Quarterly Report • Mar 22, 2017
Quarterly Report
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SKAKO ANNUAL REPORT 2016 / 1
| KEY FIGURES AND FINANCIAL RATIOS – DKK |
3 |
|---|---|
| KEY FIGURES AND FINANCIAL RATIOS – EUR* |
4 |
| LETTER FROM MANAGEMENT | 5 |
| SKAKO AT A GLANCE | 6 |
| FINANCIAL REVIEW (FULL YEAR 2016) | 7 |
| FINANCIAL REVIEW (Q4 2016) | 8 |
| OUTLOOK 2017 | 9 |
| SHAREHOLDER INFORMATION | 10 |
| RISK MANAGEMENT ACTIVITIES | 12 |
| CORPORATE GOVERNANCE | 13 |
| EXECUTIVE MANAGEMENT | 15 |
| BOARD OF DIRECTORS | 16 |
| MANAGEMENT STATEMENT | 18 |
| INDEPENDENT AUDITOR'S REPORT | 19 |
| CONSOLIDATED FINANCIAL STATEMENTS | 22 |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 29 |
| PARENT COMPANY FINANCIAL STATEMENTS | 51 |
| NOTES TO PARENT COMPANY FINANCIAL STATEMENTS | 57 |
| 2016 | 2015 | 2014 | 2013 | 2012 | |
|---|---|---|---|---|---|
| INCOME STATEMENT, DKK THOUSANDS | |||||
| Revenue | 308,059 | 319,136 | 353,585 | 345,459 | 353,036 |
| Gross profit | 84,306 | 88,314 | 81,272 | 72,695 | 74,772 |
| Operating profit (EBIT) | 16,411 | 16,210 | 1,320 | (555) | 11,876 |
| Net financial items | (3,265) | (3,133) | (4,100) | (4,271) | (4,912) |
| Profit before tax | 13,146 | 13,077 | (2,781) | (4,826) | 6,964 |
| Profit for the year, continuing activities | 16,540 | 13,242 | (6,796) | (9,958) | 4,838 |
| Profit/(loss) for the year, discontinuing activities | - | - | (682) | 1,461 | 2,894 |
| Profit for the year | 16,540 | 13,242 | (7,478) | (8,497) | 7,732 |
| BALANCE SHEET, DKK THOUSANDS | |||||
| Non-current assets | 68,470 | 62,734 | 66,429 | 71,581 | 86,235 |
| Current assets | 176,601 | 181,710 | 170,011 | 163,252 | 161,162 |
| Assets | 245,071 | 244,445 | 236,440 | 237,821 | 251,717 |
| Equity | 102,360 | 84,797 | 70,521 | 77,517 | 73,557 |
| Non-current liabilities | 13,545 | 15,559 | 15,913 | 18,849 | 29,325 |
| Current liabilities | 129,166 | 144,090 | 150,004 | 140,967 | 146,984 |
| Net interest-bearing debt | 16,870 | 30,439 | 53,379 | 24,607 | 40,482 |
| Net working capital | 81,058 | 75,571 | 80,451 | 57,168 | 54,926 |
| OTHER KEY FIGURES, DKK THOUSANDS | |||||
| Investment in intangible and tangible assets | 5,849 | 1,245 | 5,264 | 2,413 | 11,708 |
| Cash flow from operating activities (CFFO) | 16,853 | 23,854 | (24,476) | (12,216) | 20,067 |
| Free cash flow | 11,004 | 22,610 | (22,582) | (5,835) | 18,624 |
| Average number of employees | 183 | 180 | 191 | 188 | 192 |
| FINANCIAL RATIOS | |||||
| Gross profit margin | 27.4% | 27.7% | 23.0% | 21.0% | 21.2% |
| Profit margin (EBIT margin) | 5.3% | 5.1% | 0.4% | -0.2% | 3.4% |
| Liquidity ratio | 136.7% | 126.1% | 115.8% | 115.8% | 109.6% |
| Equity ratio | 41.8% | 34.7% | 29.8% | 32.6% | 29.2% |
| Return on equity | 17.7% | 17.1% | -10.1% | -11.2% | 11.1% |
| Financial leverage | 16.5% | 35.9% | 75.7% | 31.7% | 55.0% |
| NWC/revenue | 26.3% | 23.7% | 22.8% | 16.5% | 15.6% |
| Earnings per share, DKK | 5.36 | 4.30 | -2.41 | -3.38 | 3.20 |
| Equity value per share, DKK | 33.0 | 27.3 | 22.7 | 25.0 | 32.3 |
| Share price, DKK | 92.5 | 44.8 | 21.8 | 27.7 | 30.6 |
| Price-book ratio | 2.8 | 1.6 | 1.0 | 1.1 | 0.9 |
| Market capitalisation, DKK | 287,343 | 139,167 | 67,720 | 86,048 | 95,056 |
Financial ratios are calculated in accordance with "Recommendations and Financial Ratios 2015" from the Danish Society of Financial Analysts. Net working capital is calculated as Inventory, Trade receivables and Work in progress for third parties less Prepayments from customers and Trade payables.
| INCOME STATEMENT, EUR THOUSANDS | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|
| Revenue | 41,377 | 42,865 | 47,492 | 46,400 | 47,418 |
| Gross profit | 11,324 | 11,862 | 10,916 | 9,764 | 10,043 |
| Operating profit (EBIT) | 2,204 | 2,177 | 177 | (75) | 1,595 |
| Net financial items | (438) | (421) | (551) | (573) | (660) |
| Profit before tax | 1,766 | 1,756 | (374) | (648) | 935 |
| Profit for the year, continuing activities | 2,222 | 1,779 | (912) | (1,337) | 650 |
| Profit/(loss) for the year, discontinuing activities | - | - | (92) | 196 | 389 |
| Profit for the year | 2,222 | 1,779 | (1,004) | (1,141) | 1,039 |
| BALANCE SHEET, EUR THOUSANDS | |||||
| Non-current assets | 9,210 | 8,438 | 8,935 | 9,628 | 11,599 |
| Current assets | 23,754 | 24,442 | 22,868 | 21,959 | 21,678 |
| Assets | 32,964 | 32,880 | 31,804 | 31,989 | 33,858 |
| Equity | 13,768 | 11,406 | 9,486 | 10,427 | 9,894 |
| Non-current liabilities | 1,822 | 2,093 | 2,140 | 2,535 | 3,945 |
| Current liabilities | 17,374 | 19,382 | 20,177 | 18,961 | 19,771 |
| Net interest-bearing debt | 2,269 | 4,094 | 7,180 | 3,310 | 5,445 |
| Net working capital | 10,903 | 10,165 | 10,821 | 7,690 | 7,388 |
| OTHER KEY FIGURES, EUR THOUSANDS | |||||
| Investment in intangible and tangible assets | 787 | 167 | 708 | 325 | 1,575 |
| Cash flow from operating activities (CFFO) | 2,267 | 3,209 | (3,292) | (1,643) | 2,699 |
| Free cash flow | 1,480 | 3,041 | (3,038) | (785) | 2,505 |
| Average number of employees | 183 | 180 | 191 | 188 | 192 |
| FINANCIAL RATIOS | |||||
| Gross profit margin | 27.4% | 27.7% | 23.0% | 21.0% | 21.2% |
| Profit margin (EBIT margin) | 5.3% | 5.1% | 0.4% | -0.2% | 3.4% |
| Liquidity ratio | 136.7% | 126.1% | 115.8% | 115.8% | 109.6% |
| Equity ratio | 41.8% | 34.7% | 29.8% | 32.6% | 29.2% |
| Return on equity | 17.7% | 17.1% | -10.1% | -11.2% | 11.1% |
| Financial leverage | 16.5% | 35.9% | 75.7% | 31.7% | 55.0% |
| NWC/revenue | 26.3% | 23.7% | 22.8% | 16.5% | 15.6% |
| Earnings per share, EUR | 0.72 | 0.58 | -0.32 | -0.45 | 0.43 |
| Equity value per share, EUR | 4.43 | 3.67 | 3.05 | 3.36 | 4.34 |
| Share price, EUR | 12.44 | 6.03 | 2.93 | 3.73 | 4.12 |
| Price-book ratio | 2.8 | 1.6 | 1.0 | 1.1 | 0.9 |
| Market capitalisation, EUR | 38,650 | 18,719 | 9,109 | 11,574 | 12,786 |
Financial ratios are calculated in accordance with "Recommendations and Financial Ratios 2015" from the Danish Society of Financial Analysts. Net working capital is calculated as Inventory, Trade receivables and Work in progress for third parties less Prepayments from customers and Trade payables.
*On the translation of key figures and financial ratios from Danish kroner to euro, Danmarks Nationalbank's rate of exchange at 30 December 2016 of 743.44 has been used for balance sheet items, and the average rate of exchange of 744.52 has been used for income statement and cash flow items.
Following a very low order intake during the first nine months of 2016 for SKAKO Concrete, market activity resumed in fourth quarter and the Group ended the year with a higher order intake than last year. Order intake in fourth quarter was only to a limited extent converted to revenue in 2016 and Group revenue amounted to DKK 308,1m which was DKK 11m lower than last year.
Despite the decrease in revenue, profit for the year increased by nearly 25% and amounted to DKK 16,5m, which is within our expectations and in line with our guidance for the year. We are pleased that both SKAKO´s business areas again contributed positively to the increased earnings.
A key priority for Management in 2016 has been to strengthen our customer focus.
Another key priority for Management in 2016 was to simplify the business even further. Whilst our offering to customers often has a high degree of complexity, our internal setup needs to be lean and simple. We have started to implement a new ERP system within the Group providing the functionality necessary to further optimize our business. We have already experienced improved efficiency from this and we expect further efficiency improvements when the ERP system is fully implemented.
We know that all our employees worldwide are committed to contributing to the Group's goals so we would like to take this opportunity to thank our dedicated and talented employees around the world for their performance and solid contribution to the results realised in 2016.
Kaare Vagner Jensen Søren Pedersen Chairman of the Board Director
CFO Director
Jakob Have Lionel Girieud
The SKAKO Group has two business areas:
SKAKO Vibration develops, designs and sells high-end vibratory feeding, conveying, and screening equipment, used across the complete spectrum of material handling and processing. Our main focus is on plant sales with a solid after sales division.
Our production facilities are in Faaborg in Denmark and Strasbourg in France and the products are based on application know-how and own developed technology.
The global market is penetrated using a niche strategy with a sector-driven focus. We are strong within the automotive sector, the mining sector and especially the phosphate mining sector. The main markets are EU and North Africa. We have strong focus on expanding in Morocco to support our significant growth within supplying to the phosphate mining sector. Focus is also on becoming one of the leading global participants in the automotive industry.
SKAKO Concrete develops, designs and sells a versatile high-end product range of all types of concrete batching plants for ready-mix, precast and jobsite plants. Our main focus is on plant sales with a strong after sales division.
Our production facility is in Lille in France and the products are based on own developed technology.
The main markets are EU, North America and the Middle East. We have strong focus on obtaining higher market share on existing markets without increasing the risk profile on the orders.
We have completed a turnaround and we continue to have high focus on efficiency and optimization initiatives.
Both business areas' product portfolios were significantly improved in 2016, among other things with a patented semiautomated modular system to fill and compact gabions, and our new packaging system, a flexible machine that can fill differently sized carton boxes and plastic returnable boxes. Furthermore, we have developed a new AM 4500 mixer and a wash unit for AM mixers.
All products have been specially developed to strengthen our position on core markets and to attract new customers. Our innovation is aiming at adding value to the market by developing new equipment, developing better alternative technologies and developing innovative solutions that can optimize the performance of existing plants and equipment. Several forms of direct and indirect R&D incentives in terms of tax incentives and other grants and subsidy schemes for research and development exist, all with the aim of boosting innovation and productivity. As in prior years, part of our research and development costs have been covered by research and development incentives received, cf. note 2 in the consolidated financial statements. We will continue our strong focus on developing new innovative products and solutions in the years to come.
Order intake, revenue and earnings Following a very low order intake during the first nine months of 2016 for the Concrete division, market activity resumed in fourth quarter and we ended the year with an order intake of DKK 325,2m (2015: DKK 324,4m).
Order intake in fourth quarter was only to a limited extent converted to revenue in 2016 and Group revenue amounted to DKK 308,1m which was DKK 11m lower than last year. Gross profit amounted to DKK 84,3m (2015: DKK 88,3m), corresponding to a gross profit margin of 27.4% (2015: 27.7%).
Our high focus on efficiency and optimization initiatives has started to materialize, and EBIT amounted to DKK 16,4m representing an increase of DKK 0,2m compared to last year, corresponding to a EBIT margin of 5.3% (2015: 5.1%).
Profit for the year amounted to DKK 16,5m (2015: DKK 13,2m). corresponding to earnings per share (EPS) of DKK 5.36 (2015: DKK 4.30).
Profit for the year of DKK 16,5m was within the guidance for 2016 of a profit for the year in the level DKK 15-25m, corresponding to earnings per share (EPS) in the level DKK 4.83-8.05.
The Group´s equity was DKK 102,4m at 31 December 2016 (DKK 84,8m at 31 December 2015) matching an equity ratio of 41.8%. The increase in equity is mainly due to profit for the year of DKK 16,5m.
Cash flow from operating activities (CFFO) amounted to DKK 16,9m (2015: DKK 23,9m). Free cash flow amounted to DKK 11,0m (2015: DKK 22,6m).
The order book contains several large projects and the cash flow is impacted by the payment terms in these contracts.
At 31 December 2016, the Group's assets totalled DKK 245,1m which is an increase of DKK 0,6m on the balance sheet total at year-end 2015.
Net interest-bearing debt was reduced by DKK 13,6m and totalled DKK 16,9m at 31 December 2016. In 2016 we have renegotiated conditions with our primary financial institution which have resulted in interest rates reduced by more than 50% compared to last year.
There have been no events that materially affect the assessment of this Annual Report 2016 after the balance sheet date and up to today.
The profit for the period in the Parent company is influenced by a reversal of write down related to shares in subsidiaries.
We have successfully completed a turnaround of the business and generated a strong pipeline of orders during 2016. Based on this, the write down from previous years has been reversed, in total DKK 75,3m.
The reversal of write down has no impact on the consolidated figures.
Order intake, revenue and earnings
Order intake in Q4 2016 amounted to DKK 103,2m representing an increase of 23% (Q4 2015: DKK 84,0m). The increase was predominantly driven by the Concrete division due to the two large, total DKK 37m, orders won in Sweden and in the Far East, cf. company announcements 12/2016 and 13/2016.
Revenue amounted to DKK 85,3m (Q4 2015: DKK 86,5m) which was DKK 10m higher than average for the first three quarters of 2016. The two large orders won in Sweden and in the Far East had a limited impact on revenue in Q4 2016.
The gross profit amounted to DKK 25,4m (Q4 2015: DKK 29,3m), corresponding to a gross profit margin of 29.8% (Q4 2015: 33.9%).
Our high focus on efficiency and optimisation initiatives has started to materialize, and EBIT amounted to DKK 7,6m (Q4 2015: 7,5m), corresponding to a EBIT margin of 8.9% (Q4 2015: 8.7%).
Profit for the period amounted to DKK 7,4m (Q4 2915: 6,9m).
Cash flow from operating activities (CFFO) amounted to DKK 20,5m in Q4 2016 (Q4 2015: DKK 13,3m).
Free cash flow amounted to DKK 17,8m in Q4 2016 (Q4 2015: DKK 6,3m).
The order book contains several large projects and the cash flow of the period is impacted on the payment terms in these contracts.
We are entering 2017 with a higher backlog compared to prior year, which is expected to contribute positively to our financial performance in the beginning of 2017, when comparing to prior year.
The pipelines in both SKAKO Concrete and SKAKO Vibration are good. In recent years, we have annually announced up to four large orders and we expect to announce a similar level of large orders in 2017. For large orders, the usual time from contract signing to project handover is more than six months. The financial performance for 2017 is largely depending on timing of receipt of new large orders.
We are guiding for an operating profit (EBIT) of DKK 15-20m.
As of 31 December 2016, SKAKO's nominal share capital was 31,064,180 DKK divided into 3,106,418 shares of 10 DKK each. All shares are the same class and carry one vote each.
The Board of Directors has been authorised by the annual general meeting to increase the company's share capital by a nominal value of up to DKK 1,000,000. The authorisation is valid until 31 March 2017. Furthermore, the Board of Directors has been authorised to increase the share capital by an additional nominal value of up to DKK 2,000,000 in connection with the warrant program. The authorisation is valid until 18 April 2021.
The company's Board of Directors has the authority of the general meeting to acquire up to 10% own shares at a market price +/-10%. The authority is valid until 18 April 2017.
SKAKO A/S is listed at NASDAQ OMX Copenhagen A/S under identification code DK0010231877. The price of SKAKO shares increased by 106.5% in 2016, and at 31 December 2016, the share price was 92.5 corresponding to a market capitalisation of DKK 287.3m.
By the end of 2016 the company had 1697 registered shareholders compared with 1184 registered shareholders by the end of 2015. The registered shareholders own a total of 93.4% of the share capital compared to 79.2% by the end of 2015.
| DKK thousands | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|
| Share capital at 01.01. | 31,064 | 31,064 | 31,064 | 24,362 | 24,362 |
| Capital increase | - | - | - | 6,702 | - |
| Share capital at 31.12 | 31,064 | 31,064 | 31,064 | 31,064 | 31,064 |
| Lind Invest ApS, Aarhus: | 30.58% |
|---|---|
| Danica Pension, Copenhagen: | 10.11% |
| Maj Invest Holding A/S, Copenhagen: | 9.98% |
| Christian Herskind Jørgensen, Humlebæk: | 5.34% |
The Board of Directors recommends that no dividend is paid for 2016.
| 22 March | Annual report for 2016 |
|---|---|
| 18 April | Ordinary general meeting 2017 |
| 23 May | Interim report for the period 1 January – 31 March 2017 |
| 29 August | Interim report for first half-year 2017 |
| 31 October | Interim report for the period 1 January 2017 – 30 September 2017 |
The annual general meeting will be held on Tuesday 18 April 2017 at 3 p.m. at the Company's head office, Bygmestervej 2, 5600 Faaborg, Denmark.
Investors, analysts and medias are welcome to contact Kaare Vagner Jensen (Chairman of the Board of Directors) by phone +45 63113860 or by email to [email protected]
| 5 February | 01- SKAKO wins new significant order in North Africa |
|---|---|
| 10 February | 02- SKAKO appoints new CFO |
| 22 March | 03 - Annual report 2015 |
| 22 March | 04 - Notice to ordinary General Assembly |
| 18 April | 05 - Course of General Assembly on 18 April 2016 |
| 24 May | 06 - Interim report first quarter 2016 |
| 7 June | 07 - Insider trading with SKAKO shares |
| 22 June | 08 - SKAKO secures another large order in North Africa |
| 18 July | 09 - Granting of warrants to management and managerial employees |
| 30 August | 10 - Interim report first half-year 2016 |
| 5 September | 11 - Insider trading with SKAKO shares |
| 20 October | 12 - SKAKO sells newly developed concrete mixer to |
| major Scandinavian customer | |
| 21 October | 13 - Another large order to SKAKO Concrete for a high silo concrete |
| mixing plant to distant market | |
| 25 October | 14 - Financial calendar for 2017 |
| 27 October | 15 - Interim report for SKAKO A/S for the first three quarters of 2016 |
The company announcements are available on the company website: http://www.skako.com/dk/skako-group/investor-relations/selskabsmeddelelser.html
Risk management activities in the SKAKO Group first and foremost focus on financial risks to which the Company is fairly likely to be exposed. In connection with the preparation of the Group's strategic, budgetary and annual plans, the Board of Directors considers the risks identified in these activities.
Financial risk management concentrates on identifying risks in respect of exchange rates, credit and liquidity with a view to protecting the Group against potential losses and ensuring that Management's forecasts for the current year are only to a limited extent affected by changes or events in the surrounding world – be the changes in exchange rates or in interest rates. It is Group policy to exclusively hedge financial risks arising from our commercial activities and not to undertake any financial transactions of a speculative nature.
With 90% of the Group's sales being invoiced in foreign currencies, reported revenue is affected by movements in the Group's trading currencies. The Group seeks to hedge against such exchange rate risks by seeking to match positive and negative cash flows in the main currencies as much as possible.
The Group´s credit risks relate primarily to trade receivables. For large projects we have a signed letter of credit from the customer's bank before we undertake any work. Our remaining customer base is fragmented, so credit risks in general only led to minor losses on individual customers. Overall, we therefore estimate that we have no major credit exposure on Group level.
The Group aims at having sufficient cash resources to be able to take appropriate steps in case of unforeseen fluctuations in cash outflows. We have access to suitable undrawn credit facilities, and the liquidity risk is therefore considered to be low.
Once a quarter we carry through a detailed planning and budgetary process, and any deviations from the plans and budgets are carefully monitored.
The responsibility of maintaining sufficient and efficient internal control and risk management in connection with financial reporting lies with the Executive Board. The Board of Directors has assessed the Group's existing control environment and concluded that it is adequate and that there is no need for setting up an internal audit function.
Management continuously seeks to minimize any financial consequences of damage to corporate assets including any operating losses resulting from such damage. We have invested in security and surveillance systems to prevent damage and to minimize such damage, should it arise. Major risks, which cannot be adequately minimized, are identified by the Company's Management, who will ensure that appropriate insurance policies are, on a continuous basis, taken out under the Group's global insurance programme administered by recognised and credit-rated insurance brokers and that such insurances are taken out with insurance companies with high credit ratings. The Group's insurance programme has deductible clauses in line with normal market terms. The Board of Directors reviews the Company's insurance policies once a year including the coverage of identified risks and is briefed regularly on developments in identified risks. The purpose of this reporting is to keep the Board members fully updated and to facilitate corrective action to minimize any such risks.
Recommendations issued by the Danish Committee on Corporate Governance and adopted by Nasdaq Copenhagen are best-practice guidelines for the management of companies admitted to trading on a regulated market in Denmark. The recommendations should be viewed together with the statutory requirements including not least the Danish Companies Act and the Danish Financial Statements Act, but also European Union company law and the OECD Principles of Corporate Governance.
A complete schematic presentation of the recommendations and how we comply, Statutory report on corporate governance, cf. section 107 b of the Danish Financial Statements Act, is available on our website, http://www.skako.com/fileadmin/SKAKO/PDF/Stamdata\_SKAKO/SKAKO\_recommendations\_on\_corporate\_governance\_201 6.pdf
Through this reference to our website, we meet the requirement that the annual report must include a statutory report on company management, cf. section 107 b of the Danish Financial Statements Act.
The work on corporate governance is an ongoing process for our Board of Directors and Executive Board, who determine the extent to which the Company should comply with the recommendations and regularly assess whether the recommendations give rise to amendments to our rules of procedure or managerial processes. When reporting on corporate governance, we follow the "comply or explain" principle, which means that if we do not comply with a recommendation, this does not constitute a breach as long as we explain why we have chosen not to follow a given recommendation and also explain what we do instead. The few cases where we have chosen to deviate from a recommendation are well-founded, and we explain what we do instead. To further increase transparency, we have decided to provide supplementary and relevant information, even when we follow the recommendations.
We find it relevant to accentuate a number of aspects and supplementary information on corporate governance in the SKAKO Group in this chapter.
The Company's Board of Directors has set up an audit committee. The Board of Directors appoints the chairman of the audit committee, who must be independent and who must not be Chairman of the Board of Directors.
According to its charter, the Audit Committee, among other things, assists the Board of Directors in relation to internal accounting and financial control systems, the integrity of the company's financial reports and engagements with external auditors. The audit committee also carries out ongoing assessments of the company's financial and business risks. In 2016, the committee reviewed the main accounting principles, tax strategy and compliance and key risks, etc. In 2016, the Audit Committee held four meetings.
At SKAKO A/S we believe that a multiple and tolerant organisation makes the company stronger, increases the competitiveness and creates a good and innovative working environment.
We want to develop and benefit from the total potential of all employees and that all employees can develop their full potential in balance between working life and private life. Gender equality in the management and focus on multiplicity is an integrated part of SKAKO A/S's personnel policy.
At present, SKAKO A/S has no female board members. However, the Board of Directors is aware of this underrepresentation and wants to support and contribute to the part of female board members being increased. Considering SKAKO A/S's business and the line of business within which SKAKO A/S is operating the Board of Directors has set the specific goal that the part of women elected at the general meeting is to amount to at least 20% by 2020.
In the view of the Board of Directors, the determined goal is an ambitious and realistic goal for a company within the lines of business in which SKAKO is operating as these lines of business traditionally do not have a large number of women neither in the board of directors nor at the other management levels. Within the last 12 months we succeeded in promoting two female managers. It is the plan of the Board of Directors to further increase the number of female managers in the years to come.
Ultimately, SKAKO A/S's shareholders elect the Board of Directors at the company's general assembly and consequently also determine the gender composition of the Board of Directors. To the extent that the Board of Directors proposes new candidates for the Board of Directors, the Board of Directors will regard gender as one separate parameter in order to reach the determined goal. When candidates are proposed for SKAKO A/S's Board of Directors, it is essential that the members represent professional competences relevant to SKAKO A/S.
It is SKAKO's goal to increase the part of women in the management group within a three-year period. SKAKO A/S will reach the goal by requiring candidates of both genders in the recruiting phase and by taking into account the underrepresented gender at succession planning. SKAKO works very intentionally on showing multiplicity in its marketing to signal that the company wants to reflect the society in its employee composition.
SKAKO has no formal policies regarding social responsibility. However, the company works on the basis of general principles for social responsibility and on limiting the negative environmental impacts as much as possible.
To SKAKO, respect of human rights is about the company's own employee conditions and securing that suppliers and sub suppliers deliver services to the Group in a way that considers the environment and the employees' rights including safety and health.
Through energy improvements and savings and through innovative thinking of internal transportation and communication, SKAKO contributes to reducing its climate impact.
This has resulted in the wording of the "Code of Conduct" in our production principles. This ensure that suppliers and their suppliers produce and deliver their services to the Group in a way that considers the environment and the employees' rights.
It is the Group's view that we all have a responsibility of contributing to a better environment. The Group companies continue to focus on the environment.
Our innovation is aimed at adding value to the market by developing new equipment, developing better alternative technologies and developing innovative solutions that can optimize the performance of existing plants and equipment.
The Group's policies within the working environment and in relation to the Group's employees involve a strong focus on establishing and securing a healthy working environment to prevent accidents and damage as well as creating positive relations to the workplace, in general.
Workplace environment committees have been established in Denmark and in France, respectively, in order to plan the cooperation between management and employees to increase health and safety of the Group's employees. Heart defibrillators have been mounted in the Group and a number of employees have followed first aid courses continuously to be able to increase safety among employees.
| Name | Søren Pedersen | Lionel Girieud | Jakob Have |
|---|---|---|---|
| Born in | 1962 | 1971 | 1981 |
| Title | Director | Director | CFO |
| Member of the Management since |
2014 | 2016 | 2016 |
| Number of shares in SKAKO |
5,460 | 5,166 | 5,000 |
| Board positions | - | - | - |
since
Board member
Managerial positions in other companies
Name Kaare Vagner Jensen Chairman
Chairman of the Board:
Copenhagen Engineering A/S
ERRIA Container Service I/S Plumrose Latinoamerico C.A. LS Stålmontage ApS
Strandøre Invest A/S
ERRIA A/S
Selskab 1 ApS
Board member: Mols-Linien A/S
Others positions:
committee)
Member of the Audit Committee
Considered as an independent Board member
Christian Herskind Jørgensen Deputy Chairman
Considered as an independent Board member
Born in 1946 1961
2010 2009
SKAKO shares 75,667 165,907
Board: Mannaz A/S Fonden Amager Bakke
Fonden Soldaterlegatet Fonden til støtte for soldater I internationale missioner
Danske Ingeniørers Efteruddannelses Fond Sumisura A/S Nordsøenheden/Nordsøfonden Orbicon A/S Associated Danish Ports A/S LM Byg A/S
Refshaleøen Holding A/S, Managing Director Refshaleøens Ejendomsselskab A/S, Managing Director Herskind Venture Capital ApS, Director Ejendomsselskabet Helsingør/Århus, Director
Christian Herskind Jørgensen is educated lawyer from University of Copenhagen and University of London and is also Reserve Colonel. His competences include significant experience within sales, marketing, strategy, management, HR and conditions of employment as well as legal matters.
Special
competences
Kaare Vagner Jensen is educated extended marine engineer and engineer officer (in the Danish Navy) with several supplementary educations from IMD/INSEAD. His competences include many years of management of significant Danish and international companies within industry, railway and shipping business.
LD Invest Vietnam K/S (member investment
Chairman of the Audit Committee
Born in 1960 1975 Board member since 2010 2011
SKAKO shares 49,876 949,808
Managerial positions in other companies
Chairman of the Board: Mediehuset Ingeniøren A/S Dansk Selskab for Virksomhedsledelse (VL) INDEX: Design to Improve Life SimplyDay AB Freeminds Media A/S Ezector Solutions ApS
Deputy Chairman: Billund Lufthavn
FDM Travel Marketsoft A/S Charlotte Sparre A/S Experimentarium A/S Koldinghus Handiscover AB Fonden Design Society
Colonial ApS, Director own holding company
Special competences
Jens Wittrup Willumsen is educated Cand. Merc. from Copenhagen Business School and has had managing positions in Denmark and abroad. His competences include strategy, finance, financing, sales and marketing.
Considered a non-independent Board member
Lind Capital A/S Lind Capital Fondsmæglerselskab A/S
Kristensens Partners III A/S Cornerstone Properties Germany Holding ApS 4U-Development A/S Blue Equity Management A/S
Danske Commodities A/S, CEO Lind Invest ApS, CEO Aros Investments Holding ApS, CEO
Henrik Lind is educated HD in Financing from University of Aarhus, supplemented by a board education from Plesner. His competences include comprehensive experience with business development as well as financial and structural conditions hereunder M&A activities.
We have today discussed and approved the Annual Report 2016 of SKAKO A/S for the financial year 1 January – 31 December 2016.
The annual report has been prepared and presented in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.
In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the parent company´s assets, liabilities and financial position on 31 December 2016 and of the results of the Group´s and the parent company´s operations and cash flows for the financial year 1 January – 31 December 2016.
Further, in our opinion the management´s report includes a fair view of the development and performance of the group´s and the parent company´s business and financial condition, the profit for the year and of the group´s and the parent company´s financial position, together with a description of the principal risks and uncertainties that the group and the parent company face.
We recommend the Annual Report for 2016 be approved at the Annual General Meeting.
Faaborg, 22 March 2017
Executive Board
Søren Pedersen Lionel Girieud Jakob Have Director Director CFO
_______________________ _______________________ _______________________
Board of Directors
_______________________ _______________________ Chairman Deputy Chairman
Kaare Vagner Jensen Christian Herskind Jørgensen
_______________________ _______________________ Jens Wittrup Willumsen Henrik Lind
To the shareholders of SKAKO A/S
In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group's and the Parent Company's financial position at 31 December 2016 and of the results of the Group's and the Parent Company's operations and cash flows for the financial year 1 January to 31 December 2016 in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act.
SKAKO A/S' Consolidated Financial Statements and Parent Company Financial Statements for the financial year 1 January to 31 December 2016 comprise income statement and statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes to the financial statements, including summary of significant accounting policies for the Group as well as for the Parent Company. Collectively referred to as the "financial statements".
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the ethical requirements that are relevant to our audit of the financial statements in Denmark. We have also fulfilled our other ethical responsibilities in accordance with the IESBA Code.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for 2016. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Key Audit Matter | How our audit addressed the Key Audit Matter |
|---|---|
| Revenue recognition from long-term construction contracts |
|
| Recognition of the Group's revenue is complex due to a high degree of accounting estimates and uncertainty regarding recognition of revenue from long-term construction contracts. |
Our audit procedures included considering the appropriateness of the Group's revenue recognition accounting policies and assessing compliance with applicable accounting standards. |
| Work in progress for third parties amounted to DKK 49 million (2015: DKK 30 million) net and prepayments from customers DKK 10 (2015: DKK |
We performed substantive procedures over significant contracts and costs allocated to projects in order to assess the accounting treatment and principles applied. |
| 18 million). | We assessed Management's estimated cost to completion and |
| We focused on this area, as recognition of revenue involves a number of judgements made by Management originating from percentage of completion and estimated cost to completion. |
contribution margin for construction contracts in order to evaluate valuation of construction contracts and recognised revenue. We compared the estimated contribution margins to actual contribution margins for finished projects in 2016 and 2017 and to prior year's estimates. |
| We refer to note 13. | We tested Management's estimated percentage of completion by assessing subsequent development in costs allocated to the projects and Management's updated estimates for cost to completion and contribution margin. |
| We performed journal entry testing of revenue entries including entries regarding long-term contracts. |
| Deferred tax assets | |
|---|---|
| At 31 December 2016, the Group has recognised | We evaluated Management's procedure for estimating the |
| deferred income tax assets of DKK 23 million (2015: | deferred tax assets. |
| DKK 17 million). | In understanding and evaluating Management's judgements, we |
| Management is required to exercise considerable | considered the status of recent tax authority audits and enquiries, |
| judgement when determining the appropriate | judgmental positions taken in tax returns and current year |
| amount to capitalise in respect of deferred tax. | estimates and developments in the tax environment. |
| We focused on this area as the amounts involved | Further, we evaluated the Group's budgets for the coming years |
| are potentially material and the valuation of tax | including key assumptions. |
| assets is associated with uncertainty and | In addition, we used tax specialists, evaluated and challenged the |
| judgement. | adequacy of Management's key assumptions to assess |
| Reference is made to note 11. | Management's estimates. |
Management is responsible for Management's Review.
Our opinion on the financial statements does not cover Management's Review, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read Management's Review and, in doing so, consider whether Management's Review is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Moreover, we considered whether Management's Review includes the disclosures required by the Danish Financial Statements Act.
Based on the work we have performed, in our view, Management's Review is in accordance with the Consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management's Review.
Management is responsible for the preparation of Consolidated Financial Statements and Parent Company Financial Statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the Group's and the Parent Company'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 the Parent Company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the 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 ISAs and the additional requirements applicable in Denmark will 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 ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Group's and the Parent Company'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 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 or the Parent Company to cease to continue as a going concern.
We communicate with those charged with governance 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 those charged with governance 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 those charged with governance, 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.
Odense, 22 March 2017 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab CVR no 3377 1231
Gert Fisker Tomczyk Line Hedam
State Authorised Public Accountant State Authorised Public Accountant
ANNUAL REPORT 2016
SKAKO ANNUAL REPORT 2016 / 22
| DKK thousands | 2015 | ||
|---|---|---|---|
| Notes | |||
| 1 | Revenue | 308,059 | 319,136 |
| 2,3 | Production costs | (223,753) | (230,822) |
| Gross profit | 84,306 | 88,314 | |
| 3 | Distribution costs | (39,418) | (37,159) |
| 3,4,5 | Administrative expenses | (28,477) | (34,961) |
| Other income | 0 | 16 | |
| Operating profit (EBIT) | 16,411 | 16,210 | |
| 6 | Financial income | 58 | 487 |
| 6 | Financial expenses | (3,323) | (3,620) |
| Profit before tax | 13,146 | 13,077 | |
| 7 | Tax on profit for the year | 3,394 | 165 |
| Profit for the year | 16,540 | 13,242 | |
| Profit for the year attributable to SKAKO A/S shareholders | 16,540 | 13,242 | |
| 8 | Earnings per share (EPS), DKK | 5.36 | 4.3 |
| 8 | Diluted earnings per share (EPS), DKK | 5.36 | 4.3 |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Notes | ||
| Profit for the year | 16,540 | 13,242 |
| Other comprehensive income: | ||
| Items that have been or may subsequently be reclassified to | ||
| the income statement: | ||
| Foreign currency translation, subsidiaries | 496 | 903 |
| Value adjustments of hedging instruments | 153 | 169 |
| Tax on items that have been or may subsequently be reclassified | 0 | (38) |
| to the income statement | ||
| Other comprehensive income | 649 | 1,033 |
| Comprehensive income | 17,189 | 14,275 |
| Comprehensive income attributable to SKAKO A/S shareholders |
17,189 | 14,275 |
| DKK thousands | 2016 | 2015 | |
|---|---|---|---|
| Notes | |||
| Other intangible assets | 5,356 | 1,013 | |
| Intangible assets under development | 542 | 561 | |
| 9 | Intangible assets | 5,898 | 1,574 |
| Land and buildings | 34,488 | 35,721 | |
| Plant and machinery | 2,727 | 3,758 | |
| Operating equipment, fixtures and fittings | 1,116 | 1,968 | |
| Leasehold improvements | 58 | 1,265 | |
| Tangible assets under construction | 453 | 53 | |
| 10 | Tangible assets | 38,842 | 42,765 |
| Other receivables | 1,145 | 1,128 | |
| 11 | Deferred tax assets | 22,585 | 17,268 |
| Other non-current assets | 23,730 | 18,396 | |
| Total non-current assets | 68,470 | 62,735 | |
| 12 | Inventories | 43,425 | 48,258 |
| Trade receivables | 65,521 | 77,396 | |
| 13 | Work in progress for third parties | 48,830 | 29,939 |
| Income tax | 185 | 1,067 | |
| Other receivables | 7,593 | 8,922 | |
| Prepaid expenses | 1,586 | 2,107 | |
| Other investments | 74 | 74 | |
| Cash | 9,387 | 13,947 | |
| Current assets | 176,601 | 181,710 | |
| Assets | 245,071 | 244,445 |
| DKK thousands | 2016 | 2015 | |
|---|---|---|---|
| Notes | |||
| Share capital | 31,064 | 31,064 | |
| Foreign currency translation reserve | 747 | 251 | |
| Hedging reserve | 45 | (108) | |
| Retained earnings | 70,504 | 53,590 | |
| Total equity | 102,360 | 84,797 | |
| 14 | Bank loans and credit facilities | 9,724 | 12,116 |
| 14 | Financial leasing | 237 | 519 |
| 15 | Provisions | 3,584 | 2,924 |
| Non-current liabilities | 13,545 | 15,559 | |
| 15 | Provisions | 8,714 | 6,411 |
| 14 | Bank loans and credit facilities | 16,014 | 29,113 |
| 14 | Financial leasing | 282 | 2,637 |
| 13 | Prepayments from customers | 9,847 | 17,812 |
| Trade payables | 66,872 | 62,210 | |
| Income tax | 743 | 351 | |
| Other liabilities | 24,812 | 22,566 | |
| Deferred income | 1,882 | 2,990 | |
| Current liabilities | 129,166 | 144,090 | |
| Liabilities | 142,711 | 159,649 | |
| EQUITY AND LIABILITIES | 245,071 | 244,445 |
| DKK thousands | 2016 | 2015 | |
|---|---|---|---|
| Notes | |||
| Profit before tax | 13,146 | 13,077 | |
| 16 | Adjustments | 10,136 | 8,748 |
| Changes in receivables, etc. | (5,182) | (8,483) | |
| Change in inventories | 4,833 | 2,780 | |
| Change in trade payables and other liabilities, etc. | (2,166) | 11,451 | |
| Cash flow from operating activities before financial items and | 20,767 | 27,573 | |
| tax | |||
| Financial items received and paid | (3,265) | (3,133) | |
| Taxes paid | (649) | (586) | |
| Cash flow from operating activities | 16,853 | 23,854 | |
| Investment in intangible assets | (5,030) | (719) | |
| Investment in tangible assets | (819) | (526) | |
| Cash flow from investing activities | (5,849) | (1,245) | |
| Change in borrowings | (2,392) | 1,642 | |
| Cash flow from financing activities | (2,392) | 1,642 | |
| Change in cash and cash equivalents | 8,612 | 24,251 | |
| Cash and cash equivalents at 1 January | (15,094) | (39,755) | |
| Foreign exchange adjustment, cash and cash equivalents | (71) | 410 | |
| Cash and cash equivalents at 31 December | (6,553) | (15,094) |
| DKK thousands | Share capital | Foreign | Hedging | Retained | Equity |
|---|---|---|---|---|---|
| currency | reserve | earnings | |||
| translation | |||||
| reserve | |||||
| Equity at 1 January 2015 | 31,064 | (652) | (238) | 40,348 | 70,522 |
| Comprehensive income in 2015: | |||||
| Profit for the year | 13,242 | 13,242 | |||
| Other comprehensive income: | |||||
| Foreign currency translation | 903 | 903 | |||
| adjustments, subsidiaries | |||||
| Value adjustments of hedging | 168 | 168 | |||
| instruments | |||||
| Tax on other comprehensive | (38) | (38) | |||
| income | |||||
| Other comprehensive income | - | 903 | 130 | - | 1,033 |
| Comprehensive income, year | 0 | 903 | 130 | 13,242 | 14,275 |
| Equity at 31 December 2015 | 31,064 | 251 | (108) | 53,590 | 84,797 |
| DKK thousands | Share capital | Foreign currency translation reserve |
Hedging reserve |
Retained earnings |
Equity |
|---|---|---|---|---|---|
| Equity at 01 January 2016 | 31,064 | 251 | (108) | 53,590 | 84,797 |
| Comprehensive income in 2016: | |||||
| Profit for the year | 16,540 | 16,540 | |||
| Other comprehensive income: | |||||
| Foreign currency translation | 496 | 496 | |||
| adjustments, subsidiaries | |||||
| Value adjustments of hedging | 153 | 153 | |||
| instruments | |||||
| Tax on other comprehensive | 0 | 0 | |||
| income | |||||
| Other comprehensive income | - | 496 | 153 | - | 649 |
| Comprehensive income, year | - | 496 | 153 | 16,540 | 17,189 |
| Share-based payment, warrants | 220 | 220 | |||
| Disposal treasury shares | 154 | 154 | |||
| Equity at 31 December 2016 | 31,064 | 747 | 45 | 70,504 | 102,360 |
| Note No. | Description |
|---|---|
| 1 | Segment information and geographical revenue |
| 2 | Production costs |
| 3 | Staff costs |
| 4 | Share-based payment, warrants |
| 5 | Fee to parent company auditors appointed at the Annual General Meeting |
| 6 | Net financial items |
| 7 | Tax on profit for the year |
| 8 | Earnings per share (EPS) |
| 9 | Intangible assets |
| 10 | Tangible assets |
| 11 | Deferred tax |
| 12 | Inventory |
| 13 | Work-in-progress for third parties |
| 14 | Bank loans and credit facilities |
| 15 | Provisions |
| 16 | Adjustments, consolidated cash flow statement |
| 17 | Exchange rate- and liquidity risks and hedging and forward exchange contracts |
| 18 | Contractual liabilities, contingent liabilities and securities |
| 19 | Related parties |
| 20 | Events after the balance sheet date |
| 21 | Approval and publication |
| 22 | Group accounting policies |
Accounting policy
SKAKO operates in the following business segments: Concrete and Vibration.
Administrative functions such as Finance, HR, IT are shared by the divisions. The administrative functions are based in the individual countries, but supported by Group functions in Denmark.
Shared costs are allocated to business segments based on assessment of usage.
Revenue is presented by geographical regions. Segment income and costs include transactions between business areas. The transactions are eliminated in connection with the consolidation. Revenue is recognised in the income statement on delivery and passing of the risk to the buyer, and when the revenue can be measured reliably.
Work-in-progress for third parties is recognised in revenue based on the value of the work completed at the balance sheet date whereby the revenue corresponds to the sales value of the year's completed work based on costs incurred as percentage of the total estimated costs (percentage of completion method).
Revenue from the supply of services and spare parts are recognised as revenue in line with the services agreed being supplied so that the revenue corresponds to the sales value of the work completed in the financial year.
All intercompany transactions are made on market terms.
Segment assets and liabilities comprise items directly attributable to a segment and items that can be allocated to a segment on a reasonable basis.
| DKK thousands | Concrete plants | Vibration | Not distributed | Eliminations | Group total |
|---|---|---|---|---|---|
| 2016 | equipment | including parent | |||
| company | |||||
| External revenue | 150,794 | 157,265 | - | - | 308,059 |
| Internal revenue | 246 | 3,901 | - | (4,147) | - |
| Total revenue | 151,040 | 161,166 | (4,147) | 308,059 | |
| Depreciations | (2,458) | (832) | (565) | - | (3,855) |
| Operating profit (EBIT) | 5,758 | 13,030 | (2,377) | - | 16,411 |
| Financial income | 336 | 116 | 175 | (569) | 58 |
| Financial expenses | (1,710) | (1,509) | (673) | 569 | (3,323) |
| Result before tax | 4,384 | 11,636 | (2,874) | - | 13,146 |
| Tax on profit for the year | 2,446 | 947 | 1 | - | 3,394 |
| Profit for the year | 6,830 | 12,583 | (2,873) | - | 16,540 |
| Segment non-current assets | 61,981 | 3,944 | 2,545 | - | 68,470 |
| Segment assets | 142,982 | 114,829 | 6,270 | (19,010) | 245,071 |
| Segment liabilities | 66,120 | 77,733 | 17,868 | (19,010) | 142,711 |
| Investments of intangible and tangible asset | 5,171 | 678 | - | - | 5,849 |
| Average number of employees | 98 | 85 | - | - | 183 |
| DKK thousands | Concrete plants | Vibration | Not distributed | Eliminations | Group total |
|---|---|---|---|---|---|
| 2015 | equipment | including parent | |||
| company | |||||
| External revenue | 168,743 | 150,393 | - | - | 319,136 |
| Internal revenue | 709 | 4,433 | - | (5,142) | - |
| Total revenue | 169,452 | 154,826 | - | (5,142) | 319,136 |
| Depreciations | (3,679) | (836) | (1,449) | 36 | (5,929) |
| Operating profit (EBIT) | 2,525 | 15,023 | (1,338) | - | 16,210 |
| Financial income | 563 | 31 | 1,076 | (1,183) | 487 |
| Financial expenses | (1,489) | (1,818) | (1,496) | 1,183 | (3,620) |
| Result before tax | 1,599 | 13,236 | (1,758) | - | 13,077 |
| Tax on profit for the year | 995 | (2,266) | 1,436 | - | 165 |
| Profit for the year | 2,594 | 10,970 | (322) | - | 13,242 |
| Segment non-current assets | 55,317 | 38,743 | 2,733 | (7,803) | 62,735 |
| Segment assets | 99,863 | 143,019 | 9,336 | (7,803) | 244,445 |
| Segment liabilities | 63,825 | 82,726 | 20,473 | (7,376) | 159,648 |
| Investments in intangible and tangible asset | 606 | 482 | 157 | - | 1,245 |
| Average number of employees | 98 | 82 | - | - | 180 |
Production costs are costs incurred to generate revenue. Production consists of raw materials, consumables, production staff, research and development cost as well as maintenance of and depreciation, amortisation and impairment losses on property, plant and equipment and intangible assets used in the production process.
Research costs are always recognised in the Income Statement in step with the incurrence of such costs. Development costs include all costs not satisfying capitalisation criteria, but incurred in connection with development, prototype construction and development of new business concepts.
Direct and indirect research and development incentives in terms of tax incentives and other grants and subsidy schemes for research and development are recognised when there is reasonable certainty that the conditions for such grants are satisfied and that they will be awarded. Grants are offset against research and development costs.
The obsolescence provision for inventories is based on the expected sales forecast. Sales forecasts are based on the Management's expectations of market conditions and trends, and the obsolescence provision is subject to changes in these assumptions.
The measurement and classification of government grants related to research and development is based on Management´s assessment. The incentive schemes applied does not require positive taxable income and hence government grants received has been accounted for in accordance with IAS 20.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Cost of goods sold during the year | 144,013 | 158,044 |
| Write down of inventories for the year, net | (722) | 3,150 |
| Research and development costs* | 13,599 | 289 |
| Government grants | (1,150) | - |
| Production staff costs and other costs | 68,013 | 69,339 |
| Total production costs | 223,753 | 230,822 |
*Our definition of research and development costs has been extended in 2016.
Staff costs consist of direct wages and salaries, remuneration, pension, share-based payments, training, etc.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Wages, salaries and other remuneration | 90,184 | 81,806 |
| Contribution plans and other social security costs, etc. | 15,449 | 15,956 |
| Share-based payment, warrants | 220 | 0 |
| Other staff costs | 2,176 | 2,483 |
| 108,029 | 100,245 | |
| The amounts are included in the items: | ||
| Production costs | 67,281 | 62,363 |
| Distribution costs | 22,717 | 21,671 |
| Administrative costs | 18,031 | 16,211 |
| 108,029 | 100,245 |
The average number of employees was 183 (2015: 180).
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Board of Directors and Audit committee | 1,100 | 1,037 |
| Executive management | ||
| Wages, salaries and other remuneration | 4,355 | 4,682 |
| Contribution plans and other social security costs, etc. | 735 | 751 |
| Share-based payment, warrants | 131 | 0 |
| 5,221 | 5,433 |
The Executive management have been granted warrants to purchase 60,000 shares in the company, cf. note 4.
The Executive managements contracts are based on normal conditions and one Director has a change of control clause.
Plans classified as equity-settled warrants are measured at fair value at grant date of allocation and are recognised in the income statement as staff costs in the period in which the final entitlement to the warrants is attained, as well as an inflow directly in equity.
In connection with initial recognition of warrants, an estimate is made of the number of warrants to which Group Executive Management and key staff are expected to become entitled. Subsequent adjustment is made for changes in the estimate of the number of warrant entitlements so the total recognition is based on the actual number of warrant entitlements.
The fair value of the warrants allocated is estimated by means of the Black & Scholes model. The calculation takes into account the terms and conditions under which the share warrants are allocated.
In 2016, the Executive Management and other key employees in the Group have been granted warrants to purchase 100,000 shares in the company at a set price (strike price). The share-based program has vesting conditions under which Management must stay employed for three years to receive the remuneration.
At 31 December 2016, the remaining average contractual life of share based remuneration program was less than three years.
| Granted | Strike | Exercise | |
|---|---|---|---|
| this | price | period | |
| year | |||
| Executive management | 60,000 | 72.35 | July 2019 |
| Other key employees | 40,000 | 72.35 | July 2019 |
| Total | 100,000 | 72.35 |
The recognised fair value of warrants in the consolidated income statement amounts to DKK 220k.
The calculation of the fair value of warrants at the time of allocation is based on the following assumptions:
*The expected volatility is based on the historical volatility of the SKAKO shares in the preceding 36 months.
| Granted 18 July | |
|---|---|
| 2016 | |
| Average price per share | 62.5 |
| Annual hurdle rate | 5% |
| Strike price per share | 72.35 |
| Expected volatility* | 42.61% |
| Risk-free interest rate | -0.53% |
| Number of shares allocated | 100,000 |
| Fair value per warrant, DKK | 14.52 |
| Total fair value, DKK thousands | 1,452 |
In addition to the statutory audit, PwC, the Group auditors appointed at the Annual General Meeting, provides other assurance engagements and other consultancy services to the Group.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| PwC | ||
| Statutory audit | 446 | 554 |
| Other assurance engagements | 0 | 111 |
| Tax and indirect taxes consultancy | 37 | 140 |
| Other services | 385 | 43 |
| 868 | 848 | |
| Other audit firms | ||
| Statutory audit | 228 | 239 |
| Other assurance engagements | 0 | 0 |
| Tax and indirect taxes consultancy | 25 | 61 |
| Other services | 40 | 9 |
| 293 | 309 |
Net financial items mainly consist of interest income and interest expenses and also include interest on lease debt as well as realised and unrealised foreign exchange gains and losses. Interest income and interest expenses are accrued based on the principal amount and the effective interest rate.
The effective interest rate is the discount rate used for discounting expected future payments attaching to the financial asset or financial liability in order for the present value to match the carrying amount of such asset or liability.
| DKK thousands 2016 2015 Interest on cash and bank deposits 58 43 Financial income from financial assets not measured at fair value in the income statement 58 43 Gains on assets held for sale 0 8 Foreign exchange gains, net 0 436 Financial income 58 487 Interest on bank debt (1,409) (3,488) Interest on lease debt (91) (132) Financial expenses on financial liabilities not measured at fair value in the income statement (1,500) (3,620) Foreign exchange losses, net (796) 0 Other financial expenses (1,027) 0 Financial expenses (3,323) (3,620) |
|||
|---|---|---|---|
| Net financial items | (3,265) | (3,133) |
Tax for the year comprises current tax and changes in deferred tax and is recognised in the Income Statement with the share attributable to the profit for the year, and in the other comprehensive income with the share attributable to items recognised in other comprehensive income. Exchange rate adjustments of deferred tax are included as part of the year's adjustments of deferred tax.
Current tax comprises tax calculated on the basis of the expected taxable income for the year using the applicable tax rates for the financial year and any adjustments of taxes for previous years.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Current tax on the profit for the year | (1,923) | (599) |
| Adjustment of current tax, prior years | 0 | 0 |
| Change in deferred tax | 5,317 | 764 |
| Adjustment of deferred tax, prior years | 0 | 0 |
| Impact on changes in corporate tax rates | 0 | 0 |
| Tax for the period | 3,394 | 165 |
| Tax using the Danish corporate tax rates | (2,882) | (3,073) |
| Effect of tax rates in foreign jurisdictions | (1,701) | (222) |
| Impact in changes in corporate tax rates | 0 | 8 |
| Tax assets not previously recognised | 7,560 | 3,389 |
| Permanent differences | 0 | 63 |
| Other items | 417 | 0 |
| 3,394 | 165 |
Earnings per share (EPS) and diluted earnings per share (EPS, diluted) are measured according to IAS 33. Non-diluted earnings per share is calculated as the profit for the year divided by the total average number of shares outstanding during the year (shares issued adjusted for treasury shares).
Diluted earnings per share is calculated as profit for the year divided by the average number of shares in circulation.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Earnings | ||
| Profit for the year | 16,540 | 13,242 |
| Number of shares, average | ||
| Number of shares issued | 3,106,408 | 3,106,408 |
| Adjustment for treasury share | (22,567) | (26,781) |
| Average number of shares | 3,083,841 | 3,079,627 |
| Earnings per share (EPS) | 5.36 | 4.30 |
| Earnings per share, diluted | 5.36 | 4.30 |
Accounting policy
Other intangible assets with a finite useful life are measured at cost less accumulated amortisation and impairment losses.
Development projects, for which the technical rate of utilisation, sufficient resources and a potential future market or application in the Group can be demonstrated and which are intended to be manufactured, marketed or used, are recognised as completed development projects. This requires that the cost can be determined and it is sufficient certain that the future earnings or the net selling price will cover production, sales and administrative costs plus the development costs. Other development costs are recognised in the income statement when the costs are incurred. Development costs consist of salaries and other costs that are directly attributable to development activities.
Amortisation of completed development projects is charged on a straight-line basis during their estimated useful life. Development projects are written down for impairment to recoverable amount, if lower. Development projects in progress are tested for impairment at least once a year.
The amortisation profile is systematically based on the expected useful life of the assets, taking into account the remaining agreement period and consumption (unit for production method) at the time of implementation. The basis of amortisation is reduced by impairment, if any.
Amortisation takes place systematically over the estimated useful life of the assets which is as follows:
Management estimates the useful life of software systems. The asset is then depreciated and amortised systematically over the expected future useful life.
| DKK thousands | Intangible assets under development |
Development projects | Software | Total |
|---|---|---|---|---|
| Cost at 1 January 2016 | 561 | 1,537 | 17,914 | 20,012 |
| Foreign exchange adjustments | - | (6) | (12) | (18) |
| Investments | 542 | - | 4,488 | 5,030 |
| Disposals | - | - | (1,531) | (1,531) |
| Transferred between categories | (561) | - | 561 | - |
| Transferred from tangible assets | - | 7 | 7 | |
| Cost at 31 December 2016 | 542 | 1,531 | 21,427 | 23,500 |
| Amortisation and impairment at 1 January 2016 |
- | 1,537 | 16,901 | 18,438 |
| Foreign exchange adjustment | - | (6) | (32) | (38) |
| Disposals | - | - | (1,531) | (1,531) |
| Amortisation | - | - | 733 | 733 |
| Amortisation and impairment at 31 December 2016 |
- | 1,531 | 16,071 | 17,602 |
| Carrying amount at 31 December 2016 |
542 | - | 5,356 | 5,898 |
| DKK thousands | Intangible assets under development |
Development projects | Software | Total |
|---|---|---|---|---|
| Cost at 1 January 2015 | - | 1,518 | 23,094 | 24,612 |
| Foreign exchange adjustments | - | 19 | 8 | 27 |
| Investments | 561 | - | 158 | 719 |
| Disposals | - | - | (5,906) | (5,906) |
| Transferred between categories | - | - | 560 | 560 |
| Cost at 31 December 2015 | 561 | 1,537 | 17,914 | 20,012 |
| Amortisation and impairment at 1 January 2016 |
- | 1,137 | 22,182 | 23,319 |
| Foreign exchange adjustment | - | - | 6 | 6 |
| Disposals | - | - | (5,906) | (5,906) |
| Amortisation | - | 400 | 619 | 1,019 |
| Amortisation and impairment at 31 December 2015 |
- | 1,537 | 16,901 | 18,438 |
| Carrying amount at 31 December 2015 |
561 | 0 | 1,013 | 1,574 |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| The amortisation is included in the items: | ||
| Production costs | 310 | 487 |
| Distribution costs | 114 | 195 |
| Administrative costs | 309 | 337 |
| 733 | 1,019 | |
Accounting policy
Land and buildings, plant and machinery and other facilities, operating equipment and tools and equipment are measured at cost less accumulated depreciation and impairment losses.
Depreciation is charged on a straight-line basis over the estimated useful life of the assets until they reach the estimated residual value. Estimated useful life is as follows:
Assets with an acquisition value of less than DKK 50,000 or expected life of less than one year are expensed in the Income Statement at acquisition.
Newly acquired assets are depreciated from the time they are available for use.
Assets held under a finance lease are measured in the balance sheet at fair value or the present value of future lease payments at the time of entering the contract, if lower. In calculating the present value, the internal interest rate of the lease agreement is used as a discounting factor or as the Group's alternative borrowing rate are depreciated like other tangible assets of the Group.
The capitalised residual lease commitment is recognised in the balance sheet as debt whilst the interest component of the lease payment is recognised in the income statement as a financial item.
For operating leases, the lease payments are recognised in the income statement on a straight-line basis over the lease period.
Management makes an estimate of the useful life and residual values. The asset is then depreciated and amortized systematically over the expected future useful life.
| DKK thousands | Land and building |
Plant and machinery |
Operating equipment, fixtures and fittings |
Leasehold improvements |
Tangible assets in course of construction |
Total |
|---|---|---|---|---|---|---|
| Cost at 1 January 2016 | 56,798 | 22,992 | 17,750 | 6,773 | 547 | 104,860 |
| Foreign exchange adjustments | (201) | (71) | (37) | (9) | (317) | |
| Investments | - | 64 | 277 | 77 | 401 | 818 |
| Disposals | - | - | (1,717) | (2,691) | (495) | (4,903) |
| Transferred between categories | 97 | 22 | (119) | - | - | - |
| Transferred to intangible assets | - | - | (7) | - | - | (7) |
| Cost at 31 December 2016 | 56,694 | 23,007 | 16,147 | 4,150 | 453 | 100,451 |
| Depreciation and impairment at 1 January 2016 Foreign exchange adjustments |
21,077 (75) |
19,235 (55) |
15,781 (25) |
5,508 (6) |
494 - |
62,095 (161) |
| Disposals | - | - | (1,503) | (1,450) | (494) | (3,447) |
| Depreciation | 1,204 | 1,100 | 778 | 40 | - | 3,122 |
| Transferred between categories | - | - | - | - | - | - |
| Depreciation and impairment at 31 December 2016 |
22,206 | 20,280 | 15,031 | 4,092 | - | 61,609 |
| Carrying amount at 31 December 2016 |
34,488 | 2,727 | 1,116 | 58 | 453 | 38,842 |
| Hereof finance leases | 304 | 304 |
| DKK thousands | Land and building |
Plant and machinery |
Operating equipment, fixtures and fittings |
Leasehold improvements |
Tangible assets in course of construction |
Total |
|---|---|---|---|---|---|---|
| Cost at 1 January 2015 | 56,030 | 23,573 | 17,971 | 6,423 | 1,388 | 105,385 |
| Foreign exchange adjustments | 127 | 44 | 136 | 9 | 4 | 320 |
| Investments | 328 | - | 168 | - | 30 | 526 |
| Disposals | - | (627) | (184) | - | - | (811) |
| Transferred between categories | - | - | (341) | 341 | - | - |
| Transferred to intangible assets | 313 | - | - | - | (874) | (560) |
| Cost at 31 December 2015 | 56,798 | 22,992 | 17,750 | 6,773 | 547 | 104,860 |
| Depreciation and impairment at 1 January 2015 |
19,249 | 18,496 | 14,933 | 4,495 | - | 57,173 |
| Foreign exchange adjustments | 45 | 31 | 103 | 6 | - | 185 |
| Disposals | - | - | (171) | - | - | (171) |
| Depreciation | 1,783 | 708 | 1,170 | 753 | 494 | 4,908 |
| Transferred between categories | - | - | (254) | 254 | - | - |
| Depreciation and impairment at 31 December 2015 |
21,077 | 19,235 | 15,781 | 5,508 | 494 | 62,095 |
| Carrying amount at 31 December 2015 |
35,721 | 3,757 | 1,969 | 1,265 | 53 | 42,765 |
| Hereof finance leases | - | - | 590 | - | - | 590 |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| The depreciation is included in the items: | ||
| Production costs | 1,891 | 2,322 |
| Distribution costs | 789 | 1,193 |
| Administrative costs | 442 | 1,393 |
| 3,122 | 4,908 |
Deferred tax is calculated using the balance sheet liability method on all temporary differences between the carrying amounts for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is calculated based on the applicable tax rates for the individual financial years. The effect of changes in the tax rates are stated in the income statement unless they are items previously entered in the statement of other comprehensive income.
A deferred tax liability is made to cover re-taxation of losses in foreign enterprises if shares in the enterprises concerned are likely to be sold and to cover expected additional future tax liabilities related to financial year or previous years. No deferred tax liabilities regarding investments in subsidiaries are recognised if the shares are unlikely to be sold in the short term.
The tax value of losses that are expected with adequate certainty to be available for utilisation against future taxable income in the same legal tax unit and jurisdiction is included in the measurement of deferred tax.
SKAKO A/S is jointly taxed with all Danish subsidiaries, SKAKO A/S being the administrator of the Danish joint taxation.
All the Danish subsidiaries provide for the Danish tax based on the current rules with full distribution. Recognition of deferred tax assets and tax liabilities is made in the individual Danish enterprises based on the principles described above. The jointly taxed Danish enterprises are included in the Danish tax payable on account scheme.
If companies in the Group have deferred tax liabilities, they are valued independently of the time when the tax, if any, becomes payable.
Deferred tax assets, including the tax value of any tax losses allowed for carry forward, are recognised in the balance sheet at the estimated realisable value of such assets, either by a set-off against a deferred tax liability or by a net asset to be set off against future positive taxable income. At the balance sheet date, an assessment is made as to whether it is probable that sufficient taxable income will be available in the future against which the deferred tax asset can be utilised. Deferred tax on temporary differences between the carrying amounts and the tax values of investments in subsidiaries is recognised, unless the Parent is able to control the time of realisation of such deferred tax, and it is probable that such deferred tax will not be realised as current tax in the foreseeable future. Deferred tax is recognised in respect of eliminations of intra-Group profits and losses.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Deferred tax recognised in the balance sheet: | ||
| Deferred tax assets | 22,585 | 17,268 |
| Deferred tax liabilities | - | - |
| Deferred tax, net 31 December | 22,585 | 17,268 |
| Deferred tax, net at 1 January | 17,268 | 15,798 |
| Foreign currency translation adjustments | (5) | - |
| Changes in deferred tax | 5,322 | 1,470 |
| Deferred tax, net at 31 December | 22,585 | 17,268 |
| Deferred tax assets: | ||
| Intangible assets | 2,112 | 214 |
| Property, plants and equipment | 10,179 | 14,782 |
| Inventories | 838 | 2,359 |
| Receivables | - | (4,248) |
| Provisions | 1,346 | 1,847 |
| Tax losses | 8,114 | 2,314 |
| Other items | (4) | - |
| 22,585 | 17,268 | |
| Deferred tax assets not recognised: | ||
| Intangible assets | 2,095 | 5,795 |
| Property, plants and equipment | 928 | 395 |
| Inventories | 883 | - |
| Provisions | 1,151 | 126 |
| Tax losses | 33,077 | 52,272 |
| 38,134 | 58,588 |
Tax losses carried forward are not subject to time limitation. All recognised deferred tax assets is expected to be offset against positive taxable income within a 3-5 years period.
Raw materials, work-in-progress and goods for resale are measured at cost according to the FIFO principle (according to which the most recently purchased items are considered to be in stock) or at their net realisable value, whichever is lower.
Group-manufactured products and work in progress are measured at the value of direct cost, direct payroll costs, consumables and a proportionate share of indirect production costs (IPO), which are allocated on the basis of the normal capacity of the production facility. IPO include the proportionate share of capacity costs directly relating to Group-manufactured products and work in progress.
The obsolescence provision for inventories is based on the expected sales forecast. Sales forecasts are based on the Management's expectations of market conditions and trends, and the obsolescence provision is subject to changes in these assumptions.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Raw materials and consumables | 19,760 | 3,544 |
| Work-in-progress | 4,147 | 17,349 |
| Finished goods and goods for resale | 19,518 | 27,365 |
| Inventories net of write downs at 31 December | 43,425 | 48,258 |
| Carrying amount of inventories at fair value after deduction of costs to sell | 0 | 0 |
| Included in Income Statement under production costs: | ||
| Write down of inventories for the year, net | (722) | 3,150 |
| Costs of goods sold during the year | 144,013 | 158,044 |
Write downs for the year are shown net as breakdown into reversed write downs and new write downs are not possible.
Accounting policy
Work-in-progress for third parties is recognised in revenue based on the value of the work completed at the balance sheet date. The revenue corresponds to the sales value of the year's completed work based on costs incurred as a percentage of the total estimate costs (percentage of completion method).
The stage of completion for the individual project is calculated as the ratio between the cost incurred at the balance sheet date and the total estimated cost to complete the project. In some projects, where cost estimates cannot be used as a basis, the ratio between completed subactivities and the total project is used instead. All direct and indirect costs that relate to the completion of the contract are included in the calculation.
When invoicing on account exceeds the value of the work completed, the liability is recognised as work-in-progress for third parties under short-term liabilities.
If projects are expected to be loss-making, the loss is recognised immediately in the income statement. Costs not yet incurred are provided for as other provisions. Provisions are based on individual assessment of the estimated loss until the projects are completed.
Total expected costs related to work-in-progress for third parties are partly based on estimates, as they include provisions for unforeseen cost deviations in future supplies of raw materials, subcontractor products and services plus construction and handing over. Provisions for warranties on work-in-progress for third parties are based on Management estimates for each project, while taking contract obligations into account.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Total costs incurred | 88,352 | 88,124 |
| Profit recognised as income, net | 31,217 | 22,564 |
| Work-in-progress for third parties | 119,569 | 110,688 |
| Invoicing on account to customers | (80,586) | (98,561) |
| Net work-in-progress for third parties | 38,983 | 12,127 |
| Of which work-in-progress for third parties is stated under assets | 48,830 | 29,939 |
| and prepayments from customers | (9,847) | (17,812) |
| Net work-in-progress for third parties | 38,983 | 12,127 |
Work-in-progress for third parties consists of all open projects at 31 December including cost and profit recognised in prior years.
Debt to credit institutions is recognised at the date of borrowing at the proceeds received less transaction costs. For subsequent periods, financial liabilities are measured at amortised cost in order for the difference between proceeds and the nominal value to be recognised as a financial expense over the term of the loan.
| DKK thousands | 0-1 year | 1-5 years | More than 5 years |
Total | Carrying amount |
Weighted average effective interest rate |
|---|---|---|---|---|---|---|
| 2016 | ||||||
| Cash and cash equivalents | 9,387 | - | - | 9,387 | 9,387 | |
| Interest-bearing asset | 9,387 | - | - | 9,387 | 9,387 | 0% |
| Finance lease debt | (282) | (237) | - | (519) | (519) | |
| Debt to credit institutions | (2,067) | (8,706) | (1,018) | (11,791) | (11,791) | 2.4% |
| Short term bank facilities | (13,947) | - | - | (13,947) | (13,947) | 2.0% |
| Interest-bearing liabilities | (16,296) | (8,943) | (1,018) | (26,257) | (26,257) | 2.2% |
| Net interest-bearing debt | (6,909) | (8,943) | (1,018) | (16,870) | (16,870) | 2.2% |
| 2015 | ||||||
| Cash and cash equivalents | 13,947 | - | - | 13,947 | 13,947 | |
| Interest-bearing asset | 13,947 | - | - | 13,947 | 13,947 | 0% |
| Finance lease debt | (2,637) | (519) | - | (3,157) | (3,157) | |
| Debt to credit institutions | (2,112) | (8,706) | (3,406) | (14,224) | (14,224) | 2.4% |
| Short term bank facilities | (27,001) | - | - | (27,001) | (27,001) | 5.6% |
| Interest-bearing liabilities | (31,750) | (9,225) | (3,406) | (44,382) | (44,382) | 5.3% |
| Net interest-bearing debt | (17,803) | (9,225) | (3,406) | (30,435) | (30,435) | 5.3% |
In 2016 we have renegotiated conditions with our primary financial institution which have resulted in interest rates reduced to more than half compared to last year.
Interest-bearing debt broken down by currency: 45% in EUR (36% in 2015), 21% in US dollars (15% in 2015), 21% in British pound (10% in 2015), 11% in Danish kroner (37% in 2015) and 2% in other currencies (2% in 2015).
The undiscounted cash flows essentially correspond to the carrying amounts.
Based on the Group's net debt at the end of the 2016 financial year, a rise of 1 percentage point in the general interest rate level will cause an increase in consolidated annual interest expenses before tax of approximately DKK 263 thousand (DKK 450 thousand in 2015).
Accounting policy
Provisions are recognised when the Group, due to an event occurring before or at the balance sheet date, has a legal or constructive obligation and it is probable that financial benefits must be waived to settle the obligation. Provisions are measured according to Management's best estimate of the amount whereby the obligation is expected to be settled.
Provisions for warranty claims are estimated on a project-by-project basis based on historically realised cost related to claims in the past. The provision covers estimated own costs of completion, subsequent warranty supplies and unsettled claims from customers or subcontractors.
Provisions regarding disputes and lawsuits are based on Management's assessment of the likely outcome settling the cases based on the information at hand at the balance sheet date.
Management assesses provisions and the likely outcome of pending and probable lawsuits, etc. on an on-going basis. The outcome depends on future events, which are by nature uncertain. In assessing the likely outcome of lawsuits etc., Management bases its assessment on internal and external legal assistance and established precedents.
Warranties and other provisions are measured on the basis of empirical information covering several years. Together with estimates by Management of future trends, this forms the basis for warranty provisions and other provisions. Long-term warranties and other provisions, discounted to net present value takes place based on the future cash flow and discount rate expected by Management
| DKK thousands | 2016 | ||
|---|---|---|---|
| Warranties | Other provisions | Total | |
| Provisions at 1 January | 4,202 | 5,133 | 9,335 |
| Foreign exchange adjustments | 79 | (43) | 36 |
| Additions | 2,050 | 5,451 | 7,501 |
| Used | (2,800) | (78) | (2,878) |
| Reversals | (15) | (1,681) | (1,696) |
| Provisions at 31 December | 3,516 | 8,782 | 12,298 |
| The maturity of provisions is specified as follows: |
|||
| Current liabilities | 2,182 | 6,532 | 8,714 |
| Non-current liabilities | 1,334 | 2,250 | 3,584 |
| 3,516 | 8,782 | 12,298 |
| DKK thousands | 2015 | ||
|---|---|---|---|
| Warranties | Other provisions | Total | |
| Provisions at 1 January | 4,778 | 4,689 | 9,467 |
| Foreign exchange adjustments | _- | - | - |
| Additions | 1,284 | 1,138 | 2,422 |
| Used | (58) | (694) | (752) |
| Reversals | (1,802) | - | (1,802) |
| Provisions at 31 December | 4,202 | 5,133 | 9,335 |
| The maturity of provisions is specified as follows: |
|||
| Current liabilities | 3,360 | 3,051 | 6,411 |
| Non-current liabilities | 842 | 2,082 | 2,924 |
| 4,202 | 5,133 | 9,335 |
Provisions for warranty covers a 1-3 year warranty period.
Other provisions relate to provisions for disputes etc. and are essentially expected to be applied within the next five years.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Amortisation and depreciation | 3,855 | 5,927 |
| Change in provisions | 2,963 | (136) |
| Financial items received and paid | 3,265 | 3,133 |
| Other | 53 | (176) |
| 10,136 | 8,748 |
Risk management activities in the SKAKO Group first and foremost focus on financial risks to which the Company is fairly likely to be exposed. In connection with the preparation of the Group's strategic, budgetary and annual plans, the Board of Directors considers the risks identified in these activities.
Financial risk management concentrates on identifying risks in respect of exchange rates, credit and liquidity with a view to protecting the Group against potential losses and ensuring that Management's forecasts for the current year are only to a limited extent affected by changes or events in the surrounding world – be the changes in exchange rates or in interest rates. It is Group policy to exclusively hedge financial risks arising from our commercial activities and not to undertake any financial transactions of a speculative nature.
With 90% of the Group´s sales being invoiced in foreign currencies, reported revenue is affected by movements in the Group´s trading currencies. The Group seeks to hedge against such exchange rate risks by seeking to match positive and negative cash flows in the main currencies as much as possible.
Below is a sensitivity analysis in respect of exchange rates, given a positive change of 5% in the currencies with the highest exposures. The estimate has been provided on a non-hedged basis.
| DKK thousands | Net position | Change in currency |
2016: Potential impact on P/L and |
2015: Potential impact on P/L and |
|---|---|---|---|---|
| equity | equity | |||
| EUR | (8,445) | 5% | (422) | (196) |
| USD | 9,494 | 5% | 475 | 44 |
| GBP | 4,566 | 5% | 228 | 103 |
The Group aims at having sufficient cash resources to be able to take appropriate steps in case of unforeseen fluctuations in cash outflows. We have access to suitable undrawn credit facilities and the liquidity risk is therefore considered to be low. In 2016 the Group has not defaulted in any loan agreements.
The Group's credit risks relate primarily to trade receivables. For large projects we have a signed letter of credit from the customer's bank before we undertake any work. Our remaining customer base is fragmented so credit risks in general only involve minor losses on individual customers. Overall, we therefore estimate that we have no major credit exposure on Group level.
The maximum credit risk relating to receivables matches the carrying amount of such receivables.
Trade receivables can be allocated as follows:
| DKK thousands | 2016 | 2015 | ||
|---|---|---|---|---|
| Europe | 30,746 | 46,410 | ||
| United States | 6,949 | 5,802 | ||
| Africa | 21,704 | 22,827 | ||
| Other | 6,122 | 2,357 | ||
| 65,521 | 77,396 | |||
| Aging and provisions for bad debt, 31.12, gross: | Gross | Provision | Gross | Provision |
| Not due | 47,835 | - | 52,130 | - |
| Due 0-30 days | 8,080 | - | 13,395 | 29 |
| Due 31-120 days | 3,817 | 13 | 7,947 | 12 |
| Due 121-365 days | 6,011 | 706 | 4,200 | 362 |
| Due more than 1 year | 1,765 | 1,268 | 3,434 | 3,306 |
| 67,508 | 1,987 | 81,106 | 3,709 |
Irrevocable operational leasing payments are as follows:
| DKK thousands | 2016 | 2015 |
|---|---|---|
| 0-1 year | 1,564 | 2,067 |
| 1-5 years | 4,796 | 2,920 |
| More than 5 years | 342 | 948 |
| 6,702 | 5,935 |
The Group leases operating equipment on operational leasing contracts.
The typical leasing period is a period of three to six years with the warrant of prolongation upon expiry of the period. No leasing contracts include conditional leasing payments.
The company's financial institutions have provided bank guarantees for consignments and prepayments of a total of DKK 41.3 million. (2015: 9.2 million DKK)
Towards the company's primary financial institution, a company deposit of DKK 50 million (2015: DKK 50 million) has been provided with deposit in unsecured claims, stocks, tangible assets and intangible rights.
There is a 12 month rent commitment related to the building in Denmark. The minimum rent liability amounts to DKK 1.6 million (2015: DKK 1.6 million).
The Danish subsidiaries of the Group are liable for tax of the jointly taxed income, etc. of the Group. SKAKO A/S is the administrative company of the joint taxation.
SKAKO A/S has no related parties with a controlling interest. Given its share of ownership, Lind Invest ApS may be considered to have significant influence.
The company's related parties comprise the company's Executive management, Board of Directors these persons' related family members. Related parties also comprise companies in which the before-mentioned persons have controlling or common control. In addition, related parties comprise the subsidiaries cf. page 61 in which SKAKO A/S has controlling or significant influence.
There have been no events that materially affect the assessment of this Annual Report 2016 after the balance sheet date and up to today.
At the Board meeting on 22 March 2017, our Board of Directors approved this Annual Report 2016 for publication. The report will be presented to the shareholders of SKAKO A/S for adwarrant at the annual general meeting on 18 April 2017.
The Group's general accounting policies are described below. In addition to this, specific accounting policies are described in each of the individual notes to the consolidated financial statements.
General
The consolidated financial statements are presented in compliance with International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for annual reports published by reporting class D (listed) companies cf. the Danish executive order on IFRS issued in compliance with the Danish Financial Statements Act. The registered office of SKAKO A/S is in Denmark.
The consolidated financial statements are presented in Danish kroner (DKK), which is the presentation currency for Group activities and the functional currency for the Parent. The consolidated financial statements are presented on the basis of historical cost, except for share-based remuneration and financial assets classified as assets available for sale, which are measured at their fair value.
The financial statements for the Parent as well as the Parent's accounting policies are presented from the consolidated financial statements and are shown on the second last pages of this Annual Report 2016.
The accounting policies remain unchanged for the consolidated financial statements compared to 2015, with the exception of the implementation of new and amended standards as described below. Also, insignificant reclassifications in the comparative figures for 2015 have been made.
The Group has adopted all new, amended and revised accounting standards and interpretations as published by the IASB and adopted by the EU effective for the accounting period beginning on 1 January 2016. None of these new, updated and amended standards and interpretations resulted in any changes to the accounting policies for the Group or had any significant impact on the consolidated financial statements for 2016.
Revised and new standards and interpretations issued, but not yet effective or approved by the EU at the time of publication of this Annual Report 2016, have not been incorporated into this report.
Issued in May 2014, IFRS 15 Revenue from Contracts with Customers establishes a single comprehensive model for entities to be used in accounting for revenue arising from contracts with customers. IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue and related interpretations when it becomes effective. Management is in the process of evaluating the impact and prospects of the standard. It is the Management's expectation that the new standard will have some impact on the timing of revenue recognition, on net or gross recognition of principal and agent relationships and on the disclosure of revenue. The value of the impact of these changes has not been estimated yet, but is at this stage expected to have some, but not material impact. IFRS 15 will take effect on 1 January 2018.
IFRS 9 Financial Instruments was issued in 2009 and has been revised several times since then. Management anticipates that the future application of IFRS 9 may impact the Group's reporting on and disclosure of financial instruments and hedging instruments. Management is in the process of evaluating the impact and prospects of the revised standard and the warrant to hedge net positions (i.e. EBIT) instead of hedging revenue. The new rules on provisions for loans and receivables are expected to have very limited impact on our financial statements. IFRS 9 will take effect on 1 January 2018.
Issued in January 2016, IFRS 16 Leases requires lessees to recognise nearly all leases on the balance sheet. Management is in the process of evaluating the expected future impact of the application of IFRS 16 on the amounts reported and disclosed by the Group. Management expects the implementation of this standard to have a limited impact on the recognition of tangible assets and financial debt on the balance sheet. The standard is also expected to have a limited impact on the classification of expenses in the income statement, the classification of cash flows in the cash flow statement as well as the related key figures. IFRS 16 is expected to take effect on 1 January 2019.
IFRS contain extensive disclosure requirements. The Group discloses the information required according to IFRS, unless such information is deemed immaterial.
The consolidated financial statements comprise SKAKO A/S (the Parent) and the enterprises in which the Parent can or actually does exercise control by either directly or indirectly holding more than 50% of the voting rights.
The consolidated financial statements are prepared on the basis of the financial statements for the Parent and its subsidiaries by aggregating uniform items. The financial statements included in the consolidated financial statements are prepared in accordance with the Group's accounting policies. Intra-Group income, expenses, shareholdings, balances and dividends as well as unrealised intra-Group profits on inventories are eliminated. The accounting items of subsidiaries are recognised 100% in the consolidated financial statements.
Income and costs are recognised on an accruals basis. The income statement is broken down by function, and all costs, including depreciation, amortization and impairment losses, are then charged to production, distribution and administration.
Distribution costs include costs relating to training, sales, marketing, promotion materials, distribution, bad debts as well as depreciation, amortisation and impairment losses on assets used for distribution purposes.
Administrative expenses include administrative staff costs, office expenses as well as depreciation, amortisation and impairment losses on assets used for administrative purposes.
Receivables comprise trade receivables and other receivables.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost. A write down is recognised when there is an indication that an individual receivable cannot be collected. Assessment of bad debt is carried out for individual receivables and includes:
The write down is deducted from the carrying amount of trade receivables and the cost is recognised in the income statement as administrative costs.
Prepaid expenses recognised under assets include costs relating to the subsequent financial years. Prepaid expenses are measured at cost.
Deferred income includes income received relating to the subsequent financial year. Deferred income is measured at cost.
Foreign currency translation reserve includes foreign currency translation adjustments on the translation of financial statements of foreign subsidiaries from their respective functional currencies into Danish kroner. Foreign currency translation adjustments are recognised in the income statement on realization of the net investment. Hedging reserves include fair value adjustments of derivatives satisfying the criteria for hedging of future transactions. The amounts are recognised in the income statement or the balance sheet in step with recognition of the hedged transactions.
On the sales of treasury shares, the purchase price or selling price, respectively, is recognised directly in equity under other reserves (retained earnings).
The cash flow statement is prepared according to the indirect method and reflects the consolidated net cash flow broken down into operating, investing and financing activities. Cash flow from operating activities includes inflows from the year's operations adjusted for non-cash operating items, changes in working capital, financial income received and expenses paid, realised foreign currency translation gains and losses and income tax paid. Cash flow from investing activities includes the purchase, development, improvement or sale of intangible assets and property, plant and equipment. Cash flow from financing activities includes the raising and repayment of non-current and current debt not included in working capital. Cash flow in currencies other than the function currency is recognised at average exchange rates for the months of the year, unless they deviate significantly from actual exchange rates on the transaction dates.
On the preparation of the consolidated financial statements, Management makes a number of accounting estimates and judgements. These relate to the recognition, measurement and classification of assets and liabilities. Many items can only be estimated rather than accurately measured. Such estimates are based on the most recent information available on preparation of the financial statements. Estimates and assumptions are therefore reassessed on an ongoing basis. Actual figures may, however, deviate from these estimates. Any changes in accounting estimates will be recognised in the reporting period in which such changes are made.
SKAKO ANNUAL REPORT 2016 / 51
| DKK thousands | 2016 | 2015 | |
|---|---|---|---|
| Notes | |||
| Other income | 900 | 6,275 | |
| 1,2 | Administrative expenses | (3,266) | (7,574) |
| Operating profit (EBIT) | (2,366) | (1,299) | |
| 3,7 | Financial income | 75,303 | 908 |
| 3 | Financial expenses | (671) | (2,617) |
| Profit before tax | 72,266 | (3,008) | |
| 4 | Tax on profit for the year | 0 | 589 |
| Profit for the year | 72,266 | (2,419) |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Notes Profit for the year |
72,266 | (2,419) |
| Other comprehensive income | 0 | 0 |
| Comprehensive income | 72,266 | (2,419) |
| Comprehensive income attributable to SKAKO A/S shareholders |
72,266 | (2,419) |
| DKK thousands | 2016 | 2015 | |
|---|---|---|---|
| Notes | |||
| Other intangible assets | 88 | 348 | |
| 5 | Intangible assets | 88 | 348 |
| Operating equipment, fixtures and fittings | 304 | 589 | |
| Leasehold improvements | 0 | 20 | |
| Tangible assets under construction | 0 | 0 | |
| 6 | Tangible assets | 304 | 609 |
| 7 | Investments in subsidiaries | 164,158 | 88,905 |
| Other receivables | 11 | 340 | |
| 8 | Deferred tax assets | 589 | 589 |
| Other non-current assets | 164,758 | 89,834 | |
| Total non-current assets | 165,150 | 90,791 | |
| Receivables from subsidiaries | 0 | 2,271 | |
| Trade receivables | 0 | 82 | |
| Income tax | 0 | 0 | |
| Other receivables | 0 | 3 | |
| Prepaid expenses | 0 | 13 | |
| Other investments | 74 | 74 | |
| Cash | 56 | 4 | |
| Current assets | 130 | 2,447 | |
| Assets | 165,280 | 93,238 |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Notes | ||
| Share capital | 31,064 | 31,064 |
| Retained earnings | 116,360 | 43,720 |
| Total equity | 147,424 | 74,784 |
| Debt to subsidiaries | 16,636 | 0 |
| Financial leasing | 237 | 519 |
| Non-current liabilities | 16,873 | 519 |
| Debt to subsidiaries | 0 | 12,036 |
| Bank loans and credit facilities | 107 | 4,899 |
| Financial leasing | 282 | 249 |
| Trade payables | 64 | 181 |
| Income tax | 0 | 0 |
| Other liabilities | 530 | 570 |
| Current liabilities | 983 | 17,935 |
| Liabilities | 17,856 | 18,454 |
| EQUITY AND LIABILITIES | 165,280 | 93,238 |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Notes | ||
| Profit before tax | 72,266 | (3,008) |
| 9 Adjustments |
(73,941) | 3,156 |
| Changes in receivables, etc. | 427 | 1,817 |
| Change in trade payables and other liabilities, etc. | (157) | (1,444) |
| Cash flow from operating activities before financial items and | (1,405) | 521 |
| tax | ||
| Financial items received and paid | (622) | (1,709) |
| Taxes paid | 0 | 0 |
| Cash flow from operating activities | (2,027) | 1,188 |
| Investment in intangible assets | 0 | (157) |
| Investment in tangible assets | 0 | 0 |
| Cash flow from investing activities | 0 | (157) |
| Change in intra-group balances | 6,871 | 31,551 |
| Cash flow from financing activities | 6,871 | 31,551 |
| Change in cash and cash equivalents | 4,844 | 30,206 |
| Cash and cash equivalents at 1 January | (4,895) | (35,115) |
| Foreign exchange adjustment, cash and cash equivalents | 14 | |
| Cash and cash equivalents at 31 December | (51) | (4,895) |
| DKK thousands | Share capital | Retained earnings | Equity |
|---|---|---|---|
| Equity at 1 January 2015 | 31,064 | 46,139 | 77,203 |
| Comprehensive income in 2015: | |||
| Profit for the year | (2,419) | (2,419) | |
| Other comprehensive income | 0 | 0 | 0 |
| Comprehensive income, year | 0 | (2,419) | (2,419) |
| Equity at 31 December 2015 | 31,064 | 43,720 | 74,784 |
| DKK thousands | Share capital | Retained earnings | Equity |
|---|---|---|---|
| Equity at 1 January 2016 | 31,064 | 43,720 | 74,784 |
| Comprehensive income in 2016: | |||
| Profit for the year | 72,266 | 72,266 | |
| Other comprehensive income | 0 | 0 | 0 |
| Comprehensive income, year | 72,266 | 72,266 | |
| Share-based payment, share warrants | 220 | 220 | |
| Disposal treasury shares | 154 | 154 | |
| Equity at 31 December 2016 | 31,064 | 116,360 | 147,424 |
Number of employees in 2016: 0 (2015: 0)
For information regarding Executive Management and Board of Directors remuneration, including share based warrant plans, please refer to note 3 and note 4 in the consolidated financial statements.
In addition to the statutory audit, PwC, the Parent Company auditors appointed at the Annual General Meeting, provides other assurance engagements and other consultancy services to the Parent Company.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| PwC | ||
| Statutory audit | 121 | 146 |
| Other assurance engagements | 0 | 90 |
| Tax and indirect taxes consultancy | 25 | 120 |
| Other services | 290 | 61 |
| 436 | 416 | |
| Other | ||
| Statutory audit | 0 | 0 |
| Other assurance engagements | 0 | 0 |
| Tax and indirect taxes consultancy | 25 | 0 |
| Other services | 0 | 0 |
| 25 | 0 |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Interest from subsidiaries | 36 | 889 |
| Reversal of write down of shares in subsidiaries | 75,254 | 0 |
| Interest on cash and bank deposits | 0 | 0 |
| Financial income from financial assets not measured at fair value in the income statement | 75,290 | 889 |
| Gains on assets held for sale | 0 | 12 |
| Other financial income | 13 | 7 |
| Foreign exchange gains, net | 0 | 0 |
| Financial income | 75,303 | 908 |
| Interest to subsidiaries | (423) | (293) |
| Interest on bank debt | (146) | 0 |
| Interest on lease debt | (45) | (82) |
| Financial expenses on financial liabilities not measured at fair value in the income | (614) | (375) |
| statement | ||
| Foreign exchange losses, net | (0) | (1,124) |
| Other financial expenses | (57) | (1,118) |
| Financial expenses | (671) | (2,617) |
| Net financial items | 74,632 | (1,709) |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Current tax on the profit for the year | 0 | 0 |
| Adjustment of current tax, prior years | 0 | 0 |
| Change in deferred tax | 0 | 589 |
| Adjustment of deferred tax, prior years | 0 | 0 |
| Impact on changes in corporate tax rates | 0 | 0 |
| Tax for the period | 0 | 589 |
| Danish corporate tax rates | (15,899) | 707 |
| Effect of tax rates in foreign jurisdictions | 0 | 0 |
| Impact in changes in corporate tax rates | 0 | 0 |
| Tax assets not previously recognised | (657) | (114) |
| Permanent differences | 16,556 | 0 |
| Other items | 0 | (4) |
| 0 | 589 |
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Software | Software | |
| Cost at 1 January | 907 | 749 |
| Investments | - | 158 |
| Disposals | - | - |
| Transferred between categories | - | - |
| Cost at 31 December | 907 | 907 |
| Amortisation and impairment at 1 January | 559 | 279 |
| Disposals | - | - |
| Amortisation | 260 | 280 |
| Amortisation and impairment at 31 December | 819 | 559 |
| Carrying amount at 31 December | 88 | 348 |
| DKK thousands | Leasehold improvements |
Operating equipment, fixtures and fittings |
Tangible assets under construction |
Total |
|---|---|---|---|---|
| Cost at 1 January 2016 | 341 | 2,168 | 494 | 3,003 |
| Investments | - | - | - | - |
| Disposals | - | - | (494) | (494) |
| Transferred between categories | - | - | - | - |
| Cost at 31 December 2016 | 341 | 2,168 | 0 | 2,509 |
| Depreciation and impairment at 1 | 321 | 1,579 | 494 | 2,394 |
| January 2016 | ||||
| Transferred between categories | - | - | - | - |
| Disposals | - | - | (494) | (494) |
| Depreciation | 20 | 285 | - | 305 |
| Depreciation and impairment at | 341 | 1,864 | 0 | 2,205 |
| 31 December 2016 | ||||
| Carrying amount at 31 December 2016 |
0 | 304 | 0 | 304 |
| Hereof finance leases | 304 | 589 |
| DKK thousands | Leasehold improvements |
Operating equipment, fixtures and fittings |
Tangible assets under construction |
Total |
|---|---|---|---|---|
| Cost at 1 January 2015 | - | 2,509 | 494 | 3,003 |
| Investments | - | - | - | - |
| Disposals | - | - | - | - |
| Transferred between categories | 341 | (341) | - | - |
| Cost at 31 December 2015 | 341 | 2,168 | 494 | 3,003 |
| Depreciation and impairment at 1 January 2015 |
- | 1,225 | - | 1,225 |
| Transferred between categories | 254 | (254) | - | - |
| Disposals | - | - | - | - |
| Depreciation | 67 | 608 | 494 | 1,169 |
| Depreciation and impairment at 31 December 2015 |
321 | 1,579 | 494 | 2,394 |
| Carrying amount at 31 December 2015 |
20 | 589 | 0 | 609 |
| Hereof finance leases | 589 | 589 |
| 2015 |
|---|
| 260,534 |
| - |
| - |
| 260,534 |
| (171,629) |
| - |
| (171,629) |
| 88,905 |
| 2016 260,534 - - 260,534 (171,629) 75,254 (96,375) 164,159 |
The reversal of write down relates to shares in SKAKO Concrete A/S. We consider the fair value of SKAKO Concrete A/S to be higher than the carrying amount. Group companies are listed on page 61.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Deferred tax recognised in the balance sheet: | ||
| Deferred tax assets | 589 | 589 |
| Deferred tax liabilities | - | - |
| Deferred tax, net 31 December | 589 | 589 |
| Deferred tax, net at 1 January | 589 | - |
| Changes in deferred tax | - | 589 |
| Deferred tax, net at 31 December | 589 | 589 |
| Deferred tax assets: | ||
| Tax losses | 589 | 589 |
| 589 | 589 | |
| Deferred tax assets not recognised: | ||
| Intangible assets | 104 | - |
| Property, plants and equipment | 80 | 395 |
| Inventories | - | - |
| Provisions | - | 125 |
| Tax losses | 4,840 | 4,257 |
| 5,024 | 4,777 |
Tax losses carried forward are not subject to time limitation.
| DKK thousands | 2016 | 2015 |
|---|---|---|
| Reversal of wright down of shares in subsidiaries | (75,254) | |
| Depreciations | 565 | 1,449 |
| Financial items received and paid | 622 | 1,709 |
| Other | 126 | (4) |
| (73,941) | 3,156 |
Irrevocable operational leasing payments are as follows:
| DKK thousands | 2016 | 2015 |
|---|---|---|
| 0-1 year | 58 | 70 |
| 1-5 years | - | 58 |
| More than 5 years | - | - |
| 58 | 128 |
The Group leases operating equipment on operational leasing contracts. Please refer to note 18 in the consolidated financial statements.
The company has provided security in respect of guarantees concerning the continuous operation in 2017 for one of its subsidiaries.
There is a 12 month rent commitment related to the building in Denmark. The minimum rent liability amounts to DKK 1.6 million (2015: DKK 1.6 million).
The company is jointly taxed with all Danish subsidiaries. The company is jointly and severally liable with the other companies in the joint taxation for Danish corporate taxes and withholding taxes on dividend, interests and royalties within the joint taxation.
Please refer to note 19 in the consolidated financial statements.
In 2016 the Parent Company has sold services to subsidiaries for DKK 900 thousands (2015: DKK 6,275 thousands) and paid net interest expenses, cf note 3.
Please refer to note 20 in the consolidated financial statements.
The financial statements for 2016 of the parent company, SKAKO A/S has been prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for annual reports of listed companies. The financial statements have been prepared in accordance with the historical cost convention, as modified by the revaluation of available-for-sale financial assets and derivative financial instruments at fair value.
The accounting policies for the financial statements of the parent company are unchanged from the last financial year and are the same as for the consolidated financial statements with the following additions.
Investments in subsidiaries are recognised at cost less impairment losses. Where the recoverable amount is lower than cost, investments are written down to this lower value. Dividends received from investments in subsidiaries and associates are recognised in the income statement in the financial year in which the dividends are declared.
Intra-group transactions are recognised in the parent company financial statements at the carrying amount. Accordingly, additions to or disposals of investments are recognised at the carrying amount, and any difference between the carrying amount of net assets and the consideration paid is recognised directly in equity. Comparative figures are not restated.
Intercompany balances which are expected to be settled as part of the normal operating cycle, or where an unconditional right to defer settlement.
| Company name | Country | Interest |
|---|---|---|
| SKAKO A/S | Denmark | Parent |
| SKAKO Concrete A/S | Denmark | 100% |
| SKAKO GmbH | Germany | 100 % |
| SKAKO Concrete, Inc. | USA | 100 % |
| SKAKO Concrete S.A. | France | 100 % |
| SKAKO Vibration A/S | Denmark | 100 % |
| SKAKO Vibration Ltd. | UK | 100 % |
| SKAKO Vibration S.A. | France | 100 % |
| SKAKO Vibration Succursale Maroc | Morocco | 100 % |
| Aktieselskabet af 01.04.2012 | Denmark | 100 % |
Bygmestervej 2 DK-5600 Faaborg Denmark Tel.: +45 6311 3860 [email protected] www.skako.com CVR No. 36440414
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