be recorded in equity. Profit and losses incurred when selling non-controlling interests shall also be recorded in equity.

iv) Currency conversion

The items included in the financial statements of each group company shall be evaluated on the basis of the currency that corresponds to the currency of the primary economic environment in which the company operates (functional currency). The Consolidated Financial Statements are prepared in euros ("EUR") which is the functional currency of the FACC Group and the reporting currency of the Group.

When converting the currency of annual financial statements of subsidiaries into foreign currencies, the exchange rates on the balance sheet date were applied to items in the Consolidated Statement of Financial Position and the average exDifferences in these currency conversions shall be recorded as part of the other comprehensive income/loss in equity. change rates for the reporting period were applied to items in the Consolidated Statement of Comprehensive Income.

Exchange rate differences from the conversion of transactions and monetary balance sheet items into foreign currencies shall be recorded to profit or loss at the exchange rates applicable at the time of the transaction or valuation. Currency conversion with respect to foreign currency derivatives is explained in note 3 q).

The following exchange rates were applied to currency conversions:

Closing rate
29 February, 2016
Average rate
2015/16
EUR/CAD 1 1.4767 1.4388
EUR/USD 1 1.0888 1.1014
EUR/RMB 1 7.1351 6.9799
EUR/INR 1 74.3825 71.6992
Closing rate
28 February, 2017
Average rate
2016/17
EUR/CAD 1 1.3984 1.4435
EUR/USD 1 1.0597 1.1012
EUR/RMB 1 7.2728 7.3700
EUR/INR 1 70.6290 73.9357

d) Intangible assets

i) Goodwill

Goodwill results from the acquisition of subsidiaries. Goodwill is reported as the value resulting from the surplus of the procurement costs of the acquisition above the Group's share of identifiable net assets evaluated at the attributed fair value. If the procurement costs are lower than the net assets of the acquired subsidiary evaluated at the attributed fair value, the difference shall be recorded to profit or loss in the consolidated statement of comprehensive income.

For the purposes of the impairment test, the goodwill acquired in the framework of a corporate merger shall be allocated to the Cash Generating Units (CGUs) or groups of CGUs expected to benefit from the synergies of the merger. Each CGU or group of CGUs to which the goodwill is allocated constitutes the lowest level within the company at which the goodwill is monitored for internal management purposes. The goodwill is monitored internally on the segment level.

A CGU or group of CGUs to which the goodwill has been allocated shall be tested annually with respect to intrinsic value on the financial statement date and whenever there is evidence of impairment. The carrying amount of the CGU, including goodwill, is compared to its recoverable amount, i.e. the higher of attributed fair value less costs of disposal and value in use. If the carrying amount of the CGU exceeds its recoverable amount, the difference shall be recorded directly in profit and loss as amortisation costs. Amortisation costs recorded for the goodwill will not be made up for in the following periods.

ii) Software and supply rights

Intangible assets acquired in return for payment shall be valued at procurement costs in the Consolidated Statement of Financial Position and, in general, amortised linearly over their respective usage durations (three to ten years). Supply rights are amortised on the basis of delivered shipsets or shipsets still to be delivered.

iii) Development costs

An intangible asset resulting from development shall only be recognised if all of the following points can be attested:

  • a) The technical feasibility of completing the intangible asset so that it will be available for use or sale.
  • b) The intention of completing the intangible asset as well as using or selling it.
  • c) The ability to use or sell the intangible asset.
  • d) How the intangible asset will achieve a presumable, future financial benefit; among other things, the existence of a market for the products of the intangible asset or the intangible assets itself or, if intended for internal use, the benefit of the intangible asset can be verified.
  • e) The availability of adequate technical, financial and other resources in order to conclude the development and use or sell the intangible asset.
  • f) The ability to reliably evaluate expenses attributable to the intangible asset during its development.

The Group capitalises development costs in accordance with IAS 38 on the basis of project-related costs. Per development project, all costs defined as development costs are capitalised. The capitalised development costs are treated as construction in progress. Amortisation begins at the time the series is ready for production. The revenue framework is determined based on the airline monitors in use in the aviation industry (= market prognosis created by a third party) and current customer projections. This revenue framework is re-evaluated on each balance sheet date. The planning horizon of the revenue framework extends to a maximum of 20 years depending on the status of the project (new projects or ongoing projects with remaining terms). This amortisation method ensures that changes in order volumes directly affect development costs. The costs for research projects shall be recorded as an expense as soon as they are incurred.

Borrowing costs standing in direct relation with the acquisition, construction or production of qualified assets (these are assets for which a significant period of time is required to achieve the intended usable and salable status) shall be added to the manufacturing costs of these assets up to the time at which the assets are essentially ready for their intended use or sale. All other borrowing costs shall be recorded to profit or loss in the period in which they were incurred.

e) Property, plant and equipment

Property, plant and equipment are measured at the procurement or manufacturing cost, less scheduled depreciation and impairment.

The manufacturing costs of property, plant and equipment include individual costs and reasonable parts of the overhead costs.

Depreciable property, plant and equipment are depreciated linearly over the expected economic lifecycle of the respective object. When determining the depreciation rates, the following lifecycles were assumed, without changes, in all reporting years:

Life cycle in years
from to
Buildings 10 50
Investments in third-party buildings1) 33 50
Technical plants and machinery 3 33
Office equipment 5 14
Vehicles 5 8

Profits and losses from disposals of property, plant and equipment shall be determined as the difference between the disposal proceeds and the carrying amounts of property, plant and equipment and are recorded in the Consolidated Statement of Comprehensive Income under the items "other operating income" and "other operating expenses".

f) Assets from renting and leasing relationships

The Group rents assets as a leasing partner. Leasing relationships in which an essential part of the risks and opportunities connected to the ownership of the lease object remain with the lessor are classified as operating leasing relationships. Payments made in conjunction with an operating leasing relationship (net after taking incentives paid by the lessor into account) shall be recorded linearly in the Consolidated Statement of Comprehensive Income across the duration of the leasing relationship.

Leasing contracts regarding property, plant and equipment in which the Group bears the essential risks and benefits of owning the lease object shall be classified as finance leases. Assets from finance leases shall be capitalised at the beginning of the leasing contract term at the lower value of the attributed fair value of the lease object and the present value of the minimum lease payments. A lease liability shall be recorded at the same amount as a liability under non-current liabilities. The interest share of the lease instalment shall be recorded as an expense in the Consolidated Statement of Comprehensive Income so that a constant interest results across the entire term of the leasing contract. Property, plant and equipment held under a finance lease is depreciated over the shorter of the two subsequent periods: the economic lifecycle of the asset or the term of the lease contract.

g) Other non-current financial assets

This item includes securities and interests. Regular purchases and sales of financial assets shall be reported on the settlement date.

All items shall be classified as "available for sale". They shall be valued at the procurement costs on the acquisition date and at the attributed fair value in later periods. Changes in value shall be recorded as part of other comprehensive income/loss in equity and in the event of impairment or realisation due to the sale of the security, they shall be recorded in the Consolidated Statement of Comprehensive Income. The attributed fair values of the securities result from the stock market price on the balance sheet date.

h) Impairment of intangible assets (goodwill, research and development costs, software and supply rights) and property, plant and equipment

Goodwill as an intangible asset with an unlimited lifecycle is subject to an impairment test on the segment level on an annual basis. Development costs which are not subject to scheduled amortisation are subject to an annual impairment test on the project or project group level. Assets which are subject to scheduled depreciation or amortisation are subject to an impairment test if there is any indication that the carrying amount of the asset can no longer be recovered. Assets that are subject to scheduled amortisation shall be audited with respect to impairment if there is any indication that the book value of the asset can no longer be attained. An impairment is recorded in the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of the asset is the higher of attributed fair value less sales costs of disposal and value in use. For the purposes of the impairment test, assets shall be combined on the lowest level on which the cash flows are generated which are largely independent of the cash flows of other assets or groups of assets (CGU). For non-financial assets (except for goodwill) for which a depreciation or amortisation was recorded in the past, an audit shall be performed on each balance sheet date to determine whether a reversal of an impairment loss must be recognised (see note 6).

i) Inventories

Inventories are measured on the balance sheet date at the lower value of procurement cost or manufacturing cost and net realisable value.

The procurement costs include all costs incurred in order for the product to achieve the required status and bring it to the respective location. The manufacturing costs include all costs and reasonable portions of the overhead costs incurred in conjunction with the production on the basis of an average utilisation of the production facilities. Borrowing costs directly connected to the acquisition, construction or production of qualified assets (these are assets for which a significant period of time is required to achieve the intended usable and salable status) shall be added to the manufacturing costs of these assets up to the time at which the assets are essentially ready for their intended use or sale. All other borrowing costs shall be recorded to profit or loss in the period in which they were incurred. The costs per unit shall be determined according to moving average cost.

The net realisable value results from the expected sale proceeds for the objects less the production and distribution costs yet to be incurred as defined based on experience. Price reductions in replacement costs shall be taken into account in general when determining the net sale price.

j) Employee benefit obligations

Trade receivables, other receivables and other assets are initially recognised at the attributed fair value or at procurement costs and, thereafter, are reported at the amortised cost carrying amount less necessary write-downs (in the case of impairment). Receivables in foreign currencies shall be evaluated at the applicable closing rate. Receivables which have been overdue for more than one year on the financial statement date shall be discounted (see note on IAS 8).

k) Cash and cash equivalents

Cash and cash equivalents include cash (cash holdings), received checks and credit balances with credit institutes available at any time with a maximum original term of three months or less. This corresponds to the definition of cash and cash equivalents in the Consolidated Statement of Cash Flows.

l) Obligations towards employees

i) Retirement benefit obligations

Due to an individual commitment as a result of an executive employee joining FACC AG on 1 June 2014, the Group is obligated to pay pension benefits to this executive employee after he retires. This obligation has expired according to the present legal opinion with the dismissal of the executive employee in the 2016/2017 fiscal year.

The provision for defined benefit plans recognised in the balance sheet on 29 February 2016 corresponds to the present value of defined benefit obligations (Defined Benefit Obligation, DBO) on the balance sheet date less the attributed fair value of the plan asset. The DBO shall be calculated annually by an independent expert actuarial mathematician using the projected unit credit method. The present value of the DBO shall be calculated by discounting the expected future outflow of funds with the interest rate of commercial bonds with the highest credit rating. The commercial bonds are quoted in the currency of the payout amounts and have terms corresponding to the pension obligations. In countries in which the market is not sufficiently developed for such bonds, government bonds shall be applied.

The current service costs reflect the increased defined benefit obligations earned by the employee during the 2015/16 reporting period. If there are no capitalisations, they shall be recorded under personnel costs in the Consolidated Statement of Comprehensive Income. Service costs to be settled at a later stage shall be recorded immediately to profit or loss. The net interest shall be determined by multiplying the net debt (asset) from the performance-oriented pension plan with the discount rate. Both shall be determined at the beginning of the reporting period taking any and all changes to the net debt into account that took effect as a result of the contribution and benefit payments during the course of the reporting period. The net interest shall be recorded under personnel costs in the Consolidated Statement of Comprehensive Income.

Actuarial profits and losses ("revaluation effects") based on experience-related adjustments and changes to actuarial assumptions shall be recorded under other comprehensive income/loss in equity in the period in which they were incurred.

ii) Defined contribution plans

For all members of management, the Group pays monthly contributions into an inter-company pension fund in which the contributions are invested in an employee account and paid out to the employee upon retirement or are transferred as a claim. The Group is solely obligated to pay the contributions recorded in that fiscal year under expenses for which they were paid (defined contribution obligation).

For all employment contracts established in Austria after 31 December 2002, the Group pays monthly contributions in the amount of 1.53% of the remuneration into a company pension fund in which the contributions are invested in an employee account and paid out to the employee upon termination of employment or are transferred as a claim. The Group is solely obligated to pay the contributions recorded in that fiscal year under expenses for which they were paid (defined contribution obligation).

iii) Severance obligations

Due to statutory regulations, the Group is obligated to pay a one-time severance in the event of termination or retirement to employees whose employment was established on or before 31 December 2002. This depends on the number of years of service and the income at the time of severance and amounts to between two and twelve months pay. A provision shall be created for this obligation.

This provision is determined in accordance with IAS 19 using the projected unit credit method. The present value of the future payments is calculated across the estimated employment period of the employee in accordance with an actuarial method. The calculation is performed for the respective balance sheet date by an expert actuarial mathematician.

Actuarial profits and losses ("revaluation effects") based on experience-related adjustments and changes to actuarial assumptions shall be recorded under other comprehensive income/loss in equity in the period in which they were incurred.

In addition, a provision has been created for severance payments due to contractual severance obligations towards the Board members of FACC AG. The basis of assessment for the creation of this contractual severance obligation is the value that would have to be paid on the financial statement date in the event a member of the Management Board leaves the company.

iv) Other non-current obligations towards employees

Due to collective agreements, the Group is obligated to pay employees an anniversary bonus in the amount of one monthly salary or monthly wage (without allowances and supplements) upon reaching 25 years of service. A provision has been created for this obligation.

This provision is valued based on the projected unit credit method and the assumptions on which the valuation of the statutory severance obligations are based, with the exception that actuarial profits and losses (revaluation effects) shall be recorded in the profit and loss statement.

m) Other provisions

Other provisions shall be recognised if the Group is subject to a legal or factual obligation towards a third party due to a past incident and it is probable that this obligation will result in an outflow of funds. The provisions shall be recognised at the value that can be determined based on a best estimate at the time the financial statements are created. If a reasonable estimate of the amount is not possible in specific cases, no provision shall be created. This liability will be reported as a contingent liability.

Non-current provisions are discounted if the effect of discounting is significant and the discounting period can be reliably estimated.

n) Taxes

The tax expense for the period is comprised of ongoing and deferred taxes. If taxes do not pertain to items that were recorded directly in equity or in other comprehensive income/ loss, taxes will be recorded to profit or loss, otherwise they will also be recorded in equity or other comprehensive income/loss.

As of 13/15 February 2012, Aerospace Innovation Investment GmbH (now FACC AG) as group parent and Aero Vision Holding GmbH as well as FACC AG (now FACC Operations GmbH) as group members entered into a group and tax sharing agreement pursuant to the provisions of section 9 of the Austrian Corporate Tax Act. On 28 February 2017, a new group contract was concluded between FACC AG and FACC Operations GmbH. The tax sharing agreement is in principle based on the status-alone method by which a tax allocation amounting to 25% of the positive income attributed by the group member to the group parent is to be made. The positive income of the group member is to be balanced with carried forward negative income of the group member (loss carry forward), whereby a limited loss deduction of the group parent has to be taken into consideration. In the event a group member earns negative income, a negative tax allocation of 25% is to be made to the extent that the negative income is covered by positive comprehensive income of the group parent. An agreement on settlement payments of loss carry forwards of the group member not yet accounted for has been made. Since June 2014, FACC Operations GmbH (formerly FACC AG) and FACC AG (formerly Aerospace Innovation Investment GmbH) have been an income tax group in accordance with section 2 paragraph 2 line 2 of the Austrian Income Tax Code (UStG).

Deferred taxes shall be recognised for all temporary differences between the tax base of the assets/liabilities and their carrying amounts in the IFRS-based financial statements (liabilities method). If, however, in the framework of a transaction that does not constitute a company merger, a deferred tax is generated from the initial recognition of an asset or liability which, at the time of the transaction, had neither an effect on the accounting nor on the tax-related profit or loss, the tax deferral is waived at the time of the initial recognition and thereafter. Deferred tax liabilities from the initial recognition of goodwill shall not be recorded. Deferred taxes shall be valued based on the tax rates (and tax regulations) applicable on the balance sheet date or which have been substantially enacted and are expected to be applicable at the time the deferred tax receivable or payment of the deferred tax liability is realised.

Deferred tax receivables shall only be recognised to the extent to which it is probable that a taxable profit will be available against which the temporary difference can be applied.

Deferred tax liabilities created due to temporary differences in conjunction with shares in subsidiaries shall be recognised, unless the Group can determine the time at which the reversal of the temporary differences came about and it is probable that the temporary differences will not be reversed in the foreseeable future due to this factor.

Deferred tax receivables and liabilities shall be balanced if there is an enforceable legal claim to offsetting and if the deferred tax receivables and liabilities pertain to income taxes that are collected by the same tax authority for either the same tax subject or different tax subjects which intend on bringing about the balance on a net basis.

Deferred tax assets for loss carry forwards shall only be recognised to the extent recovery is expected within a reasonable amount of time. In the framework of the estimation of the probability, the Group refers to existing tax plans.

o) Financial liabilities

The financial liabilities of the Group shall be evaluated at the attributed fair value upon initial recognition and after deducting the transaction costs. In the subsequent periods, they will be evaluated at the amortised cost carrying amount. Any difference between the payout amount (after deducting transaction costs) and the repayment amount of financial liabilities shall be recorded over the liabilities term and distributed in accordance with the effective interest rate method.

p) Trade and other payables

Trade payables and other liabilities shall be evaluated at the attributed fair value or procurement costs upon initial recognition and, thereafter, at the amortised carrying amount.

q) Derivative financial instruments

The Group utilises derivative financial instruments to hedge foreign currency risks and interest risks. In principle, the Group does not utilise derivative financial instruments for the purposes of trading or speculation. Derivative financial instruments are initially valued at the attributed fair value applicable on the acquisition date and at the attributed fair value applicable on the respective, subsequent balance sheet date. Changes in the attributed fair value are recorded dependent on whether the conditions in accordance with IAS 39 for the application of the regulations for hedge relationships have been fulfilled.

i) Cash flow hedges

Derivatives designated as hedging instruments which serve to hedge against cash flow fluctuations in conjunction with transactions that will very likely occur in the future, are classified as cash flow hedges. Upon conclusion of the transaction, the Group documents the hedging relationship between the hedging instrument and the underlying transaction, the objectives of its risk management and the underlying strategy when concluding hedging transactions. Furthermore, the estimation regarding whether derivatives implemented in the hedging relationship very effectively compensate the changes in the attributed fair value or the cash flow of the underlying transaction shall be continuously documented.

The Group concludes foreign exchange futures that serve to hedge the foreign currency risk in conjunction with certain planned foreign currency revenues. The effective portion of changes in the attributed fair value of these derivatives shall be recorded under other comprehensive income/loss in the reserve for cash flow hedges (currency hedging) as a part of other provisions. Profits and losses pertaining to the ineffective portion shall be recorded immediately in profit and loss.

The reserve for cash flow hedges shall be dissolved to profit or loss during the period in which the hedged underlying transaction has an effect on income (e.g. at the time at which a planned revenue transaction takes place).

If a hedging transaction expires, is sold or no longer fulfils the criteria for being recorded as a hedging relationship, the profit or loss accumulated in the reserve for cash flow hedges shall remain in equity and be written off to profit or loss as soon as the planned transaction is recorded to profit or loss in the Consolidated Statement of Comprehensive Income. If the future transaction is no longer expected to occur, the accumulated profits or losses in equity shall be immediately written off to profit or loss.

ii) Derivatives that do not qualify as hedging relationships for accounting purposes

For derivatives that, in accordance with IAS 39, do not qualify as a hedging relationship for accounting purposes (such as structured foreign exchange futures and interest swaps or in the case of those to which the regulations of hedge accounting do not apply), changes in the attributed fair value shall be recorded in the Consolidated Statement of Comprehensive Income under the item "Fair value evaluation of derivative financial instruments" or "Other operating income and expenses" (if these derivatives pertain to reported foreign currency receivables and liabilities). Interest income and expenses from interest derivative transactions shall be recorded in the Consolidated Statement of Comprehensive Income under "Interest income from financial instruments".

r) Foreign currency valuation

Foreign currencies for receivables, cash and cash equivalents and liabilities are converted at the closing rate. Profits and losses shall be recorded to profit or loss.

s) Investment grants

Grants from public entities shall be recorded at their attributed fair value if it can be assumed with a high probability that the grant will be issued and the Group fulfils the necessary conditions for receiving the grant.

Investment grants for costs shall be recorded over the period in which the corresponding costs the grant was intended to cover were incurred.

Investment grants for investments in property, plant and equipment shall be recorded as deferred items within non-current liabilities/current liabilities. They shall be dissolved on a linear basis, to profit or loss, over the expected economic lifecycle of the relevant assets.

t) Borrowing costs

Borrowing costs that can be directly assigned to the acquisition, construction or production of a qualified asset shall be capitalised as a portion of the procurement or manufacturing costs of this asset until essentially all work has been completed in order to manufacture the asset for its intended use or sale. A qualified asset is an asset for which a significant period of time is required for it to achieve the status intended for its utilisation or sale.

Other borrowing costs shall be recorded during the period in which they were incurred as expenses.

u) Revenue recognition

Sales revenues include the attributed fair value of the remuneration received or to be received in return for the sale of goods and services in the framework of the normal business activities of the Group. Sales revenues shall be reported less sales tax, returns, rebates and discounts and after eliminating internal group sales.

The Group generates sales revenues from the sale of goods (shipsets) to its customers. Sales of goods in the framework of supply contracts shall be posted if the Group or a group company has delivered the products to the customer after all risks have been transferred to the customer in accordance with the contractual terms and conditions and it is sufficiently likely at the time of invoicing that the benefit arising from the transaction will accrue to the company. If uncertainties arise about collectability at a later stage, the uncollected or uncertain amount shall be posted as an expense.

The Group also generates sale revenues from engineering and the provision of services to third parties in conjunction with the production of shipsets. These services include the following: The sale of technology and research results and conducting training courses for external business partners. These sales revenues shall be recorded over the period in which the services were rendered to the respective external business partner.

Parts of the Group's revenue come from construction contracts. The reporting of this revenue is explained in note 3 b) vi).

4. FINANCIAL RISK MANAGEMENT

a) Principles of financial risk management

Due to its business activities, the FACC Group is exposed to a variety of financial risks: market risks (includes the foreign currency risk, the interest-related risk from changes to the attributed fair value, the interest-related cash flow risk and the market price risk), credit risks and liquidity risks. The overarching risk management of the Group is focused on the unpredictability of the developments on the financial markets and aims at minimising the potential negative impacts on the Group's financial situation. The Group utilises derivative financial instruments to hedge against certain risks. In principle, the Group does not utilise derivative financial instruments for speculation purposes.

Risk management is performed by the central treasury department (Group treasury). The Group treasury identifies, evaluates and hedges financial risks in close cooperation with the operative units of the Group.

The branch-specific risk of the Group lies in the change of aircraft delivery plans for manufacturers with respect to their final consumers. The risk from changes in future aircraft deliveries impacts the Group's future revenues since the supply quantities of the components manufactured by the Group change accordingly. The risk can arise in the form of a reduction in aircraft deliveries, but also due to postponement thereof. This results in development costs not being earned in the calculated period of time. This risk is met by diversifying within the branch: on the one hand, by maintaining supply contracts with the two dominant market providers of commercial aircraft and, on the other hand, by entering into supply contracts in both the large passenger aircraft and business jets segments. In addition, the Group is geographically diversified since it maintains supply contracts with the American/European market and in Asia. In addition, the FACC Group also acts as a development partner in the field of improving existing aircraft models which results in supply contracts for retrofitting existing aircraft models.

b) Financial risk factors

i) Market risk

Exchange rate and interest risks must be noted here in particular and are explained in more detail in the following. In addition to the two risk groups described above, there are no other significant market price risks.

Foreign currency risk – Due to payment flows from operative business in foreign currencies, primarily USD, the FACC Group is exposed to a foreign currency risk. As a result, profit or future cash flows are impacted by changes in the US dollar to euro exchange rate to the extent that the Group does not utilise financial instruments to hedge against its current and future net foreign currency position. The hedging strategies of the Group's treasury department aim at controlling and minimising the impact of exchange rate fluctuations on these profits and future cash flows. The Management Board approves the strategies and reports regularly to the Supervisory Board. This is a continuous process. The objective is to minimise the inherent risks from changes on the market with the right strategy.

The risk management of the Group's treasury department pursues the objective of hedging the expected cash flows in USD (from sales revenues and sales of raw materials) for the following periods: for the next twelve months a 100% hedge, for months 13 to 24 a 50% hedge, for months 25 to 36 a 25% hedge. The probability of these USD cash flows occurring as a hedging relationship is high with respect to accounting. Therefore, the Group reports the foreign exchange futures as hedging instruments in accordance with the rules of hedge accounting.

A change in the exchange rates with respect to all currencies on 29 February 2016 and 28 February 2017 would have essentially only an impact on the Group with respect to USD; on the one hand, due to the effects of the closing rate evaluation of the USD items in the Consolidated Financial Statements and, on the other hand, due to the effect of the change in the attributed fair values of the derivative financial instruments in conjunction with cash flow hedges.

A change in the EUR/USD exchange rate on 29 February 2016 and 28 February 2017 by +5% (average exchange rate, respectively: 1.088 and 1.0597) would have resulted in a reduction of income (net of tax) by kEUR 4,053 and kEUR 3,740, resulting from the closing rate evaluation, and an increase in other comprehensive income/loss and equity by kEUR 10,992 and kEUR 11,108, as well as an increase in equity by kEUR 6,939 and kEUR 7,368, resulting from the change in the attributed fair values from derivative financial instruments in conjunction with cash flow hedges.

A change in the EUR/USD exchange rate on 29 February 2016 and 28 February 2017 by –5% (average exchange rate, respectively: 1.088 and 1.0597) would have resulted in an increase of income (net of tax) by kEUR 4,480 and kEUR 4,134, resulting from the closing rate evaluation, and a reduction in other comprehensive income/loss by kEUR 11,967 and kEUR 12,006, as well as a reduction in equity by kEUR 7,487 and kEUR 7,872, resulting from the change in the attributed fair values from derivative financial instruments in conjunction with cash flow hedges.

Interest risk – Risks from changes in the interest level essentially only arise from non-current third-party financing. A list of all significant liabilities subject to interest and their remaining terms and information about existing interest swap transactions is included in notes 13, 14 and 15.

Whether an item is subject to a fixed or variable interest rate is evaluated by the Group taking the aspect of interest rate change risks into consideration with respect to changes in cash flows of future interest payments. In close cooperation with market specialists from the banking sector, the treasury department regularly performs a check for each item subject to interest to determine whether a hedging instrument can sensibly be applied. Strategies are submitted to and approved by the Management Board.

If the market interest rates had been 50 base points higher on 29 February 2016 and 28 February 2017, income (net of tax) and equity would have been kEUR 256 and kEUR 270 lower. A reduction of the market interest rate by 50 base points would have resulted in an increase of income (net of tax) and equity of the same amount. The calculation is based on the financial assets and liabilities subject to a variable interest rate.

ii) Liquidity risk

A significant component of FACC's business policy is to always maintain sufficient cash and cash equivalents as a liquidity reserve in order to fulfill current and future obligations. This is largely secured by the reported total inventory of liquid assets and extensive, unused credit lines (kEUR 66,162 on 29 February 2016 and kEUR 61,000 on 28 February 2017). The amount of the working capital is constantly monitored and reported to the Management Board. Timely financing is the highest priority when making financing decisions. If needed, surplus liquid assets are invested in non-speculative highly liquid financial instruments, whereby these are primarily money market certificates, overnight money, securities and other money market instruments which are generally due within less than three months. Reference is made to note 4 e) with respect to an analysis of the due dates of the financial assets and liabilities.

In connection with the promissory note loans 2012 to 2017 (nominal volume in the amount of EUR 8 million; carrying amount EUR 8 million) and 2012 to 2019 (nominal volume EUR 34 million; carrying amount EUR 34 million) (variable interest rate from 6 month Euribor +1.2 percentage points to 6 month Euribor +2.25 percentage points, or a fixed interest rate of 2.82%–3.7%), a covenant was agreed according to which FACC Operations GmbH as issuer has to fulfill a certain corporate equity ratio (30% and 20% after deduction of the capitalised development costs). In the event of non-compliance with the covenant, the creditor has a termination right. The covenant was complied with on the financial statement dates of 28 February 2017 and 29 February 2016.

In connection with the bond 2013 to 2020 (nominal volume in the amount of EUR 90 million; carrying amount of EUR 89 million; fixed interest rate of 4%), FACC Operations GmbH as issuer made guarantees as to the specific amount of dividends calculated on the basis of the annual surplus and a certain equity ratio which must not decrease due to the payment of dividends. Thus, no more than 50% of the annual surplus may be paid to shareholders as dividends. In addition, the equity ratio of 30% must not be decreased due to the payment of dividends. In the event of non-compliance with the covenant, the creditor has a termination right. This covenant was complied with on the financial statement dates of 28 February 2017 and 29 February 2016.

In connection with the refinancing framework (carrying amount of EUR 26 million) of the Austrian Kontrollbank (ÖKB), FACC Operations GmbH as debtor made guarantees as to a specific corporate equity ratio of 35%. In the event of non-compliance with the covenant, the creditor has a termination right. This covenant was complied with on the financial statement dates of 28 February 2017 and 29 February 2016.

The Group values a sustainable financing portfolio. The financial liabilities subject to interest exhibited the following structure regarding interest rates and maturity on 28 February 2017 and 29 February 2016:

Financial liabilities subject to interest (interest rates and maturity)

The average interest rate of all financial liabilities subject to interest was 4.5% on 28 February 2017 and 5.9% as of 29 February 2016

iii) Credit risk

The Group is active in the aircraft industry and has two primary customers. Due to the limited number of aircraft manufacturers, it is therefore exposed to a concentration of credit risk.

The Group is exposed to a credit risk with respect to the non-performance of contract partners. The Group has introduced guidelines for limiting credit risks. Products and services are sold to customers with corresponding solvency. The financial situation, past experiences and additional factors are taken into account. New customers are evaluated with respect to the default risk based on credit ratings. The credit rating of existing customers is also monitored on a regular basis. Customer receivables surpassing a certain amount shall be insured against default. Credit risks also arise from cash and cash equivalents, derivative financial instruments and deposits with banks and other financial institutions. Such transactions are only executed with serious and creditworthy banks and financial institutions.

The maximum credit risk corresponds to the carrying amount of each financial asset in the balance sheet.

Term to maturity Carrying amount
29 February 2016
EUR'000
Carrying amount
28 February 2017
EUR'000
< 12 months and fixed 8,491 10,324
> 12 months and fixed 157,715 149,472
< 12 months and variable 13,143 43,975
> 12 months and variable 48,741 41,521
Total 228,089 245,292

c) Contract volumes of derivative financial instruments and corresponding attributed fair values

The nominal amounts of certain types of derivative financial instruments serve as a basis for comparison for the instruments reported in the balance sheet, but do not necessarily indicate the current attributed fair value and are therefore not a measurement for the credit or market price risk to which the Group is exposed. Depending on the individual conditions, the derivative financial instruments have a beneficial (assets) or negative (liabilities) impact depending on fluctuations in the market interest rate or exchange rate. The aggregated contractual or nominal amounts of the respective derivative financial instruments, the extent to which these are beneficial or have a negative impact and thus also the aggregated attributed fair value of the derivative financial assets and liabilities can be subject to severe temporal fluctuations.

The contract volume of the foreign currency derivatives is compiled as follows and structured by due date:

Remaining term
Status as of 29 February 2016 Up to 1 year
USD'000
1 to 5 years
USD'000
More than
5 years
USD'000
Total
USD'000
USD foreign exchange futures 255,000 80,000 335,000
Status as of 28 February 2017
USD foreign exchange futures 270,000 60,000 330,000

The contractual due dates of the payments from the cash flow hedges, i.e. when the underlying transactions have an effect on income, essentially correspond to the due dates of the currency hedging contracts above.

The contract volume of the derivative financial instruments for interest hedges is composed as follows:

Remaining term
Status as of 29 February 2016 Up to 1 year
USD'000
1 to 5 years
USD'000
More than
5 years
USD'000
Total
USD'000
Interest rate swaps 20,000 20,000
Status as of 28 February 2017
Interest rate swaps

The attributed fair values of derivative financial instruments for foreign cash flow hedges and interest hedges are as follows:

Status as of 29 February 2016 Volume
USD'000
Volume
EUR'000
Fair value
EUR'000
USD foreign exchange futures 335,000 (28,378)
Interest rate swaps 20,000 (5,098)

Status as of 28 February 2017

USD foreign exchange futures 330,000 (19,179)
Interest rate swaps

d) Carrying amounts and fair value of financial instruments

The original financial instruments include essentially other non-current financial assets, trade receivables, credit with credit institutes, bonds, financial liabilities and trade payables.

All financial instrument purchases and sales are recorded on the date of fulfillment.

The valuation of the financial instruments is performed on the acquisition date, in principle, at the procurement costs that correspond with the attributed fair value at that time. The financial assets shall be written off if the rights to payments from the investment have expired or have been transferred and the Group has transferred essentially all risks and opportunities connected to the ownership of the asset. Financial liabilities shall be written off when the obligation to pay has expired.

The current and non-current financial assets and liabilities are compiled as follows, based on the categories in accordance with IAS 39:

Carrying Carrying
amount on Fair value on amount on Fair value on
29 February 29 February 28 February 28 February
Category 2016 2016 2017 2017
ASSETS IAS 391) EUR'000 EUR'000 EUR'000 EUR'000
Valuation at (amortised) cost carrying amount
Securities (unquoted) AtFVtP&L 44 44
Non-current receivables LaR 29,494 29,494 27,866 27,866
Trade receivables LaR 92,626 92,626 98,875 98,875
Receivables from construction contracts LaR 20,242 20,242 18,788 18,788
Receivables from related companies LaR 19,060 19,060 28,533 28,533
Cash and cash equivalents LaR 56,215 56,215 48,275 48,275
Fair value measurement
(fair value hierarchy according to IFRS 13: level 1)
Securities (quoted) AfS 407 407 421 421
Total financial assets 218,088 218,044 222,802 222,758
Carrying Carrying
amount on Fair value on amount on Fair value on
29 February 29 February 28 February 28 February
Category 2016 2016 2017 2017
LIABILITIES IAS 391) EUR'000 EUR'000 EUR'000 EUR'000
Valuation at (amortised) cost carrying amount
Promissory note loans FLAC 42,000 42,000 42,000 42,000
Liabilities towards credit institutes FLAC 96,848 96,848 113,876 113,876
Trade payables FLAC 72,679 72,679 59,809 59,809
Liabilities of related companies (Group financing) FLAC 425 425 1,813 1,813
Valuation at (amortised) cost carrying amount
(fair value hierarchy according to IFRS 13: level 1)
Fair value measurement FLAC 89,242 90,220 89,416 95,967
Derivates with negative fair value AtFVtP&L 5,098 5,098
Derivates with negative fair value (foreign exchange futures) 28,378 28,378 19,179 19,179
Total financial liabilities 334,670 335,648 326,093 332,644

1) LaR Loans and Receivables AfS Available for Sale AtFVtP&L At Fair Value through Profit and Loss

FLAC Financial Liabilities at Amortised Cost

The fair value (attributed fair value) of a financial instrument is the price at which a party would assume the rights and/or obligations from this financial instrument from another party. The fair values were determined based on the market information available on the balance sheet date and the evaluation methods described below. In light of varying impact factors, the attributed fair values of financial instruments stated in the annual financial statement may deviate from the values to be realised on the market at a future date.

The majority of trade receivables, other receivables and cash and cash equivalents have short remaining terms. Therefore, their carrying amounts nearly correspond to the fair values on the balance sheet date. The fair values of non-current financial assets correspond, if no market prices are available, to the present values of the connected payments taking the respective current market parameters into account.

The fair value of the securities available for sale was determined based on their listed stock market price on the balance sheet date.

The trade payables and other current financial liabilities generally have short terms; the carrying amounts therefore nearly correspond to the fair values.

The fair value of bonds corresponds to the market value on the closing date. For variable interest rate loans, the carrying amount constitutes the fair value. For non-current fixed rate liabilities towards credit institutes (including promissory note loans), the fair value was determined by discounting the cash flows applying a standard market interest rate. The fair value of non-current fixed rate receivables and liabilities pertains to the valuation hierarchy of IFRS 13, level 2.

The attributed fair value of the derivative financial instruments reported under assets and liabilities is the estimated amount the Group would have to pay or would receive if the transactions were settled on 29 February 2016 or 28 February 2017.

When evaluating the attributed fair value of evaluated financial instruments, a distinction is made between three evaluation hierarchies:

  • Level 1: the prices quoted on active markets (unadjusted) for identical assets and liabilities
  • Level 2: directly (i.e. as a price) or indirectly (i.e. derived from the price) observable input factors for the asset or liability that are unquoted prices that are assigned to level 1
  • Level 3: input factors not based on observable market data for the asset or liability (i.e. input factors that cannot be observed). The evaluation is assigned to level 3 when an input factor that cannot be observed and significantly impacts the evaluation exists at the time of the evaluation.

The assignment of the financial instruments evaluated at the attributed fair value to the three evaluation hierarchies was as follows on the balance sheet date:

Level 1 Level 2 Level 3 Total
STATUS AS OF 29 FEBRUARY 2016 EUR'000 EUR'000 EUR'000 EUR'000
ASSETS
Non-current assets
Non-current financial assets 407 407
LIABILITIES
Current liabilities
Derivative financial instruments 33,476 33,476
STATUS AS OF 28 FEBRUARY 2017
ASSETS
Non-current assets
Non-current financial assets 421 421
LIABILITIES
Current liabilities
Derivative financial instruments 19,179 19,179

e) Remaining terms and cash flow analysis of the financial liabilities

The remaining terms of the financial liabilities are as follows:

Remaining term
Carrying
amount on
29 February 3 to 5 More than
Category 2016 1 year 2 years years 5 years
LIABILITIES IAS 391) EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Valuation at (amortised) cost carrying amount
Bonds FLAC 89,242 89,242
Promissory note loans FLAC 42,000 8,000 34,000
Liabilities towards credit institutes FLAC 96,848 21,634 8,903 32,533 33,778
Trade payables FLAC 72,679 72,679
Liabilities towards related companies
(Group financing)
FLAC 425 425
Fair value measurement
Derivatives with negative fair value
(interest rate swaps)
AtFVtP&L 5,098 5,098
Derivatives with negative fair value
(foreign exchange futures)
28,378 24,430 3,948
Total financial liabilities 334,670 124,266 20,851 155,775 33,778
Remaining term
LIABILITIES Category
IAS 391)
Carrying
amount on
28 February
2017
EUR'000
1 year
EUR'000
2 years
EUR'000
3 to 5
years
EUR'000
More than
5 years
EUR'000
Valuation at (amortised) cost carrying amount
Bonds FLAC 89,416 89,416
Promissory note loans FLAC 42,000 8,000 34,000
Liabilities towards credit institutes FLAC 113,876 46,299 16,133 22,129 29,315
Trade payables FLAC 59,809 59,809
Liabilities towards related companies
(Group financing)
FLAC 1,813 1,813
Fair value measurement
Derivatives with negative fair value
(interest rate swaps)
AtFVtP&L
Derivatives with negative fair value
(foreign exchange futures)
19,179 15,634 3,544
Total financial liabilities 326,093 131,555 19,677 145,545 29,315

1) FLAC Financial Liabilities at Amortised Cost

AtFVtP&L At Fair Value through Profit and Loss

The following contractually agreed upon payment obligations (interest and redemption payments) result from the financial liabilities for subsequent years as of 29 February 2016:

LIABILITIES Category
IAS 391)
Carrying
amount on
29 February
2016
EUR'000
Fixed interest
EUR'000
Valuation at (amortised) cost carrying amount
Promissory note loans2) FLAC 42,000 (634)
Bonds FLAC 89,242 (3,600)
Liabilities towards credit institutes FLAC 96,847 (1,118)
Trade payables FLAC 72,679
Payables to related companies 425
Fair value measurement
Derivatives with negative fair value (interest rate swaps)3) AtFVtP&L 5,098
Derivatives with negative fair value (foreign exchange futures) 28,378
Total financial liabilities 334,669 (5,353)

The interest payments were calculated based on the most recent fixed interest rates on or prior to the balance sheet date. Scheduled payments for future new liabilities are not included in the presentation. Financial liabilities to be paid back at any time are always assigned to the earliest maturity date.

The following contractually agreed upon payment obligations (interest payments and repayment) result from the financial liabilities for subsequent years as of 28 February 2017:

LIABILITIES
Valuation at (amortised) cost carrying amount
Category
IAS 391)
Carrying
amount on
28 February
2017
EUR'000
Fixed interest
EUR'000
Promissory note loans2) FLAC 42,000 (582)
Bonds FLAC 89,416 (3,600)
Liabilities towards credit institutes FLAC 113,876 (1,047)
Trade payables FLAC 59,809
Payables to related companies 1,813
Fair value measurement
Derivatives with negative fair value (interest rate swaps)3) AtFVtP&L
Derivatives with negative fair value (foreign exchange futures) 19,179
Total financial liabilities 326,093 (5,229)

The interest payments were calculated based on the most recent fixed interest rates on or prior to the balance sheet date. Scheduled payments for future new liabilities are not included in the presentation. Financial liabilities to be paid back at any time are always assigned to the earliest maturity date.

1) FLAC Financial Liabilities at Amortised Cost

AtFVtP&L At Fair Value through Profit and Loss

2) See note 4 for further information on the covenant agreement (financial risk management).

3) Due to the partially high volatility of the interest rate landscape, a useful presentation of the interest payments based on an estimate of the interest rate development until the end of the maturity term of the interest derivative (in 2016) cannot be provided. Therefore, a presentation of the subsequent fiscal years has been completely omitted.

Fiscal year 2016/17 Fiscal years 2017/18 to 2020/21 Fiscal years 2021/22 and following
Variable interest
EUR'000
Repayments
EUR'000
Fixed interest
EUR'000
Variable
interest
EUR'000
Repayments
EUR'000
Fixed interest
EUR'000
Variable
interest
EUR'000
Repayments
EUR'000
(515) (1,369) (1,044) (42,000)
(11,950) (90,000)
(503) (21,634) (3,555) (1,732) (41,436) (7,106) (3,930) (33,777)
(72,679)
(425)
(24,430) (3,948)
(1,018) (119,168) (16,874) (2,776) (177,384) (7,106) (3,930) (33,777)
Fiscal year 2017/18 Fiscal years 2018/19 to 2021/22 Fiscal years 2022/23 and following
Variable
interest
EUR'000
Repayments
EUR'000
Fixed interest
EUR'000
Variable
interest
EUR'000
Repayments
EUR'000
Fixed interest
EUR'000
Variable
interest
EUR'000
Repayments
EUR'000
(419) (8,000) (762) (532) (34,000)
(8,354) (90,000)
(549) (46,299) (3,389) (1,425) (38,262) (6,475) (3,576) (29,315)
(59,809)
(1.813)
(15,634) (3,544)
(968) (131,555) (12,505) (1,957) (165,806) (6,475) (3,576) (29,315)

The Group has access to the following lines of credit:

29 February 2016
EUR'000
28 February 2017
EUR'000
Total unused credit lines 66,162 61,000

f) Net income from financial instruments

The net income from the financial instruments based on classes or measurement categories in accordance with IAS 39 include net profits and losses, total interest income and expenses and impairment expenses, and are composed as follows:

Total (11,633) 5,255 (296) (6,674)
Financial liabilities valued at the amortised
cost carrying amount
(6,585) (6,585)
Financial liabilities valued at fair value
through profit and loss
(5,472) 5,242 (230)
Disposable financial assets 10 13 23
Loans and receivables 413 (296) 117
From
interest
EUR'000
At fair value
EUR'000
Impairment
EUR'000
From
disposals
EUR'000
Total
EUR'000
From subsequent valuation
Fiscal year 2015/16

Fiscal year 2016/17

From subsequent valuation

From
interest
EUR'000
At fair value
EUR'000
Impairment
EUR'000
From
disposals
EUR'000
Total
EUR'000
Loans and receivables 258 (598) (340)
Disposable financial assets 8 10 18
Financial liabilities valued at fair value
through profit and loss
(4,267) 5,098 831
Financial liabilities valued at the amortised
cost carrying amount
(6,209) (6,209)
Total (10,210) 5,108 (598) (5,700)

The changes in impairments of loans and receivables is reported in "other operating income" and "other operating expenses". The subsequent valuation at the fair value of the disposable financial assets is reported as a part of other comprehensive income/loss under "fair value valuation of securities". The remaining components of the net income are largely included in the financing expenses, interest income from financial instruments and under the item "fair value measurement of derivative financial instruments".

5. SEGMENT REPORTING

Divisions
Fiscal year 2015/16 Aerostructures
EUR'000
Engines &
Nacelles
EUR'000
Interiors
EUR'000
Total
EUR'000
Information on profitability
Revenue 269,221 113,812 197,180 580,214
Income before interest, taxes and fair value measurement of
derivative financial instruments
20,286 (14,654) (14,795) (9,163)
Depreciation, amortisation and impairment (11,903) (14,417) (23,306) (49,627)
Income before interest, taxes and fair value
measurement of derivative financial instruments
and depreciation and amortisation
8,383 (29,071) (38,101) (58,790)
Information on assets
Assets 324,764 127,347 212,773 664,883
Of which intangible assets and property, plant and equipment 171,716 51,654 87,730 311,100
Investments during the fiscal year 30,407 5,432 15,025 50,865
Divisions
Fiscal year 2016/17 Aerostructures
EUR'000
Engines &
Nacelles
EUR'000
Interiors
EUR'000
Total
EUR'000
Information on profitability
Revenue 330,954 141,957 232,784 705,695
Income before interest, taxes and fair value measurement of
derivative financial instruments
68,650 (7,782) (3,165) 57,703
Depreciation, amortisation and impairment (17,432) (4,138) (9,228) (30,798)
Income before interest, taxes and fair value
measurement of derivative financial instruments
and depreciation and amortisation
51,219 (11,920) (12,893) 26,905
Information on assets
Assets 337,365 136,298 206,932 680,595
Of which intangible assets and property, plant and equipment 172,271 55,120 88,468 315,859
Investments during the fiscal year 16,621 7,620 10,165 34,406

The Group manufactures supply parts for the aviation industry, primarily for civil aircraft and helicopters. The range of products includes structural components (cladding components on the fuselage and tail unit, engine cowling components and composite parts for engines, wing components and wing tips) as well as components for interiors of aircraft (such as baggage storage areas, interior cladding, service units, etc.).

The segment reporting follows the internal control and reporting of FACC. Due to the different applications the products are used for, three operative segments were created. The "FACC Aerostructures" segment is responsible for the development, production and distribution of structural components, the "FACC Interiors" segment is responsible for the development, production and distribution of interior furnishings and the "FACC Engines & Nacelles" segment is responsible for the production and distribution of engine components. After concluding the customer contracts and processing the order, the individual orders are manufactured at the Group's five plants. In addition to the three operative segments, the company also includes the central services for financial and controlling, human resources, quality assurance, purchasing and IT (including engineering services). The central services support the operative segments in fulfilling their duties in accordance with a matrix organisation.

In separate monthly management review meetings, the segment managers report to the Management Board (primary decision makers). The current status of the order situation, revenue, coverage contributions for individual projects, dates and milestones, project and development risks, proposal calculation and proposal creation, necessary investments and other important operative topics are discussed and, if necessary, immediate decisions are made.

The segmented assets and expenses and income are assigned to the three segments using a defined procedure. The total segment income constitutes external revenue with external parties.

The internal reporting in the segments is based primarily on information on profitability. As part of the segment calculation, profitability is calculated on the project level in the form of direct costing and summarised in segments. The expenses and income not directly attributable to the project level were assigned to the segments based on a defined code.

With the exception of depreciations, amortisations and write-downs, there were no other significant non-cash expenses in the individual segments. Furthermore, there was no significant non-cash income.

The segment assets include the portion of the non-current and current assets utilised for the operative activity of the segment. This includes, in particular, intangible assets, property, plant and equipment, cash and cash equivalents, provisions and trade receivables. Liabilities were not divided by segment since this has also not been done in internal controlling and reporting.

VALUES ON 29 FEBRUARY 2016 Domestic
EUR'000
USA
EUR'000
Canada
EUR'000
Germany
EUR'000
Other
foreign
countries
EUR'000
Total
EUR'000
Revenue 2,640 166,764 66,743 235,693 108,375 580,214
VALUES ON 28 FEBRUARY 2017
Revenue 1,966 178,221 66,809 327,490 131,210 705,695

The revenue is segmented into geographic regions based on the customer's headquarters.

For the fiscal year ending on 28 February 2017, the Group earned revenue from two external customers which each exceeded 10% of total revenue, namely by kEUR 288,279 and kEUR 67,473.

For the fiscal year ending on 29 February 2016, the Group earned revenue from two external customers which each exceeded 10% of total revenues, namely by kEUR 187,804 and kEUR 70,776 respectively.

Sales revenues from external customers are generated from the production of shipsets and engineering services and other services in conjunction with the production of shipsets. The sales revenues are broken down as follows:

2015/16
EUR'000
2016/17
EUR'000
Production 518,580 646,092
Engineering and services 61,634 59,603
Total sale revenues 580,214 705,695

6. INTANGIBLE ASSETS

Research and
Goodwill Software Supply rights development
costs
Other Total
Fiscal years 2015/16 and 2016/17 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Procurement costs
Status as of 1 March 2015 18,595 18,752 29,119 148,060 214,526
Additions 530 55 23,983 24,568
From consolidation 2 2
From final consolidation (93) (93)
Disposals
Status as of 29 February 2016 18,595 19,191 29,174 172,043 239,003
Additions 210 60 16,368 16,638
From consolidation 70 70
Disposals
Status as of 28 February 2017 18,595 19,471 29,234 188,411 255,711
Accumulated scheduled
amortisation and impairment
Status as of 1 March 2015 14,802 14,345 33,720 62,867
Scheduled amortisation 2,192 1,126 6,751 10,069
Impairment 20,200 20,200
Restructuring
Disposals
Status as of 29 February 2016 16,994 15,471 60,671 93,136
Scheduled amortisation 1,447 2,219 8,281 11,947
Impairment 883 883
Disposals
Status as of 28 February 2017 18,441 17,690 69,836 105,967
Carrying amounts on 29 February 2016 18,595 2,197 13,703 111,371 145,867
Carrying amounts on 28 February 2017 18,595 1,030 11,544 118,575 149,743

Supply rights are payments for the right to supply customers with specific aircraft components.

Reference is made to note 33 regarding information on the impairment test of the goodwill.

Respective amounts of kEUR 2,317 (29 February 2016) and kEUR 2,913 (28 February 2017) were posted under expenses as research expenses.

7. PROPERTY, PLANT AND EQUIPMENT

Properties, Technical Operating and
office
Facilities
under
buildings facilities equipment construction Total
Fiscal years 2015/16 and 2016/17 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Procurement costs
Status as of 1 March 2015 100,825 147,999 22,418 14,065 285,307
Additions 540 6,944 2,196 16,616 26,296
From consolidation 48 48
Transfers 162 7,773 264 (8,199)
From final consolidation (5) (5)
Disposals (323) (323)
Status as of 29 February 2016 101,527 162,716 24,598 22,482 311,323
Additions 983 12,486 1,745 3,615 18,829
From consolidation 38 38
Transfers 1,808 10,378 252 (12,438)
Disposals (10) (546) (556)
Status as of 28 February 28 2017 104,318 185,570 26,087 13,659 329,634
Accumulated depreciation
Status as of 1 March 2015 20,492 92,162 14,401 127,055
Scheduled depreciation 2,843 10,855 2,144 15,841
Impairment 3,515 3,515
Disposals (323) (323)
Status as of 29 February 2016 23,335 106,531 16,222 146,088
Scheduled depreciation 2,918 12,110 2,031 17,058
Impairment 910 910
Disposals (1) (537) (538)
Status as of 28 February 2017 26,253 119,550 17,716 163,518
Carrying amounts on 29 February 2016 78,192 56,185 8,376 22,482 165,234
Carrying amounts on 28 February 2017 78,065 66,020 8,371 13,659 166,116

Certain properties and buildings serve as collaterals for liabilities towards credit institutions (see note 13).

The finance leasing relationships in the Group pertain to properties and buildings at the procurement costs in the amount of kEUR 20,632. At the end of the 2016/17 fiscal year, accumulated depreciations in the amount of kEUR 1,443 were posted. This resulted in a net carrying amount of the relevant assets of kEUR 19,189.

8. OTHER NON-CURRENT FINANCIAL ASSETS

Securities
EUR'000
Book-entry
securities
EUR'000
Total
EUR'000
Fair value on 1 March 2015 425 44 469
Additions
Unrecognised changes in fair value (17) (17)
Fair value on 29 February 2016 407 44 451
Additions
Unrecognised changes in fair value 14 14
Fair value on 28 February 2017 421 44 465

The pension reinsurance (plan asset) was offset with the retirement benefit provisions in the 2016/17 fiscal year. The pension reinsurance (plan asset) offset with the retirement benefit provisions in the 2016/17 fiscal year has a carrying amount of kEUR 1,779 (see note 16 a)).

Securities (quoted)

The disposable securities cover the retirement benefit obligations according to the provisions of section 14 and 116 of the Austrian Income Tax Law (EStG). The carrying amount corresponds to the market price on the corresponding balance sheet date (29 February 2016 and 28 February 2017).

Book-entry securities (unquoted)

Unquoted book-entry securities pertaining to the Group shares in Techno-Z Ried Technologiezentrum GmbH, Ried im Innkreis were accounted for under other non-current financial assets in the Consolidated Statement of Financial Position on 29 February 2016.

Carrying amount on Carrying amount on
29 February 2016 28 Februar 2017
Share EUR'000 EUR'000
Techno-Z Ried Technologiezentrum GmbH, Ried im Innkreis 2.95% 44 44
Status 44 44

All non-current financial assets are quoted in EUR.

9. INVENTORY

Carrying amount 29 February 2016
EUR'000
28 Februar 2017
EUR'000
Raw, auxiliary and operating materials 66,969 65,703
Unfinished products 34,858 35,943
Finished products 5,996 11,733
Status (after deduction of write-downs) 107,823 113,379

Based on a detailed analysis of the inventory for slow-moving items and due to reduced net sales prices, write-downs of the inventory in the amount of kEUR 4,128 (29 February 2016) and kEUR 4,039 (28 February 2017) were generated. Write-downs on inventory in the amount of kEUR 471 (29 February 2016) and kEUR 89 (28 February 2017) were posted with an effect on profit.

10. TRADE RECEIVABLES, RECEIVABLES FROM CONSTRUCTION CONTRACTS, OTHER RECEIVABLES AND DEFERRED ITEMS, RECEIVABLES FROM RELATED COMPANIES AND NON-CURRENT RECEIVABLES

Carrying amount 29 February 2016
EUR'000
28 February 2017
EUR'000
Current trade receivables 92,626 98,875
Non-current trade receivables 10,349 8,684
Receivables from construction contracts (= incurred costs) 20,242 18,788
Customer receivables 123,217 126,347
Other receivables 14,037 18,593
Deferred items 1,300 1,454
Receivables from related companies 19,060 28,533
Status 157,614 174,927

The FACC Group recognises construction contracts in accordance with IAS 11 using the zero-profit method since the income from a production order cannot be reliably and regularly determined due to the specificities of the orders. Thus, the income from orders is only recorded to the extent the order costs incurred can likely be obtained from the customer. During the 2016/17 fiscal year, incurred order costs = income from orders in the amount of kEUR 13,697 (kEUR 21,681 on 29 February 2016) were recorded.

On the balance sheet date, the following construction contracts exist with outstanding customer balances:

Carrying amount 29 February 2016
EUR'000
28 February 2017
EUR'000
Total incurred costs 20,242 18,788
Less partial settlements
Receivables from construction contracts 20,242 18,788

The receivables from construction contracts correspond to the carrying amount of the receivables from construction contracts posted in the balance sheet since there were no partial settlements. There are no withholdings for partial settlements either.

Received advanced payments from customers in conjunction with construction contracts for which there is no rendered service yet are recorded as trade payables with a carrying amount of kEUR 1,627 (kEUR 4,023 on 29 February 2016).

29 February 2016
EUR'000
28 February 2017
EUR'000
Current and non-current trade receivables and receivables from construction contracts 126,413 128,752
Less write-downs and discounting on trade receivables (3,196) (2,405)
Trade receivables, net 123,217 126,347
Other receivables 14,037 18,593
Deferred items 1,300 1,454
Receivables from related companies 19,060 28,533
Status 157,614 174,927

The Group revenue is based largely on a payment objective of 30 to 120 days from the date of invoice.

On 29 February 2016 and 28 February 2017, trade receivables in the amount of kEUR 34,817 and kEUR 20,624, respectively, were overdue but not yet impaired. These receivables pertain to a number of independent customers who have not been in default recently. On the financial statement date, there is no indication that the debtors will not fulfill their payment obligations.

Trade receivables
(overdue and not impaired)
0 to 30
days
EUR'000
31 to 60
days
EUR'000
61 to 90
days
EUR'000
91 to 120
days
EUR'000
121 to 180
days
EUR'000
181 to 365
days
EUR'000
More than
365 days
EUR'000
Status as of 29 February 2016 15,108 2,958 4,187 2,948 203 1,288 8,125
Status as of 28 February 2017 7,688 2,302 164 2,349 63 2,473 5,583

The Group maintains a non-recourse cession agreement with a financial institution in conjunction with receivables from seven customers. The assigned amount reduces the trade receivables of the FACC Group.

The write-downs of trade receivables developed as follows:

29 February 2016
EUR'000
28 February 2017
EUR'000
Write-downs and discounting of trade receivables, status of the previous period 2,643 3,196
Use
Reversal (1,082) (1,902)
Addition 1,635 1,111
Write-downs and discounting, status of financial statement date 3,196 2,405

Other receivables include:

Carrying amount 29 February 2016
EUR'000
28 February 2017
EUR'000
Credit balance tax office 12,156 10,534
Other 1,881 8,059
Status 14,037 18,593

The other receivables do not include notably overdue receivables. Furthermore, no notable write-downs were performed on these receivables. All other receivables have a remaining term of up to one year.

The receivables from related companies include:

The Group has reported receivables from Fesher Aviation Component (Zhenjiang) Co. Ltd., Shanghai Aircraft Manufac-

Non-current receivables include:

turing Co. Ltd. and XAIC Tech. (Xi'an) Industrial Co., Ltd. With respect to receivables from related companies, kEUR 1,794 are due beyond 120 days. No notable write-downs were performed on these receivables. In conjunction with the overdue receivables from related companies, after the balance sheet date for the 2016/17 fiscal year, payments in the amount of kEUR 1,672 were received. These receivables have a remaining term of up to one year.

29 February 2016 28 February 2017
Carrying amount EUR'000 EUR'000
Non-current trade receivables 10,349 8,684
Receivables from the "Fake President Incident" 10,860 10,860
Advanced payments and deposits 8,285 8,322
Status 29,494 27,866

With the exception of the following receivables, all trade receivables and receivables from related companies, as in the previous year, have a remaining term of up to one year:

Receivable from the customer Rohr Inc., Chula Vista, USA, with a nominal amount of kEUR 3,567 (corresponds to a cash value of kEUR 3,441) with an annual repayment plan starting on 15 January 2015 and ending on January 15, 2019 and a further receivable with a nominal amount of kEUR 4,630 (corresponds to a cash value of kEUR 4,109) with a non-current repayment plan dependent upon the number of annually delivered units starting on 1 March 2014 and ending at the time at which 1,108 units have been delivered. For one customer, in conjunction with a development project, a receivable in the amount of kEUR 1,178 was reported under "non-current",

since the payment agreement provides for a non-current repayment plant dependent upon the number of annually delivered units starting on 1 March 2015.

During the reporting period 2015/2016, the company lost kEUR 52,847 in cash flows from the company as a result of an external fraud (fake president incident). As a result of directly initiated measures, we were able to block kEUR 10,860 to receiver accounts. This amount is recognised as long term receivables. This is because the subsidiary FACC Operations GmbH sees itself as the legal owner of the money and assumes a refund by bank transfer on the basis of a legal opinion. The assumption is that the funds blocked in the recipient accounts will not be returned in the near future.

The carrying amounts of the trade receivables, receivables from construction contracts and other Group receivables are quoted in the following currencies:

29 February 2016
EUR'000
28 February 2017
EUR'000
GBP 191
USD 115,734 119,582
EUR 41,689 55,345
157,614 174,927

11. CASH AND CASH EQUIVALENTS

Carrying amount 29 February 2016
EUR'000
28 February 2017
EUR'000
Bank balance 56,032 48,248
Cash balance 28 27
Received 155
Checks 56,215 48,275

12. EQUITY AND CAPITAL MANAGEMENT

a) Share capital

FACC AG's unchanged share capital amounts to kEUR 45,790 and has been paid in full. It is divided into 45,790,000 units at a price of EUR 1 each.

b) Capital reserve

The capital reserve amounts to kEUR 221,459 (kEUR 221,459 on 29 February 2016).

c) Reserves for cash flow hedges

The reserve for cash flow hedges results from changes in the fair value of hedging instruments which must be recorded directly in equity in accordance with IAS 39 (cash flow hedges). The effective share of the fair value changes was recorded in comprehensive income under cash flow hedge reserve. These changes in the equity shall be reported net of tax under other comprehensive income/loss in the Consolidated Statement of Comprehensive Income. The ineffective portion of the fair value changes in the amount of kEUR 0 (Monday, 29 February 2016) and kEUR 0 (Tuesday, 28 February 2017) was recorded to profit or loss in the Consolidated Statement of Comprehensive Income. The reserve for cash flow hedges shall be liquidated to profit or loss while also liquidating the amount recorded under other comprehensive income/loss if the underlying hedged transactions are recorded in the Consolidated Statement of Comprehensive Income to profit or loss.

The changes in the fair value of forward exchange transactions which are designated as hedging instruments are as follows:

EUR'000
Status as of 1 March 2015 (19,779)
Recycling in the Consolidated Statement of Comprehensive Income, net 19,779
Change in the fair value of hedging instruments, net (9,727)
Status as of 29 February 2016 (9,727)
Recycling in the Consolidated Statement of Comprehensive Income, net 9,727
Change in the fair value of hedging instruments, net (9,444)
Status as of 28 February 2017 (9,444)

d) Revaluation effects of pensions and termination benefits

Actuarial profits and losses in conjunction with termination benefits and pension obligations shall be recorded in equity for previous periods and the current period as other provisions for revaluation effects of termination benefits and pension obligations (provision IAS 19).

e) Dividends

Dividends in the amount of kEUR 0 (2015/16: kEUR 0) were distributed to the equity holders during the reporting period.

f) Capital management

The objective of capital management is to maintain a strong capital base in order to face the specific company risks (growth and development risks) with a balanced capital structure. Management considers solely the carrying amount of the equity as capital in accordance with IFRS. The objective is an equity ratio of at least 30%. On the balance sheet date, the equity ratio (ratio of equity to total assets) was 40% (29 February 2016) and 42% (28 February 2017).

13. BONDS AND PROMISSORY NOTE LOANS

The following table shows the bonds and promissory notes issued by the Group:

Status 132,000 131,242 131,416
FACC bond 2013-20 (ISIN AT0000A10J83) 90,000 89,242 89,416
Promissory note loans 2012 to 2019 34,000 34,000 34,000
Promissory note loans 2012 to 2017 8,000 8,000 8,000
Nominal value
EUR'000
Carrying amount on
29 February 2016
EUR'000
Carrying amount on
28 February 2017
EUR'000

14. OTHER FINANCIAL LIABILITIES

This item includes all liabilities with a residual term of less than one year:

Carrying amount on Carrying amount on
29 February 2016 28 February 2017
EUR'000 EUR'000
Liabilities towards credit institutions 15,613 34,851
Liabilities from finance leasing 490 878
Other financial liabilities 5,531 10,566
Status 21,634 46,295

This item includes all liabilities with a residual term of more than one year:

Carrying amount on
29 February 2016
EUR'000
Carrying amount on
28 February 2017
EUR'000
Liabilities towards credit institutions 57,141 50,197
of which a residual term of more than 5 years 19,335 15,215
Liabilities from finance leasing 18,996 18,118
of which a residual term of more than 5 years 14,442 14,100
Other financial liabilities (924) (464)
of which a residual term of more than 5 years
Status 75,213 67,851
of which a residual term of more than 5 years 33,778 29,315

Certain liabilities towards credit institutes are secured by granting liens to operational properties, by guarantees from the AWS, by state guarantees for loans in the framework of subsidies agreements from the Austrian Research Promotion Agency and by chattel mortgages on machines. The export loan in the control bank procedure is secured by export receivables in the amount of 120% of the amount granted. In order to utilise preferential interest rates for research funding loans, certain constraints must be met. The collateral for certain liabilities towards credit institutions in conjunction with properties and buildings amounted to kEUR 15,966 on Monday, 29 February 2016 and kEUR 15,966 on Tuesday, 28 February 2017.

The interest change risks and contractual interest adjustment dates connected to variable interest rate financial liabilities are as follows on the balance sheet date:

Carrying amount 29 February 2016
EUR'000
28 February 2017
EUR'000
Six months or less 13,290 51,168
Six to twelve months 43,986 18,996
Status 57,276 70,164

The carrying amounts and the attributed fair values of the non-current fixed interest financial liabilities are:

29 February 2016
Carrying amount
EUR'000
29 February 2016
Fair value
EUR'000
28 February 2017
Carrying amount
EUR'000
28 February 2017
Fair value
EUR'000
Bond 89,242 90,220 89,416 95,967
Promissory notes 17,500 17,500 15,000 15,000
Liabilities towards credit institutes 56,534 56,534 51,820 51,820
Status 163,276 164,245 156,236 162,787

The carrying amounts of current financial liabilities nearly correspond to the attributed fair values since the effects of discounting are insignificant.

Liabilities from finance leasing – minimum leasing payments

29 February 2016
EUR'000
28 February 2017
EUR'000
Up to one year 967 961
After more than one year and up to five years 4,140 4,716
After more than five years 20,229 18,753
Future financing costs from finance leasing (5,849) (5,434)
Present value of liabilities from finance leasing 19,487 18,996

The maturity of the liabilities from finance leasing is as follows:

29 February 2016
EUR'000
28 February 2017
EUR'000
Up to one year 905 878
After more than one year and up to five years 4,140 4,018
After more than five years 14,442 14,100
Total 19,487 18,996

15. DERIVATIVE FINANCIAL INSTRUMENTS

The nominal amounts for derivative financial instruments are as follows:

29 February 2016
USD'000
28 February 2017
USD'000
Forward exchange transactions 335,000 330,000
Total, current 335,000 330,000
29 February 2016 28 February 2017
EUR'000 EUR'000
Interest rate swaps 20,000
Current share 20,000

The full attributed fair value of a derivative financial instrument is classified as a non-current asset/liability if the remaining term exceeds twelve months; if the remaining term does not exceed twelve months it is classified as a current asset/liability.

A positive attributed fair value is recorded on the asset side under the item "derivative financial instruments". A negative attributed fair value is recorded on the liability side under the item "derivative financial instruments".

a) Forward exchange transactions

Forward exchange transactions are concluded to hedge against the currency risk resulting from the product of sales in a currency other than the functional currency of the Group. In order to recognise them as hedging relationships, qualified forward exchange transactions are illustrated as cash flow hedges in accordance with IAS 39. Forward exchange transactions that are not recorded as cash flow hedges are illustrated as freestanding derivatives.

Hedged transactions in foreign currencies are expected to occur during the hedged periods. Profits and losses from forward exchange transactions that are recorded as comprehensive income in the reserve for cash flow hedges in equity shall be reposted to profit or loss in the period income for the period(s) in which the hedged, expected transaction has an effect on comprehensive income in the Consolidated Statement of Comprehensive Income. This is generally done within a maximum of 36 months after the balance sheet date.

b) Interest rate swaps

In order to hedge against the interest risk of the financial liabilities subject to interest, interest swapping agreements were made that are not illustrated as hedging relationships in accordance with IAS 39 but are instead recognised as freestanding derivatives.

16. INVESTMENT GRANTS

The non-current and current investment subsidies amount to kEUR 13,289 (Monday, 29 February 2016) and kEUR 13,546 (Tuesday, 28 February 2017). The significant portion of the investment subsidies is contingent upon constraints which, in general, have to be met for three to five years from the time the final invoice is recognised by the funding body. These largely pertain to a minimum number of employees that have to be employed and the constraint that the funded assets have to remain at the project location and may not be sold. The other investment subsidies pertain to receivables for development projects and shall be liquidated based on the duration of the project.

17. EMPLOYEE BENFIT OBLIGATIONS

Provisions 29 February 2016
EUR'000
28 February 2017
EUR'000
Provisions for pensions a) 2,008
Provisions for severance benefits b) 7,288 7,333
Provisions for anniversary bonuses c) 1,463 1,712
Total 10,759 9,045
Amounts recorded in the Consolidated Statement of Comprehensive Income 2015/2016
EUR'000
2016/2017
EUR'000
Pension obligations (674) (2,008)
Severance obligations 618 45
Provisions for anniversary funds 443 249
Early retirement benefits (10)
Total 377 (1,714)

The accrual for pension benefits was offset by existing plan assets from a pension reinsurance scheme.

a) Pension benefit obligations

The amounts indicated in the balance sheet on 29 February 2016 are as follows: 2015/16
EUR'000
Present value of the retirement benefit obligations on 1 March, gross 4,318
Service costs
Interest costs 65
Revaluation effects (recorded in other comprehensive income/loss minus deferred taxes) (739)
Reversal as a result of persons entitled to benefits leaving the company
Cash value of retirement benefit obligations at the end of the period (DBO), gross 3,643
Fair value plan asset (pension reinsurance) (1,635)
Net liabilities (provision) on 29 February 2016 2,008

The amounts indicated in the balance sheet on Monday, 28 February 2017 are as follows:

2016/17
EUR'000
Present value of the retirement benefit obligations on 1 March gross 2,008
Reversal as a result of persons entitled to benefits leaving the company (2,008)
Present value of retirement benefit obligations at the end of the period (DBO), gross
Fair value plan asset (pension reinsurance))
Net liabilities (provision) on 28 February 2017

The amounts included in the Consolidated Statement of Comprehensive Income are as follows:

2015/16
EUR'000
2016/17
EUR'000
Service costs
Interest costs 65
Revaluation effects (recorded in other comprehensive income/loss minus deferred taxes) (739)
Service costs not yet accounted for
Total (674)

The following essential actuarial assumptions were applied:

2015/16 2016/17
Interest rate 2.00%
Retirement benefit and salary increases 2.00%
Salaried employee fluctuations none
Retirement age for men 60 years
Life expectancy1) AVÖ 2008-P

All expenses in conjunction with retirement benefits in the 2015/2016 fiscal year were reported in the Consolidated Statement of Comprehensive Income under the item "personnel costs".

b) Provision for severance benefits

2015/16
EUR'000
2016/17
EUR'000
Present value of severance benefit obligations at the beginning of the period 6,358 7,288
Other termination provisions 577 (353)
Service costs 342 350
Interest costs 145 133
Revaluation effects (recorded in other comprehensive income/loss minus deferred taxes) 73 223
Termination benefits (207) (308)
Present value of severance benefits at the end of the period (DBO) 7,288 7,333

1) The assumptions pertaining to future life expectancy are based on actuarial consultation and published statistics and experience. Mortality probabilities are based on mortality tables in Austria (published by the Austrian Actuarial Association).

The calculations on Monday, 29 February 2016 and Tuesday, 28 February 2017 are based on the following assumptions:

29 February 2016 28 February 2017
Interest rate 2.00% 1.70%
Retirement benefit and salary increases 2.00% 2.00%
Salaried employee fluctuation 4.00% 4.16%
Employee fluctuation 2.70% 3.57%
Retirement age for women 60 years 60 years
Retirement age for men 65 years 65 years
Life expectancy AVÖ 2008-P AVÖ 2008-P
Duration 15.05 years 14.77 years

The statutory transitional provisions pertaining to retirement ages were taken into account.

All expenses in conjunction with termination benefits, with the exception of the revaluation effects, are reported in the Consolidated Statement of Comprehensive Income under the item "personnel costs".

c) Accruals for anniversary bonuses

2015/16
EUR'000
2016/17
EUR'000
Present value of anniversary bonus obligations at the beginning of the period 1,020 1,463
Service costs 480 224
Interest costs 23 29
Actuarial profit/loss during the period (45) 36
Anniversary bonus payments (15) (40)
Present value of anniversary bonus obligations at the end of the period 1,463 1,712

The calculation of the provisions for anniversary bonuses is based on a duration of 13.91 years on 28 February 2017 and 13.72 years 29 February 2016. All expenses in conjunction with anniversary bonuses are reported in the Consolidated Statement of Comprehensive Income under the item "personnel costs".

Defined contribution plans (pension fund)

Per fiscal year, kEUR 131 (29 February 2016) and kEUR 133 (28 February 2017) were discharged to the inter-company pension fund.

18. TRADE PAYABLES

The maturity analysis for trade payables on 28 February 2015 and 29 February 2016 resulted in the following:

29 February 2016
EUR'000
28 February 2017
EUR'000
Within 90 days 72,667 58,927
More than 90 days and within 360 days 12 882
Total 72,679 59,809

Defined contribution plans (employee pension fund – "new termination model") Per fiscal year, kEUR 1,524 (29 February 2016) and kEUR

1,729 (28 February 2017) were discharged to the employee pension fund.

19. OTHER LIABILITIES AND DEFERRED ITEMS, LIABILITIES OF RELATED COMPANIES

Carrying amount on
29 February 2016
EUR'000
Carrying amount on
28 February 2017
EUR'000
Liabilities from social security 3,436 3,717
Other liabilities 1,851 2,844
Liabilities towards employees 18,754 19,999
Deferred items 1,485 873
Status 25,526 27,433

Liabilities of related companies essentially pertain to trade payables.

20. OTHER ACCRUALS

Warranties
EUR'000
Other
EUR'000
Total
EUR'000
Status as of 1 March 2015 1,439 5,203 6,642
Use / Dissolution (1,345) (3,244) (4,680)
New 2,803 10,259 11,305
Status as of 29 February 2016 2,897 10,461 13,358
Of which, current 2,897 10,461 13,358
Of which, non-current

In conjunction with warranty claims, an accrual was recognisedsolely for concrete obligations.

of development and production projects in the amount of kEUR 3,876, an accrual for pending freight costs in the amount of kEUR 281 and an accrual for legal disputes in the amount of kEUR 713.

The other accruals include an accrual for follow-up costs (pending incoming invoices) in conjunction with a number

Project-related
provisions
EUR'000
Warranties
EUR'000
Other
EUR'000
Total
EUR'000
Status as of 1 March 2016 2,897 10,461 13,358
Use / Dissolution (2,736) (10,461) (13,197)
New 7,451 7,967 4,878 20,296
Status as of 28 February 2017 7,451 8,129 4,878 20,458
Of which current 366 8,129 4,878 13,373
Of which non-current 7,085 7,085

In conjunction with warranty claims, a provision was recognised solely for concrete obligations.

The other provisions include a provision for follow-up costs (pending incoming invoices) in conjunction with a number of development and production projects in the amount of kEUR 1,535, project-related provisions in the amount of kEUR 7,451 and a provision for pending freight costs in the amount of kEUR 49 and a provision for legal disputes in the amount of kEUR 761.

21. CHANGES IN INVENTORY OF FINISHED AND UNFINISHED PRODUCTS

2015/16
EUR'000
2016/17
EUR'000
Finished products 1,799 5,874
Unfinished products 2,625 1,085
Total 4,424 6,959

22. OWN WORK CAPITALISED

2015/16
EUR'000
2016/17
EUR'000
Capitalisation of research and development costs 18,455 10,851
Other 329 295
Total 18,784 11,145

23. COST OF MATERIALS AND OTHER PURCHASED SERVICES

2015/16
EUR'000
2016/17
EUR'000
Material expenses 356,584 402,550
Expenses of commissioned services 20,275 40,477
Total 376,859 443,027

24. PERSONNEL COSTS

2015/16
EUR'000
2016/17
EUR'000
Wages and salaries 122,186 133,529
Expenses for statutory, compulsory social contributions and benefits 31,604 36,750
Expenses for termination benefits and benefits to corporate employee pension funds 2,166 2,037
Pensions 119 (1,874)
Other social expenses 2,434 2,837
Total (incl. Board member remunerations) 158,510 173,235

Of the expenses for termination benefits and contributions to corporate employee pension funds, the contributions to corporate pension funds amount to kEUR 1,524 (29 February 2016) and kEUR 1,729 (28 February 2017).

The group-wide employment status is 3,393 persons (2,323 employees and 1,070 salaried employees) on the balance sheet date of 28 February 2017 in comparison to 3,062 persons (2,030 employees and 1,032 salaried employees) on the balance sheet date of the previous year.

25. REMUNERATION OF MEMBERS OF MANAGEMENT IN KEY POSITIONS

The remuneration of the members of the Management Board of FACC AG and the Supervisory Board of FACC AG who perform the same duties for FACC Operations GmbH is as follows in the 2015/16 financial year:

Name Salary
EUR'000
Variable
bonus
EUR'000
Termination
benefit
EUR'000
Employer
contribution to
pension fund
EUR'000
Total
EUR'000
Management Board
Walter Stephan 401 66 (674)1) (207)
Minfen Gu (until 2 February 2016) 275 46 8 329
Robert Machtlinger 326 46 8 380
Yongsheng Wang (from 25 February 2016)
1.002 158 (658) 502

The remuneration of the members of the Management Board and the Supervisory Board was as follows in the 2016/17 financial year:

Name
Management Board
Salary
EUR'000
Variable
bonus
EUR'000
Termination
benefit
EUR'000
Employer
contribution to
pension fund
EUR'000
Total
EUR'000
Walter Stephan (until 24 May 2016) 103 103
Robert Machtlinger 294 (4) 8 298
Aleš Stárek (since 1 October 2016) 107 15 122
Yongsheng Wang (since 25 February 2016)2) 147 147
651 11 8 670

In the past fiscal year, members of the Supervisory Board received a total remuneration of kEUR 178 (2015/16: kEUR 140) for their activities.

26. DEPRECIATION, AMORTISATION AND IMPAIRMENT

2015/16
EUR'000
2016/17
EUR'000
Of intangible assets 10,069 11,947
Impairment of intangible assets 20,200 883
Of property, plant and equipment 15,842 17,058
Impairment of property, plant and equipment 3,515 910
Total 49,627 30,798

In the Aerostructures segment, development costs and tools were impaired by kEUR 1,334 in the current fiscal year due to changed market assessments. In the Engines & Nacelles segment, development costs and tools were impaired by kEUR 368 in the current fiscal year due to changed market assessments. In the Interiors segment, development costs and tools were impaired by kEUR 91 in the current fiscal year due to changed market assessments. The value in use of the development costs and tools amounts to kEUR 0 (WACC net of tax 7.44%).

1) Of that, actuarial profits from revaluation effects of pensions in the amount of kEUR 795 are posted under comprehensive income/loss 2) Wang Yongsheng is working for FACC AG on the basis of a service contract via Aerospace Innovation Investment GmbH.

27. OTHER OPERATING INCOME AND EXPENSES

Other operating income
2015/16 2016/17
EUR'000 EUR'000
Income from the reversal of provisions 2,878 6,108
Income from the reversal of receivable write-downs 1,082 1,709
Income from public funding and tax-free grants 5,018 4,799
Foreign currency effects 12,262 16,548
Other 6,583 11,860
Total 27,824 41,024

Other operating expenses

2015/16
EUR'000
2016/17
EUR'000
Service, maintenance and third-party repairs expenses 7,922 9,123
Freight expenses 10,528 12,898
Material testing and certification expenses 5,391 4,720
Rental fees and leasing expenses 5,534 5,541
Travel expenses 3,094 2,780
Expenses related to the fake president incident 41,987
Expenses related to consulting services 6,286 10,818
Storage expenses 3,932 6,178
Expenses related to warranty obligations 4,203 13,681
Expenses related to write-downs 1,378 1,111
Various expenses 14,784 24,007
Total 105,040 90,857

During the reporting period 2015/2016, the company lost kEUR 52,847 in cash flows from the company as a result of an external fraud (fake president incident). As a result of immediately introduced measures, kEUR 10,860 in recipient accounts were blocked. This amount is posted as non-current receivables as FACC Operations GmbH sees itself as the legal owner of the money and assumes a refund by bank transfer on the basis of a legal opinion.

In the 2015/2016 fiscal year, kEUR 41,987 were posted as damage incidents under various expenses.

The expenses attributable to the respective fiscal year for the auditor of the Consolidated Financial Statements are as follows:

2015/16
EUR'000
2016/17
EUR'000
Group and annual audit 218 185
Other consulting services 9
Tax consulting services 5
Total 232 185

28. FINANCING EXPENSES

Interest expenses from discounting receivables
1,026
Total
13,587
145
11,184
Interest promissory note loan
1,195
1,117
Interest on bonds
3,785
3,729
Interest and bank fees
7,582
6,184
2015/16
EUR'000
2016/17
EUR'000

29. INTEREST INCOME FROM FINANCIAL INSTRUMENTS

2015/16
EUR'000
2016/17
EUR'000
Bank interest 305 45
Income from interest swaps
Income from securities 10 8
Other interest 129 582
Total 444 635

30. FAIR VALUE MEASUREMENT OF DERIVATIVE FINANCIAL INSTRUMENTS

Changes in the attributed fair value of derivative financial instruments is recorded in the Consolidated Statement of Comprehensive Income as follows:

Recorded
under "fair value Recorded
measurement Recorded under "other
of derivative under "cash operating
financial flow hedges income and
Volume Volume Fair value instruments" (net of tax)" expenses"
Status as of 29 February 2016 USD'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
USD forward exchange transactions 335,000 (28,378) 9,727 6,418
Interest rate swaps 20,000 (5,098) 5,242
Status as of 28 February 2017
USD forward exchange transactions 330,000 (19,179) 9,443 (6,979)
Interest rate swaps (5,098)

31. INCOME TAX

2015/16
EUR'000
2016/17
EUR'000
Corporate tax, ongoing 132 684
Deferred taxes (14,722) 3,986
(14,590) 4,670
Tax expense from previous years 160 106
Total (14,430) 4,776

The income tax on the Group income before taxes differs from the calculated income tax expense that would have resulted if a tax rate of 25% had been applied to the income of the fiscal years, as illustrated in the following:

2015/16
EUR'000
2016/17
EUR'000
Income before taxes (66,691) 21,454
Calculated income tax expense 25% (16,673) 5,364

Tax effects from:

Deviating foreign tax rates (191) (329)
Tax-free income (677) (616)
Expenses that cannot be deducted for tax purposes 186 105
Change of deferred taxes on tax loss carry forward 2,947
Other effects/value adjustments on deferred taxes (190)
Consolidation effects 886
Prior year adjustment 160 107
Minimum corporate tax and withholding taxes 7 (741)
Reported income tax expense (14,430) 4,776

The deferral of taxes developed as follows:

Change in profit Change in other
comprehensive
1 March 2015 and loss income/loss 29 February 2016
Deferred taxes EUR'000 EUR'000 EUR'000 EUR'000
Financial assets 347 62 4 413
Other receivables and assets 96 8 104
Investment grants 1,285 (103) 1,182
Obligations towards employees 1,307 (215) (184) 908
Derivative financial instruments 12,050 (1,604) (3,351) 7,095
Provisions 351 (629) 19 (259)
Liabilities 11,353 (494) 10,859
Tax loss carry forwards 16,763 16,532 33,295
Intangible assets (development costs) (28,616) 737 (27,879)
Property, plant and equipment (8,967) 1.045 (7,922)
Inventory
Trade receivables
(essentially differences from valuation in USD) (5,636) 1,469 (4,167)
Bonds (106) 20 (86)
Other (1,860) 853 (1,008)
(1,633) 17,681 (3,512) 12,536
Change in profit Change in other
comprehensive
1 March 2016 and loss income/loss 28 February 2017
Deferred taxes EUR'000 EUR'000 EUR'000 EUR'000
Financial assets 413 39 (3) 448
Other receivables and assets 104 (44) 60
Investment grants 1,182 (147) 1,035
Employee benefit obligations 908 (407) 501
Derivative financial instruments 7,095 (2,104) (195) 4,795
Provisions (259) 45 56 (158)
Liabilities 10,859 (1.133) 9,726
Tax loss carry forwards 33,295 (1.268) 32,027
Intangible assets (research and development costs) (27,879) (1,804) (29,683)
Property, plant and equipment (7,922) 221 (7,701)
Inventory
Trade receivables (essentially differences from
valuation in USD) (4,167) 1,815 (2,351)
Bonds (86) 19 (67)
Other (1,009) 882 (127)
(12,535) (3,884) (143) 8,508

Deferred tax assets and deferred tax liabilities are balanced as assets or liabilities in the Consolidated Statement of Financial Position if there is an enforceable right to offset actual tax reimbursement claims against actual tax liabilities and the deferred tax claims and tax liabilities pertain to income taxes that are collected by the same tax office.

Deferred tax assets in the amount of kEUR 12,536 were reported in the Consolidated Statement of Financial Position on 29 February 2016. Deferred tax liabilities in the amount of kEUR 8,508 were reported in the Consolidated Statement of Financial Position on 28 February 2017.

Within the next twelve months, recognition of the deferred tax assets in the amount of, kEUR 13,100 and kEUR 19,769 or a fulfillment of the deferred tax liabilities in the amount of kEUR 12,993 and kEUR 18,652 is expected on 29 February 2016 and 28 February 2017.

The Group did not recognise deferred tax receivables in the amount of kEUR 131 on 29 February 2016 and kEUR 0 on 28 February 2017 which pertain to losses in the amount of kEUR 522 and kEUR 0, which are carried forward in the respective country of the relevant subsidiary and can be offset against future tax profits.

Deferred tax liabilities in the amount of kEUR 6,164 resulted from temporary differences from shares in subsidiaries amounting to kEUR 24,657 on 28.02.2017. No deferred tax liabilities were recognised according to IAS 12.39 as FACC AG is capable of steering the time course and these temporary differences will not resolve in the near future.

The amount of income tax which is allocated directly to other comprehensive income/loss is comprised as follows:

2015/16 2016/17
Gross
EUR'000
Tax
EUR'000
Net
EUR'000
Gross
EUR'000
Tax
EUR'000
Net
EUR'000
Revaluation effects of pensions and
termination benefits
665 (166) 499 (223) 56 (167)
Fair value measurement of securities (18) 5 (13) 13 (3) 10
Cash flow hedges 13,403 (3,351) 10,052 781 (195) 283
Total 14,050 (3,512) 10,538 571 (142) 126

32. OBLIGATIONS FOR THE ACQUISITION OF ASSETS

Property, plant and equipment 29 February 2016
EUR'000
28 February 2017
EUR'000
Approved, without contractual obligation 30,701 41,232
Contractual obligation, not yet incurred 5,715 7,150
36,416 48,382

33. OBLIGATIONS FROM RENTAL AND LEASING RELATIONSHIPS

The future accumulated minimum leasing payments from operating leasing contracts in connection with property, plant and equipment amount to:

29 February 2016
EUR'000
28 February 2017
EUR'000
Up to one year 3,665 5,430
After more than one year and up to five years 10,117 22,330
After more than five years 5,422 3,893
Total 19,204 33,116

New leasing contracts pertaining to real estate were concluded in the 2016/2017 fiscal year.

34. IMPAIRMENT TEST OF GOODWILL

A summary of the distribution of the goodwill on the segment level is illustrated in the following:

2016/17 Carrying amount
29 February 2016
Additions Disposals Impairment Carrying amount
28 February 2017
Aerostructures 10,211 10,211
Engines & Nacelles 3,054 3,054
Interiors 5,330 5,330
Total 18,595 18,595

The recoverable amount of a CGU is determined by calculating its value in use. These calculations are based on the projected cash flows which are derived from the multi-year plan adopted by the management. Cash flows after this multi-year period shall be extrapolated using the growth rates illustrated below. The growth rate does not exceed the non-current average growth rate of the business segment in which the CGU is active.

Key assumptions when calculating the value in use in the year 2016/17:

Aerostructures Engines & Nacelles Interiors
Growth rate1) 1.50% 1.50% 1.50%
Discount rate2) 7.44% 7.44% 7.44%

Key assumptions when calculating the value in use in the year 2015/16:

Aerostructures Engines & Nacelles Interiors
Growth rate1) 1.50% 1.50% 1.50%
Discount rate2) 7.55% 7.55% 7.55%

The average rate of inflation, applied to the most important sales markets, is used as an estimate for the sustainable growth rate. Furthermore, sale contracts in the aircraft component supply industry are mostly long-term. These allow, in connection with data from the airline monitor, for a reliable estimate of growth rates.

In the planning period, an average EBIT margin of 7.7% (2015/16: 9.8%) or an average sales growth rate of 5.4% (2015/16: 8.9%) on Group level was taken into account. For the Interiors segment, an average EBIT margin of 4.8% (2015/16: 1.8%) and an average sales growth rate of 3.3% (2015/16: 4.7%) were taken into account.

The management defined the budgeted gross margin based on past developments and expectations with respect to future market developments.

For the essential assumptions of sensitivity analyses, reference is made to note 4 b) vii).

As a result of the long-term basis of the underlying business (contract terms of up to 15 years) as well as associated extended industrialisation phases (five to seven year periods until target margin is achieved) a planning period of six years was determined on the part of management. It is expected that a steady state of the earning situation for the calculation of the perpetuity will first be reached after six years.

The WACC, sales volumes and the development of prices and costs were used as key assumptions for the impairment test of development costs.

35. TRANSACTIONS WITH RELATED COMPANIES AND PERSONS

The group companies have conducted and concluded various transactions with related consolidated companies as part of their regular business activity. These activities have been fully consolidated.

Transactions with related companies and persons outside of the consolidated companies for the period from 1 March 2015 to 29 February 2016

Sales revenues in the amount of kEUR 1,172 (2014/15: kEUR 9,655) were earned with the affiliated company Shanghai Aircraft Manufacturing Co., Ltd. Receivables in the amount of kEUR 5,622 (28 February 2015: kEUR 17,315) were reported in the Consolidated Statement of Financial Position.

Sales revenues in the amount of kEUR 2,122 (2014/15: kEUR 3,329) were earned with the affiliated company Fesher Aviation Component (Zhenjiang) Co., Ltd. Receivables in the amount of kEUR 10,469 (28 February 2015: kEUR 12,739) and liabilities in the amount of kEUR 234 (28 February 2015: kEUR 0) were reported in the Consolidated Statement of Financial Position.

Sales revenues in the amount of kEUR 0 (2014/15: kEUR 0) were earned with the affiliated company Future Aviation International Investment Co. Ltd. Receivables in the amount of kEUR 2,800 (28 February 2015: kEUR 2,800) were reported in the Consolidated Statement of Financial Position.

1) Weighted average growth rate for extrapolating cash flows outside the planning period

2) Discount rate net of tax (WACC) used for discounting the cash flows

A dividend in the amount of kEUR 0 (2014/15: kEUR 19,000) was distributed to FACC International Company Limited in the reporting period.

Costs were passed on to the affiliated company FACC International Company Limited in the amount of kEUR 0 (2014/15: kEUR 1,811). Receivables in the amount of kEUR 168 (28 February 2015: kEUR 1,811) were reported in the Consolidated Statement of Financial Position.

Costs were passed on to the affiliated company Aerospace Innovation Investment GmbH in the amount of kEUR 0 (2014/15: kEUR 166). Receivables in the amount of kEUR 0 (28 February 2015: kEUR 656) and liabilities in the amount of kEUR 34 (28 February 2015 kEUR 0) were reported in the Consolidated Statement of Financial Position.

Transactions with affiliated companies and persons outside of the consolidated companies were concluded in the period from 1 March 2015 to 29 February 2016 under customary third-party conditions.

Transactions with related companies and persons outside of the consolidated companies for the period from 1 March 2016 to 28 February 2017

Sales revenues were earned with the affiliated company Shanghai Aircraft Manufacturing Co., Ltd. in the amount of kEUR 9,344 (2015/16: kEUR 1,172). Receivables in the amount of kEUR 8,998 (29 February 2016: kEUR 5,622) were reported in the Consolidated Statement of Financial Position.

Sales revenues were earned with the affiliated company Fesher Aviation Component (Zhenjiang) Co., Ltd. in the

Primary items of the management remuneration:

amount of kEUR 4,757 (2015/16: kEUR 2,122). Receivables in the amount of kEUR 16,704 (29 February 2016: kEUR 10,469) and liabilities in the amount of kEUR 1,658 (29 February 2016: kEUR 234) were reported in the Consolidated Statement of Financial Position.

Costs were passed on to the affiliated company Aerospace Innovation Investment GmbH in the amount of kEUR 48 (2015/16: kEUR 0). Receivables in the amount of kEUR 0 (29 February 2016: kEUR 0) and liabilities in the amount of kEUR 155 (29 February 2016: kEUR 34) were reported in the Consolidated Statement of Financial Position.

Sales revenues were earned with the affiliated company XAIC Tech. (Xi'an) Industrial Co., Ltd in the amount of kEUR 2,562 (2015/16: kEUR 0). Receivables in the amount of kEUR 2,831 (29 February 2016: kEUR 0) were reported in the Consolidated Statement of Financial Position.

The Aerospace Innovation Investment GmbH has invoiced cost for management service fees in the amount of kEUR 147.

Transactions with affiliated companies and persons outside of the consolidated companies were concluded in the period from 1 March 2016 to 28 February 2017 under customary third-party conditions.

Remuneration

The total remuneration of the members of the Management Board amounted to kEUR 502 (29 February 2016) and kEUR 751 (28 February 2017). The members of the Management Board were not granted any loans or advance payments.

29 February 2016
EUR'000
28 February 2017
EUR'000
Salaries and other current obligations towards employees 1,002 730
Contribution payments to pension funds (658)1) 10
Termination benefit endowments 158 11
502 751

36. EARNINGS PER SHARE

The undiluted earnings per share are determined in accordance with IAS 33 by dividing the annual comprehensive income by the number of issued shares. As no "potential ordinary shares with a diluting effect" were circulating in the previous fiscal year, the "diluted income per share" corresponds to the "undiluted income per share".

29 February 2016 28 February 2017
Earnings net of tax, attributable to the equity providers (in kEUR) (52,270) 16,669
Average number of issued shares (in units) 45,790,000 45,790,000
Undiluted/diluted earnings per share (in kEUR) (1.14) 0.36

37. EVENTS AFTER THE BALANCE SHEET DATE

The Supervisory Board of FACC AG appointed a new Chief Operating Officer (COO), Andreas Ockel, as member of the

38. MANAGEMENT BOARD AND SUPERVISORY BOARD

Members of the Management Board during the reporting period were:

Walter Stephan (until 24 May 2016) Robert Machtlinger Aleš Stárek (from 1 October 2016) Yongsheng Wang (from 2 February 2016)

Members of the Supervisory Board during the reporting period were:

Ruguang Geng as Chairman Shengqiang He as Deputy Chairman (from 1 June 2016) Weixi Gong Yanzheng Lei Gregory B. Peters (until 25 May 2016) Jun Tang Xuejun Wang Yongsheng Wang (until 2 February 2016) Chunsheng Yang George Maffeo (from 15 July 2016) Birol Mutlu Barbara Huber Peter Krohe Ulrike Reiter

Ried im Innkreis, 11 June 2017

Robert Machtlinger m. p. Chairman of the Management Board

Aleš Stárek m. p. Member of the Management Board

Yongsheng Wang m. p. Member of the Management Board

Management Board on 27 May 2017. Mr. Ockel will take over the responsibilities of the Chief Operating Officer (COO) of FACC AG on 1 January 2018 for a period of three years.

Statement of all Legal Representatives

ACCORDING TO SECTION 82 PARA. 4 NO. 3 BÖRSEGESETZ (AUSTRIAN STOCK EXCHANGE ACT)

We confirm to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as required by the applicable accounting standards.

In addition, we confirm to the best of our knowledge that the Group Management Report gives a true and fair view of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties the Group faces.

Ried im Innkreis, 11 June 2017

The Management Board

Robert Machtlinger m. p. Chairman of the Management Board

Aleš Stárek m. p. Member of the Management Board

Yongsheng Wang m. p. Member of the Management Board

Auditor's Report1)

REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

Audit Opinion

We have audited the Consolidated Financial Statements of FACC AG, Ried im Innkreis, and of its subsidiaries (the Group) comprising the Consolidated Statement of Financial Position as of 28 February 2017, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the fiscal year then ended and the notes to the Consolidated Financial Statements.

Based on our audit the accompanying Consolidated Financial Statements were prepared in accordance with the legal regulations and present fairly, in all material respects, the assets and the financial position of the Group as of 28 February 2017 and its financial performance for the year then ended in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the EU, and the additional requirements under Section 245a of the Austrian Company Code (UGB).

Basis for Opinion

We conducted our audit in accordance with the Austrian Standards on Auditing. Those standards require that we comply with the International Standards on Auditing. Our responsibilities under those regulations and standards are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We are independent of the Group in accordance with the Austrian Generally Accepted Accounting Principles and professional requirements and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Financial Statements of the fiscal year. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We considered the following matters as key audit matters for our audit:

    1. Restated errors in accordance with IAS 8
    1. Recoverability of goodwill and development cost
    1. Valuation of onerous contracts
    1. Revenue recognition
    1. Impact of fake president incident
  • 1. Restated errors in accordance with IAS 8

Description

In connection with the ongoing enforcement audit in accordan-

*) This report is a translation of the original report in German, which is solely valid. Publication or sharing with third parties of the Consolidated Financial Statements together with our auditor's opinion is only allowed if the Consolidated Financial Statements and the Management Report for the Group are identical with the German audited version. This audit opinion is only applicable to the German and complete Consolidated Financial Statements with the Management Report for the Group. Section 281 paragraph 2 of the UGB (Austrian Company Code) applies to alternated versions.

ce with accounting control law (Rechnungslegungs-Kontrollgesetz), which was not finalised until the date of the issuance of the Group's financial statements, management evaluated specific matters and made a restatement in accordance with IAS 8 for the following balance sheet positions, which resulted also in adjustments to the Group's comprehensive income statement, the Group's equity development and the Group's cash flow: intangible assets, fixed assets, trade accounts receivables, receivables from construction projects, other provisions and deferred taxes.

The impact of these restatements on the result after taxes in the financial year 2015/2016 was EUR –30.4 million and on the equity as of 29 February 2016 was EUR –37.3 million.

The main risk is the calculation of the amounts to be restated, the correct recognition and presentation of the error corrections in the Group's financial statements as of 28 February 2017 and the completeness of the notes for the restatements.

The disclosures for the restated errors are in note 2.

How our audit addressed the matter

To address the risk we challenged critically the underlying assessments and management estimates and have performed amongst others the following audit procedures:

  • Audit of the underlying audit matters that resulted in the error corrections and whether the error corrections are in compliance with IFRS as endorsed within the EU
  • Discussion of the restated amounts with management
  • Audit of the calculations of the errors
  • Evaluation of impacts of the error corrections on other balance sheet items (especially deferred taxes)
  • Detailed audit of all corrections made in the Group's financial statements and audit of completeness of notes disclosures in accordance with IAS 8

2. Recoverability of goodwill and development cost

Description

in the Group's financial statements FACC AG discloses goodwill amounting to EUR 18.6 million (prior year: EUR 18.6 million) and capitalised development cost amounting to EUR 118.6 million (previous year: EUR 111.4 million).

In the course of the annual impairment test for goodwill and the development cost not yet in use and the development cost with a trigger for an impairment, management have to make significant accounting estimates of value in use, which is derived by a discounted cashflow model. The recoverable amount is highly dependent on the discount rate (WACC) and the expected and planned cash flows in the midterm planning and for the amount used in the terminal value for goodwill. For development cost of programmes with an amortisation period longer than the midterm planning, planning assumptions have to be set depending on the rates of the airline monitor. The expected amortisation period is estimated based on the specific programme.

The main risk is the estimation of future cash flows and the derivation of an adequate discount rate. The estimation of cash flows includes assumptions about future market and economy developments and they are also impacted by internal learning curves for the specific programmes.

We also refer to our explanations in key audit matter 1. Restated errors in accordance with IAS 8.

The disclosures for goodwill and development cost are included in note 3 b) vi) and note 3 d).

How our audit addressed the matter

To address the risk we have critically challenged the assumptions and estimates of management and among others performed the following audit procedures:

  • Audit of CGU ("cash generating units") definitions and analysis of separation of cash inflows
  • Audit of the model used and audit of the correctness of the calculations and evaluation of the discount rate with the involvement of our internal valuation specialists
  • Evaluation of detailed plans and budgets and analysis of the main drivers (revenue, expenses, capex, change in working capital)
  • Audit of the rates derived from airline monitor
  • Comparison of the planned revenue and results and capex for the CGU with the budget approved by the Supervisory Board
  • Audit of completeness of disclosures
  • Evaluation of sensitivity analysis by calculation of downside valuation scenarios

3. Valuation of onerous contracts

Description

FACC AG recognises no provisions for onerous contracts, because there are no contracts for which the expected total contract cost exceed the expected revenue of the contract. Two significant agreements with one customer under one framework contract are considered linked based on the timing and economic dependency of the cash inflows for the evaluation of the provision of an onerous contract.

The main risk is that the criteria for the combination of contracts to one contract are not given and a common consideration is not adequate. Another significant risk is the estimation of the total contract cost and contract revenue.

The disclosures for the valuation of onerous contracts are in note 3 b) viii).

How our audit addressed the matter

To address the risk we have critically challenged the assumptions and estimates of management and among others performed the following audit procedures:

• Evaluation whether the common consideration of several customer agreements for the valuation of onerous contracts is adequate

  • Audit of the existence of the criteria for a common consideration
  • Audit of the underlying calculations for the valuation of onerous contracts
  • Evaluation of the underlying assumptions for units and duration of specific contracts
  • Evaluation of detailed plans and analysis of the main drivers (revenue, cost)
  • Audit of completeness of notes disclosures
  • Audit and evaluation of impact in case of the combination of contracts is not adequate

4. Revenue recognition and recoverability of trade account receivables and receivables from construction contracts

FACC AG recognises the revenue from the sale of goods and from engineering and other services. The revenue from services and engineering are realised over a time period and are disclosed as receivables from construction contracts in accordance with IAS 11.

For the revenue recognition from the sale of goods the main risk is that management has to assess how probable it is that the economic benefit will flow to the company and which uncertainties exist at the time of the revenue recognition.

For constructions contracts significant estimations for the expected contract revenue and contract cost have to be made, which are impacted by uncertainties and may be dependent on the outcome of future events. In a next step after the revenue recognition it has to be evaluated in how far changes in the estimation of recoverability have occurred and accounts receivables need to be impaired.

The disclosures for revenue recognition are in note 3 u) for revenue recognition, in note 3 b) vi) and note 3 j) for trade accounts receivables and in note 3 b) vi) for receivables from construction contracts.

How our audit addressed the matter

To address the risk we have critically challenged the assumptions and estimates of management and among others performed the following audit procedures:

  • Evaluation whether the criteria for revenue recognition in accordance with IAS 18 and IAS 11 for significant contracts were fulfilled
  • Analysis of the underlying contracts for significant construction contracts
  • Audit of the total recognised cost in significant construction contracts
  • Audit of the estimation of contract revenue for significant construction contracts
  • Audit of open item list and identification of trade receivables overdue more than 90 days and audit of recoverability
  • Evaluation of external legal opinion in respect of disputed matters in contracts

  • Discussion of significant overdue trade receivables with management and division management

  • Evaluation of all agreements reached until the issuance of the financial statements in the course of negotiations with regard to disputed receivables
  • Audit of completeness of notes disclosures

5. Impact of fake president incident

Description

At the end of the fiscal year 2015/16 the FACC Group was confronted with a fake president incident, which led to a cash outflow of EUR 52.9 million. Thereof an amount of approx. EUR 10.9 million was frozen on a bank account in China. Based on a legal opinion requested by management as of 28 February 2017 receivables amounting to EUR 10.9 million are recognised.

Immediately after this fraud case additional controls in the payment process of the Group have been implemented and during the financial year the payment and purchasing process was analysed in detail and controls to improve the process have been implemented.

Due to the fraud case described above there is a risk that controls in the payment process are not sufficient to avoid a further fraudulent outflow of money. In addition there is a risk that the frozen money cannot be repaid and the respective receivables are not recoverable.

The disclosures for the fake president incident are in note 10.

How our audit addressed the matter

To address the risks mentioned above we have evaluated the payment process and the estimates made by management in respect of receivables for the frozen money in China and we have performed among others the following audit procedures:

  • Evaluation of concept and implementation of purchasing and payment process and the controls implemented
  • Involvement of internal IT experts to audit the IT-general controls in general and IT-application controls in payment process
  • Execution of test of controls
  • Evaluation of the external lawyers statement requested by management to estimate the repayment for the frozen money recognised as receivables
  • Audit of the completeness of notes disclosures

Remark on other matters

The Group's financial statements of FACC AG for the year ended 29 February 2016 were audited by another group auditor who issued an unqualified audit opinion 20 May 2016.

Responsibilities of Management and of the Audit Committee for the Consolidated Financial Statements

Management is responsible for the preparation of the Consolidated Financial Statements in accordance with IFRS as adopted by the EU, and the additional requirements under Section 245a of the Austrian Company Code (UGB) for them to present a true and fair view of the assets, the financial position and the financial performance of the Group and for such internal controls as management determines are necessary to enable the preparation of Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error.

In preparing the Consolidated Financial Statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The Audit Committee is responsible for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU regulation and in accordance with the Austrian Standards on Auditing, which require the application of ISA, always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the EU regulation and in accordance with the Austrian Standards on Auditing, which require the application of ISA, we exercise professional judgment and maintain professional scepticism throughout the audit.

We also:

  • Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
  • Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures, and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
  • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Comments on the Management Report for the Group

Pursuant to the Austrian Generally Accepted Accounting Principles, the Management Report for the Group is to be audited as to whether it is consistent with the Consolidated Financial Statements and as to whether the Management Report for the Group was prepared in accordance with the applicable legal regulations.

Management is responsible for the preparation of the Management Report for the Group in accordance with the Austrian Generally Accepted Accounting Principles.

We conducted our audit in accordance with the Austrian Standards on Auditing for the audit of the Management Report for the Group.

Opinion

In our opinion, the Management Report for the Group was prepared in accordance with the valid legal requirements, comprising the details in accordance with Section 243a of the Austrian Company Code (UGB), and is consistent with the Consolidated Financial Statements.

Statement

Based on the findings during the audit of the Consolidated Financial Statements and due to the thus obtained understanding concerning the Group and its circumstances no material misstatements in the Management Report for the Group came to our attention.

OTHER INFORMATION

Management is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the Consolidated Financial Statements, the Management Report for the Group and the auditor's report thereon. The Annual Report is estimated to be provided to us after the date of the auditor's report. Our opinion on the Consolidated Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Consolidated Financial Statements, our responsibility is to read the other information, as soon as it is available, and, in doing so, to consider whether – based on our knowledge obtained in the audit – the other information is materially inconsistent with the Consolidated Financial Statements or otherwise appears to be materially misstated.

Responsible Austrian Certified Public Accountant

The auditor responsible for the audit mandate resulting in this independent auditor's report is Ms. Johanna Hobelsberger-Gruber, Certified Public Accountant.

Linz, 11 June 2017

Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H.

Johanna Hobelsberger-Gruber m. p. Certified Public Accountant

Hans Seidel m. p. Certified Public Accountant

CORPORATE GOVERNANCE REPORT

The Austrian Code of Corporate Governance (ACCG) provides Austrian stock corporations with a framework for the management and control of enterprises. It covers the standards of good corporate management common in international business practice as well as the most important provisions of Austrian corporation law that are of relevance in this context. The Code aims to establish a system of management and control of companies and groups that is accountable and is geared to creating sustainable, long-term value.

Key elements of good corporate governance practice encompass a high degree of transparency for all stakeholders, a long-term sustainable increase in corporate value as well as efficient cooperation among all governing bodies, the safeguarding of shareholders' interests and open corporate communications.

DECLARATION OF COMMITMENT

FACC AG respects the Austrian Code of Corporate Governance (ACCG) and committed itself for the first time to compliance with the provisions contained in this Code in 2014, following the first listing of the company shares on the Prime Market of the Vienna Stock Exchange. The Code is available on the Internet at www.corporate-governance.at in the currently valid version.

In accordance with the provisions of the law, compliance with the ACCG is assessed by an external auditor. The outcome of the assessment confirms that corporate governance is integral to FACC. The results of this assessment are made available to all interested parties on the corporate website at www.facc.com.

In accordance with Rule 60 of the ACCG, FACC AG is required to prepare and publish a Corporate Governance Report. This Corporate Governance Report is publicly available on the website of FACC AG (www.facc.com) (C-Rule 61 of the ACCG).

CORPORATE BODIES OF FACC AG

Management Board

Organisation and operation of the Mangement Board: In accordance with the Articles of Association of FACC AG, the Management Board consists of two or maximally four members, who are appointed by the Supervisory Board.

The Management Board is responsible for managing the business operations of FACC AG in line with prevailing legal regulations, the Articles of Association and the internal rules of procedure. The distribution of responsibilities among the individual members of the Management Board is determined in accordance with the internal rules of procedure, which also regulate the mode of cooperation among the Management Board members. Furthermore, the Management Board is required to fully comply with the rules stipulated in the Austrian Code of Corporate Governance.

Management Board Robert MACHTLINGER (1967)

Chairman of the Management Board First appointed: 2014

Current mandate expires: June 2020

Areas of responsibility: Strategy, Customer Relations, Business Development, Marketing, Programme Management, Quality Control, Corporate Communications, Production, Logistics, Tooling & Industrial Engineering, Facility Management, Human Resources

Supervisory Board mandates in other companies: none

Aleš STÁREK (1970)

Member of the Management Board First appointed: 2016 Current mandate expires: October 2019 Areas of responsibility: Finance, Controlling, Taxes, Treasury, IT, Risk Management, Legal Affairs, Investor Relations Supervisory Board mandates in other companies: none

Yongsheng WANG (1963)

Member of the Management Board First appointed: 2016 Current mandate expires: October 2019 Areas of responsibility: Internal Auditing, China Business Relations, M&A, Special Projects Supervisory Board mandates in other companies: none

Members of the Management Board who resigned from the Board in the 2016/17 financial year:

The Supervisory Board revoked the appointment of Walter Stephan to the Management Board of FACC AG as of 24 May 2016.

Aleš Stárek Member of the Management Board Robert Machtlinger Chairman of the Management Board

Yongsheng Wang Member of the Management Board

SUPERVISORY BOARD

The actions of the Supervisory Board have their legal basis in laws and regulations that are binding for publicly listed companies in Austria, such as the Austrian Stock Corporation Act and the Stock Exchange Act. Besides, the Supervisory Board has committed itself to compliance with the rules of the Austrian Code of Corporate Governance. With regard to in-house regulations, the Articles of Association and the internal rules of procedure are particularly relevant. In accordance with the Articles of Association of FACC AG, the Supervisory Board consists of at least three and not more than ten members, who are elected by the Annual General Meeting.

Pursuant to article 11.2 of the Articles of Association of FACC AG, FACC International Company Limited has the statutory right to delegate up to a third of all members of the Supervisory Board as long as its stake in the company does not fall below 25 percent of the share capital.

When appointing the members of the Supervisory Board, the Annual General Meeting shall take due care to ensure the expertise and personal qualifications as well as a balanced composition of the Supervisory Board. Furthermore, reasonable attention is to be given to the aspect of diversity of the Supervisory Board with respect to the representation of both genders and the age structure as well as the internationality of the members. New members of a Supervisory Board must inform themselves adequately of the organisation and activities of the company as well as of the tasks and responsibilities of the Supervisory Board members. Besides, the members of the Supervisory Board shall perform a self-evaluation of their activities once a year.

Ruguang GENG (1957)

Chairman since 2009 First appointed: 2014 Current mandate expires: Annual General Meeting (AGM) resolving upon the 2017/18 financial year Supervisory Board mandates in other companies: none

Shengqiang HE (1966)

Vice Chairman First appointed: 2016 Supervisory Board mandates in other companies: none

On 30 June 2016, FACC International Company Limited exercised its statutory right pursuant to article 11.2 of the Articles of Association of FACC AG to delegate up to a third of all members of the Supervisory Board as long as it owns at least 25 percent of the share capital, appointing Mr Shengqiang He to the Supervisory Board of FACC AG.

Jun TANG (1960)

First appointed: 2014

Current mandate expires: Annual General Meeting resolving upon the 2017/18 financial year

Supervisory Board mandates in other companies: none

Yanzheng LEI (1965)

First appointed: 2014

Current mandate expires: Annual General Meeting resolving upon the 2017/18 financial year

Supervisory Board mandates in other companies: none

Weixi GONG (1962)

First appointed: 2014

Current mandate expires: Annual General Meeting resolving upon the 2017/18 financial year

Supervisory Board mandates in other companies: none

Xuejun WANG (1972)

First appointed: 2014

Current mandate expires: Annual General Meeting resolving upon the 2017/18 financial year

Supervisory Board mandates in other companies: none

Chunsheng YANG (1955)

First appointed: 2014 Current mandate expires: Annual General Meeting resolving upon the 2017/18 financial year Supervisory Board mandates in other companies: none

George MAFFEO (1954)

First appointed: 2016 Current mandate expires: Annual General Meeting resolving upon the 2017/18 financial year Supervisory Board mandates in other companies: none

Supervisory Board members delegated by the Works Council

Barbara HUBER (1965) First appointed: 2014

Birol MUTLU (1981) First appointed: 2015

Peter KROHE (1959) First appointed: 2014

Ulrike REITER (1960) First appointed: 2014

Members of the Supervisory Board who resigned from the Board in the 2016/17 financial year:

Gregory B. Peters resigned from the Supervisory Board in the 2016/17 financial year.

Yongsheng Wang resigned from the Supervisory Board in the 2016/17 financial year.

INDEPENDENCE OF SUPERVISORY BOARD MEMBERS

The Supervisory Board has adopted the guidelines relating to the independence of its members pursuant to Appendix 1 of the Austrian Code of Corporate Governance. As a result, all members of the Supervisory Board have declared their independence of the company and its Management Board (Rule 53 of the ACCG).

George Maffeo and Weixi Gong are the members of the Supervisory Board, who represent the interests of those shareholders with an equity interest of no more than 10 percent (Rule 54 of the ACCG).

SUPERVISORY BOARD COMMITTEES

In accordance with the Stock Corporation Act, the Supervisory Board of FACC AG has set up an Audit Committee, which carries out scheduled supervisory and control functions. In addition to the review of the accounting process as well as the process of auditing the financial statements and the consolidated financial statements, the Audit Committee also monitors the effectiveness of the internal control and risk management systems of the company.

Besides, the Committee is required to audit the corporate governance report, on which a report is made at the Annual General Meeting. In the 2016/17 financial year, the Audit Committee met three times. In the year under review, a total of four Supervisory Board meetings were held.

No additional meetings were required. No member of the Supervisory Board attended less than half of the meetings.

In addition to the Audit Committee, whose establishment is mandatory, the Supervisory Board has also set up a Strategy Committee and a Personnel and Remuneration Committee (Nomination Committee).

The functional responsibilities of the Supervisory Board members in the respective committees are shown in the following table:

Audit Committee Members

  • Yanzheng LEI (Chairman)
  • Xuejun WANG
  • George MAFFEO
  • Barbara HUBER

Personnel and Remuneration Committee (Nomination Committee) Members

  • Ruguang GENG (Chairman)
  • Shengqiang HE
  • Yanzheng LEI
  • Weixi GONG
  • Xuejun WANG
  • Chunsheng YANG

Strategy Committee Members

  • Shengqiang HE (Chairman)
  • Ruguang GENG
  • Yanzheng LEI
  • Weixi GONG
  • George MAFFEO
  • Chunsheng YANG
  • Ulrike REITER

COOPERATION OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD

The Management Board reports to the Supervisory Board on fundamental issues relating to the future business policies of both the company and the Group as a whole as well as the future development of assets and liabilities, financial position and profit or loss. In addition, the Management Board regularly informs the Supervisory Board about business performance and the current situation of both the company and the Group as a whole in comparison to forecasts, while taking future development into account.

REMUNERATION REPORT

Remuneration of the Management Board

The Supervisory Board shall ensure that the total remuneration of the members of the Management Board is commensurate with the tasks and performance of each individual member of the Management Board, the situation of the company, the usual level of remuneration, and must also take measures to create incentives to promote behaviour supportive of the long-term development of the company. Total remuneration contains both fixed and variable components.

The most important parameter for calculating the variable remuneration components is the development of the operating result (EBIT) along with individually agreed performance indicators.

No maximum limit has been defined for these variable remuneration components.

In the 2016/17 financial year, variable remuneration components accounted for 0 percent of total remuneration of the members of the Management Board.

No stock option programme has been set up for members of the Management Board or for the company's executives.

Total remuneration for the members of the Management Board including performance-related variable components for the 2016/17 financial year amounted to TEUR 651 (2015/16: TEUR 1,001).

Remuneration of the active members of the FACC AG's Management Board in the 2016/17 financial year:

TEUR Fixed Variable Total
Robert MACHTLINGER 294 0 294
Aleš STÁREK 107 0 107
Yongsheng WANG1) 147 0 147
Walter STEPHAN 103 0 103

1) Wang Yongsheng is working for FACC AG on the basis of a service contract via Aerospace Innovation Investment GmbH.

A D&O insurance policy is currently in place, for which the premiums are paid by the company.

A defined-contribution pension scheme has been set up for members of the Management Board. Total expenses amounted to TEUR 8 in the 2016/17 financial year (2015/16: TEUR 16).

Following the early termination of the Management Board's contracts by the Supervisory Board, members will have certain entitlements with regard to basic salaries. Upon scheduled termination of a contract, Board members are entitled to severance payments depending on the length of their service and in accordance with statutory regulations.

Remuneration of the Supervisory Board

Total remuneration for the members of the Supervisory Board for the 2015/16 financial year, which was approved by the Annual General Meeting held on 15 July 2016, amounted to EUR 133,100 and was distributed as follows:

EUR
For the Chairman of the Supervisory Board 15,000
For the Vice Chairman of the Supervisory Board 13,200
For independent members of the
Supervisory Board
46,250
For members of the Supervisory Board 58,650

PROMOTION OF WOMEN ON THE MANAGEMENT BOARD, SUPERVISORY BOARD AND IN EXECUTIVE POSITIONS

There are currently two women represented in the FACC's Supervisory and Management Boards and top executive team. In the management levels underneath, the proportion of female executives is still quite low. Therefore, FACC continues to attend job fairs and seeks to address potential female high-performers in a targeted manner. The company is trying to attract more women to fill new management roles or to replace existing managers. However, the fact that the great majority of management positions at FACC requires a technical education is proving to be a hurdle.

The proportion of female employees within the FACC Group increased from 22% to 27% in the 2016/17 financial year.

FACC AG is committed to promoting equal opportunities at the workplace and strongly opposes any form of gender discrimination.

POSITION OF THE SHAREHOLDERS

Each share grants shareholders one vote at the Annual General Meeting of FACC AG. Unless mandatory statutory provisions require otherwise, the Annual General Meeting shall pass resolutions by a simple majority of votes cast. Resolutions requiring equity majority are passed by a simple majority of the capital stock represented at the time when the resolution is adopted. None of the shares conveys special control rights.

DIRECTORS' DEALINGS

In the 2016/17 financial year, no share trading transactions concluded by individuals of FACC AG subject to reporting obligations were announced.

AUDITORS

The Supervisory Board proposed Ernst & Young Wirtschaftsprüfungs GmbH, Linz, as auditor of FACC AG's financial statements and consolidated financial statements for the 2016/17 financial year. The motion was passed with the required majority by the second Annual General Meeting held on 15 July 2016.

Total expenses for auditing services amounted to TEUR 185 for the 2016/17 financial year, (2015/16: TEUR 226). A breakdown of expenses by activity area is represented in the Notes to the consolidated financial statements.

3. ZUSAMMENFASSUNG DES PRÜFUNGSERGEBNISSES

3.1. Feststellungen zur Gesetzmäßigkeit von Buchführung, Jahresabschluss sowie zum Corporate Governance-Bericht und zum Lagebericht

Bei unseren Prüfungshandlungen stellten wir die Einhaltung der gesetzlichen Vorschriften und der Grundsätze ordnungsmäßiger Buchführung fest.

Im Rahmen unseres risiko- und kontrollorientierten Prüfungsansatzes haben wir – soweit wir dies für unsere Prüfungsaussage für notwendig erachteten – die internen Kontrollen in Teilbereichen des Rechnungslegungsprozesses in die Prüfung einbezogen.

Hinsichtlich der Gesetzmäßigkeit des Jahresabschlusses und des Lageberichtes verweisen wir auf unsere Ausführungen im Bestätigungsvermerk.

Wir haben uns im Zuge unserer Prüfungshandlungen vergewissert, dass die in der Eröffnungsbilanz des Geschäftsjahres übernommenen Wertansätze den gesetzlichen Vorschriften und den Grundsätzen ordnungsmäßiger Bilanzierung entsprechen und der Grundsatz der Bewertungsstetigkeit beachtet wurde.

Der Abschluss der FACC AG, Ried im Innkreis, für das am 29. Februar 2016 endende Geschäftsjahr wurde von einem anderen Abschlussprüfer geprüft, der einen uneingeschränkten Bestätigungsvermerk zu diesem Abschluss am 20. Mai 2016 abgegeben hat.

Die Gesellschaft hat einen Corporate Governance-Bericht gemäß § 243b UGB aufgestellt. Eine materielle Prüfung dieses Berichtes war nicht Gegenstand der Abschlussprüfung.

3.2. Erteilte Auskünfte

Die gesetzlichen Vertreter erteilten die von uns verlangten Aufklärungen und Nachweise. Eine von den gesetzlichen Vertretern unterfertigte Vollständigkeitserklärung haben wir zu unseren Akten genommen.

Wir erhielten vom Abschlussprüfer des Vorjahres Zugang zu den relevanten Informationen der geprüften Gesellschaft.

3.3. Stellungnahme zu Tatsachen nach § 273 Abs 2 und Abs 3 UGB (Ausübung der Redepflicht)

Bei Wahrnehmung unserer Aufgaben als Abschlussprüfer haben wir keine Tatsachen festgestellt, die den Bestand der geprüften Gesellschaft gefährden oder ihre Entwicklung wesentlich beeinträchtigen können oder die schwerwiegende Verstöße der gesetzlichen Vertreter oder von Arbeitnehmern gegen Gesetz oder Satzung erkennen lassen. Wesentliche Schwächen bei der internen Kontrolle des Rechnungslegungsprozesses sind uns nicht zur Kenntnis gelangt. Die Voraussetzungen für die Vermutung eines Reorganisationsbedarfs (§ 22 Abs 1 Z 1 URG) sind nicht gegeben.

4. BESTÄTIGUNGSVERMERK *)

Bericht zum Jahresabschluss

Prüfungsurteil

Wir haben den Jahresabschluss der

FACC AG, Ried im Innkreis,

bestehend aus der Bilanz zum 28. Februar 2017, der Gewinn- und Verlustrechnung für das an diesem Stichtag endende Geschäftsjahr und dem Anhang, geprüft.

Nach unserer Beurteilung entspricht der beigefügte Jahresabschluss den gesetzlichen Vorschriften und vermittelt ein möglichst getreues Bild der Vermögens- und Finanzlage zum 28. Februar 2017 sowie der Ertragslage der Gesellschaft für das an diesem Stichtag endende Geschäftsjahr in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften.

Grundlage für das Prüfungsurteil

Wir haben unsere Abschlussprüfung in Übereinstimmung mit den österreichischen Grundsätzen ordnungsmäßiger Abschlussprüfung durchgeführt. Diese Grundsätze erfordern die Anwendung der International Standards on Auditing (ISA). Unsere Verantwortlichkeiten nach diesen Vorschriften und Standards sind im Abschnitt "Verantwortlichkeiten des Abschlussprüfers für die Prüfung des Jahresabschlusses" unseres Bestätigungsvermerks weitergehend beschrieben. Wir sind von der Gesellschaft unabhängig in Übereinstimmung mit den österreichischen unternehmensrechtlichen und berufsrechtlichen Vorschriften, und wir haben unsere sonstigen beruflichen Pflichten in Übereinstimmung mit diesen Anforderungen erfüllt. Wir sind der Auffassung, dass die von uns erlangten Prüfungsnachweise ausreichend und geeignet sind, um als Grundlage für unser Prüfungsurteil zu dienen.

Besonders wichtige Prüfungssachverhalte

Besonders wichtige Prüfungssachverhalte sind solche Sachverhalte, die nach unserem pflichtgemäßen Ermessen am bedeutsamsten für unsere Prüfung des Jahresabschlusses des Geschäftsjahres waren. Diese Sachverhalte wurden im Zusammenhang mit unserer Prüfung des Jahresabschlusses als Ganzem und bei der Bildung unseres Prüfungsurteils hierzu berücksichtigt, und wir geben kein gesondertes Prüfungsurteil zu diesen Sachverhalten ab.

Hinweis auf sonstige Sachverhalte

Der Abschluss der FACC AG, Ried im Innkreis, für das am 29. Februar 2016 endende Geschäftsjahr wurde von einem anderen Abschlussprüfer geprüft, der einen uneingeschränkten Bestätigungsvermerk zu diesem Abschluss am 20. Mai 2016 abgegeben hat.

Verantwortlichkeiten der gesetzlichen Vertreter und des Prüfungsausschusses für den Jahresabschluss

Die gesetzlichen Vertreter sind verantwortlich für die Aufstellung des Jahresabschlusses und dafür, dass dieser in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage der Gesellschaft vermittelt. Ferner sind die gesetzlichen Vertreter verantwortlich für die internen Kontrollen, die sie als notwendig erachten, um die Aufstellung eines Jahresabschlusses zu ermöglichen, der frei von wesentlichen - beabsichtigten oder unbeabsichtigten - falschen Darstellungen ist.

Bei der Aufstellung des Jahresabschlusses sind die gesetzlichen Vertreter dafür verantwortlich, die Fähigkeit der Gesellschaft zur Fortführung der Unternehmenstätigkeit zu beurteilen, Sachverhalte im Zusammenhang mit der Fortführung der Unternehmenstätigkeit - sofern einschlägig - anzugeben, sowie dafür, den Rechnungslegungsgrundsatz der Fortführung der Unternehmenstätigkeit anzuwenden, es sei denn, die gesetzlichen Vertreter beabsichtigen, entweder die Gesellschaft zu liquidieren oder die Unternehmenstätigkeit einzustellen oder haben keine realistische Alternative dazu.

Der Prüfungsausschuss ist verantwortlich für die Überwachung des Rechnungslegungsprozesses der Gesellschaft.

Verantwortlichkeiten des Abschlussprüfers für die Prüfung des Jahresabschlusses

Unsere Ziele sind, hinreichende Sicherheit darüber zu erlangen, ob der Jahresabschluss als Ganzes frei von wesentlichen – beabsichtigten oder unbeabsichtigten – falschen Darstellungen ist, und einen Bestätigungsvermerk zu erteilen, der unser Prüfungsurteil beinhaltet. Hinreichende Sicherheit ist ein hohes Maß an Sicherheit, aber keine Garantie dafür, dass eine in Übereinstimmung mit der EU-VO und mit den österreichischen Grundsätzen ordnungsmäßiger Abschlussprüfung, die die Anwendung der ISA erfordern, durchgeführte Abschlussprüfung eine wesentliche falsche Darstellung, falls eine solche vorliegt, stets aufdeckt. Falsche Darstellungen können aus dolosen Handlungen oder Irrtümern resultieren und werden als wesentlich angesehen, wenn von ihnen einzeln oder insgesamt vernünftigerweise erwartet werden könnte, dass sie die auf der Grundlage dieses Jahresabschlusses getroffenen wirtschaftlichen Entscheidungen von Nutzern beeinflussen.

Als Teil einer Abschlussprüfung in Übereinstimmung mit der EU-VO und mit den österreichischen Grundsätzen ordnungsmäßiger Abschlussprüfung, die die Anwendung der ISA erfordern, üben wir während der gesamten Abschlussprüfung pflichtgemäßes Ermessen aus und bewahren eine kritische Grundhaltung.

Wir bestimmen von den Sachverhalten, über die wir uns mit dem Prüfungsausschuss ausgetauscht haben, diejenigen Sachverhalte, die am bedeutsamsten für die Prüfung des Jahresabschlusses des Geschäftsjahres waren und daher die besonders wichtigen Prüfungssachverhalte sind. Wir beschreiben diese Sachverhalte in unserem Bestätigungsvermerk, es sei denn, Gesetze oder andere Rechtsvorschriften schließen die öffentliche Angabe des Sachverhalts aus oder wir bestimmen in äußerst seltenen Fällen, dass ein Sachverhalt nicht in unserem Bestätigungsvermerk mitgeteilt werden sollte, weil vernünftigerweise erwartet wird, dass die negativen Folgen einer solchen Mitteilung deren Vorteile für das öffentliche Interesse übersteigen würden.

Bericht zum Lagebericht

Der Lagebericht ist auf Grund der österreichischen unternehmensrechtlichen Vorschriften darauf zu prüfen, ob er mit dem Jahresabschluss in Einklang steht und ob er nach den geltenden rechtlichen Anforderungen aufgestellt wurde.

Die gesetzlichen Vertreter sind verantwortlich für die Aufstellung des Lageberichts in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften.

Wir haben unsere Prüfung in Übereinstimmung mit den Berufsgrundsätzen zur Prüfung des Lageberichts durchgeführt.

Urteil

Nach unserer Beurteilung ist der Lagebericht nach den geltenden rechtlichen Anforderungen aufgestellt worden, enthält zutreffende Angaben nach § 243a UGB, und steht in Einklang mit dem Jahresabschluss.

Erklärung

Angesichts der bei der Prüfung des Jahresabschlusses gewonnenen Erkenntnisse und des gewonnenen Verständnisses über die Gesellschaft und ihr Umfeld wurden wesentliche fehlerhafte Angaben im Lagebericht nicht festgestellt.

JAHRESABSCHLUSS

UND LAGEBERICHT

ZUM 28. FEBRUAR 2017

DER

FACC AG, RIED IM INNKREIS

BILANZ ZUM 28. FEBRUAR 2017

GEWINN- UND VERLUSTRECHNUNG 2016/2017

Aktiva 28.02.2017 28.02.2017
EUR
29.02.2016
TEUR
A. Anlagevermögen
I. Immaterielle Vermögensgegenstände
1. gewerbliche Schutzrechte und ähnliche
Rechte und Vorteile und Software
0,00 1
II. Sachanlagen
1. Betriebs- und Geschäftsausstattung 0,00 0
III. Finanzanlagen
1. Anteile an verbundenen Unternehmen 267.822.715,00 267.823
2. Wertpapiere (Wertrechte) des
Anlagevermögens
1.779.372,17 1.635
269.602.087,17 269.458
269.602.087,17 269.459
B. Umlaufvermögen
I. Forderungen und sonstige
Vermögensgegenstände
1. Forderungen aus Lieferungen und
Leistungen
1.046,97 0
2. Forderungen gegenüber verbundenen
Unternehmen
davon aus Lieferungen und Leistungen
davon sonstige
3.549.995,09
1.386.889,90
2.163.105,19
2.074
1.118
957
3. sonstige Forderungen und
Vermögensgegenstände
6.414.690,10 7.287
9.965.732,16 9.361
II. Guthaben bei Kreditinstituten 3.465.045,01 2.971
13.430.777,17 12.332
C. Rechnungsabgrenzungsposten 472.018,00 183
D. Aktive latente Steuern 32.069.452,22 0
Summe Aktiva 315.574.334,56 281.974
Passiva 28.02.2017 28.02.2017
EUR
29.02.2016
TEUR
A. Eigenkapital
I. eingefordertes, übernommenes und
eingezahltes Grundkapital
gezeichnetes Grundkapital
einbezahltes Grundkapital
übernommenes Grundkapital
45.790.000,00
45.790.000,00
45.790.000,00
45.790.000,00
45.790
45.790
45.790
45.790
II. Kapitalrücklagen
1. gebundene 134.215.000,00 134.215
2. nicht gebundene 95.041.250,00 95.041
229.256.250,00 229.256
III. Bilanzverlust
davon Verlustvortrag
-2.560.523,29
-6.610.720,07
-6.611
-8.540
272.485.726,71 268.436
B. Rückstellungen
1. Rückstellungen für Abfertigungen 236.561,00 580
2. Rückstellungen für Pensionen 1.779.372,17 3.643
3. Steuerrückstellungen 29.509.439,73 25
4. sonstige Rückstellungen 637.314,85 1.062
32.162.687,75 5.309
C. Verbindlichkeiten
1. Verbindlichkeiten aus Lieferungen und
Leistungen
davon mit einer Restlaufzeit von bis zu einem Jahr
557.935,05
557.935,05
684
684
2. Verbindlichkeiten gegenüber verbundenen
Unternehmen
davon aus Lieferungen und Leistungen
davon sonstige
davon mit einer Restlaufzeit von bis zu einem Jahr
10.275.435,97
154.762,19
10.120.673,78
10.275.435,97
7.281
34
7.247
7.281
3. sonstige Verbindlichkeiten
davon aus Steuern
davon im Rahmen der sozialen Sicherheit
davon mit einer Restlaufzeit von bis zu einem Jahr
92.549,08
3.298,08
31.215,60
92.549,08
264
4
22
264
10.925.920,10 8.229
davon mit einer Restlaufzeit von bis zu einem Jahr
Summe Passiva
10.925.920,10
315.574.334,56
8.229
281.974
2016/2017
EUR
2015/2016
TEUR
1. Umsatzerlöse 3.965.880,00 3.000
2. sonstige betriebliche Erträge
a) Erträge aus der Auflösung von Rückstellungen 190.628,00 1.232
b) übrige 57.039,74
247.667,74
0
1.232
3. Personalaufwand
a) Gehälter 1.110.260,12 1.630
b) soziale Aufwendungen
davon Aufwendungen für Altersversorgung
-1.890.751,63
-1.989.358,05
-300
-722
aa) Aufwendungen für Abfertigungen und Leistungen an
betriebliche Mitarbeitervorsorgekassen
-198.736,50 171
bb) Aufwendungen für gesetzlich vorgeschriebene
Sozialabgaben sowie vom Entgelt abhängige Abgaben und
Pflichtbeiträge
290.372,64 248
-780.491,51 1.330
4. Abschreibungen
a) auf immaterielle Gegenstände des Anlagevermögens und
Sachanlagen
485,17 0
5. sonstige betriebliche Aufwendungen
a) übrige 4.673.839,41 2.393
6. Zwischensumme aus Z 1 bis 5 (Betriebserfolg) 319.714,67 508
7. sonstige Zinsen und ähnliche Erträge
davon aus verbundenen Unternehmen
1.043,95
641,92
1.429
1.145
8. Zinsen und ähnliche Aufwendungen 15.859,84 4
9. Zwischensumme aus Z 7 bis 8 (Finanzerfolg) -14.815,89 1.425
10. Ergebnis vor Steuern (Zwischensumme aus Z 6 und 9) 304.898,78 1.933
11. Steuern vom Einkommen
davon latente Steuern
-2.959.348,52
-2.959.348,52
0
0
Körperschaftsteuer aus Gruppenbesteuerung
davon weiterbelastet an Gruppenmitglied
-785.949,48
-1.294.167,44
4
-2
-3.745.298,00 4
12. Ergebnis nach Steuern 4.050.196,78 1.929
13. Jahresüberschuss 4.050.196,78 1.929
14. Verlustvortrag aus dem Vorjahr -6.610.720,07 -8.540
15. Bilanzverlust -2.560.523,29 -6.611

ANHANG ZUM JAHRESABSCHLUSS

zum 28. Februar 2017

Allgemeine Grundsätze

Unternehmensgröße Die FACC AG ist eine große Kapitalgesellschaft im Sinne des § 221 UGB.

Prinzipien Der Jahresabschluss wurde nach den Rechnungslegungsbestimmungen des Unternehmensgesetzbuches (UGB) in der im Erstellungszeitraum geltenden Fassung und unter Berücksichtigung der Grundsätze ordnungsmäßiger Buchführung erstellt. Er vermittelt ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage des Unternehmens.

Bei der Erstellung des Jahresabschlusses wurden die Grundsätze der Vollständigkeit und Willkürfreiheit beachtet. Die Bewertung der einzelnen Vermögensgegenstände und Schulden folgte dem Grundsatz der Einzelbewertung und unterstellte die Fortführung des Unternehmens. Dem Vorsichtsprinzip und dem imparitätischen Realisationsprinzip wurde Rechnung getragen.

Darstellung Änderungen der Form der Darstellung gegenüber dem Vorjahr basieren auf den Rechtsfolgen des Rechnungslegungsänderungsgesetzes 2014, welches auf das vorliegende Geschäftsjahr erstmalig anzuwenden ist.

Vorjahresbeträge Die Vorjahresbeträge wurden bei Bedarf der aktuellen Gliederung angepasst.

Gliederungen Die Gliederung der Bilanz und der Gewinn- und Verlustrechnung folgt den gesetzlichen Bestimmungen, insbesondere den §§ 224 und 231 UGB. Die Gewinnund Verlustrechnung wurde nach dem Gesamtkostenverfahren erstellt.

Konzernverhältnisse

Mutterunternehmen Die FACC AG mit Sitz Ried im Innkreis stellt einen Konzernabschluss als Mutterunternehmen der FACC Operations GmbH auf, der am Firmenbuch Ried im Innkreis veröffentlicht wird. Die FACC Operations GmbH erstellt einen Teilkonzernabschluss, der unter der Firmenbuchnummer 114257a veröffentlicht wird.

Der Konsolidierungskreis der FACC AG zum 28. Februar 2017 wurde im Vergleich zum Konsolidierungskreis des Konzernabschlusses zum 29. Februar 2016 nicht verändert.

Die FACC AG befindet sich wiederum im Konsoliderungskreis der FACC International Company Ltd. mit Sitz in Hongkong (Units 1603-4, 16th Floor, Causeway Bay Plaza I, No. 489 Hennessy Road, Hong Kong), Registernummer 1394811.

Geschäftliche Beziehungen

Der FACC AG obliegt die Holdingfunktion. Als Muttergesellschaft der FACC Operations GmbH übernimmt sie Managementtätigkeiten und Financial Services für den Konzern. Des Weiteren übernimmt die FACC AG Finanzierungsagenden im Konzern.

Bilanzierungs- und Bewertungsmethoden

Stetigkeit Die bisher angewandten Bilanzierungs- und Bewertungsmethoden wurden mit Ausnahme der Änderungen auf Grund der erstmaligen Anwendung des RÄG 2014 beibehalten; diese Änderungen auf Grund der erstmaligen Anwendung des RÄG 2014 betreffen den erstmaligen Ansatz von aktiven latenten Steuern ab 01.03.2016.

Anlagevermögen Erworbene immaterielle Vermögensgegenstände und Vermögensgegenstände des Sachanlagevermögens werden zu Anschaffungskosten aktiviert und planmäßig abgeschrieben. In Anlehnung an die steuerrechtlichen Bestimmungen wird für Zugänge im ersten Halbjahr eine volle Jahresabschreibung, für Zugänge im zweiten Halbjahr eine halbe Jahresabschreibung vorgenommen.

Geringwertige Vermögensgegenstände mit einem Betrag von bis zu EUR 400,00 werden im Jahr der Anschaffung voll abgeschrieben und im Anlagenspiegel im Anschaffungsjahr als Zu- und Abgang ausgewiesen.

Die Finanzanlagen werden zu Anschaffungskosten oder, falls ihnen ein niedrigerer Wert beizumessen ist, mit diesem angesetzt.

Forderungen und sonstige Vermögensgegenstände

Forderungen und sonstige Vermögensgegenstände werden mit dem Nennwert angesetzt.

  • Latente Steuern Latente Steuern werden gemäß § 198 Abs. 9 und 10 UGB nach dem bilanzorientierten Konzept und ohne Abzinsung auf Basis des aktuellen Körperschaftsteuersatzes von 25 % gebildet. Dabei werden, falls vorhanden, latente Steuern auf steuerliche Verlustvorträge in dem Ausmaß berücksichtigt, in dem ausreichende passive latente Steuern vorhanden sind oder soweit überzeugende substanzielle Hinweise vorliegen, dass ein ausreichendes zu versteuerndes Ergebnis in der Zukunft zur Verfügung stehen wird.
  • Rückstellungen Rückstellungen für Abfertigungen Die Abfertigungsrückstellung wird für gesetzliche und vertragliche Ansprüche gebildet. Die Berechnung erfolgt nach IAS 19 auf Basis eines Rechnungszinssatzes von 2,2 % (Vorjahr 2,0 %) und einer Gehaltssteigerung von 2,0 % (Vorjahr 2,0 %) pro Jahr. Dabei wird mit einem Pensionsantrittsalter von 65 Jahren für Männer bzw. 60 Jahren für Frauen gerechnet. Bei der Rückstellungsberechnung wird kein Fluktuationsabschlag berücksichtigt. Versicherungsmathematische Gewinne und Verluste werden erfolgswirksam erfasst. Der Rechnungszinssatz für Abfertigungsrückstellungen wird aus dem Stichtagszinssatz basierend auf Marktzinssätzen von Unternehmen hoher Bonität abgeleitet.

Rückstellungen für Pensionen

Per 30.11.2016 erfolgte unter Beiziehung eines externen Rechtsgutachters eine Neueinschätzung der für eine schriftliche, rechtsverbindliche und unwiderrufliche Einzelzusage gebildeten Pensionsrückstellung. Gemäß der Neueinschätzung wird die Pensionsrückstellung entsprechend des Rückkaufswerts der Pensionsrückdeckversicherung bewertet, da sämtliche Pensionsansprüche von dieser Versicherung gedeckt sind. Der Differenzbetrag wurde per 30.11.2016 aufgelöst.

Die im Vorjahr ausgewiesene Pensionsrückstellung für eine schriftliche, rechtsverbindliche und unwiderrufliche Einzelzusage wurde nach versicherungsmathematischen Grundsätzen nach IAS 19 unter Zugrundelegung eines Rechnungszinssatzes von 2,0 % und einer Gehaltsdynamik von 2,0 % bzw. eine Rentendynamik von 1,0 % gebildet. Dabei wurde ein Pensionsantrittszeitpunkt von 65 Jahren zugrunde gelegt. Bei der Rückstellungsberechnung wurde kein Fluktuationsabschlag berücksichtigt. Versicherungsmathematische Gewinne und Verluste wurden erfolgswirksam erfasst.

Sonstige Rückstellungen

In den sonstigen Rückstellungen werden unter Beachtung des Vorsichtsprinzips alle im Zeitpunkt der Bilanzerstellung erkennbaren Risiken und der Höhe oder dem Grunde nach ungewisse Verbindlichkeiten mit jenen Beträgen berücksichtigt, die nach vernünftiger unternehmerischer Beurteilung erforderlich scheinen.

Sozialversicherungsbeiträge des Arbeitgebers und gesetzliche Lohnnebenkosten werden bei der Bewertung der Urlaubsrückstellung berücksichtigt.

Die Rückstellung für Zeitguthaben berücksichtigt die zum Bilanzstichtag offene Zeitverrechnung mit Mitarbeitern. Die Berechnung beinhaltet die anteiligen Lohnnebenkosten.

Die Berechnung der Jubiläumsgeldrückstellung erfolgt nach IAS 19. Es werden ein Rechnungszinssatz von 1,7 % (Vorjahr 2,0 %) und eine Gehaltssteigerung von 2,0 % (Vorjahr 2,0 %) pro Jahr unterstellt. Dabei wird mit einem Pensionsantrittsalter von 65 Jahren für Männer bzw. 60 Jahren für Frauen gerechnet. Bei der Berechnung der Jubiläumsgeldrückstellungen wurden Sozialversicherungsbeiträge berücksichtigt und ein Fluktuationsabschlag von 30,6 % zugrunde gelegt. Versicherungsmathematischen Gewinne und Verluste werden sofort erfolgswirksam erfasst. Der Rechnungszinssatz für Jubiläumsgeldrückstellungen wird aus dem Stichtagszinssatz basierend auf Marktzinssätzen von Unternehmen hoher Bonität abgeleitet.

Verbindlichkeiten Verbindlichkeiten werden mit ihrem Erfüllungsbetrag unter Bedachtnahme auf den Grundsatz der Vorsicht angesetzt.

Datumsangaben im Anhang

Die in den Erläuterungen zur Bilanz verwendete Zeitangabe bezieht sich auf den Bilanzstichtag, die in den Erläuterungen zur Gewinn- und Verlustrechnung verwendete Zeitangabe umfasst den Zeitraum des Geschäftsjahres.

Währung und Rundung

Sämtliche Betragsangaben erfolgen in Euro. Beträge des aktuellen Jahres werden mit zwei Nachkommastellen (Euro-Cent) dargestellt. Die Vorjahreswerte werden in 1.000 EUR angegeben.

Erläuterungen zu Posten der Bilanz

A. Anlagevermögen 269.602.087,17

Die Entwicklung des Anlagevermögens kann dem Anlagenspiegel entnommen werden, der alle nach § 226 Abs. 1 UGB geforderten Angaben enthält und als Anlage diesem Bericht beiliegt.

III. Finanzanlagen 269.602.087,17

1. Anteile an verbundenen Unternehmen 267.822.715,00

Beteiligungsspiegel zum 28.02.2017

Beteiligungsspiegel zum 29.02.2016
Anteil am
Stammkapital
Eigenkapital zum
Bilanzstichtag
Jahresfehlbetrag
FACC Operations GmbH Ried im Innkreis 100,0 172.641.351,60 -49.411.839,82

FACC Operations GmbH Ried im Innkreis 100,0 188.198.586,17 15.557.234,57

Im Vorjahr erhielt das Tochterunternehmen einen Gesellschafterzuschuss in Form einer Stammkapitalerhöhung in Höhe von EUR 47.000.000,00 sowie einen Gesellschafterzuschuss in Form einer ungebundenen Kapitalrücklage durch einen unwiderruflichen Forderungsverzicht in Höhe von EUR 79.000.000,00, wodurch sich der Beteiligungsansatz entsprechend erhöhte.

Anteil am Stammkapital Eigenkapital zum

2. Wertpapiere (Wertrechte) des Anlagevermögens 1.779.372,17

Bei den Wertrechten handelt es sich um die Rückkaufswerte der Pensionsrückdeckungsversicherung für die im Geschäftsjahr 2016/17 bestehenden Pensionsverpflichtungen des Konzerns. Diese werden zu dem von der Versicherung bestätigten Deckungskapital am Bilanzstichtag bewertet.

Bilanzstichtag Jahresüberschuss

  • 8 -

Der Wert entspricht in etwa den erwarteten Mittelzuflüssen bei Auflösung der Versicherungspolizze zum Bilanzstichtag.

28.02.2017 29.02.2016
Wr. Städtische Versicherung
- Deckungskapital Pol. 1,128.230-0 1.475.573,93 1.431,2
- Deckungskapital Pol. L 331.841-J 303.798,24 203,9
1.779.372,17 1.635,1

Diese Ansprüche wurden an den Berechtigten der Pensionszusage verpfändet.

B. Umlaufvermögen 13.430.777,17

I. Forderungen und sonstige Vermögensgegenstände 9.965.732,16

Analog zum Vorjahr weisen die Forderungen und sonstigen Vermögensgegenstände zum Bilanzstichtag durchwegs eine Restlaufzeit von unter einem Jahr auf. Es bestehen keine Forderungen mit einer Restlaufzeit zwischen einem und fünf Jahren bzw. größer als fünf Jahren.

2. Forderungen gegenüber verbundenen Unternehmen 3.549.995,09

Zum Bilanzstichtag bestanden folgende Forderungen gegenüber verbundenen Unternehmen:

28.02.2017 29.02.2016
FACC Operations GmbH, Ried im Innkreis
- Forderungen aus laufender Verrechnung 1.386.889,90 949,4
- Darlehensforderungen 0,00 100,0
- Forderungen aus Steuerumlage 2.163.105,19 856,7
FACC International Company Limited, Hongkong
- Forderungen aus laufender Verrechnung 0,00 168,2
3.549.995,09 2.074,3

Das an die FACC Operations GmbH gewährte Darlehen in Höhe von EUR 79.100.000,00 wurde im Vorjahr im Ausmaß von EUR 79.000.000,00 durch einen unwiderruflichen Forderungsverzicht in einen Gesellschafterzuschuss in Form einer Kapitalrücklage umgewandelt.

3. sonstige Forderungen und Vermögensgegenstände 6.414.690,10

Unter den sonstigen Forderungen und Vermögensgegenständen wurden folgende Einzelwerte zusammengefasst:

6.414.690,10 7.286,8
Ausländische Vorsteuer 541,60 0,2
Geleistete Anzahlungen 52.000,00 15,0
Finanzamt Linz 6.362.148,50 7.271,5
28.02.2017 29.02.2016

Im Posten "Sonstige Forderungen und Vermögensgegenstände" sind analog zum Vorjahr keine Erträge enthalten, die erst nach dem Bilanzstichtag zahlungswirksam werden.

II. Guthaben bei Kreditinstituten 3.465.045,01

Bankguthaben bestanden zum Bilanzstichtag bei folgenden Kreditinstituten:

28.02.2017 29.02.2016
Erste Bank
- Kto.Nr. 600-131-246/00 3.442.842,16 2.410,5
Bank Austria
- Kto.Nr. 10009.182.832 22.202,85 560,6
3.465.045,01 2.971,1

C. Rechnungsabgrenzungsposten 472.018,00

Zum Zwecke der Periodenabgrenzung waren zum Bilanzstichtag 28.02.2017 folgende Rechnungsabgrenzungsposten in die Bilanz einzustellen:

28.02.2017 29.02.2016
Gebühren, Mitgliedsbeiträge 85.406,15 23,7
Versicherungen 383.508,85 158,7
Werbeaufwand 3.103,00 0,8
472.018,00 183,2

D. Aktive latente Steuern 32.069.452,22

Die aktiven latenten Steuern zum Bilanzstichtag wurden für temporäre Differenzen zwischen dem steuerlichen und unternehmensrechtlichen Wertansatz für folgende Posten gebildet:

32.069.452,22 33.376.740,27 0,00
abzgl. Saldierung mit passiven latenten Steuern -14.531,00 -19.013,75 0,00
Daraus resultierende aktive latente Steuern 32.083.983,22 33.395.754,02 0,00
130.133.072,05 137.456.036,18 0,00
Steuerliche Verlustvorträge 128.108.504,88 133.102.287,18 0,00
Personalbezogene Rückstellungen 2.024.567,17 4.353.749,00 0,00
28.02.2017 01.03.2016 29.02.2016

Die aktiven latenten Steuern entwickelten sich wie folgt:

EUR
Stand am 01.03.2016 33.376.740,27
Erfolgswirksame Veränderung -1.307.288,05
Erfolgsneutrale Veränderung aus Umgründungen 0,00
Stand am 28.02.2017 32.069.452,22

Es wurde auf Ebene der FACC AG als Gruppenträgerin für interne Verlustvorträge eine aktive latente Steuer in Höhe von EUR 29.110.103,70 gebildet. In selber Höhe wurde eine Rückstellung für künftige Steuerbelastungen aus der Gruppe dotiert.

Der Ansatz von aktiven latenten Steuern auf steuerliche Verlustvorträge ist gerechtfertigt, da ausreichend postive Ergebnisse in den nächsten Geschäftsjahren zu erwarten sind.

A. Eigenkapital 272.485.726,71

Das Eigenkapital der AG setzt sich zusammen aus:

28.02.2017 29.02.2016
Eingefordertes, übernommenes
und eingezahltes Grundkapital 45.790.000,00 45.790,0
Kapitalrücklagen 229.256.250,00 229.256,3
Bilanzverlust -2.560.523,29 -6.610,7
272.485.726,71 268.435,5

I. eingefordertes, übernommenes und eingezahltes Grundkapital 45.790.000,00

Das Grundkapital der an der Börse notierenden Gesellschaft beträgt EUR 45.790.000,00 und ist voll eingezahlt. Es ist in 45.790.000 Stückaktien zu je EUR 1,00 eingeteilt.

Genehmigtes Kapital

In der außerordentlichen Hauptversammlung vom 23. Juni 2014 wurde ein genehmigtes Kapital beschlossen. Der Vorstand ist demnach berechtigt, mit Zustimmung des Aufsichtsrats innerhalb von längstens fünf Jahren ab Eintragung des genehmigten Kapitals im Firmenbuch das Grundkapital um bis zu einer Nominale von EUR 19.895.000,00 durch Ausgabe von bis zu 19.895.000 neuen Aktien gegen Bar- oder Sacheinlage zu erhöhen. Die Ausgabe der neuen Aktien kann auch unter Ausschluss des Bezugsrechts der Aktionäre erfolgen.

In der außerordentlichen Hauptversammlung vom 23. Juni 2014 wurde ein genehmigtes Kapital beschlossen. Der Vorstand ist demnach berechtigt, mit Zustimmung des Aufsichtsrats innerhalb von längstens fünf Jahren ab Eintragung des genehmigten Kapitals im Firmenbuch das Grundkapital um bis zu einer Nominale von EUR 3.000.000,00 durch Ausgabe von bis zu 3.000.000 neuen Aktien zur Einräumung von Aktienoptionen an Arbeitnehmer, leitende Angestellte und Mitglieder des Vorstands oder eines mit ihr verbundenen Unternehmens zu erhöhen. Die Ausgabe der neuen Aktien kann auch unter Ausschluss des Bezugsrechts der Aktionäre erfolgen.

Bedingtes Kapital

In der außerordentlichen Hauptversammlung vom 23. Juni 2014 wurde das Grundkapital um bis zu EUR 15.000.000,00 durch Ausgabe von bis zu 15.000.000 neuen auf Inhaber lautenden Stückaktien bedingt erhöht (bedingtes Kapital). Dieses bedingte Kapital dient der Gewährung von Bezugs- oder Umtauschrechten an Gläubiger von Wandelschuldverschreibungen und der Vorbereitung des Zusammenschlusses mehrerer Unternehmen. Der Ausgabebetrag und das Umtauschverhältnis sind nach Maßgabe der Bestimmungen der Wandelschuldverschreibungen zu ermitteln. Der Ausgabebetrag der Aktien darf nicht unter dem anteiligen Betrag des Grundkapitals liegen.

II. Kapitalrücklagen 229.256.250,00

28.02.2017 29.02.2016 Gebundene Kapitalrücklage 134.215.000,00 134.215,0 Nicht gebundene Kapitalrücklage 95.041.250,00 95.041,3 229.256.250,00 229.256,3

III. Bilanzverlust -2.560.523,29

28.02.2017 29.02.2016
Verlustvortrag per 28./29.02. -6.610.720,07 -8.539,9
Jahresgewinn 4.050.196,78 1.929,2
-2.560.523,29 -6.610,7

B. Rückstellungen 32.162.687,75

1. Rückstellungen für Abfertigungen 236.561,00

Stand
01.03.2016
Übertragung Verwendung Auflösung Stand
28.02.2017
Abfertigungs
rückstellung
579.741,00 8.050,00 206.102,00 145.128,00 236.561,00

Im vorliegenden Geschäftsjahr wurde weiteres Verwaltungspersonal von der FACC Operations GmbH in die FACC AG übernommen. In diesem Zusammenhang wurden Abfertigungsansprüche in Höhe von EUR 8.050,00 übertragen.

Im Geschäftsjahr 2016/17 wurden versicherungsmathematische Verluste in Höhe von EUR 61,00 (Vorjahr TEUR 2) erfolgswirksam in der Gewinn- und Verlustrechnung erfasst.

2. Rückstellungen für Pensionen 1.779.372,17

Stand
01.03.2016 Auflösung Zuweisung 28.02.2017
Rückstellungen für Pensionen 3.642.553,00 2.007.468,33 144.287,50 1.779.372,17

Die Pensionsrückstellung orientiert sich per 28.02.2017 an der Höhe des von der Versicherung bestätigten Deckungskapitals, da die Pensionsansprüche vollständig von der Versicherung abgedeckt sind. Der Differenzbetrag in Höhe von EUR 2.007.468,33 war entsprechend aufzulösen.

Im Geschäftsjahr 2016/17 wurden versicherungsmathematische Gewinne bzw. Verluste von EUR 0,00 erfolgswirksam erfasst. Im Vorjahr wurden versicherungsmathematische Gewinne in Höhe von TEUR 739 erfolgswirksam in der Gewinn- und Verlustrechnung erfasst.

3. Steuerrückstellungen 29.509.439,73

Als Gruppenträger schuldet die FACC AG die Körperschaftsteuer für die Unternehmensgruppe.

Für erwartete Steuerverpflichtungen wurden folgende Rückstellungen gebildet:

Stand
01.03.2016
Verwendung Zuweisung Stand
28.02.2017
Rückstellung für KöSt 2013 23.009,23 23.009,23 0,00 0,00
Rückstellung für KöSt 2014 437,50 437,50 0,00 0,00
Rückstellung für KöSt 2015 750,00 0,00 0,00 750,00
Rückstellung für KöSt 2016 750,00 0,00 500,00 1.250,00
Rückstellung für KöSt 2017 0,00 0,00 397.336,03 397.336,03
Rückstellung für künftige
Steuerbelastungen aus Gruppe 0,00 0,00 29.110.103,70 29.110.103,70
24.946,73 23.446,73 29.507.939,73 29.509.439,73

Aufgrund erwarteter künftiger Belastungen aus Steuerumlagevereinbarungen im Rahmen der Unternehmensgruppe war im vorliegenden Geschäftsjahr eine Rückstellung für diese künftigen Verpflichtungen des Gruppenträgers zu bilden.

4. sonstige Rückstellungen 637.314,85

Die Rückstellungen für sonstige Verpflichtungen setzen sich wie folgt zusammen:

Stand
01.03.2016
Verwendung Zuweisung Stand
28.02.2017
sonstige Rückstellungen
Unternehmensberatung 0,00 0,00 225.160,00 225.160,00
Nicht konsumierte Urlaube 572.168,34 572.168,34 206.470,93 206.470,93
Steuerberatung 57.800,00 57.800,00 44.400,00 44.400,00
Aliquote Sonderzahlungen 42.827,58 42.827,58 42.521,30 42.521,30
Abschlussprüfung 74.000,00 74.000,00 42.000,00 42.000,00
Rechtsberatung 230.400,00 230.400,00 14.302,87 14.302,87
Aufsichtsratsvergütungen 41.000,00 41.000,00 43.075,00 43.075,00
Sonstige 43.726,09 40.868,09 16.526,75 19.384,75
1.061.922,01 1.059.064,01 634.456,85 637.314,85

C. Verbindlichkeiten 10.925.920,10

Die Verbindlichkeiten weisen wie im Vorjahr zum Bilanzstichtag durchwegs Restlaufzeiten von unter einem Jahr auf. Es bestehen keine Verbindlichkeiten mit einer Restlaufzeit zwischen einem und fünf Jahren bzw. größer als fünf Jahren.

Dingliche Sicherheiten

Es bestehen keine dinglichen Sicherheiten.

2. Verbindlichkeiten gegenüber verbundenen Unternehmen 10.275.435,97

Die Verbindlichkeit gegenüber verbundenen Unternehmen besteht in Höhe von EUR 10.120.673,78 (Vorjahr TEUR 7.247) aus Umsatzsteuerguthaben des Organmitglieds, das aufgrund der umsatzsteuerlichen Organschaft über die FACC AG verrechnet wird, sowie in Höhe von EUR 154.762,19 (Vorjahr TEUR 34) aus Kostenverrechnungen der Schwestergesellschaft Aerospace Innovation Investment GmbH.

3. sonstige Verbindlichkeiten 92.549,08

Der Bilanzansatz "Sonstige Verbindlichkeiten" setzt sich aus folgenden Einzelwerten zusammen:

28.02.2017 29.02.2016
Aus Steuern 3.298,08 3,9
Im Rahmen der sozialen Sicherheit
Verbindlichkeiten gegenüber Personal
31.215,60 21,8
- Verbindlichkeiten aus Bezugsverrechnung 54.369,44 69,2
- Abfertigungsverpflichtungen 0,00 122,2
Verbindlichkeiten gegenüber Aufsichtsratsmitgliedern 0,00 27,8
Sonstige 3.665,96 18,9
92.549,08 263,9
davon aus Steuern
28.02.2017 29.02.2016
Kommunalsteuer Februar 3.298,08 3,9
davon im Rahmen der
sozialen Sicherheit
28.02.2017 29.02.2016
Verbindlichkeiten Sozialversicherungsbeiträge 31.215,60 21,8

In dieser Bilanzposition sind Aufwendungen in Höhe von EUR 92.549,08 (Vorjahr TEUR 264) enthalten, die erst im Folgejahr zahlungswirksam werden.

Erläuterungen zu Posten der Gewinn- und Verlustrechnung

1. Umsatzerlöse 3.965.880,00

Erlöse aus Warenlieferungen und Leistungen

3.965.880,00 3.000,0
- Mieterlöse 5.880,00 0,0
- Erlöse aus Managementtätigkeit 3.960.000,00 3.000,0
Erlöse Inland
2016/2017 2015/2016

Der FACC AG obliegt die Holdingfunktion. Als Muttergesellschaft der FACC Operations GmbH übernimmt sie als solche die Managementtätigkeiten, Finanzierungsagenden und Financial Services für den Konzern und stellt die dafür anfallenden Kosten der FACC Operations GmbH in Rechnung.

2. sonstige betriebliche Erträge 247.667,74

Erträge aus der Auflösung von Rückstellungen

2016/2017 2015/2016
Auflösung von Abfertigungsrückstellungen
Auflösung von sonstigen Rückstellungen
145.128,00
45.500,00
0,0
0,0
Auflösung der Rückstellung für Kosten des Börsegangs 0,00 1.875,0
Anpassung von Erträgen aus der Weiterverrechnung an
verbundene Unternehmen
0,00 -643,3
190.628,00 1.231,7

Die erwartete Incentive Fee im Zuge des Börsegangs fiel nicht an, die Rückstellung wurde daher im Vorjahr aufgelöst und die an den Mehrheitsaktionär FACC International Company Limited verrechneten anteiligen Kosten angepasst.

übrige

2016/2017 2015/2016
Erlöse aus Kostenersätzen 48.539,74 0,0
Erträge aus verrechneten Gebühren 8.500,00 0,0
Erträge Bildungsprämie 0,00 0,2
57.039,74 0,2

3. Personalaufwand -780.491,51

Aufwendungen für Altersversorgung

-1.989.358,05 -722,0
Beiträge vertragliche Pensionsvorsorge Angestellte 18.110,28 28,6
Anpassung der Pensionsrückdeckungsversicherung -144.287,50 -246,3
Beiträge Pensionsrückdeckungsversicherung 0,00 170,0
Zuweisung/Auflösung Pensionsrückstellung -1.863.180,83 -674,3
2016/2017 2015/2016

Die Pensionsrückstellungen waren in der das Deckungskapital übersteigenden Höhe (EUR 2.007.468,33) aufzulösen, da die Versicherung alle Pensionsansprüche gänzlich deckt.

Aufwendungen für Abfertigungen und Leistungen an betriebliche Mitarbeitervorsorgekassen

2016/2017 2015/2016
Abfertigungsaufwand 115.164,00 122,2
Auflösung/Zuweisung Abfertigungsrückstellung -328.316,00 38,2
Beiträge Mitarbeitervorsorgekasse 14.415,50 10,1
-198.736,50 170,6

In der Summe der Gehälter ist ein Ertrag von EUR 3.787,00 (Vorjahr: Aufwand von TEUR 6) aus der Veränderung der Jubiläumsgeldrückstellungen enthalten.

11. Steuern vom Einkommen -3.745.298,00

2016/2017 2015/2016
Körperschaftssteuer laufende Periode 401.336,03 5,3
Steuerumlage -1.224.661,23 -1,8
Körperschaftsteuer Vorperioden 106.881,93 0,0
Steuerumlage Vorperioden -69.506,21 0,0
Ertrag aus der Aktivierung latenter Steuern -2.959.348,52 0,0
-3.745.298,00 3,5

In den Steuern vom Einkommen sind Erträge aus der Aktivierung von latenten Steuern in Höhe von EUR 2.959.348,52 (Vorjahr TEUR 0) enthalten.

Sonstige Pflichtangaben

Sonstige finanzielle Verpflichtungen

Der Gesamtbetrag der finanziellen Verpflichtungen aus der Nutzung von in der Bilanz nicht ausgewiesenen Sachanlagen für die folgenden fünf Jahre beläuft sich auf EUR 110.982,79 (Vorjahr TEUR 111). Davon entfallen EUR 59.612,28 (Vorjahr TEUR 60) auf das nächste Jahr.

Außerbilanzielle Geschäfte

Es bestehen keine außerbilanziellen Geschäfte gemäß § 238 Abs. 1 Z 10 UGB, aus denen wesentliche Risiken oder Vorteile für die Gesellschaft entstehen.

Gruppenbesteuerung Mit 13./15. Februar 2012 haben die Aerospace Innovation Investment GmbH (nunmehr FACC AG) als Gruppenträgerin und die - inzwischen verschmolzene - Aero Vision Holding GmbH sowie die FACC AG (nunmehr FACC Operations GmbH) als Gruppenmitglieder mit erstmaliger Wirksamkeit für das Wirtschaftsjahr 2012 eine Gruppen- und Steuerumlagenvereinbarung gemäß den Bestimmungen des § 9 KStG abgeschlossen. Die Gruppen- und Steuerumlagevereinbarung wurde dem zuständigen Finanzamt mit Gruppenantrag vom 27.02.2012 angezeigt. Zum 28.02.2017 wurde diese Vereinbarung durch einen neuen Gruppenvertrag geändert und ersetzt:

Die Steuerumlagevereinbarung besteht grundsätzlich in der Belastungsmethode, wonach für dem Gruppenträger vom Gruppenmitglied zugerechnete positive Einkommen eine positive Steuerumlage iHv 25 % zu leisten ist. Das positive Einkommen des Gruppenmitgliedes ist mit evident gehaltenen negativen Einkommen (Verlustvortrag) des Gruppenmitgliedes auszugleichen, wobei ein eingeschränkter Verlustabzug des Gruppenträgers zu berücksichtigen ist. Erzielt das Gruppenmitglied ein negatives Einkommen ist eine negative Steuerumlage iHv 25 % zu leisten insoweit das negative Einkommen in einem zusammengefassten positiven Ergebnis des Gruppenträgers Deckung findet. Eine Vereinbarung über den Schlussausgleich von in der Gruppe noch nicht verrechnete Verlustvorträge des Gruppenmitglieds wurde getroffen.

Umsatzsteuerliche Organschaft

Die FACC Operations GmbH und die FACC AG begründen seit Juni 2014 eine umsatzsteuerliche Organschaft im Sinne des § 2 Abs. 2 Z 2 UStG, wobei die FACC AG (vormals Aerospace Innovation Investment GmbH) als Gruppenträger die Umsatzsteuervoranmeldungen für die umsatzsteuerliche Organschaft abgibt.

Nahestehende Unternehmen und Personen

Es bestehen keine Geschäftsbeziehungen mit nahestehenden Unternehmen oder Personen, die zu marktunüblichen Bedingungen abgeschlossen worden sind.

Aufwendungen für den Abschlussprüfer

Die Aufwendungen für den Abschlussprüfer verteilen sich im Geschäftsjahr 2016/2017 folgendermaßen:

185.000,00 81,9
Prüfungsnahe Beratungsleistungen 7,9
Konzern- und Jahresabschlussprüfung 185.000,00 74,0
2016/2017 2015/2016

Angaben zu Arbeitnehmern und Organen

Arbeitnehmer

Der durchschnittliche Beschäftigungsstand der FACC AG betrug im Geschäftsjahr 15 Angestellte (Vorjahr 11).

Zum Bilanzstichtag waren 20 Angestellte beschäftigt gegenüber 12 Angestellten zum Bilanzstichtag im Vorjahr.

Vorstand

Der Vorstand der Gesellschaft besteht aus:

  • Robert Machtlinger (geb. 25.07.1967)
  • seit 02.02.2016: Yongsheng Wang (geb. 20.05.1963)
  • seit 01.10.2016: Ales Starek (geb. 21.11.1970)
  • bis 24.05.2016: Dipl.-Ing. Walter Stephan (geb. 03.08.1954)
  • bis 02.02.2016: Dipl.-Kauffr. Minfen Gu (geb. 09.11.1965)

Die Vorstandsmitglieder vertreten jeweils gemeinsam mit einem weiteren Vorstandsmitglied oder Prokuristen.

Die Bezüge der Mitglieder des Vorstands im Zeitraum 1. März 2016 bis 28. Februar 2017 stellen sich wie folgt dar:

Name Gehalt Variabler Bonus Abfertigungen Arbeitgeber
beitrag zur
Pensions
vorsorge
Summe
TEUR TEUR TEUR TEUR TEUR
Machtlinger Robert 294 - -4* 8 298
Wang Yongsheng** 147 - - - 147
Starek Ales 106 - 15* - 121
Stephan Walter Dipl.-Ing. 103 - - - 103
Gu Minfen Dipl.-Kauffr. 79 - - 2 81
729 11 10 750

*) bedingt durch eine Anpassung der Abfertigungsrückstellung

**) Werkvertragshonorar / Wang Yongsheng ist über die Aerospace Innovation Investment GmbH auf Grundlage eines Werkvertrags für die FACC AG tätig.

zum 28.02.2017
ANLAGENSPIEGEL
Stand
28.02.2017
0,00 0,00 267.822.715,00 1.779.372,17 269.602.087,17 269.602.087,17
Buchwerte
Stand
01.03.2016
709,00 0,00 267.822.715,00 1.635.084,67 269.457.799,67 269.458.508,67
Stand
28.02.2017
0,00 0,00 0,00 0,00 0,00 0,00
Abgänge 472,00 249,17 0,00 0,00 0,00 721,17
0,00 0.00 0,00 0,00 0,00 0,00
kumulierte Abschreibungen
Abschreibungen Zuschreibungen
236,00 249,17 0,00 0,00 0.00 485,17
Stand
01.03.2016
236,00 0,00 0,00 0,00 0,00 236,00
Stand
28.02.2017
0,00 0,00 267.822.715,00 1.779.372.17 269.602.087,17 269.602.087,17
0,00 0,00 0,00 0,00 0,00 0,00
Anschaffungs-/Herstellungskosten
Inge Abgänge Umbuchungen
945,00 249,17 0,00 0,00 0,00 1.194, 17
Zugänge 0,00 249,17 0,00 144.287,50 144.287,50 144.536,67
Stand
01.03.2016
945,00 0,00 267.822.715,00 1.635.084,67 269.457.799,67 269.458.744,67
Immaterielle Vermögensgegenstände gewerbliche Schutzrechte und ähnliche Rechte
und Vorteile und Software
Betriebs- und Geschäftsausstattung Anteile an verbundenen Unternehmen Wertpapiere (Wertrechte) des Anlagevermögens SUMME ANLAGENSPIEGEL
CC AG Anlagevermögen Sachanlagen Finanzanlagen

LAGEBERICHT DER FACC AG FÜR DAS GESCHÄFTSJAHR 2016/17

1. RAHMENBEDINGUNGEN

1.1. Gesamtwirtschaftliche Rahmenbedingungen

Um 2,2 % wuchs die Wirtschaft im Jahr 2016 weltweit. Im Vorjahr hatte das Wachstum 2,6 % betragen. Gebremst wurde die Wachstumsdynamik durch eine schwache Entwicklung der US-Konjunktur im ersten Halbjahr sowie die Rezession in Russland und Brasilien. In den Industrieländern blieb das Wachstum schwach, in den Schwellenländern stabilisierte es sich nach mehreren Jahren der Abschwächung. Die US-Konjunktur wuchs 2016 um 1,6 % nach 2,5 % im Jahr 2015, wobei das Wachstum vor allem durch den Außenhandel gestützt wurde. Investitionstätigkeit und privater Konsum erfüllten die Erwartungen hingegen nicht. In der Eurozone standen die Zeichen auf moderates Wachstum: Das Plus betrug 2016 1,7 % gegenüber 2,0 % im Jahr 2015. Begünstigt wurde diese Entwicklung von der lockeren Geldpolitik der Europäischen Zentralbank, vom weiterhin günstigen Ölpreis und von der Abwertung des Euro gegenüber anderen Währungen. Chinas Wirtschaft entwickelte sich 2016 besser als erwartet. Die Konjunktur stabilisierte sich bei 6,7 % Wachstum. Im Baugewerbe, im Einzelhandel und im Immobilienmarkt zogen die Geschäfte wieder an, aufgrund der schwachen Währung stiegen die globale Nachfrage und damit das Exportvolumen. Die schwache Konjunktur und das Überangebot drückten auf den Ölpreis. Die Energy Information Administration EIA errechnete für 2016 einen durchschnittlichen Rohölpreis der Sorte Brent in Höhe von 43 USD pro Barrel. Ende September 2016 einigten sich die 14 OPEC-Staaten auf Maßnahmen zur Marktstabilisierung, um das Überangebot abzubauen und damit das Preisniveau anzuheben.

1.2. Rahmenbedingungen der Luftfahrtindustrie

Die Luftfahrtbranche wurde 2016 von verschiedenen Faktoren beeinflusst: Politische Instabilität beeinträchtigte das Wachstum, das in den einzelnen Weltregionen sehr unterschiedlich ausfiel. Vor allem auf Verbindungen zwischen Europa und Asien hielt die Nachfrageschwäche an, während sich die Märkte Afrikas, der USA und Osteuropas erholten. Das globale Passagieraufkommen wuchs 2016 um 6,3 %. In Asien stieg die Nachfrage um 8,9 %, in Nordamerika um 3,2 % und in Europa um 3,8 %.

Stimuliert wurde die Nachfrage von niedrigen Ticketpreisen – eine Reaktion der Fluggesellschaften auf sinkende Treibstoffkosten und auf wachsenden Wettbewerbsdruck. Aufgrund der steigenden Passagierzahlen erweiterten die Airlines ihre Flotten: Die weltweite Flotte wuchs 2016 um 5,2 %.

Nach Angaben des Internationalen Luftverkehrsverbands IATA erzielten die Fluggesellschaften 2016 Rekordeinnahmen. Der Nettogewinn der Branche erreichte 35,6 Mrd. USD, nach 35,3 Mrd. USD im Jahr 2015. Hintergrund ist vor allem der niedrige Ölpreis. Laut EIA dürfte dieser noch bis in das Jahr 2020 hinein unter 60 USD pro Barrel liegen. Darüber hinaus setzten die Fluggesellschaften effizientere Flugzeuge ein und profitierten von den Erfolgen, die Umstrukturierungsmaßnahmen der vergangenen Jahre zeitigten.

Airbus und Boeing lieferten 2016 1.436 Flugzeuge aus; 2015 waren es 1.397 gewesen. Im gleichen Zeitraum wurden von Boeing und Airbus 1.419 neue Flugzeuge verkauft, womit sich die Book - to - Bill Ratio annähernd auf 1:1 belief. Der Auftragsbestand für Flugzeuge mit mehr als 100 Sitzen blieb mit 13.442 auf dem Niveau des Jahresendes 2015.

Das Verkehrsaufkommen in der Luftfahrzeugindustrie dürfte aus heutiger Sicht weiterhin stabil wachsen. Die letzten Marktvorschauen von Airbus und Boeing gehen von einer erneuten Verdoppelung des Verkehrsaufkommens in den kommenden 20 Jahren aus. Laut einer Analyse von Airbus und Boeing wird der Bedarf an neuen Flugzeugen nach heutigen Abwägungen bis zum Jahr 2035 rund 36.300 betragen.

Als wesentliche Faktoren sind in diesem Zusammenhang steigende Reisetätigkeiten in China, Indien, den USA sowie in Europa zu nennen. Die Reisetätigkeit je Einwohner wird sich in den Wachstumsmärkten China und Indien bis zum Jahr 2035 vervierfachen. Die bereits stark ausgeprägte Reisetätigkeit in den Regionen USA und Europa wird bis zum Jahr 2035 um ca. 20 % ansteigen.

2. Allgemeine Angaben

Der FACC AG obliegt die Holdingfunktion. Als Muttergesellschaft der FACC Operations GmbH übernimmt sie Managementtätigkeiten und Financial Services für den Konzern. Des Weiteren übernimmt die FACC AG Finanzierungsagenden im Konzern.

Der FACC-Konzern mit Sitz in Ried im Innkreis ist ein österreichischer Konzern, der sich mit der Entwicklung, Produktion und Wartung von Luftfahrtbauteilen befasst.

Seine Produktpalette umfasst "Strukturbauteile" (Verkleidungsteile an Rumpf und Leitwerk, Triebwerksverkleidungsteile und Composite-Teile für Triebwerke, Flügelteile und Flügelspitzen) sowie Komponenten für die Innenausstattung von Flugzeugen (Gepäckablagefächer, Innenraumverkleidungen, Service-Einheiten etc.).

Aufgrund der unterschiedlichen Anwendungen, denen die Produkte dienen, wurden drei operative Segmente gebildet. Das Segment "Aerostructures" ist für die Entwicklung, die Fertigung und den Vertrieb von Strukturbauteilen verantwortlich, das Segment "Interiors" für die Entwicklung, die Fertigung und den Vertrieb von Innenausstattungen und das Segment "Engines & Nacelles" für die Fertigung und den Vertrieb von Triebwerksbauteilen. Nach Abschluss der Kundenverträge und der Auftragsabwicklung werden die einzelnen Aufträge in den fünf Werken des Konzerns gefertigt. Neben den drei operativen Segmenten umfasst das Gesamtunternehmen noch die zentralen Dienste Finanzen und Controlling, Personal, Qualitätssicherung, Einkauf und EDV (einschließlich Engineering-Services). Die zentralen Dienste unterstützen die operativen Segmente im Sinne einer Matrixorganisation bei der Erfüllung ihrer Aufgaben.

3. ENTWICKLUNG DES FACC-KONZERNS

Das abgelaufene Geschäftsjahr kann als Jahr der Weichenstellung gesehen werden. Zum Beginn des Jahres stand die Aufarbeitung des Fake President Incident und der daraus resultierenden Veränderungen im Fokus des Managements. Oberstes Ziel war es für Stabilität und Nachhaltigkeit zu sorgen, die vakanten Managementpositionen zu besetzen und parallel dazu die Umsetzung der festgelegten Konzernziele konzentriert voranzutreiben. In Betrachtung des Marktes wurden zahlreiche Serienstarts im Geschäftsjahr erfolgreichumgesetzt, der Hochlauf verschiedener Projekte in allen Segmenten planmäßig vorangetrieben und daraus resultierend ein Umsatzwachstum von über 20% erzielt. Durch gezielte Investitionen wurde sowohl die Kapazität als auch unsere Effizienz gesteigert. Besonders erfreulich ist im Umfeld der Umstände die deutliche Verbesserung des Konzernergebnisses, das das um Sondereffekte bereinigte EBIT konnte um nahezu die Hälfte gesteigert werden. Die weltweit langfristig steigende Nachfrage an neuen Flugzeugen, die letzten Langzeitanalysen bestätigen den Bedarf von über 36.300 neuen Verkehrsflugzeugen bis zum Jahr 2035, ergeben unter den heutigen Prognosen eine FACC Auftragsrücklage von über 5 Milliarden USD. Wir haben auf Basis der vorhandenen Marktvorschauen und der von uns vorangetriebenen Innovationsstrategie gute Voraussetzungen die Position der FACC AG als globaler Tier 1 Partner der Luftfahrzeugindustrie weiter zu festigen.

2016/17 2015/16 2014/15
Mio. EUR Mio. EUR Mio. EUR
Umsatz 705,7 580,2 528,9
davon Produktumsatz 646,1 518,6 471,4
davon Entwicklungsumsatz 59,6 61,6 57,5
EBIT bereinigt um Einmaleffekte 26,9 -
58,8
-
4,5
Einmaleffekte (Schadensfall) 0,0 -
41,9
-
EBIT 26,9 -
16,9
-
4,5
EBIT Marge (bereinigt) 3,8% -10,1% -0,9%
Ergebnis nach Steuern 16,7 -52,3 -9,6
Ergebnis je Aktie 0,36 -1,14 -0,22

Im Zuge einer Stichprobenprüfung der Österreichischen Prüfstelle für Rechnungslegung (OePR) wurden der Konzernabschluss zum 29. Februar 2016 sowie die Halbjahresfinanzberichte zum 31. August 2015 und 31. August 2016 der FACC AG ausgewählt und einer Prüfung gemäß § 2 Abs. 1 Z. 2 Rechnungslegungs-Kontrollgesetz (Prüfung ohne besonderen Anlass) unterzogen. Im September 2016 wurde die FACC AG von der Finanzmarktaufsicht (FMA) informiert, dass sie das gegenständliche Verfahren selbst durchführen wird.

Das Verfahren war zum Zeitpunkt der Veröffentlichung des Konzernabschlusses im Juni 2017 nicht abgeschlossen. Wir verweisen auf die Erläuterungen unter Note 2im Anhang.

Im Geschäftsjahr 2016/17 erzielte der FACC-Konzern einen Umsatz in Höhe von 705,7 Mio. EUR und verzeichnete damit einen Anstieg von 125,5 Mio. EUR oder 21,6 % gegenüber dem Vorjahr.

Die Umsatzerlöse aus Produktlieferungen konnten um 24,6 % auf 646,1 Mio. EUR gesteigert werden. Wesentliche Treiber im Bereich der Produktumsätze bildeten im Geschäftsjahr 2016/17 die Programme für die Airbus-A320-Familie, den Airbus A350 XWB, die Boeings 737 und 787 sowie für Bombardier und Embraer Business Jets. Alle weiteren Programme, darunter auch sämtliche Komponenten für die Ausstattungen von Triebwerken der Hersteller Rolls-Royce und Pratt & Whitney, haben sich entsprechend den Planungen des FACC-Managements entwickelt und zum Wachstum des Konzerns beigetragen.

Die Umsatzerlöse aus der Verrechnung von Entwicklungsleistungen blieben konstant.

Der Materialaufwand erhöhte sich im Geschäftsjahr 2016/17 um 66,1 Mio. EUR von 376,9 Mio. EUR auf 443,0 Mio. EUR. Der Anstieg steht im Zusammenhang mit dem deutlichen gestiegenen Produktionsumsatz um 24,6 %. Im Materialaufwand sind auch Aufwendungen für Leiharbeitskräfte in Höhe 15,6 Mio. EUR enthalten (2015/16: 2,8 Mio. EUR). Dieser deutliche Anstieg steht ausschließlich im Zusammenhang mit der unterjährigen Hereinnahmen von Arbeitskräften zur Abdeckung von Produktionsspitzen im Segment Interiors.

Die Materialquote (Materialaufwand/Umsatzerlöse) reduzierte sich gegenüber dem Vorjahr um 2,2 Prozentpunkte auf 62,8 % (2015/16: 65,0 %).

Der Personalaufwand des Konzerns erhöhte sich 2016/17 um 14,7 Mio. EUR von 158,5 Mio. EUR auf 173,2 Mio. EUR. Die Personalquote des Konzerns (Personalaufwand/Umsatzerlöse) reduzierte sich gegenüber dem Vorjahr um 2,8 Prozentpunkte auf 24,5 %. Diese Reduktion ist das Ergebnis laufender Effizienzsteigerungen im Zusammenhang mit Lernkurveneffekten und Ratensteigerungen in wesentlichen Programmen.

Das Ergebnis vor Zinsen und Steuern (EBIT) betrug im abgelaufenen Geschäftsjahr 26,9 Mio. EUR (2015/16: –58,8 Mio. EUR). Im EBIT der Vorjahresperiode ist der Schadensfall aus dem "Fake President Incident" in Höhe von 41,9 Mio. EUR in den sonstigen betrieblichen Aufwendungen verbucht.

3.1. Finanzlage

Zentrales Ziel des Finanzmanagements ist es, jederzeit die ausreichende Liquidität des Konzerns sicherzustellen, finanzielle Risiken zu vermeiden und die finanzielle Flexibilität zu sichern. Zur Sicherung der Liquidität und zur Verringerung von Risiken nutzt FACC verschiedene interne und externe Finanzierungsquellen mit unterschiedlichen Fristigkeiten. Die längerfristige Liquiditätsprognose erfolgt auf Basis der operativen Planung des Konzerns. Der Mittelzufluss aus der operativen Geschäftstätigkeit der Geschäftssegmente stellt die Hauptliquiditätsquelle des Konzerns dar. Dadurch werden der externe Finanzierungsbedarf und die Zinsaufwendungen reduziert. Zur Sicherung der Liquidität nutzt FACC zudem verschiedene Finanzierungsinstrumente wie Anleihen, Schuldscheindarlehen, Kreditvereinbarungen sowie Leasingmodelle.

Finanzierungsinstrumente

In den Treasury-Grundsätzen sind die Bankpolitik, die Genehmigung von Bankbeziehungen, Finanzierungsvereinbarungen, das Liquiditäts- und Finanzanlagenmanagement sowie das Management von Währungs- und Zinsrisiken geregelt. Gemäß den Grundsätzen des Konzerns werden die Kreditlinien durch die Treasury-Abteilung konzernweit verwaltet.

Zum Finanzierungspotenzial aus dem genehmigten und bedingten Kapital sowie zu den Finanzierungsquellen wird auf die Erläuterungen im Anhang unter "A I." verwiesen. Damit hat FACC die wesentlichen Voraussetzungen für eine nachhaltige und stabile Finanzierung geschaffen.

3.1.1. Liquiditätsanalyse

Eine der zentralen Steuerungsgrößen von FACC ist die Kennzahl Free Cashflow. Den Free Cashflow ermittelt FACC aus der Kombination der Cashflows aus operativerTätigkeit und aus Investitionstätigkeit.

2016/17 2015/16 2014/15
Mio. EUR Mio. EUR Mio. EUR
Cash Flow aus operativerTätigkeit 20,0 -9,3 7,3
Cash Flow aus Investitionstätigkeit -34,4 -50,9 -77,8
Free Cash Flow -14,4 -60,2 -70,5
Cash Flow aus Finanzierungstätigkeit 6,0 3,9 120,9
Zahlungswirksame Veränderung des Finanzmittelbestandes -8,4 -56,3 50,4
Bewertungseffekte aus Fremdwährungsunterschieden 0,5 1,5 9,5
Finanzmittelbestand am Beginn der Periode 56,2 111,0 51,0
Finanzmittelbestand am Ende der Periode 48,3 56,2 111,0

Cashflow aus operativer Tätigkeit

Der Cashflow aus operativerTätigkeit lag im Berichtsjahr 2016/17 mit 20,0 Mio. EUR um 29,3 Mio. EUR über dem Vorjahreswert von –9,3 Mio. EUR. Treiber dieser positiven Entwicklung im Berichtsjahr war insbesondere die positive Umsatz- und Ergebnisentwicklung des Konzerns.

Cashflow aus Investitionstätigkeit

Der Cashflow aus Investitionstätigkeit beliefen sich im Geschäftsjahr 2016/17 auf –34,4 Mio. EUR gegenüber –50,9 Mio. EUR im Vorjahreszeitraum.

Hauptreiber bei den Projektinvestitionen waren die Entwicklungs- und Werkzeugkosten für die Flugzeugtypen Airbus A350-1000, Embraer E2 Jets, Comac C919 Interior sowie Investitionen in verschiede Werkzeugduplikationen zur Absicherung zukünftiger Fertigungsraten.

Die Sachanlageinvestitionen stehen im Wesentlichen im Zusammenhang mit dem Ausbau der Produktionskapazitäten an den österreichischen Standorten Werk 1, Ried, Werk 2, St. Martin und Werk 4, Reichersberg, für die neu anlaufenden Programme sowie zur Unterstützung von steigender steigenden Abrufen im Rahmen bestehender Projekte. Während des Geschäftsjahres wurden insbesondere Neuinvestitionen in Anlagen zur Kapazitätserweiterung durchgeführt sowie Investitionen in zusätzliche Automatisierungsmaßnahmen, Optimierungen bei bestehenden Produktionsanlagen und der Infrastruktur umgesetzt sowie darüber hinaus laufende Erhaltungsinvestitionen durchgeführt.

Langfristige Entwicklung der Investitionstätigkeit

Cashflow aus Finanzierungstätigkeit

Im Geschäftsjahr 2016/17 lag der Cashflow aus Finanzierungstätigkeit bei 6,0 Mio. EUR (2015/16: 3,9 Mio. EUR). Im Geschäftsjahr 2016/17 lag der Mittelzufluss aus Finanzierungstätigkeit bei 24,6 Mio. EUR (2015/16: 21,9 Mio. EUR).

Im Wesentlichen standen den Einzahlungen Mittelabflüsse aus der Rückzahlung von Finanzkrediten in Höhe von 7,8 Mio. EUR und aus der Auszahlung aus Zinsen von Finanzkrediten und Anleihen in Höhe von 10,9 Mio. EUR gegenüber.

3.1.2. Nettofinanzverbindlichkeiten

2016/17 2015/16 2014/15
Mio. EUR Mio. EUR Mio. EUR
Schuldscheindarlehen 42,0 42,0 45,0
davon Schuldscheindarlehen 2012 bis 2015 - - 3,0
davon Schuldscheindarlehen 2012 bis 2017 8,0 8,0 8,0
davon Schuldscheindarlehen 2012 bis 2019 34,0 34,0 34,0
Anleihen 2013-20 (ISIN AT0000A10J83) 89,4 89,2 89,1
Finanzverbindlichkeiten gegenüber Kreditinstituten 113,9 96,8 79,4
Brutto Finanzverbindlichkeiten 245,3 228,0 213,5
Abzüglich
Liquide Mittel 48,3 56,2 111,0
Finanzvermögen 48,3 56,2 111,0
Netto Finanzverbindlichkeiten 197,0 171,8 102,5

Die Nettoverschuldung belief sich zum Ende des Geschäftsjahr 2016/17 auf 197,0 Mio. EUR (29. Februar 2016: 171,9 Mio. EUR). Die liquiden Mittel des FACC-Konzerns betrugen zum Bilanzstichtag 48,3 Mio. EUR (29. Februar 2016: 56,2 Mio. EUR).

3.2. Vermögenslage

Die Bilanzsumme erhöhte sich im Vergleich zum Vorjahr um 15,7 Mio. EUR auf 680,6 Mio. EUR.

28. Febuar 2017 29. Febuar 2016
Mio. EUR Mio. EUR
Langfristiges Vermögen 352,7 353,6
Kurzfristiges Vermögen 327,9 311,3
Aktiva 680,6 664,9
Eigenkapital 284,0 267,1
Langfristige Verbindlichkeiten 219,5 229,6
Kurzfristige Verbindlichkeiten 177,1 168,2
Schulden 396,6 397,8
Eigenkapital und Schulden 680,6 664,9

3.2.1. Aktiva

Das langfristige Vermögen reduzierte sich gegenüber dem Bilanzstichtag am 29. Februar 2016 nur geringfügig um 0,9 Mio. EUR auf 352,7 Mio. EUR.

Das kurzfristige Vermögen des Konzerns erhöhte sich im Vergleichszeitraum um 16,6 Mio. EUR. Zum einen erhöhten sich hier aufgrund des deutlich Anstiegs der Produktumsätze die Forderungen sowie die Vorräte, zum Anderen verringerte sich der Bestand an liquiden Mitteln zum Bilanzstichtag am 28. Februar 2017 um 7,9 Mio. EUR auf 48,3 Mio. EUR.

3.2.2. Eigenkapital

Das Eigenkapital des FACC-Konzerns erreichte per Ende des Berichtsjahres einen Wert von 284,0 Mio. EUR. Dies entspricht einer Eigenkapitalquote von 41,7 % (29. Februar 2016: 40,2 %).

3.2.3. Schulden

Innerhalb der langfristigen Schulden reduzierten sich die sonstigen Finanzverbindlichkeiten um 7,6 Mio. EUR auf 67,6 Mio. EUR. Der langfristige Ausweis des Schuldscheins reduzierte aufgrund der Klassifizierung der Tranche "Schuldscheindarlehen 2012 bis 2017" als kurzfristige Schulden um 8,0 Mio. EUR auf 34,0 Mio. EUR.

Innerhalb der kurzfristigen Schulden reduzierten sich die Verbindlichkeiten aus Lieferungen und Leistungen um 12,9 Mio. EUR auf 59,8 Mio. EUR. Die sonstigen Finanzverbindlichkeiten erhöhten sich um 24,7 Mio. EUR auf 46,3 Mio. EUR.

4. ENTWICKLUNG DER SEGMENTE

4.1. Segment Aerostructures

Der Umsatz im Bereich Aerostructures betrug im Geschäftsjahr 2016/17 331,0 Mio. EUR (2015/16: 269,2 Mio. EUR.). Die Umsätze aus Produktlieferungen erhöhten sich um 72,7 Mio. EUR oder 31,0 % deutlich auf 303,9 Mio. EUR. Die Umsätze aus Entwicklungstätigkeiten reduzierten sich im Berichtszeitraum um 28,0 % von zuvor 38,1 Mio. EUR auf 27,1 Mio. EUR.

Das Ergebnis vor Zinsen und Steuern (EBIT) im Bereich Aerostructures betrug im Geschäftsjahr 2016/17 51,2 Mio. EUR (2015/16 bereinigt um Einmaleffekte von 19,5 Mio. EUR: 27,9 Mio. EUR.).

Die positive Entwicklung im Bereich Aerostructures ist wesentlich beeinflusst durch die steigende Nachfrage nach Komponenten für den Airbus A350 und die weiteren Ratenhochläufe von Airbus-A320- und Airbus-A321-Produkten. Bei Neuprojekten wie jenen für die Bombardier C-Series oder die Embrear E2 Jets begann im abgelaufenen Geschäftsjahr die Serienfertigung, was in den kommenden Perioden zu zusätzlichem Wachstum des Segments Aerostructures führen dürfte.

4.2. Segment Engines & Nacelles

Der Umsatz des Bereichs Engines & Nacelles erreichte im Geschäftsjahr 2016/17 142,0 Mio. EUR (2015/16: 113,8 Mio. EUR.). Das entspricht einer Steigerung von 24,8 %. Die Umsätze aus Produktlieferungen stiegen um 25,5 % von 105,4 Mio. EUR auf 133,8 Mio. EUR. Die Umsätze aus Entwicklungstätigkeiten blieben konstant bei 8,2 Mio. EUR (2015/16: 8,4 Mio. EUR.).

Das Ergebnis vor Zinsen und Steuern (EBIT) im Bereich Engines & Nacelles betrug im Geschäftsjahr 2016/17 –11,9 Mio. EUR (2015/16 bereinigt um Einmaleffekte von 8,2 Mio. EUR: –20,8 Mio. EUR).

Die Entwicklung im Bereich Nacelles bleibt weiterhin positiv beeinflusst durch das Hochlaufen der Serienproduktion für das Projekt A350 Translating Sleeve (TRSL). Weiters profitiert das Segment durch konstant steigende Nachfrage nach Komponenten für die Flugzeugtriebwerke der Airbus-A320neo-Flugzeugfamilie. Mit der Erstauslieferung der neuen Produkte für den Airbus A330neo wurden wesentliche Meilensteine für die zukünftige Entwicklung des Segments erfolgreich gesetzt.

Der Bereich Engine Composites entwickelte sich erneut positiv. Auch für den Bereich Engine Composites sind die Projekte Airbus A350 Trent XWB sowie PW800 Bypass Ducts maßgeblich für die planmäßige Geschäftsentwicklung.

In der Division Engines & Nacelles konnte der Ergebnisbeitrag der Engine-Programme gesteigert werden. Demgegenüber belastete in den Nacelles-Programmen der Hochlauf des Projekts A350 TRSL die Ertragslage der Division. Temporäre Mehrkosten für Personal zur Absicherung der Ratensteigerungen sowie erhöhte Frachtkosten wirkten vor allem in der ersten Jahreshälfte belastend auf die Ertragslage. Mit voranschreitender Serienfertigung und den erfolgreich eingeführten Maßnahmen konnte mit Beginn des dritten Quartals 2016 ein ausgeglichenes Ergebnis im Segment erreicht werden.

4.3. Segment Interiors

Der Umsatz im Bereich Interiors belief sich im Geschäftsjahr 2016/17 auf 232,8 Mio. EUR (2015/16: 197,2 Mio. EUR). Damit konnte die Division erneut eine deutliche Steigerung gegenüber dem Vorjahr erzielen. Insgesamt betrug der Produktumsatz 2016/17 208,5 Mio. EUR (2015/16: 183,1 Mio. EUR). Das erzielte Wachstum um 13,7 % beruht fast ausschließlich auf den neuen Programmen Airbus A350. Die Umsätze der bestehenden Serienprogramme für Airbus A320, Suchoi Superjet 100 und Embraer Phenom 300 sowie Bombardier C350 blieben stabil. Die Umsätze aus den Business-Jet-Programmen Embrarer Legacy 450 und 500 waren leicht rückläufig.

Die Umsätze aus Entwicklungstätigkeiten erhöhten sich um 72,6 % auf 24,3 Mio. EUR nach 14,1 Mio. EUR im Vorjahr. Mehreinnahmen bei der Entwicklung resultieren im Wesentlichen aus der Abwicklung des Konfigurationsmanagements im Bereich Kabinenausstattung für den Airbus A350, den erhöhten Rückflüssen an Entwicklungskosten in Verbindung mit den steigenden Produktionsraten für den Airbus A350 sowie Engineering-Serviceleistungen im Zuge der Entwicklung neuer Passagierkabinenkonzepte für die Xi'an MA700.

Das Ergebnis vor Zinsen und Steuern (EBIT) des Bereichs Interiors betrug im Geschäftsjahr 2016/17 –12,4 Mio. EUR (2015/16 bereinigt um Einmaleffekte von 14,2 Mio. EUR: –23,9 Mio. EUR).

Die Ertragslage des Bereichs Interiors war im Geschäftsjahr 2016/17 weiterhin von anlaufenden Airbus-A350-Neuprojekten beeinflusst. Mehrkosten im Fertigungsumfeld wurden vor allem von der Aufstockung des Mitarbeiterstands durch temporäres Leihpersonal verursacht. Die Herstellungskosten im Bereich der Business-Jet-Fertigung konnten hingegen im Vergleich zum Vorjahr planmäßig reduziert werden.

5. GESCHÄFTSENTWICKLUNG DER GESELLSCHAFT

Der FACC AG obliegt die Holdingfunktion. Als Muttergesellschaft der FACC Operations GmbH übernimmt sie Managementtätigkeiten und Financial Services für den Konzern. Zahlenangaben für den Einzelabschluss der FACC AG erfolgen nach UGB, jene für den FACC AG Konzern nach IFRS.

Die Umsatzerlöse von 4,0 Mio. EUR im Geschäftsjahr 2016/17 (Geschäftsjahr 2015/16: 3,0 Mio. EUR) resultieren aus Verrechnungen aus Managementleistungen gegenüber der FACC Operations GmbH.

Der Anstieg der sonstigen betrieblichen Aufwendungen um 2,3 Mio. EUR auf 4,6 Mio. EUR im Geschäftsjahr 2016/17 beruht im Wesentlichen auf Kosten für die Aufarbeitung eines Schadensfalles aus dem Geschäftsjahr 2015/16 ("Fake President Incident").

Die FACC AG erzielte im Geschäftsjahr 2016/17 einen Jahresüberschuss von 4,0 Mio. EUR (Geschäftsjahr 2015/16: 1,9 Mio. EUR).

Das Eigenkapital beläuft sich auf 272,5 Mio. EUR gegenüber 268,4 Mio. EUR in der Vorjahresperiode. Die Eigenkapitalquote der FACC AG zum Bilanzstichtag 28. Februar 2017 beträgt 95 % (Geschäftsjahr 2015/16: 95 %)

6. RISIKOBERICHT

FACC ist im Unternehmensalltag fallweise mit unvorhersehbar eintretenden Situationen konfrontiert, die potenziell negative Auswirkungen haben können. Um darauf entsprechend vorbereitet zu sein bzw. kontrolliert auf solche Situationen reagieren zu können, hat FACC ein konzernweites Risikomanagementsystem etabliert.

Primäre Aufgabe des Risikomanagementsystems ist es, alle Risiken in sämtlichen Bereichen des Unternehmens zu identifizieren, zu beurteilen und zu minimieren. Damit sollen die Pläne strategisch wie auch operativ entsprechend umgesetzt und der Fortbestand des Unternehmens entsprechend abgesichert werden.

Die unmittelbare Verantwortung für das Risikomanagement liegt bei dem jeweiligen Risk Owner. Der Director Risk Management berichtet direkt dem Vorstand, bei dem die Gesamtverantwortung für das Risikomanagement liegt.

Im Rahmen des Risikomanagementprozesses werden sowohl die eingetretenen als auch mögliche zukünftige Risiken kontinuierlich durch die operativen Einheiten überwacht, bewertet und zweimal jährlich im Zuge der Management Reviews an den Vorstand berichtet. Außergewöhnliche Ereignisse werden umgehend dem zuständigen Risk Owner bzw. dem Director Risk Management mitgeteilt. Dieser entscheidet, ob eine sofortige Meldung an den Vorstand erforderlich ist. Der Vorstand wiederum informiert den Aufsichtsrat in seinen Sitzungen. Dadurch ist sichergestellt, dass wesentliche Risiken frühzeitig erkannt und Maßnahmen zur Gegensteuerung bzw. Eingrenzung der Risiken getroffen werden.

Nach Einschätzung des Vorstands sind die heute erkennbaren möglichen Risiken überschauund beherrschbar und stellen damit keine existenzielle Gefahr für das Unternehmen dar.

6.1. Managementrisiken

Ausgehend von Marktbeobachtungen und -analysen wird ein Businessplan mit einer Planungsperiode von fünf Jahren erstellt. Dieser definiert die grundsätzliche Strategie des Unternehmens und wird vom Aufsichtsrat geprüft. Aus diesem jährlich aktualisierten Plan leiten sich die konkreten Ziele für das jeweilige Geschäftsjahr ab.

Kurzfristige Veränderungen des Marktes stellen hier das größte Risiko dar, ebenso ist der Erfolg in der Umsetzung durch äußere Faktoren, die oftmals kaum beeinflusst werden können, immer wieder gefährdet.

Das Management von FACC ist dafür verantwortlich, die konsequente Umsetzung zu verfolgen bzw. auf kurzfristige Veränderungen rasch und im Sinne der festgelegten Strategie zu reagieren. Dabei ist sicherzustellen, dass die strategische Ausrichtung ebenso weiter beachtet wird wie die geplanten Umsatz- und Ergebnisziele.

6.2. Betriebsunterbrechungsrisiko

Die Fertigungsstätten und -anlagen des Unternehmens werden kontinuierlich instandgehalten und gewartet, sodass das Risiko von Betriebsstörungen oder längeren Produktionsausfällen gering ist. Das Betriebsunterbrechungsrisiko ist außerdem durch eine Betriebsunterbrechungsversicherung mit einer Haftungszeit von 24 Monaten versichert.

6.3. Finanzrisiken

Hier erfolgt das Risikomanagement durch die Treasury-Abteilung des Konzerns, die direkt an den Vorstand berichtet. Die Treasury-Abteilung bewertet und sichert finanzielle Risiken in enger Zusammenarbeit mit den operativen Geschäftsbereichen. Zur Absicherung der ermittelten Finanzrisiken werden neben strukturierten operativen Maßnahmen auch gängige derivative Finanzinstrumente eingesetzt.

6.3.1. Zinsänderungsrisiko

Das Zinsänderungsrisiko – die mögliche wertmäßige Schwankung von Finanzinstrumenten aufgrund von Änderungen der Marktzinssätze bzw. Änderungen künftiger Cash Flows – entsteht in Zusammenhang mit mittel- und langfristigen Forderungen und Verbindlichkeiten (insbesondere Finanzverbindlichkeiten). Dabei wird darauf geachtet, dass ein Großteil des Zinsänderungsrisikos durch den Einsatz von fest verzinslichen Finanzverbindlichkeiten und gängigen derivativen Finanzinstrumenten reduziert wird.

6.3.2. Fremdwährungsrisiko

Transaktionen in der Luftfahrtindustrie werden fast ausschließlich in US-Dollar (USD) abgewickelt. Ein Großteil der Aufwendungen ist in USD fakturiert. Die übrigen Aufwendungen fallen hauptsächlich in Euro an.

Zur Absicherung der Währungsrisiken wird durch die Treasury-Abteilung eine laufende Überwachung aller Transaktions- und Umrechnungsrisiken durchgeführt. Zur generellen Reduktion des USD-Risikos werden Einkäufe mittlerweile zu rund 96 % in USD abgewickelt, sodass so genanntes "Natural Hedging" entsteht.

Zur Absicherung der verbleibenden offenen USD-Positionen (Nettowährungsposition) werden derivative Finanzinstrumente (Devisentermingeschäfte) eingesetzt. Der Einsatz von derivativen Finanzinstrumenten reduziert das Risiko von Wechselkursschwankungen deutlich.

6.4. Projektmanagement

Das Projektmanagement von FACC ist dafür verantwortlich, die vom Management festgelegten Ziele in Form von Projekten umzusetzen. Projekte werden dabei dahingehend unterschieden, ob FACC Entwicklungsverantwortung übernimmt oder nicht. Jeder Vertrag ist auf seine Umsetzbarkeit zu prüfen, die mit dem Projekt verbundenen Risiken werden identifiziert, beurteilt und während der Abarbeitung genauestens beobachtet und analysiert, um – wenn erforderlich – notwendige Maßnahmen einleiten und umsetzen zu können. Die bedeutsamsten Risiken bilden dabei die Verfügbarkeit von Ressourcen aller Art (Manpower, Equipment, Materialien etc.) sowie äußere Faktoren, die entweder über die Schnittstellen im Unternehmen oder von außen an das Projektteam herangetragen werden können.

6.5. Kundenrisiko

Das Unternehmen verfolgt eine strenge Kreditpolitik. Die Kreditwürdigkeit bestehender Kunden wird laufend überprüft, Neukunden werden einer Kreditbewertung unterzogen. Für eventuell eintretende Zahlungsausfälle werden nach eingehender Beurteilung des Risikos Einzelwertberichtigungen auf Forderungen vorgenommen.

6.6. Einkaufs- und Lieferantenrisiko

Der Bereich Einkauf führt regelmäßig Risk Assessments der Zulieferer durch, um Gefährdungspotenziale und Risiken frühzeitig zu erkennen und damit die Prioritäten für die Planung und Durchführung von Audits festlegen zu können bzw. um den Entscheidungsprozess bei der Vergabe von neuen Aufträgen zu unterstützen. Bei der Auswahl neuer Lieferanten wird die Abteilung Procurement Quality Assurance (PQA) eingebunden. Sie stellt sicher, dass die erforderlichen Qualifikationen und Zulassungen vorhanden sind und keine erkennbaren Risiken bestehen. Zu Beginn neuer Projekte wird durch verpflichtende Erstmusterprüfung bei den Lieferanten das Produktrisiko reduziert. Die kontinuierliche qualitätsgerechte und termingetreue Belieferung mit Materialien sowie Halb- und Fertigerzeugnissen wird regelmäßig über SAP bewertet. Diese Bewertung ist ebenfalls Bestandteil des Risk Assessments. Abweichungen – sowohl der Bauteilqualität als auch der Lieferperformance – werden systematisch erfasst, analysiert, bewertet und mit definierten Zielen verglichen. Auffälligkeiten werden im Zuge der Management Reviews an den Vorstand berichtet.

6.7. Produkthaftungs- und Qualitätsrisiko

Die vom Unternehmen konstruierten und hergestellten Produkte sind für den Einbau in Luftfahrzeuge oder in Triebwerke bestimmt. Fehler oder Funktionsmängel der hergestellten Produkte können mittelbar oder unmittelbar Eigentum, Gesundheit oder Leben Dritter beeinträchtigen. Die dauerhafte Sicherheit hat damit höchste Priorität. FACC ist nicht in der Lage, ihre Haftung gegenüber Kunden, Konsumenten oder Dritten in Absatzverträgen zu reduzieren oder auszuschließen. Jedes Produkt, das im Unternehmen entwickelt und/oder hergestellt wird und das Unternehmen verlassen soll, durchläuft daher qualifizierte Kontrollen hinsichtlich seiner Funktion und Qualität.

Bei Projekten, bei denen FACC Entwicklungsverantwortung trägt, besteht aufgrund der Möglichkeit von Konstruktionsfehlern ein höheres Risiko, das jedoch durch systematisches Handeln minimiert wird. Regelmäßige Kontrollschritte in allen Stadien der Entwicklung reduzieren hier Risiken frühzeitig. FACC betreibt zudem ein Archivierungssystem für vertraglich festgelegte und auch individuell darüber hinaus gehende Qualitätsaufzeichnungen (Quality Records). Damit wird nachgewiesen, dass Leistungen und Produkte entsprechend definierten und vom Kunden bzw. von der/den Luftfahrtbehörde/n freigegebenen Vorgaben ausgeführt wurden.

Obwohl das Produkthaftungsrisiko angemessen versichert ist, kann es im Fall von Qualitätsproblemen zu negativen Auswirkungen auf die Vermögens-, Finanz- und Ertragslage des Unternehmens kommen.

7. FORSCHUNG, ENTWICKLUNG UND INNOVATION

FACC investiert laufend in Forschung und Entwicklung, um die Geschäftsbeziehungen zu ihren Kunden zu stärken und neue Geschäftsfelder zu erschließen. Der Fokus liegt dabei auf proprietärer Eigenentwicklung, um das generierte Wissen für alle derzeitigen und zukünftigen Kunden des Unternehmens einsetzen zu können, jedoch werden auch Kooperationen mit Kunden zur Optimierung von Produkten eingegangen.

Im Geschäftsjahr 2016/17 wendete FACC 10,0 Mio. EUR bzw. 1,4 % ihres Umsatzes für Grundlagenforschung und Vorentwicklung auf. Darüber hinaus wurden in Verbindung mit Kunden zusätzliche Auftragsentwicklungen durchgeführt – Aufwendung aus diesen Projekten konnten an die Entwicklungspartner weiterverrechnet werden.

Die konsequente Ausrichtung auf Technologieentwicklung bildet den Grundstein für kommerziellen Markterfolg. Steigendem Wettbewerb, insbesondere durch Mitbewerber in Niedriglohnländern, lässt sich nur durch optimierte Prozesse und innovative Produkte begegnen.

Aus Sicht des Unternehmens bildet aktive Forschung und Innovation eine Grundvoraussetzung, um die führende Position von FACC als Entwicklungspartner und Systemlieferant ihrer Kunden beizubehalten. Da FACC oft mit geschützten Kundenpatenten und -prozessen arbeitet, helfen Eigenentwicklungen, bestehende Aufträge zu sichern und neue Geschäftsfelder zu erschließen. In einem starken Netzwerk aus Kunden, Zulieferern und wissenschaftlichen Partnern entwickelt FACC neue Technologien für die Anwendung in zukünftigen Serienaufträgen.

Das abgelaufene Geschäftsjahr zeigte aus Entwicklungssicht weiterhin sehr positive Ergebnisse. So wurde der Serienanlauf der Airbus A330 Fan Cowl Doors umgesetzt und Strukturbauteile für die COMAC C919 und die Embraer E2 in die Testphase gebracht. Die gute Marktposition von FACC als Hersteller von Winglets konnte durch Neuentwicklungen für die COMAC C919, die Embraer E2 sowie die Airbus-Modelle A320neo und A350 bestätigt werden.

Langfristige Ziele in der Entwicklung liegen derzeit verstärkt auch im Bereich Automatisierung und Produktionsprozessverbesserungen. So wurden im vergangenen Geschäftsjahr neue Fertigungsverfahren für hohe und höchste Stückzahlen entwickelt, die weiterhin eine hohe Auslastung der bestehenden Werke garantieren sollen. In Kombination mit einer Offensive im Bereich Industrie 4.0 arbeiten Forschung & Entwicklung, Produktionsplanung und Fertigung Hand in Hand am Konzept einer "virtuellen Fabrik", um Stoffströme zu optimieren und die Fertigungszeiten weiter zu verkürzen.

Die Entwicklung eines völlig neuartigen Prüfverfahrens für Composite-Bauteile wurde im Geschäftsjahr 2106/17 zum Abschluss gebracht. FACC ist derzeit weltweit das einzige von Boeing qualifizierte Unternehmen, das diese neue Technologie im Serienbetrieb einsetzen darf. Die Vorteile dieser Entwicklung von FACC liegen in der signifikanten Reduktion der Prüfzeiten sowie in erheblichen Einsparungen bei zukünftigen Anlagenkosten. Weitere Kundenqualifikationen befinden sich in Umsetzung und sollen in den kommenden Perioden zum Abschluss gebracht werden.

7.1. Patente & Preise

FACC strebt weitgehende Unabhängigkeit in ihrem Prozessportfolio an, um ihre Technologieführerschaft im Composite-Bereich weiter auszubauen. Darüber hinaus wird das Bauteilportfolio des Unternehmens sukzessive erweitert, um neue Absatzmöglichkeiten zu erschließen. Beide Wachstumsfelder werden durch eine erweiterte Patentstrategie flankiert, die auf den größtmöglichen Schutz des intellektuellen Eigentums abzielt.

Im vergangenen Jahr wurden insgesamt elf neue Patentfamilien angemeldet, darunter neue Fertigungstechnologien, leichte Gepäckablagesysteme, mechanische Anlenkungen und Spoilertechnologien. Insgesamt hält FACC 53 Patentfamilien.

7.2. Vorschau

Die Technologieoffensive, die FACC in den letzten Jahren gestartet hatte, beginnt nun, die erwarteten positiven Effekte zu zeigen. FACC ist im Markt als innovativer Entwicklungspartner gut etabliert und wird als Technologiebenchmark in verschiedenen Bereichen genannt. Technologische Abstimmungen mit den Hauptkunden des Unternehmens finden laufend und im Zuge von gemeinsam umgesetzten Projekten statt.

8. MITARBEITER

Zum Stichtag am 28. Februar 2017 betrug der Mitarbeiterstand der FACC AG 3.393 Vollzeitäquivalente (FTE). Bedingt durch das starke Umsatzwachstum stieg auch der Mitarbeiterstand im Vergleich zum Vorjahr um 11 %. Bei den Angestellten gab es dabei einen leichten Anstieg um 5 %, bei den Arbeitern ein Plus von 14 %.

In Österreich waren zum 28. Februar 2017 3.171,1 FTE beschäftigt. Dies entspricht rund 93 % der gesamten Belegschaft des Konzerns. Der Frauenanteil liegt bei 22,2 %.

Arbeiter Angestellte Gesamt
Central Services 130 287 417
Aerostructures 885 223 1108
Engines & Nacelles 500 129 629
Interiors 732 228 960
Tochtergesellschaften 75 184 259
FACC AG 20 20
Summe 2.322 1.070 3.393

Zur Abdeckung der notwendigen Serienhochläufe waren im Geschäftsjahr 2016/17 zusätzlich bis zu 320 Leasingkräfte in der Produktion eingesetzt. Mit Stichtag am 28. Februar 2017 reduzierte sich der Stand auf 103 Leasingkräfte.

Die Internationalität von FACC spiegelt sich auch in der Mitarbeiterstruktur wider. An den österreichischen Standorten sind Mitarbeiter aus 38 Nationen aller Kontinente beschäftigt. 56 % der Belegschaft haben die österreichische Staatsbürgerschaft, 22 % kommen aus Deutschland.

Um ihre Attraktivität als Arbeitgeber sowie die Mitarbeiterbindung weiter zu verbessern, hat FACC ihre umfassende Employer-Branding-Strategie im Berichtszeitraum weiter konsequent umgesetzt. Mit dem Projekt "Gesund und zufrieden bei FACC" wurden während des Geschäftsjahres zusätzliche Maßnahmen zur Verbesserung der Mitarbeitermotivation gesetzt. Das Engagement für betriebliche Gesundheitsförderung wurde im Februar 2017 mit dem "Gütesiegel Betriebliche Gesundheitsförderung" ausgezeichnet.

Weiterbildung und Qualifizierung der Belegschaft bildeten 2016/17 wie schon in den Jahren zuvor ein Schwerpunktthema im Personalmanagement. Im Rahmen der FACC Academy, in der alle Weiterbildungsmaßnahmen des Konzerns gebündelt sind, wurden daher umfangreiche Entwicklungsprogramme umgesetzt.

Neben der laufenden Weiterbildung des bestehenden Personals hat die Weiterbildung neuer Mitarbeiter hohe Priorität, um deren Qualifikation entsprechend den sehr hohen Anforderungen der Flugzeugindustrie sicherzustellen. Dazu wurden im Berichtszeitraum insgesamt 604 Trainings mit 6.370 Teilnehmern abgehalten.

Um die Unternehmenswerte von FACC - Leistung, Erfolg, Wertschätzung und Teamgeist nachhaltig zu verankern, wurde im Berichtszeitraum zum dritten Mal der "FACC Leonardo" verliehen – ein Team-Award, der besondere Leistungen bei der Umsetzung dieser Werte oder einzelner Projekte auszeichnet. Im November 2016 wurde der Preis nach einem mehrstufigen Auswahlprozess vergeben. Das Siegerteam entwickelte ein völlig neuartiges und weltweit einzigartiges NDI-Thermografie-Prüfverfahren für Composite-Bauteile, mit dem die Einbettung von Fremdmaterialien und die ordnungsgemäße Verklebung sowohl kosteneffizient als auch zeitsparend überprüft werden können. FACC konnte die Entwicklung als weltweit einziges Unternehmen der Luftfahrtindustrie bei ihren Kunden Boeing qualifizieren und einsetzten. Prüfzeiten von komplexen Bauteilen werden durch das neue System signifikant reduziert.

Hohen Stellenwert genießt bei FACC die Lehrlingsausbildung. So waren im Geschäftsjahr 2016/17 in Summe 42 Lehrlinge in den Berufen Kunststofftechnik (26 Lehrlinge), Metalltechnik (ein Lehrling), Konstruktion (13 Lehrlinge), IT Technik (ein Lehrling) und IT Informatik (ein Lehrling) im Unternehmen beschäftigt. Für die hohe Qualität der Ausbildung bei FACC sprechen unter anderem die Ergebnisse, welche die Lehrlinge des Unternehmens 2016 beim Lehrlingswettbewerb der Wirtschaftskammer Oberösterreich für kaufmännische und

technische Berufe erzielten. Von 757 Lehrlingen aus 97 oberösterreichischen Unternehmen sicherten sich wieder zahlreiche Mitglieder des FACC Future Teams Spitzenplätze. In der Kategorie "Kunststofftechnik" konnte sich FACC den Dreifachsieg sichern, in der Kategorie "Konstruktion" wurden die Plätze zwei und drei belegt. In der Spezialwertung "Mädchen in der Technik" konnten die ersten beiden Plätze erzielt werden. Das Engagement in der Lehrlingsausbildung wurde auch 2016 erneut mit der INEO-Auszeichnung zum vorbildlichen Lehrbetrieb belohnt.

9. ENERGIE & UMWELT

9.1. Energie

Seit der Gründung von FACC im Jahr 1989 prägt kontinuierliches Wachstum die Entwicklung des Unternehmens. Von 2011 bis 2015 beschleunigte sich dieses Wachstum deutlich. Der Verbrauch von Energie und Ressourcen folgte diesem Trend jedoch nicht. Dank vielfältiger Maßnahmen zeigte die Entwicklung des Energieverbrauchs bei FACC einen deutlich flacheren Verlauf als die Betriebsleistung des Unternehmens. Konkret stieg die Energieeffizienz der FACC-Werke in den Jahren von 2010 bis 2014 jährlich um 10 % und 2015 um weitere knapp 7 % – Spitzenwerte, die durch Maßnahmen wie etwa Energie-Monitoring, den Einsatz von Leittechnik oder die zentrale Überwachung der Gebäudetechnik erreicht wurden.

Durch gezielte Energieeffizienzmaßnahmen konnte im Geschäftsjahr 2016/17 die Effizienz um 12,1 % gesteigert werden. Mit diesem Spitzenwert wurden sogar die äußerst positiven letzten Jahre übertroffen. Gegenüber dem Jahr 2010 wurde der spezifische Energieverbrauch in Summe um 44,92 % gesenkt.

Als konkrete Maßnahmen können hier ein konsequenter Einsatz von Wärmerückgewinnung, die Optimierung der Anlagenauslastung sowie die Senkung der Betriebstemperaturen auf der Versorgungsebene genannt werden.

Für das laufende Geschäftsjahr 2017/18 werden diese Maßnahmen weiterverfolgt bzw. wurde ein kompletter Umstieg auf LED-Beleuchtungssysteme gestartet.

9.2. Umwelt

Das Umweltmanagementsystem von FACC gemäß ISO 14001 ist bestens eingeführt und wird an laufenden Veränderungen wie neue Technologien oder neue rechtliche Anforderungen angepasst.

Um den rechtlichen Anforderungen in Bezug auf Umwelt, Arbeitssicherheit und Energie gerecht zu werden, wird derzeit das bestehende Rechtsmanagementsystem um eine Systemunterstützung erweitert.

Das Erreichen der Umweltziele, sowie die Umsetzung des Umweltprogramms werden bei FACC durch ein effektives Kennzahlensystem unterstützt, das als Basis für die Managementbewertung Umwelt dient.

Ein nachhaltiges Abfallwirtschaftssystem bildet bei FACC die Grundlage für die Entlastung der Umwelt, daher werden im Konzern kontinuierlich Verbesserungen angestrebt. Umgesetzt wurde zuletzt das Recycling von Lösungsmittel, die einen erheblichen Anteil am Abfall in der Produktion verursachen. Aktuell etwa realisiert FACC ein Pilotprojekt das die Wiederverwendbarkeit von mit Lösungsmitteln getränkten Putztüchern ermöglichen soll. Diese Tücher sollen in Zukunft nicht mehr teuer entsorgt werden müssen, sondern durch ein spezielles Waschverfahren wiederverwendet werden.

10. BERICHT ÜBER DIE ZWEIGNIEDERLASSUNGEN Die FACC AG betreibt keine Zweigniederlassungen.

11. ANGABEN GEMÄSS § 243A UGB

11.1. Berichterstattung über wesentliche Merkmale des internen Kontroll- und Risikomanagementsystems im Hinblick auf den Rechnungslegungsprozess

Gem. § 243a Abs. 2 UGB ist die FACC AG verpflichtet, die wesentlichen Merkmale des internen Kontroll- und Risikomanagementsystems im Hinblick auf den Rechnungslegungsprozess zu beschreiben. Der Vorstand der FACC AG hat gem. § 82 AktG dafür zu sorgen, dass ein Rechnungswesen und ein internes Kontrollsystem geführt werden, die den Anforderungen des Unternehmens entsprechen. Somit liegt es in der Verantwortung des Vorstands der FACC AG, ein angemessenes internes Kontroll- und Risikomanagementsystem im Hinblick auf den Rechnungslegungsprozess einzurichten.

Die wesentlichen Merkmale des Risikomanagements und des internen Kontrollsystems sind im Risikomanagementhandbuch der FACC AG festgehalten worden. Dabei wurden unter anderem wesentliche Finanz- und Controlling-Prozesse sowie deren entsprechende Risiken beschrieben und identifiziert.

Das rechnungslegungsbezogene interne Kontrollsystem ist so konzipiert, dass eine zeitnahe, einheitliche und korrekte Erfassung aller Geschäftsprozesse und Transaktionen gewährleistet ist und somit jederzeit fundierte Aussagen über die aktuelle Geschäftslage des Unternehmens sichergestellt sind.

Zu den Maßnahmen und Regeln zählen unter anderem Funktionstrennung, Vier-Augen-Prinzip, Unterschriftenordnungen, ausschließlich kollektive und auf wenige Personen eingeschränkte Zeichnungsermächtigungen für Zahlungen sowie systemunterstützte Prüfungen durch die verwendete EDV-Software (SAP).

Bei FACC wird seit mehr als zehn Jahren in fast allen Unternehmensbereichen SAP eingesetzt. Die Ordnungsmäßigkeiten der SAP-Systeme wurden in allen betroffenen Geschäftsprozessen umgesetzt.

Im Rahmen des monatlichen Reportings an den Vorstand und die zweite Berichtsebene werden insbesondere Soll-Ist-Vergleiche berichtet. Der Aufsichtsrat der FACC AG wird in seinen vierteljährlich stattfindenden Sitzungen über die aktuelle Geschäftsentwicklung und die Prognose für den weiteren Geschäftsverlauf des Konzerns unterrichtet. In den Sitzungen des Prüfungsausschusses wurden unter anderem auch Themen wie das interne Kontrollsystem und das Risikomanagement sowie Maßnahmen zur Minderung der internen Kontrollrisiken behandelt.

In Rahmen des Budgetierungsprozesses werden Budgetkosten je Kostenstelle geplant. Jeder Kostenstellenverantwortliche ist für die Einhaltung der budgetierten Kosten sowie die geplanten Investitionen verantwortlich. Alle Investitionsvorhaben sind vom Vorstand freizugeben. Über das Budget hinausgehende Investitionen unterliegen der Genehmigung des Aufsichtsrats.

In Bezug auf die IT-Sicherheit wurden Maßnahmen in den Bereichen Berechtigungskonzept, Funktionstrennung und Systemsicherheit ausgearbeitet bzw. umgesetzt.

Im Zusammenhang mit dem zunehmenden Bedrohungspotenzial durch Cyberkriminalität und dem erlittenen Schaden des Geschäftsjahres 2015/16 – dem "Fake President Incident" – hat die FACC AG unmittelbar nach Schadensfeststellung im Jänner 2016 eine umfassende Analyse des internen Kontrollsystems sowie der wesentlichen Prozesse veranlasst und weitere Prozesse und Kontrollen zur Verbesserung implementiert. Die Verbesserungsmaßnahmen haben insbesondere folgende Schwerpunkte

  • Implementierung eines integrierten "Purchase to Pay"-Prozesses
  • Organisatorische Verbesserungen im Finanzbereich (Accounting, Controlling, Treasury)

11.2. Angaben zu Kapital-, Anteils-, Stimm- und Kontrollrechten und damit verbundenen Verpflichtungen

Das Grundkapital der FACC AG belief sich zum 28. Februar 2017 auf 45.790.000 EUR und ist in 45.790.000 auf den Inhaber lautende, nennwertlose Stückaktien unterteilt. Sämtliche Aktien sind zum Handel im Segment Prime Market der Wiener Börse zugelassen.

Jede Aktie der FACC AG entspricht einer Stimme in der Hauptversammlung.

Zum 28. Februar 2017 war die FACC International Company Ltd., Hongkong, direkt bzw. indirekt mit 55,5 % an der FACC AG beteiligt. Zum Bilanzstichtag 28. Februar 2017 waren keine weiteren Aktionäre bekannt, die eine Beteiligung am Grundkapital von mehr als 10 % hielten.

Der im Streubesitz befindliche Anteil der FACC-Aktien betrug 44,5 %.

Es existieren keine Aktien mit besonderen Kontrollrechten.

Bei der FACC AG besteht kein Mitarbeiterbeteiligungsprogramm, in dessen Rahmen Mitarbeiter das Stimmrecht für ihre Anteile an der FACC AG nicht unmittelbar ausüben.

11.3. Genehmigtes Kapital

In der außerordentlichen Hauptversammlung vom 23. Juni 2014 wurde ein genehmigtes Kapital beschlossen. Der Vorstand ist demnach berechtigt, mit Zustimmung des Aufsichtsrats innerhalb von längstens fünf Jahren ab Eintragung des genehmigten Kapitals im Firmenbuch das Grundkapital um bis zu Nominale 19.895.000 EUR durch Ausgabe von bis zu 19.895.000 neuen Aktien gegen Bar- oder Sacheinlage zu erhöhen. Die Ausgabe der neuen Aktien kann auch unter Ausschluss des Bezugsrechts der Aktionäre erfolgen.

In der außerordentlichen Hauptversammlung vom 23. Juni 2014 wurde ein genehmigtes Kapital beschlossen. Der Vorstand ist demnach berechtigt, mit Zustimmung des Aufsichtsrats innerhalb von längstens fünf Jahren ab Eintragung des genehmigten Kapitals im Firmenbuch das Grundkapital um bis zu Nominale 3.000.000 EUR durch Ausgabe von bis zu 3.000.000 neuen Aktien zur Einräumung von Aktienoptionen an Arbeitnehmer, leitende Angestellte und Mitglieder des Vorstands oder eines mit ihr verbundenen Unternehmens zu erhöhen. Die Ausgabe der neuen Aktien kann auch unter Ausschluss des Bezugsrechts der Aktionäre erfolgen.

11.4. Bedingtes Kapital

In der außerordentlichen Hauptversammlung vom 23. Juni 2014 wurde das Grundkapital um bis zu 15.000.000 EUR durch Ausgabe von bis zu 15.000.000 neuen auf Inhaber lautenden Stückaktien bedingt erhöht (bedingtes Kapital). Dieses bedingte Kapital dient der Gewährung von Bezugs- oder Umtauschrechten an Gläubiger von Wandelschuldverschreibungen und der Vorbereitung des Zusammenschlusses mehrerer Unternehmen. Der Ausgabebetrag und das Umtauschverhältnis sind nach Maßgabe der Bestimmungen der Wandelschuldverschreibungen zu ermitteln. Der Ausgabebetrag der Aktien darf nicht unter dem anteiligen Betrag des Grundkapitals liegen.

11.5. Bestimmungen zur Ernennung von Vorstand und Aufsichtsrat

Solange die FACC International Company Ltd., Hongkong, Aktionärin der FACC AG mit einer Beteiligung von zumindest 25 % des jeweils geltenden Grundkapitals ist, hat diese gemäß Punkt 11 der Satzung der FACC AG das Recht, bis zu einem Drittel aller Mitglieder des Aufsichtsrats zu ernennen.

Darüber hinaus bestehen keine Satzungsbestimmungen, die über die gesetzlichen Bestimmungen zur Ernennung von Vorstand und Aufsichtsrat sowie zur Änderung der Satzung hinausgehende Regelungen enthalten.

11.6. Sonstige Angaben

Zum 28. Februar 2017 hielt die FACC AG keine eigenen Aktien.

Beschränkungen hinsichtlich der Stimmrechte der FACC-Aktien und deren Übertragung, auch aus Vereinbarungen zwischen Aktionären, sind FACC nicht bekannt.

Es bestehen keine Entschädigungsvereinbarungen zwischen der FACC AG und ihren Vorstands- und Aufsichtsratsmitgliedern für den Fall eines öffentlichen Übernahmeangebots.

In den Vereinbarungen betreffend Schuldscheindarlehen sind "Change of Control"-Klauseln enthalten. Die Darlehensgeber sind berechtigt zu kündigen, wenn

  • a. die Aviation Industry Corporation of China (AVIC) direkt oder indirekt insgesamt weniger als 50 % plus eine Aktie der Darlehensnehmerin hält oder
  • b. die Aviation Industry Corporation of China (AVIC) weder direkt noch indirekt das Recht hat, die Mehrheit der Geschäftsführungs- oder Aufsichtsratsmitglieder der Darlehensnehmer zu bestimmen und zu ernennen.

12. AUSBLICK

12.1. Der Markt der zivilen Luftfahrt

Der Wachstumstrend in der zivilen Luftfahrtindustrie dürfte auch in Zukunft weiter anhalten: Analysen der OEMs bestätigen derzeit die konstante jährliche Zunahme des Passagieraufkommens von rund 5 %. In den kommenden 20 Jahren wird sich die Flotte an Flugzeugen weltweit von derzeit 21.000 Verkehrsflugzeugen (Quelle: Marktausblick – Airbus/Boeing 2016) bis zum Jahr 2035 auf 42.500 Flugzeuge mehr als verdoppeln. Aus der derzeit bestehenden Flotte werden 14.800 Flugzeuge außer Dienst gestellt und durch moderne Flugzeuge ersetzt werden. Entsprechend dieser Einschätzung besteht innerhalb der nächsten 20 Jahre ein Bedarf an 36.300 neuen Flugzeugen.

Es wird jedoch auch von einer deutlichen Verschiebung hin zu den neuen Wachstumsmärkten China und Indien ausgegangen. Das Verkehrsaufkommen (Reisetätigkeit pro Jahr und Einwohner) soll sich in diesen Ländern bis zum Jahr 2035 vervierfachen. Das Reiseaufkommen je Einwohner in den USA und in Europa wird sich – obwohl es sich bereits heute auf hohem Niveau befindet – um weitere 20 % erhöhen.

Im vergangenen Jahr lieferten Airbus und Boeing zusammen 1.436 neue Verkehrsflugzeuge an ihre Kunden aus. Im gleichen Zeitraum wurden 1.419 Flugzeuge an Airlines verkauft. Es handelt sich somit um eine Book to Bill Ratio von annähernd 1:1.

12.2. FACC-Konzern

Das Erreichen des Umsatzziels von 1 Mrd. Euro gemäß der "Vision 2020" bis zum Ende des Geschäftsjahres 2020/21 bleibt aufrecht. Für die Folgejahre wird von einer stufenweisen Steigerung der Fertigungsrate in wesentlichen Programmen ausgegangen. Bedingt durch das ausgewogene und moderne Produkt- und Kundenportfolio von FACC kann das Unternehmen vom generellen Wachstum aller bedeutenden Flugzeugfamilien profitieren. Aus heutiger Sicht ist für das Geschäftsjahr 2017/18 ein moderates Umsatzwachstum zu erwarten.

Der Markt für Wartung und Reparatur (Maintenance, Repair and Overhaul) – allen voran die Instandhaltung und Reparatur von Composite-Systemen – wird durch den steigenden Anteil an Composite-Strukturen bei neuen Flugzeugen immer mehr zu einem Geschäftsfeld mit Potenzial. Unterstützt durch die weitreichenden Erfahrungen von FACC in der Entwicklung und Herstellung vom Composite-Systemen verfolgt FACC das Ziel, neben dem Kerngeschäft vermehrt Instandhaltungs- und Reparaturarbeiten für Airlines anzubieten.

Weiterhin im Fokus des Managements liegt die nachhaltige Stärkung der Ertragskraft des Unternehmens. Initiativen zur Erhöhung des Automatisierungsgrads und der Produktivität sowie das Outsourcing der Produktion von einfachen Composite-Teilen in die Supply Chain sollen die Ertragslage des Konzerns weiter stärken.

Erklärung aller gesetzlichen Vertreter gemäß § 82 Abs. 4 Z 3 BörseG

Wir bestätigen nach bestem Wissen, dass der im Einklang mit den maßgebenden Rechnungslegungsstandards aufgestellte Jahresabschluss des Mutterunternehmens ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage des Unternehmens vermittelt, dass der Lagebericht den Geschäftsverlauf, das Geschäftsergebnis und die Lage des Unternehmens so darstellt, dass ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage entsteht, und dass der Lagebericht die wesentlichen Risiken und Ungewissheiten beschreibt, denen das Unternehmen ausgesetzt ist."

Ried i. Innkreis am 11. Juni 2017

Der Vorstand

Robert Machtlinger eh Ales Starek eh Wang Yongsheng eh CEO CFO CCO

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