Annual Report • Mar 24, 2009
Annual Report
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Our customers are at the centre of our actions, and we find solutions to meet their changing needs.
We keep our promises and carry out the agreed actions.
We focus on documentation, timely diligence, clear allocation of responsibility and documented processes.
The customer is the most important element of every process.
We expect innovation from all links of the value chain to improve processes, ensure better customer service and higher earnings.
We want to be known as the innovative and reliable financial player who increases our customers' wealth.
Each action taken must contribute to increased productivity and have a direct impact on the bottom line.
Capinordic aims to provide excellent service and offer our customers the most innovative products. We want to capitalise on the following trends in the market: Need for an ever greater choice of products, investment performance, transparency and accessibility.
The following basis of our strategy will ensure that we achieve Capinordic's goals:
| Banking | Asset Management | Private Financial Services | |
|---|---|---|---|
| Net interest and fee income (DKKm) |
211 (230) | 81 (19) | 73 (54) |
| Activity | The Banking Business Area of Capi nordic is divided into two sub-ar eas: Investment Banking and Private Banking. Investment Banking Capinordic's Investment Banking de partment provides advisory services and assistance on corporate issues and loans within the following divi sions: -Corporate Finance -Markets -Alternative Investments Private Banking Capinordic offers asset planning with focus on the customer and his or her visions. The Group has developed rel evant expertise in a large number of asset categories. Ongoing lending ac tivities are limited to customers who make use of the Group's asset man agement services or securities trading services. In addition, Private Banking participates in the development and distribution of financial products in collaboration with the Group's other Business Areas. |
The Business Area Asset Management handles the Group's asset manage ment and develops and offers asset management products for distribution through the Group's other Business Areas and directly to institutional, pro fessional, industrial and large private investors. In addition, Asset Management provides advice to the Group's Private Banking department. |
Private Financial Services offers the Group's financial products, including bank and asset management prod ucts, in cooperation with insurance companies and banks. In cooperation with the Group's As set Management, Private Financial Services offers active and flexible as set management with focus on abso lute return. The asset management is undertaken by the Group's business area Asset Management. The products are distributed through telemarketing and a broad network of internal and external independent insurance brokers. Capinordic cooper ates with Nordic Broker Association AB and others. |
| Companies | Capinordic Bank A/S Branch of Capinordic Bank A/S (SE) Dansk O.T.C Fondsmæglerselskab A/S (the companies will merge) |
Capinordic Asset Management AB Capinordic Capital Fondsmæglerselskab A/S (formerly Steffen Rønn Fonds mæglerselskab A/S) Biofund Management OY Capinordic Property Management A/S |
Monetar Pensionsförvaltning AB Nordisk Fondservice AB (the companies will merge) |
| Key fi gures and ratios | 4 |
|---|---|
| Highlights | 5 |
| Preface | 6 |
| Financial review | 10 |
| Employees and knowledge resources | 22 |
| Environment and research and development activities | 23 |
| Expectations | 23 |
| Post-period activities | 24 |
| Shareholders | 25 |
| Corporate governance | 28 |
| Risk management | 30 |
| Management statement and auditors' report | 35 |
| Management statement | 36 |
| Independent auditors' report | 37 |
| Accounting policies | 39 |
| Accounting policies | 40 |
| Income statement for the period ended 31 december 2008 | 52 |
| Balance sheet at 31 december 2008 | 53 |
| Cash fl ow statement | 55 |
| Statement of changes in equity (Group) | 57 |
| Statement of changes in equity (Parent Company) | 58 |
| Notes | 59 |
| Information about Capinordic | 89 |
| Company information | 90 |
| Management of Capinordic | 91 |
| Shares and options held by Management | 95 |
| Company announcements published in 2008 | 96 |
| Address list and contacts | 97 |
References to 'the Company' are references to Capinordic A/S. References to 'the Group' are references to the Capinordic Group. Figures in brackets are comparative fi gures for the same period last year.
This text has been prepared in Danish and in English. In case of discrepancies, the Danish text will prevail.
| Key figures of the income statement | |||||
|---|---|---|---|---|---|
| (DKK'000) | 2008 | 2007 | 2006 | 2005 | 2004 |
| Net interest income | 71,371 | 60,081 | 18,202 | (208) | (841) |
| Fee and commission income | 350,111 | 270,499 | 150,954 | 23,633 | 20,503 |
| Net interest and fee income | 373,734 | 307,174 | 159,065 | 16,824 | 12,778 |
| Other operating income | 5,205 | 9,003 | 5,184 | 0 | 0 |
| Staff costs and administrative expenses | (272,801) | (212,165) | (81,204) | (14,062) | (11,839) |
| Losses on loans and advances | (206,097) | (3,472) | 0 | 0 | 0 |
| Profit (loss) before amortisation, depreciation, | |||||
| impairment and tax (EBTDA) | (159,355) | 154,512 | 74,748 | 3,024 | 2,792 |
| Profit (loss) before tax | (512,832) | 102,256 | 60,231 | 2,917 | 2,574 |
| Net profit (loss) for the year | (418,947) | 80,161 | 46,885 | 1,794 | 871 |
| Key figures of the balance sheet | |||||
| (DKK'000) | 31.12.2008 | 31.12.2007 | 31.12.2006 | 31.12.2005 | 31.12.2004 |
| Cash and receivables from credit institutions and central banks | 616,884 | 521,808 | 588,943 | 13,621 | 5,022 |
| Loans and advances | 921,902 | 1,262,407 | 440,289 | 0 | 0 |
| Intangible assets | 932,998 | 1,285,722 | 541,897 | 19,078 | 19,808 |
| Total assets | 3,179,940 | 3,849,670 | 1,792,032 | 61,961 | 28,565 |
| Payables to credit institutions and central banks | 62,806 | 539,172 | 46,663 | 4,495 | 4,678 |
| Deposits | 1,121,507 | 720,670 | 203,382 | 0 | 0 |
| Share capital | 59,445 | 59,445 | 42,467 | 14,296 | 11,801 |
| Total equity | 1,804,571 | 2,304,150 | 1,399,561 | 47,968 | 13,474 |
| Total liabilities and equity | 3,179,940 | 3,849,670 | 1,792,032 | 61,961 | 28,565 |
| Ratios | |||||
| 2008 | 2007 | 2006 | 2005 | 2004 | |
| Equity ratio | 56.52% | 59.85% | 78.10% | 77.42% | 47.17% |
| Return on equity after tax | -18.54% | 4.09% | 6.48% | 5.84% | 18.47% |
| Capital base * | 837,575 | 1,015,400 | 856,672 | 28,890 | |
| Capital adequacy ratio * | 45.95% | 47.80% | 114.07% | 90.30% | |
| Average number of employees | 223 | 146 | 44 | 15 | 12 |
| Per share ratios | |||||
| 2008 | 2007 | 2006 | 2005 | 2004 | |
| Average number of shares outstanding (million) | 117 | 105 | 61 | 26 | 24 |
| Average number of shares outstanding, diluted (million) | 122 | 110 | 61 | 27 | 24 |
| Earnings per share basic (EPS Basic) | (3.59) | 0.77 | 0.77 | 0.07 | 0.04 |
| Diluted earnings per share (EPS-D) | (3.59) | 0.76 | 0.77 | 0.07 | 0.04 |
| Cash flow per share (CFPS) | 1.73 | 1.24 | (2.61) | (0.14) | (0.07) |
| Dividends per share | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Equity value per share, year-end (DKK) | 15.60 | 19.69 | 15.63 | 1.68 | 0.57 |
| Share Price, year-end, cf. OMX Nordic Exchange Copenhagen | 2.98 | 21.30 | 30.10 | 23.67 | 3.93 |
* Capinordic A/S became subject to the supervision of the Danish Financial Supervisory Authority upon the acquisition of G P Børsmæglerselskab A/S in 2005 and has therefore not published these figures and ratios previously.
| 2008 | 2007 | 2006 | |
|---|---|---|---|
| Net interest and fee income (DKKm) | 374 | 307 | 159 |
| EBTDA (DKKm) | (159) | 155 | 75 |
| Profi t (loss) before tax (DKKm) | (513) | 102 | 60 |
| Profi t (loss) after tax (DKKm) | (419) | 80 | 47 |
| EPS diluted (DKK) | (3.59) | 0.76 | 0.77 |
| Recurring revenue/cost ratio (%) | 80% | 73% | 116% |
| Retrun on equity after tax | -19% | 4% | 6% |
| Asset under management (DKKbn) | 16.4 | 20.1 | 5.9 |
The year 2008 was characterised by unprecedented turbulence in the fi nancial markets. The fi nancial unrest particularly accelerated during the second half of the year, resulting in substantial impairment of a number of asset categories, strongly declining stock markets and capital markets increasingly marked by immobility and lack of liquidity.
This development implied tougher conditions for the Group's three Business Areas, and particularly the Banking Business Area was affected by the very diffi cult market conditions. The Group's results are thus affected by loan impairment losses, loan loss provisions and losses on its own portfolio.
It is part of the new strategy of the Group to wind down proprietary trading.
For 2008, the Group realised negative EBTDA of DKK 159m and a loss after tax of DKK 419m. By comparison, the Group realised EBTDA of DKK 155m and a profi t after tax of DKK 80m for 2007.
Despite the fi nancial unrest, the Group increased its level of activity. The consolidated net interest and fee income thus rose by 22 per cent on last year.
In addition, Capinordic achieved a number of specifi c strategic milestones in 2008 as shown in the table below:
| Objectives for 2008 | Activities in 2008 | |
|---|---|---|
| 9 | Maintain and consolidate current Swedish level of activities | 9Increase in net interest and fee income of 57% |
| 9Increase in customer agreements of 9% | ||
| 9 | Initiatives to increase earnings per customer in Sweden | 9Launch of Capinordic Bank in Sweden |
| 9New products, including unique 'PPM surviving partner protection' | ||
| 9Launch of the service company Nordic Broker Association | ||
| x | Continue controlled growth of bank | × Difficult market conditions for Investment and Private Banking |
| ×Drop in net interest and fee income of 8%. Negative EBTDA of DKK 195m | ||
| 9Total loans and advances reduced by 13%. Deposit surplus at year-end 2008 |
||
| 9Cost cuts with effect beginning in mid-2009 | ||
| 9 | Maintain high inflow of assets under management (AUM) | 9Net inflow of assets under management of DKK 3.2bn |
| 9Launch of four new Capinordic funds | ||
| 9Assets invested in Capinordic funds increased by DKK 3.8bn to DKK 4.0bn | ||
| 9 | Complete organisational adjustments | 9Group combined and structured into three business areas |
| 9Merger between Unitfond and Nordisk Fondservice completed | ||
| 9Merger between Nordisk Fondservice and Monetar expected to be completed in Q1 2009 with effect from 1 January 2009 |
||
| 9Merger between Capinordic Bank and Dansk OTC expected to be completed in H1 with effect from 1 January 2009 |
Capinordic has three Business Areas: Private Financial Services, Asset Management and Banking. Banking is divided into Private Banking and Investment Banking. Each Business Area is headed by a Managing Director, member of the Leadership Team.
The objective for Private Financial Services is to maintain a high customer infl ow and customer focus. It was therefore very satisfactory to see a net infl ow of approx. 20 thousand customer agreements during 2008 despite the diffi cult market conditions. In accordance with strategy, Private Financial Services additionally focused on enlarging its range of products and developed new products offered to the Group's existing and potential customers.
Within the Business Area Asset Management, one focal point throughout 2008 was the introduction of several Capinordic funds. The Group's Asset Management Business Area became increasingly able to utilise services from the Group's Banking Business Area. The Asset Management Business Area was affected by the generally negative fi nancial market development, but despite this several funds performed to satisfaction, and a few of our funds ranked high on Morningstar.se.
The Banking Business Area was also subject to diffi cult market conditions during 2008. Total earnings were thus affected by losses on the Group's own portfolio of DKK 54m, and similarly the substantial impairment of a number of asset categories resulted in loan impairment losses and loan loss provisions of DKK 193m.
Results for the Banking Business Area are not satisfactory, and the Group has initiated cost cuts and introduced a more restrictive credit policy.
For 2008, Private Banking saw a lower activity level mainly attributable to lower income from private equity transactions and alternative investments.
Investment Banking saw a satisfactory development, realising an increase in its income of 5 per cent. The increase should be seen in the light of the highly static state of the capital markets, which resulted in extremely diffi cult market conditions for the Group's Investment Banking activities, particularly during H2 2008.
Due to the still unstable and uncertain capital markets, the Group has chosen to make writedowns for impairment of goodwill and other intangible assets relating to the Group's Banking activities of DKK 195m.
In accordance with its strategic objectives, the Bank launched a Swedish branch in September. The launch was successful, and the branch is enjoying very great interest and a satisfactory infl ow of customers.
In 2008, the international crisis on the capital markets led to an interbank market freeze and a general lack of confi dence among the fi nancial players, causing a severe lack of liquidity. Capinordic was not affected by this lack of liquidity as the Group has not been active in the interbank market.
On the contrary, the Group built up its deposit volume and achieved a satisfactory deposit surplus at year-end 2008 through more traditional banking activities.
For the same reason, the Group's cash situation at year-end 2008 was good.
As a consequence of its strong capital base, the Group has a capital adequacy ratio of 46 per cent, considerably above the industry average.
Capinordic will continue the Group's growth strategy, focusing in 2009 on organic growth through the exploitation of synergies and potential for up-selling. Our objectives are:
As a consequence of the still unstable capital markets and the macro-economic development in the Scandinavian countries, Capinordic expects 2009 to be a challenging year for the Group. The Group expects more volatile earnings than usual relative to the individual quarters, and the expectations for 2009 are fi xed within a fairly wide interval. Capinordic expects:
"Capinordic was affected by an extreme fi nancial year, our share price dropped, and our results were not satisfactory.
Despite diffi cult market conditions, however, Capinordic increased its level of activity by 22 per cent and is able to maintain a capital adequacy ratio among the highest in the market.
Capinordic successfully realised a number of strategic initiatives for 2008; as an example we launched Capinordic Bank in Sweden, saw continued high infl ow of new customers and streamlined the organisation into three new Business Areas.
At the end of 2008 and the beginning of 2009, we also reviewed our costs and initiated a number of cuts, particularly on staff and administrative expenses. The cuts will begin to have an effect from mid-2009, but will only fully impact in 2010.
For 2009, our focus is still to maintain the high infl ow of customers and strengthen our profi le within Asset Management while continuing to focus on our costs."
Lasse Lindblad CEO, Capinordic A/S
The fi nancial market developments in 2008 implied very diffi cult market conditions for the fi nancial sector, including for the Capinordic Group. Particularly the results of the Banking Business Area were affected by the severe global drops in values for a number of asset categories in the form of losses on the Group's own securities portfolio, loan impairment losses and loan loss provisions.
| DKKm | 2008 | 2007 | 2006 |
|---|---|---|---|
| Net interest and fee income * | 374 | 307 | 159 |
| EBTDA | (159) | 155 | 75 |
| Impairment losses on intangible assets | (273) | 0 | 0 |
| Profi t (loss) for the year before tax | (513) | 102 | 60 |
| Total assets | 3,180 | 3,850 | 1,792 |
| Total equity | 1,805 | 2,304 | 1,400 |
* Income from the Group's asset management of property investments has been reclassifi ed from 'Other operating income' to 'Fee and commission income'. Comparative fi gures have been restated.
Despite the adverse fi nancial market developments, the Group continued to increase its level of activity. Compared with 2007, consolidated net interest and fee income rose by approx. 22 per cent to DKK 374m (DKK 307m). The increase mainly related to the Business Areas of Asset Management and Private Financial Services.
Negative market value and forex translation adjustments of the Group's own portfolio and portfolio investments amounted to DKK 55m (positive fi gure of DKK 54m) and loan impairment losses and loan loss provisions amounted to DKK 206m (DKK 3m).
As a result, 2008 consolidated operating loss (EBTDA) was DKK 159m (operating profi t of DKK 155m).
Due to the still unstable and uncertain capital markets, the Group has chosen to make an impairment of goodwill and other intangible assets of DKK 273m (DKK 0m). The impairment concerns intangible assets related to the acquisitions made in 2006 and 2007.
Total amortisation and impairment of intangible assets amounted to DKK 325m (DKK 44m), corresponding to 25 per cent of total consolidated intangible assets at the beginning of 2008. The impairment losses do not affect the cash situation of the Group nor the consolidated capital adequacy ratio as intangible assets are not included in the calculation of the capital adequacy ratio.
For 2008, consolidated cash fl ow from operating activities amounted to DKK 209 (DKK 131m), corresponding to a cash fl ow per share (CFPS) of DKK 1.73 (DKK 1.24).
The net loss for the year is DKK 419m (net profi t of DKK 80m), corresponding to negative diluted earnings per share (EPS-D) of DKK 3.59 (positive fi gure of DKK 0.76), and a negative return on equity of 18.54 per cent (positive fi gure of 4.09 per cent).
Since the autumn of 2008, Capinordic has worked on adjusting its strategy and organisation so that the Group will achieve higher growth, greater accountability of its key employees and focus on synergies between its activities. Accordingly, the Group's development will be structured according to the Business Areas:
In connection with this adjustment, we will allocate further resources to our Asset Management and enhance the Group's exposure and profi le within this Business Area.
| Business Areas | Asset | Private Financial | ||||
|---|---|---|---|---|---|---|
| DKKm | Banking | Management | Services | |||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |
| Net interest and fee income | 211 | 230 | 81 | 19 | 73 | 54 |
| EBTDA | (195) | 153 | 32 | 1 | 27 | 13 |
| Impairment losses on intangible assets | (195) | 0 | (78) | 0 | 0 | 0 |
| Profi t (loss) before tax | (429) | 117 | (52) | 1 | 8 | -1 |
| Total assets | 2,450 | 3,022 | 205 | 179 | 495 | 617 |
| Total liabilities | 1,253 | 1,416 | 30 | 15 | 93 | 111 |
At the same time, the Group will change the accounting segments so that the presentation of the fi nancial statements follows the Group's organisational structure.
In 2008, the Group saw increased activity within the Business Areas of Asset Management and Private Financial Services. Both divisions contribute a large part of the Group's recurring revenue. The Group saw an increased operating profi t (EBTDA) from these Business Areas. Impairment of intangible assets relate to past acquisitions, made in an environment of higher business valuations.
The lower level of activity within Banking is mainly attributable to lower income from private equity transactions and alternative investments within Private Banking, whereas Investment Banking maintained a high level of activity. The Group will maintain its focus on its activities within Private Banking and Investment Banking.
Total consolidated income (exclusive of market value and forex translation adjustments) amounted to DKK 428m (DKK 340m) for 2008, an increase of 26 per cent. The income consisted of both recurring revenue, mainly from Asset Management and Private Financial Services, and non-recurring revenue from Investment Banking.
| Income, DKKm | 2008 | 2007 |
|---|---|---|
| Banking | ||
| - Investment Banking | 138 | 131 |
| - Private Banking | 36 | 73 |
| - Treasury | 43 | 38 |
| Total Banking | 217 | 242 |
| Asset Management | 88 | 19 |
| Private Financial Services | 123 | 79 |
| Other income and internal trading | 0 | 0 |
| Total income | 428 | 340 |
Capinordic maintained focus on building recurring revenue. Despite the very diffi cult market conditions in 2008, the Group continued to increase its recurring revenue by way of a high customer infl ow, enlarged product range and continued net infl ow of assets under management from existing customers.
Compared with 2007, consolidated income from the Business Areas of Asset Management and Private Financial Services rose substantially. However, the income from these areas was lower than expected for 2008 as a consequence of the falling stock markets, which negatively affected assets under management.
For 2008, consolidated recurring revenue covered 80 per cent of total consolidated recurring costs (operating ex-
penses exclusive of bonus and external costs relating to Investment Banking).
The 2008 results were affected by negative market value and forex translation adjustments of the Group's own portfolio and portfolio investments totalling DKK 55m (positive adjustments of DKK 54m). The negative adjustments are related to the falling stock markets.
For 2008, operating expenses came to DKK 273 (DKK 212m), an increase of 29 per cent. The increase is related to the generally increased level of activity of the Group. For 2008, staff costs amounted to DKK 159m (DKK 148m), an increase of 7,4 per cent.
At the end of 2008 and the beginning of 2009, Capinordic reviewed the Group's costs and made a number of adjustments of both staff and other administrative expenses. These cuts will begin to show their effect from mid-2009, but will only fully impact in 2010. For both years, the effect will be reduced by the expenses from several new hires at top management level and the Bank's participation in the State Guarantee Scheme.
Loan impairment losses and loan loss provisions amounted to DKK 206m (DKK 3m). The large impairment losses refl ect the harsh slow-down of the global economy and are mainly related to the loans awarded to the property sector. Total loans and advances now amount to DKK 922m (DKK 1,262m).
For 2008, the Group realised a tax loss of DKK 128m. The tax base of this amount is DKK 32m, which has been capitalised and is expected to be utilised to reduce tax payments in future years.
The net loss for the year triggers negative tax of DKK 94m, corresponding to 18 per cent of the net loss before tax. The deviation between the calculated effective tax rate and current tax rates is mainly related to the goodwill impairment losses, which are not tax deductible.
Due to the still unstable and uncertain capital markets, Capinordic has chosen to make an impairment of goodwill and other intangible assets of DKK 273m (DKK 0m). Total amortisation and impairment of intangible assets for the year amounted to DKK 325m (DKK 44m), corresponding to 25 per cent of total intangible assets at the beginning of 2008.
Total consolidated intangible assets subsequently amounts to DKK 933m (DKK 1,286m).
To the fi nancial industry, 2008 was a challenging year due to the interbank market freeze. Capinordic was not affected by this lack of liquidity to the same extent as many other fi nancial institutions as the Group had not been present in the interbank market and therefore was not exposed to this refi nancing risk.
On the contrary, the Group built up its deposit base and achieved a deposit surplus at year-end 2008 through more traditional banking activities.
At 31 December 2008, consolidated cash amounted to DKK 617m (DKK 522m). For 2008, consolidated cash fl ow from operating activities amounted to DKK 209 (DKK 131m), corresponding to a cash fl ow per share (CFPS) of DKK 1.73(DKK 1.24). The positive cash fl ow from operating activities for 2008 mainly relates to shifts in the Group's funding structure and a reduction of the Group's loan volume and holdings of securities.
At the end of Q4 2008, the Group's equity amounted to DKK 1,805m (DKK 2,304m), corresponding to an equity ratio of 57 per cent (60 per cent). At 31 December 2008, the Group's capital base amounted to DKK 838m (DKK 1,015m), and the consolidated capital adequacy ratio was 46 per cent (48 per cent).
The Banking Business Area of Capinordic is divided into two sub-areas: Investment Banking and Private Banking. Investment Banking: Capinordic's Investment Banking department provides advisory services and assistance on corporate issues and loans within the following divisions: Corporate Finance: Capinordic offers corporate clients expert advice on Mergers and Acquisitions, divestitures, restructurings and capital raising excercises, both in the debt and equity markets. It also provides clients with loans on its own balance sheet. It also assists clients in their listings requirements, on the NASDAQ OMX Copenhagen stock exchange. Markets is responsible for the Group's trading in foreign currencies, shares, interest-rate products, etc. Alternative Investments undertakes the Group's development and structuring of alternative investments in a number of asset categories. These products are provided to clients in collaboration with Private Banking.
Private Banking: Capinordic offers asset planning with focus on the customer and his or her visions. The Group has developed relevant expertise in a large number of asset categories. Ongoing lending activities are limited to customers who make use of the Group's asset management services or securities trading services. In addition, Private Banking participates in the development and distribution of fi nancial products in collaboration with the Group's other Business Areas.
In addition to Capinordic A/S, this Business Area comprises other legal entities used as Special Purpose Vehicles (SPVs) in connection with Investment Banking activities.
The Banking Business Area was particularly affected by the very diffi cult market conditions in 2008, entailing losses on the Group's own portfolio, loan impairment losses and loan loss provisions.
For 2008, results were a negative EBTDA of DKK 195m (positive EBTDA of DKK 153m), which is not satisfactory.
The Business Area saw a drop in net interest and fee income of 8 per cent as against 2007. The decreasing level of activity is mainly attributable to lower income from Private Banking. Particularly in Q4, when the Group historically has great activity in this area, markets were characterised by a lack of liquidity which negatively affected the Group's sale of alternative investments.
As a consequence of falling fi nancial market prices, the results of the Banking activities were affected by losses on the Group's own portfolio. For 2008, negative market value and forex translation adjustments amounted to DKK 54m (a positive fi gure of DKK 57m).
Results were also affected by loan impairment losses and loan loss provisions of DKK 193m (DKK 0m). The large impairment losses refl ect the harsh slow-down of the global economy and are mainly related to the property sector. Total loans and advances now amount to DKK 922m (DKK 1,286m).
Due to the still unstable and uncertain capital markets, the Group has made an impairment of goodwill and other intangible assets relating to the Group's Banking activities of DKK 195m (DKK 0m). The impairment losses do not infl uence the cash situation or the capital adequacy as intangible assets are not included in the calculation of the capital adequacy ratio.
In accordance with its strategic objectives, the Group launched a Swedish branch of Capinordic Bank. The launch was successful, and the branch is enjoying very great interest and infl ow of customers.
Results for the Banking Business Area are not satisfactory, and the Group has therefore introduced a more restrictive credit policy according to which loans are follow-on business and business focus is aimed at savings and pensions. Moreover, at the end of 2008 and the beginning of 2009, Capinordic reviewed its costs and made a number of adjustments of both staff and other administrative expenses. These cuts will improve the recurring revenue/cost ratio from mid-2009, but will only have a full impact on the profi t and loss in 2010. For both years, the effect will be reduced by the expenses from participation in the State Guarantee Scheme.
| Financial development | ||
|---|---|---|
| DKKm | 2008 | 2007 |
| Net interest and fee income | 211 | 230 |
| Market value and forex translation adjustments of securities and foreign currencies | (54) | 57 |
| Staff costs and administrative expenses | (159) | (140) |
| Losses on loans and advances | (193) | 0 |
| EBTDA | (195) | 153 |
| Amortisation and depreciation of intangible assets, | (33) | (36) |
| property, plant and equipment * | ||
| Impairment losses on intangible assets | (195) | 0 |
| Profi t (loss) before tax | (429) | 117 |
| Loans and advances | 922 | 1,286 |
| Deposits | 1,165 | 766 |
| Total assets, including allocated goodwill, etc. | 2,450 | 3,022 |
| Total liabilities | 1,253 | 1,416 |
| Number of employees | 81 | 64 |
| Recurring revenue/cost ratio ** | 53% | 57% |
| Profi t margin ** | -94% | 66% |
* The item comprises annual impairment losses on the Group's intangible assets of DKK 26m (DKK 30m) related to the acquisitions made in 2006 and 2007.
** Amortisation and impairment of the Group's intangible assets are not included in the calculation of the recurring revenue/cost ratio or the profi t margin.
| Total income DKKm |
2008 | 2007 | |
|---|---|---|---|
| Private Banking | |||
| - Net interest income | 7 | 4 | |
| - Advisory services, investments and assets | 13 | 19 | |
| - Private equity transactions and alternative investments | 8 | 37 | |
| - Commission income | 8 | 13 | |
| Total Private Banking | 36 | 73 | |
| Investment Banking | |||
| - Net interest income | 12 | 11 | |
| - Corporate issues and loans and alternative investments | 125 | 120 | |
| - Commission income | 1 | 0 | |
| Total Investment Banking | 138 | 131 | |
| Treasury | |||
| - Net interest income | 42 | 37 | |
| - Commission income | 1 | 1 | |
| Total Treasury | 43 | 38 | |
| Totol income | 217 | 242 |
The Business Area Asset Management handles the Group's asset management and develops and offers asset management products for distribution through the Group's other Business Areas and directly to institutional, professional, industrial and large private investors. In addition, Asset Management provides advice to the Group's Private Banking department.
The Business Area Asset Management saw a positive development in the level of activity for 2008 with the launch of a number of new products, including Capinordic funds, which attracted new assets under management. At the same time, the Group streamlined the organisation through grouping the Swedish asset management activities in Stockholm.
The Group's Asset Management became increasingly able to utilise services from the Banking Business Areas.
Despite the general decline of the stock markets, the income for the Business Area quadrupled to DKK 88m (DKK 19m). The increase is related to both management fees and performance fees.
The return on the assets under management was marked by poor market conditions, but was generally satisfactory compared with the development in comparable indexes.
At year-end 2008, the consolidated assets under management amounted to DKK 16.4bn (DKK 20.1bn). Most of the Group's assets under management are denominated in foreign currencies, and the consolidated assets under management were therefore negatively affected by the exchange rate development, particularly in respect of the Swedish krone. In local currencies, consolidated assets under management fell by 9 per cent while, by comparison, MSCI World fell by 42 per cent. This applied to both the return on assets under management and the continued infl ow of assets under management from new and existing customers.
Despite the positive development for the Business Area as a whole, Capinordic has made an impairment of intangible assets related to this Business Area of DKK 78m (DKK 0m) due to the current market conditions.
In 2008, the Swedish Asset Management activities were grouped in Stockholm and the Danish ones in Copenhagen, streamlining the organisation. Particularly in Sweden it proved the basis for utilising synergies and cooperating with the Group's other Business Areas, which are also located at the same address in Stockholm.
Moreover, the acquisition of Bio Fund Management OY was implemented in February 2008.
| Financial development | ||
|---|---|---|
| DKKm | 2008 | 2007 |
| Net interest and fee income * | 81 | 19 |
| Market value and forex translation adjustments of securities and foreign currencies | (2) | (2) |
| Staff costs and administrative expenses | (48) | (16) |
| EBTDA | 32 | 1 |
| Amortisation and depreciation of intangible assets, property, plant and equipment ** |
(5) | (1) |
| Impairment losses on intangible assets | (78) | 0 |
| Profi t (loss) before tax | (52) | 1 |
| Total assets, including allocated goodwill, etc. | 205 | 179 |
| Total liabilities | 30 | 15 |
| Assets under management (AUM) (DKKbn) | 16.4 | 20.1 |
| Number of employees (average) | 30 | 10 |
| Recurring revenue/cost ratio *** | 101% | 66% |
| Profi t margin *** | 39% | 6% |
* Income from the Group's asset management of property investments has been reclassifi ed from 'Other operating income' to 'Fee and commission income'. Comparative fi gures have been restated.
** The item comprises annual impairment losses of the Group's intangible assets of DKK 3m (DKK 1m) related to the acquisitions made in 2006 and 2007.
*** Amortisation and impairment of the Group's intangible assets are not included in the calculation of the recurring revenue/cost ratio or the profi t margin.
Private Financial Services offers the Group's fi nancial products, including bank and asset management products, in cooperation with insurance companies and banks. In cooperation with the Group's Asset Management, Private Financial Services offers active and fl exible asset management with focus on absolute return. The asset management is undertaken by the Group's business area Asset Management. The products are distributed through telemarketing and a broad network of internal and external independent insurance brokers. Capinordic cooperates with Nordic Broker Association AB and others.
The level of activity has been increasing within the Private Financial Services business area, and net interest and fee income rose by 35 per cent as compared with 2007.
Operating profi t (EBTDA) also developed positively, doubling from 2007 to amount to DKK 27m (DKK 13m) for 2008. Profi t before tax was affected by amortisation of the Group's intangible assets of DKK 19m (DKK 13m). Profi t before tax for 2008 amounted to DKK 8m (loss of DKK 1m).
The satisfactory and positive development is mainly attributable to the continued high net infl ow of customers to the business area. Capinordic noted a higher outfl ow of customers in 2008 than previously, especially among Swedish PPM customers. The outfl ow is mainly attributable to the negative fi nancial market development. To counter this outfl ow of customers, Capinordic has launched a series of new products since Q2 2008, and focused on optimising its customer handling and advisory service procedures and further increasing loyalty in the distribution network.
In 2008 Capinordic Bank was launched in Sweden. The bank also distributes its products through the business area Private Financial Services. In 2009, in cooperation with the Group's Banking, Private Financial Services will focus on developing and launching additional products to increase sales.
Today Capinordic cooperates with more than 700 insurance brokers on distribution, and this cooperation was strengthened in 2008 through the improvement of services and loyalty programmes. Capinordic also acquired the insurance broker Factor in December 2008, which offers both life and non-life insurance policies with focus on business solutions. In addition, Capinordic initiated the launch of Nordic Broker Association AB, a service company for insurance brokers. There are currently 250 brokers attached to Nordic Broker Association.
In addition to insurance brokers, distribution is made through internal and external telemarketing consultants.
In concordance with its strategic objectives, Private Financial Services has been working towards merging the original three legal entities. In 2008 the merger between Nordisk Fondservice AB and Unitfond AB was thus completed, and the merger between the continuing unit and Monetar Pensionsförvaltning AB is expected to be completed in Q1 2009.
When fully implemented, the mergers are expected to imply a number of positive synergies in the form of cost savings, increased effi ciency, improved customer service, and easier access to knowledge sharing and data sharing. The mergers are expected to positively impact the development in the recurring revenue/cost ratio.
There was no impairment of intangible assets related to the business area of Private Financial Services.
| Financial development | 2008 | 2007 | |
|---|---|---|---|
| Net interest and fee income | 73 | 54 | |
| Market value and forex translation adjustments of securities and foreign currencies | 0 | 0 | |
| Staff costs and administrative expenses | (46) | (42) | |
| EBTDA | 27 | 13 | |
| Amortisation and depreciation of intangible assets, property, plant and equipment * |
(19) | (13) | |
| Profi t (loss) before tax | 8 | (1) | |
| Total assets, including allocated goodwill, etc. | 495 | 617 | |
| Total liabilities | 92 | 111 | |
| Number of employees (average) | 99 | 67 | |
| Recurring revenue/cost ratio ** | 130% | 116% | |
| Profi t margin ** | 38% | 23% |
* The item comprises annual impairment losses of the Group's intangible assets of DKK 19m (DKK 13m) related to the acquisitions of Nordisk Fondservice AB and Monetar Pensionsförvältning AB.
** Amortisation and impairment of the Group's intangible assets are not included in the calculation of the recurring revenue/cost ratio or the profi t margin.
The average number of employees for the year in the entire Group was 223 (146) full time equivalents. There were 198 (70) employees at the beginning of 2008 and 251 (198) employees at year-end. The development in the number of employees since 2006 is shown below.
| 2008 | 2007 | 2006 | |
|---|---|---|---|
| Number of | |||
| employees, year-end | 251 | 198 | 70 |
The development is attributable both to the acquisitions of the Capinordic Group and to organic growth. This development in staff thus expanded competencies extensively. The intensive growth strategy building on both acquisitions and organic growth therefore made internal communications, knowledge sharing and integration into important focus areas for the Capinordic Group.
To support the integration into the Group and to ensure the individual employee's focus on the return on equity, the Capinordic Group has implemented a number of incentive programmes in the form of bonus and share option programmes. Moreover, the Group also uses further education and attendance at international conferences on an ongoing basis as a tool to attract and retain well-qualifi ed employees.
At the end of 2008 and the beginning of 2009, Capinordic reviewed the Group's costs and adjusted costs in various areas, including staff and other administrative expenses.
The activities of the Capinordic Group have no material environmental impacts, but the Group is conscious of costs and the environment, which is mainly refl ected in the Group's internal communications.
Capinordic has no research and development activities.
As a consequence of the still unstable capital markets and the macro-economic development, Capinordic expects 2009 to be a challenging year for the Group. The Group expects more volatile earnings than usual in the individual quarters, and the expectations for 2009 are fi xed within a fairly wide interval. Capinordic expects:
Due to the new markeds conditions the Groups fi ve-year objectives are currently being reassessed and will result in a new fi ve-year plan.
In connection with defi ning a new Management team and establishing three Business Areas with respective managing directors, the Management of Capinordic has implemented a share option programme. The programme comprises 2,785,000 share options. On exercise of the options, the shares will be acquired at a strike price of DKK 2.50 per share, which was the weighted average over ten trading days of the price quoted for shares in Capinordic A/S up to and including 16 February 2009. When using the Black-Scholes formula, the market value of the programme can be calculated at DKK 3.1m based on an interest rate of 2.35 per cent and a volatility of the Capinordic share of 80.91. The grant price, which corresponds to the strike price, is DKK 2.50.
The share option programme is granted as an incentive to the newly recruited members of the Management team and to a limited extent to current employees. The share option programme will be granted as follows:
No share options will be granted to members of the Supervisory Board or the Executive Board of Capinordic A/S. The Company considers it very essential that the share option programme supports the retention, commitment and motivation of senior employees. To a limited extent, some of the options will also be granted to selected employees as a bonus. The share options vest two years after the date of grant, provided that the relevant employee is still employed with the Company at the date of vesting. The share options may be exercised for a period of 24 months from the date of vesting in four trading windows of four weeks, corresponding to insider trading windows.
As a consequence of the above, the Company maintains the full authority granted in Article 9 of the Company's Articles of Association to implement one or more share option programmes implying the issue of up to 3.5 million shares. The policy related to future share option programmes comprises the grant of up to 1.2 million shares per year.
Capinordic endeavours to conduct an active IR policy with a high level of information and good investor care. For more information on the IR policy of Capinordic A/S, please see our website www.capinordic.com.
the Management is currently revising ways to increase liquidity in the share. The chart below shows the development in the share price relative to the various indexes:
Queries regarding the Capinordic Group may also be addressed to:
Brian Steffensen, Group CFO Tel.: +45 8816 3000 Fax: +45 8816 3003 E-mail: [email protected]
The stock markets were characterised by great instability and high volatility in 2008. Capinordic experienced a drop in the price of its share of 86%. By comparison, the Financials Index fell by 64% and DJ Euro Banks by 64%. The share price of Capinordic has been affected by low liquidity and
| Market value, 31 Dec. 2008 | 354,292,974 |
|---|---|
| Total number of shares | 118,890,260 |
| Shares outstanding, 31 Dec. 2008 | 115,225,375 |
| Shares outstanding, 31 Dec. 2007 | 117,042,802 |
| Share price, 31 Dec. 2008 | 2.98 |
| Share price, 31 Dec. 2007 | 21.30 |
| Year's high (3 Jan. 2008) | 22.20 |
| Year's low (5 Dec. 2008) | 2.50 |
| All time high (16 May 2000) | 75.00 |
| Listed on NASDAQ OMX Copenhagen |
Indexes: OMX Copenhagen MidCap+, OMX Copenhagen Financials ISIN code: DK0010212570 Short name: CAPI DKK
The total share capital of the Company nominally amounts to DKK 59,445,130, corresponding to 118,890,260 shares of a nominal value of DKK 0.50 each. The major shareholders and their holdings are listed below. The Executive and Supervisory Boards of Capinordic practise a very active ownership, and several members also own large holdings.
The Management of Capinordic A/S estimates that the Company's capital structure and share structure are appropriate and in the interest of the Company and its shareholders.
| Shareholder | Number of shares | Ownership interests |
|---|---|---|
| Ncom A/S * | 11,881,700 | 9.99 % |
| Verlinvest S.A. ** | 11,881,700 | 9.99 % |
| SL Nordic Holding ApS *** | 8,728,366 | 7.34 % |
| Synerco ApS *** | 7,737,598 | 6.51 % |
| DKA Consult A/S m.fl. **** | 6,611,787 | 5.56 % |
| Others * | 72,049,109 | 60.61 % |
| Total | 118,890,260 | 100.00 % |
* The company is owned by the family of Ole Vagner, member of the Supervisory Board.
** Frédéric de Mevius, member of the Supervisory Board, is the Managing Director of Verlinvest S.A.
*** In accordance with published company announcements.
**** The company is owned by Lasse Lindblad, CEO. "A.o." comprises DKA Invest A/S, which is part of the DKA Group. The DKA Group is owned by Lasse Lindblad, CEO.
***** Shareholders owning less than 5 per cent of the share capital of the Company.
It is the objective of Capinordic A/S to provide shareholders with a return on their investment in the form of a share price increase and dividends that exceed a risk-free investment in bonds. Payment of dividends must be made with due consideration of the requisite consolidation of equity as a basis for the continued expansion of the Group at all times.
Capinordic A/S holds treasury shares for market making reasons. As at 31 December 2008, the Group's portfolio of treasury shares comprised 3.7 million shares. Capinordic A/S has prepared internal policies regarding market making and trading in treasury shares.
Since 2005, Capinordic has implemented several share option programmes to support the employees' incentive to realise the objectives of the Group. The table shows share options granted and their exercise period:
| Year | Options granted | Exercise period | Strike price |
|---|---|---|---|
| 2005 | 492,500 | 24 Oct. 2008 – 23 Oct. 2010 | 11.80 |
| 2006 | 1,333,334 | 27 Oct. 2009 – 27 Oct. 2011 | 36.09 |
| 2007 | 2,960,000 | 20 Nov. 2010 – 20 Nov. 2013 | 22.14 |
| 2008 | No programmes | ||
| 2009 | 2,785,000 | 17 Feb. 2011 – 17 Feb. 2013 | 2.50 |
Please refer to the section 'Shares and options held by Management' for a specifi cation of share options held by Management. For further information on the incentive programmes, please see note 10.
The Annual General Meeting will be held at 12.30 p.m. on 21 April 2009 at the Copenhagen Admiral Hotel, Toldbodgade 24-28, 1253 Copenhagen K, Denmark.
The agenda with complete proposals and annexes will be available at www.capinordic.com not later than eight days before the Annual General Meeting.
The Management of Capinordic A/S applies the recommendations for corporate governance actively in its work of operating the Company.
Capinordic A/S fi nds corporate governance to be an important element in achieving the Group's strategy and objectives. Similarly, good communications with stakeholders in the Group are a prerequisite for making the valuation of the Capinordic share refl ect the value of the Company.
The NASDAQ OMX Copenhagen stock exchange has prepared a set of recommendations for corporate governance on the basis of the Nørby Committee's report on corporate governance. The recommendations are divided into eight main fi elds. These eight main fi elds are reviewed below according to the 'comply-or-explain' principle so that Capinordic A/S describes the elements where the Company is non-compliant. Please see the Company's website,
www.capinordic.com, for further information on corporate governance in Capinordic A/S.
The corporate governance recommendations were updated on 10 December 2008 with adjustments to para. 3 of section III and para. 1 of section V. The updated recommendations are to be incorporated into annual reports for fi nancial years commencing on or after 1 April 2008. Accordingly, the present review of the 'comply-or-explain' principle in respect of Capinordic A/S does not take into account the adjustments of 10 December 2008.
Capinordic A/S complies with the recommendations related to the role of the shareholders and their interaction with the Management of the Company.
Capinordic A/S complies with the recommendations related to the role of the stakeholders and their importance to the Company.
Capinordic A/S complies with the recommendations related to openness and transparency.
Publication in Danish and English: Capinordic A/S publishes announcements to the market in Danish and English.
The Company's website is available in both Danish and English. Where possible and relevant, the website contents on the Danish and English pages are identical. Capinordic thus does not fully comply with the recommendation.
Capinordic A/S complies with the recommendations on the tasks and responsibilities of the Supervisory Board. These matters are provided for by the rules of procedure of the Supervisory Board, as is the self-assessment of the Supervisory Board.
According to the Company's Articles of Association, the Supervisory Board of Capinordic A/S may have up to seven members. Capinordic has fi xed an age limit of 70 for Supervisory Board members. The Supervisory Board has set out the following knowledge areas as important qualifi cations for its members:
All Supervisory Board members of Capinordic A/S are deemed to be independent, see below. To be considered independent in this context, a member of the Supervisory Board elected by the General Meeting may not:
Capinordic A/S has no staff-elected members on the Supervisory Board of the Company. Section 49(2) to (8) of the Danish Public Companies Act lays down the rules on staffelected members of the supervisory board.
The scope and frequency of meetings of the Supervisory Board are laid down in its rules of procedure. The Supervisory Board has at least four meetings per year.
Capinordic does not comply with the recommendation related to time for board work and the number of directorships of supervisory board members, as the Supervisory Board estimates that the scope of work related to the members' positions is more decisive as to whether they can discharge their board duties in Capinordic A/S than the number of their positions.
Capinordic complies with the recommendation on the use of Supervisory Board committees, and matters relevant to Supervisory Board committees are provided for by the rules of procedure of the Supervisory Board. Capinordic A/S currently has no standing committees.
Concerning the recommendation on evaluation, the matter is provided for by the rules of procedure of the Supervisory Board. The Supervisory Board seeks to optimise its work on an ongoing basis, and the Chairman and the Executive Board have a continuous dialogue about the collaboration and the work performed. The Supervisory Board has not found it necessary to formalise the dialogue according to the recommended suggestion. Accordingly no reports on this matter are presented to the entire Supervisory Board.
Capinordic A/S has adopted a remuneration policy in accordance with the recommendation on such policies. The remuneration policy of the Company is not published for competition reasons.
Capinordic A/S does not comply with the recommendation on openness about remuneration of Management. The total remuneration of the Supervisory Board and of the Executive Board will be stated in the Annual Report of the Company as usual. Supervisory and Executive Board members' share of incentive programmes appears from Articles 9b-9d of the Articles of Association and from the Annual Report of the Company. The Supervisory Board fi nds that details on the remuneration of the individual Management members are not relevant to the public.
Capinordic A/S does not comply with the general guidelines for incentive programmes in full.
At the Annual General Meeting of the Company on 17 April 2008, the general guidelines for incentive pay were approved by the shareholders of the Company. The rules are available at www.capinordic.com.
Capinordic does not comply with the recommendation on termination benefi ts. Termination benefi t plans for members of the Company's Executive Board are not assessed as material to the Company's compliance with its obligations.
Capinordic A/S complies with the recommendations related to risk management. These matters are provided for by the rules of procedure of the Supervisory Board.
Capinordic A/S complies with the recommendations related to audit. These matters are provided for by the rules of procedure of the Supervisory Board. Capinordic A/S currently has no standing Supervisory Board committees.
The Capinordic Group divides its risk management into the following risk categories:
Risks are allocated by the type of the relevant risk and by the method applied by the Group to manage the risk.
The Capinordic Group is dependent on the acquisitions completed developing in accordance with Management expectations so that the expected synergies are achieved and the acquired companies and their staff are integrated into the rest of the Group as planned.
The Capinordic Group is dependent on its ability to recruit and retain competent employees, and therefore inability to recruit and retain competent employees may be of consequence to the future development potential of the Company.
The reputation of the Company may be affected by lawsuits, unsuccessful marketing, published analyses that prove later not to have been accurate, and other events. An impact on the reputation of the Company may affect the Company's future development potential, sales and cooperation agreements, strategic alliances and attractive acquisitions.
The marketing and launch of products may be unsuccessful
or poorly timed and may thus affect the Group's sales and its collaboration with its distribution network, which may lead to reduced sales likely to lower the Group's activity level and earnings.
Particularly in these years when the pension and savings markets in Europe are continuously scrutinised and subject to political reforms, the Group's present and future product portfolios risk not being designed to accommodate potential reforms.
Macro-economic fl uctuations may affect the demand in general among consumers and may, in particular, affect the demand for savings and investment products.
The Group is exposed to various types of fi nancial risks. The purpose of the Group's policies for risk management is to minimise the potential losses resulting from unpredictable developments in the fi nancial markets, etc.
The Group is continuously developing its tools for identifi cation and management of the risks affecting it every day. The Supervisory Board lays down the overall framework and principles of risk and capital management and receives regular reports on the risk development and utilisation of the risk limits allocated.
The most important fi nancial risk factor of the Group is the credit risk, the risk exposure being mainly related to Capinordic Bank A/S. The credit policy is therefore designed to ensure that transactions with customers and other credit institutions are always within the limits adopted.
The credit policy is an integral part of the overall policy of the Group. The purpose of the credit policy is to ensure that
the Group appears as a unifi ed enterprise with an unambiguous image.
The Group only wants to enter into exposures involving no risk of loss or a risk calculated as being low with customers assessed as reliable and as being specifi cally able and willing to perform agreements made. This means that loans and advances, earnings and risk should always be delicately balanced, including by assessing the risk of loss related to the individual customer.
The natural market segment comprises affl uent private customers, corporate customers and institutional customers.
The credit policy of the Group is based on insight into the customer's fi nancial and commercial situation. This is to assess the aggregate risk exposure related to the individual customer on an ongoing basis. It is the general policy of the Group that credit facilities should be secured by suitable collateral and that the individual customers' facilities should be in line with their creditworthiness, capital and funds. The maximum term of the credit facilities is normally 24 months. An exemption is facilities (investment credits) granted for securities trading purposes.
The credit facilities granted by the Group are subject to ongoing monitoring by the account manager and the Credit Department.
At least once a year, all loans and advances are reviewed in order to examine fi nancial statements and funds. Loans and advances are also automatically reviewed if the maximum credit line is increased or the credit terms are renegotiated.
The responsibility for granting credit facilities to different groups of customers of the Group has been delegated to the relevant levels of the organisation. Major commitments are submitted by the Credit Department to the Executive Board or the Supervisory Board for approval.
Receivables from credit institutions and central banks are
placed in accordance with the Group's internal guidelines, which are based on an individual assessment of the creditworthiness of the individual banks. The internal guidelines are intended to minimise the credit risk and ensure a satisfactory return on excess liquidity.
See note 42 for a breakdown of the credit risk relating to Group loans and advances.
In connection with implementation of the capital adequacy rules by Capinordic, the Group has developed a credit score model rating all of the Group's loan customers, private, corporate as well as institutional customers, into eight grades. The credit rating is made on the basis of a number of variables spanning from the customers' fi nancial situation to external assessments and conduct.
The rating of the individual customers ensures that the Group has a general view at all times of the relative quality of the total loan portfolio, and the rating is therefore a central element of the general monitoring of the credit risk of the loan portfolio. Continuous monitoring ensures that the individual rating refl ects the customer's fi nancial situation at all times.
The credit score model is subject to regular assessment to ensure optimum validity. In that connection the model is expected to be made even more forward-looking during 2009.
Credit facilities granted by the Group are subject to continuous monitoring. This is to ensure that the assumptions at the time of grant are satisfi ed at all times. It is important to monitor the customer's continued ability and willingness to perform his or her obligations and to ensure that any weaknesses in relation to the customer are identifi ed as quickly as possible.
If any credit weaknesses relating to a customer exposure are identifi ed, such exposure is given extra attention. If the continuous monitoring of the customers identifi es objective indications for impairment of an exposure, the Group assesses the amount of any impairment loss on the basis of a model prepared for this purpose.
The market risk is the risk of loss to the market value of portfolios and fi nancial instruments or a negative development in earnings or equity as a result of fl uctuations in the fi nancial markets. The market risk exposure of the Group is mainly related to interest rates, exchange rates and share prices.
The Group has designed a model that will ensure correct reporting and measure and assess the market risk of the Group in an adequate and well documented manner.
The model is based on historical data retrieved from the Group's systems. The historical data available to the Group have been used for estimation of the model. The Group has opted to use the market values of the individual positions for the models because the Group's assets comprise a relatively limited number of assets. The method implies a more specifi c calculation. Currency positions are modelled on the basis of the net position in each currency. The most central element of the model is the estimation of the variance-covariance matrix. Equilibrium average is used for the calculation of volatility and correlations as the best way of representing fl uctuations in the current market situation.
The market risks of the Group are also governed through limits covering the level of risk that the Group is willing to assume. The purpose of the fi nancial risk management is to balance the aggregate fi nancial risk related to assets and liabilities.
The Group manages its cash resource requirement by maintaining adequate cash facilities, highly liquid securities, adequate credit facilities and the ability to close market positions. The cash resource requirement is determined on the basis of an objective of ensuring adequate and stable cash resources. The Group endeavours to maintain excess coverage relative to the requirements of the Financial Business Act.
Reference is made to the excess cover ratio and the loans/ deposits ratio.
The Group has implemented certain models and methods as an element of the applicable capital adequacy requirements. According to Group policy, the operational risks must always be limited with due consideration of the pertaining costs.
Written work procedures have been prepared to minimise the dependency on individuals. Emergency IT plans are to limit losses in case of failure or lack of IT facilities or other similar crises.
The capital management of the Capinordic Group is to ensure effi cient use of the capital relative to the capital requirements of the Group and facilitate the realisation of the Group's growth strategy.
Capital targets of the subsidiaries of the Group are determined in consideration of the growth targets of the various entities and of observation of the capital adequacy requirements.
Capital requirements and capital adequacy requirements The signifi cant subsidiaries of the Group are individually subject to the capital adequacy requirements in Denmark and Sweden, respectively.
The capital management of the Group focuses mainly on the size of the core capital ratio and the capital adequacy ratio. The Group's capital base and capital adequacy ratio have developed as specifi ed in the table.
| DKKm | 2008 | 2007 | 2006 |
|---|---|---|---|
| Capital base | 838 | 1.015 | 857 |
| Capital ade quacy ratio |
46% | 48% | 114% |
Through all of 2008, the Group and the subsidiaries individually fully observed external capital requirements, and the capital base of the Group was constantly well over the statutory capital adequacy ratio of 8 per cent.
The Supervisory and Executive Boards have today reviewed and approved the 2008 Annual Report of Capinordic A/S, which comprises the Management's review, Management statement, accounting policies, income statement, balance sheet, statement of changes in equity, cash fl ow statement and notes for the Group and the Parent Company.
The Annual Report has been prepared in accordance with the International Financial Reporting Standards as approved by the European Union and additional Danish disclosure requirements for annual reports of listed fi nancial companies.
In our opinion, the accounting policies applied are appropriate and the Financial Statements give a true and fair view of the Group's and the Parent Company's assets, liabilities, equity and fi nancial position at 31 December 2008 and of the results of the Group's and the Parent Company's activities and cash fl ows for the fi nancial year ended 31 December 2008. We also fi nd that the Management's review gives a fair presentation of developments in the operations and fi nancial situation of the Group and the Parent Company as well as a description of the major risk factors and elements of uncertainty that may affect the Group and the Parent Company.
The Annual Report is recommended for approval by the Annual General Meeting.
Copenhagen, 23 March 2009
____________________________
Executive Board:
Lasse Lindblad CEO
Supervisory Board:
Claus Ørskov Chairman of the Supervisory Board
____________________________
____________________________
____________________________
____________________________
Lars Öijer Deputy Chairman
Frédéric de Mevius
Ole Vagner
We have audited the Annual Report of Capinordic A/S for the fi nancial year ended 31 December 2008, pages 1-99, comprising the Management's review, Management statement, accounting policies, income statement, balance sheet, statement of changes in equity, cash fl ow statement and notes for the Group and the Parent Company.
The Annual Report has been prepared in accordance with the International Financial Reporting Standards as approved by the European Union and additional Danish disclosure requirements for annual reports of listed fi nancial companies.
Management is responsible for the preparation and fair presentation of an annual report in accordance with the International Financial Reporting Standards as approved by the European Union and additional Danish disclosure requirements of annual reports for listed fi nancial companies. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of an annual report that is free of material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on the Annual Report based on our audit. We conducted our audit in accordance with Danish Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the Annual Report is free of material misstatement.
An audit involves performing procedures to obtain audit evidence of the amounts and disclosures in the annual report. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the annual report, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the preparation and fair presentation of an annual report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of the accounting policies applied by Management and the reasonableness of the accounting estimates made by Management as well as evaluating the overall presentation of the annual report.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion.
Our audit has not given rise to any qualifi cations.
In our opinion, the Annual Report gives a true and fair view of the Group's and the Parent Company's assets, liabilities, equity and fi nancial position at 31 December 2008 and of the results of the Group's and the Parent Company's activities and cash fl ows for the fi nancial year ended 31 December 2008 in accordance with the International Financial Reporting Standards as approved by the European Union and additional Danish disclosure requirements for annual reports of listed fi nancial companies.
Hellerup, 23 March 2009 PricewaterhouseCoopers Statsautoriseret Revisionsaktieselskab
____________________________
____________________________
Mikael Sørensen statsautoriseret revisor
Vibeke Bak Solok statsautoriseret revisor
The consolidated 2008 Annual Report of Capinordic A/S has been prepared in accordance with the International Financial Reporting Standards (IFRS) as approved by the European Union and additional Danish disclosure requirements for annual reports of listed fi nancial companies, see the disclosure requirements of NASDAQ OMX Copenhagen for annual reports of listed companies and the IFRS Executive Order issued pursuant to the Danish Financial Business Act.
The consolidated Annual Report also meets the requirements of the International Financial Reporting Standards issued by the IASB.
The consolidated Annual Report is presented according to the historical cost principle modifi ed by measurement of certain fi nancial instruments at fair value.
The presentation currency of the Annual Report is Danish kroner (DKK).
Key fi gures and ratios for 2004 have not been adapted to the revised accounting policies following from the transition to IFRS in 2005 and thus correspond to those of the 2004 Annual Report. The above also applies to the Parent Company.
The Group has opted for early adoption of IFRS 8 on segment information. According to the standard, segmentation and segment reporting must be based on the management approach.
The Group has chosen to change its presentation of segments so that they are presented by business segments in future as against geographical segments previously.
This change does not affect the Group's accounting policies for recognition and measurement of assets and liabilities.
New and amended standards approved by the European Union as at 31 December 2008
The following new and amended standards became effective in 2008:
Amendments to IAS 39, relaxation of the provisions for when a fi nancial instrument may be reclassifi ed from one category (trading portfolio, available for sale, etc.) to another after initial recognition. >
Moreover, the following interpretation aids, applicable as from 2008, have been issued:
The following standard, which becomes effective for 2009, has been applied as from 2008:
IFRS 8 on segment information. According to the standard, segmentation and segment reporting must be based on the management approach. >
The following new standards become effective for 2009 or later:
interim fi nancial report.
Amendments to IFRS 2 on share-based payment concerning the distinction between vesting conditions and restrictions and accounting treatment of cancellations. >
The following interpretation aids, effective as from 2009, have also been issued:
IFRIC 13 concerning accounting treatment of customer loyalty programmes. >
The above standards and interpretation aids are expected not to infl uence the recognition and measurement of any items of the fi nancial statements, but only to infl uence the presentation of the Annual Report.
The consolidated fi nancial statements comprise the Parent Company, Capinordic A/S, and Group enterprises over which Capinordic A/S exercises control, that is, has a controlling infl uence on the fi nancial and operational policies of the enterprise in order to obtain a return or other advantages from its activities. Controlling infl uence is obtained by owning or controlling more than 50 per cent of the voting rights, whether directly or indirectly, or by otherwise controlling the enterprise in question. Enterprises in which the Group exercises signifi cant, but not controlling infl uence, and which are not classifi ed as portfolio investments on initial recognition, are considered associates. Signifi cant infl uence is typically obtained by owning or controlling more than 20 per cent but less than 50 per cent of the voting rights, whether directly or indirectly. When assessing whether Capinordic A/S has controlling or signifi cant infl uence, potential voting rights exercisable on the balance-sheet date are taken into account.
The consolidated fi nancial statements have been prepared by consolidating the fi nancial statements of the Parent Company and the individual Group enterprises calculated according to the Group's accounting policies with elimination of intra-Group income and costs, shareholdings, internal balances and dividends as well as realised and unrealised gains from transactions between the consolidated enterprises.
Investments in Group enterprises are eliminated at the proportionate share of the subsidiary's fair value of identifi able net assets and recognised contingent liabilities at the acquisition date.
Investments in associates are recognised according to the equity method. Unrealised gains on associates are eliminated in proportion to the Group's ownership interest in the enterprise. Unrealised losses are eliminated in the same way as unrealised gains if no impairment has occurred. The carrying amount of equity investments includes goodwill identifi ed at the date of acquisition.
Newly acquired and newly formed enterprises are recognised in the consolidated fi nancial statements as from the acquisition date. Enterprises divested or wound up are recognised in the consolidated income statement until the date of disposal. Comparative fi gures are not adjusted for newly acquired enterprises. Discontinued operations are shown separately, see also below.
On acquisition of new enterprises over which the Parent Company obtains a controlling infl uence, the purchase method is applied. Identifi able assets, liabilities and contingent liabilities of the enterprises acquired are measured at their fair value at the acquisition date. Identifi able intangible assets are recognised if they are separable or arise from a contractual right and their fair value may be measured on a reliable basis. Deferred tax on the re-assessments made is recognised.
As regards business combinations made on or after 1 January 2004, positive differences (goodwill) between the cost of the enterprise and the fair value of identifi able assets, liabilities and contingent liabilities acquired are recognised as
goodwill under intangible assets. Goodwill is not amortised, but tested for impairment annually and if there is indication of impairment. The fi rst impairment test must be carried out before the end of the year of acquisition. On acquisition, goodwill is attributed to the cash-generating units on which the impairment tests are subsequently based. Goodwill and fair value adjustments in connection with the acquisition of a foreign entity whose functional currency differs from the presentation currency of the Capinordic Group are treated under assets and liabilities belonging to the foreign entity and are translated into the functional currency of the foreign entity using the exchange rate ruling at the date of acquisition. Negative differences (negative goodwill) are charged to the income statement at the acquisition date.
As regards business combinations made before 1 January 2004, the classifi cation in the fi nancial statements has been made according to the previous accounting policies. Goodwill is recognised at the cost of acquisition recognised in accordance with the previous accounting policies (Danish Financial Statements Act and Danish accounting standards) less amortisation and write-downs until 31 December 2003. Goodwill is not amortised after 1 January 2004. The accounting treatment of business combinations before 1 January 2004 has not been revised in connection with the opening balance sheet at 1 January 2004. Goodwill recognised in the opening balance sheet was tested for impairment at 1 January 2004.
If, at the date of acquisition, the measurement of the identifi able assets, liabilities and contingent liabilities acquired is subject to uncertainty, the initial recognition is made on the basis of a provisional calculation of fair value. If it subsequently turns out that the identifi able assets, liabilities and contingent liabilities had a different fair value at the acquisition date than fi rst assumed, goodwill may be adjusted for up to 12 months following the acquisition date. The effect of the adjustments is recognised in equity at the beginning of the fi nancial year, and comparative fi gures are restated. Subsequently, goodwill is only adjusted due to changes in the estimated contingent purchase consideration unless a material error has occurred. Subsequent realisation of the deferred tax assets of the acquired enterprise not recognised at the date of acquisition entails recognition of the tax advantage in the income statement and simultaneous reduction of the carrying amount of goodwill to the amount that would have been recognised had the deferred tax asset been recognised as an identifi able asset at the date of acquisition.
Gains or losses on disposal or winding up of Group enterprises and associates are stated as the difference between the selling price/winding-up consideration and the carrying amount of the net assets, including goodwill, at the date of sale, including divestment or winding-up costs.
Leases under which the Company assumes all material risks and benefi ts related to ownership (fi nance leases) are recognised in the balance sheet at the lower of the fair value of the asset and the present value of the lease payments calculated by applying the interest rate implicit in the lease or an approximate value thereof as the discount rate. Assets under fi nance leases are amortised, depreciated or written down for impairment losses according to the policy laid down for the Company's other fi xed assets.
The residual lease obligation is capitalised and recognised as a payable in the balance sheet, and the interest element of the lease payments is charged to the income statement on a continuous basis. All other leases are considered operating leases. Lease payments under operating leases are recognised in the income statement over the lease term on a straight-line basis.
A functional currency is determined for each reporting enterprise of the Group. The functional currency is the currency used in the primary fi nancial environment in which the individual reporting enterprise operates. Transactions denominated in currencies other than the functional cur-
rency are considered foreign currency transactions.
On initial recognition, foreign currency transactions are translated into the functional currency at the exchange rate ruling at the transaction date. Exchange differences between the exchange rates at the transaction date and the date of payment are recognised in the income statement under 'Market value and forex translation adjustments'.
Receivables, payables and other monetary items denominated in a foreign currency are translated into the functional currency at the exchange rate ruling at the balance-sheet date. The difference between the exchange rates at the balance-sheet date and the date on which the receivable or payable was recorded or the exchange rate was used in the latest annual report is recognised in the income statement as 'Market value and forex translation adjustments'.
When enterprises with a functional currency other than Danish kroner are initially recognised in the consolidated fi nancial statements, their income statements are translated at the exchange rates ruling on the transaction date, and the balance-sheet items are translated at the exchange rates ruling on the balance-sheet date. An average exchange rate for the individual months is used as the transaction-date exchange rate unless this exchange rate signifi cantly deviates from the exchange rates ruling at the relevant transaction dates. Exchange differences arising on translation of the equity of such enterprises at the beginning of the year at the exchange rates ruling at the balance-sheet date and on translation of the income statements from the exchange rates ruling at the transaction dates to the exchange rates ruling at the balance-sheet date are recognised directly in equity as a separate foreign currency translation reserve.
The fair value of fi nancial assets traded in an active market is calculated on the basis of the most recently quoted bid price. As regards other fi nancial assets and liabilities, the fair value is calculated using generally recognised valuation techniques. Such techniques include discounting models based, if possible, on observable market data, such as yield graphs, and observable prices of comparable instruments for which market prices are available, and other valuation models.
Interest income and interest expenses are recognised in the income statement for the relevant period, calculated according to the effective interest-rate method. Commissions and fees constituting an integral part of the effective interest rate of a loan are recognised as part of amortised cost and thus as an integral part of the return on the relevant fi nancial instrument (loan) under interest income.
Fee and commission income and expenses is divided between activity-derived fees and portfolio-derived fees. Income relating to services provided over a period, such as guarantee commissions and fees for asset management, are accrued over the period. Fees for completing any particular transaction, such as trading commission or fees for raising of capital, are recognised in the income statement when the transaction has been completed.
Share dividends are recognised in the income statement when the dividends are declared.
The item includes income from activities not attributable to the primary activities of the Company.
Staff costs comprise wages and salaries, social security costs and pensions, etc., for staff.
The costs of services and benefi ts for employees are recognised as the employees perform the work services entitling them to such services and benefi ts.
The costs of incentive programmes are recognised in the income statement in the fi nancial year to which the cost is attributable. Share-based payments are charged at the fair value calculated at the date of grant and are offset in equity.
Defi ned contribution pension plans have been entered into with most of the employees. Under the defi ned contribution pension plans, fi xed contributions are paid into an independent pension fund. The Company has no obligation to pay further contributions.
In respect of share-based payments, the consideration for the incentive programme corresponds to the value of the services received. That value is measured on the basis of the fair value of the options granted and is recognised as staff costs. The fair value is measured at the date of grant by means of an option model and is recognised in the income statement over the vesting period according to the straightline method. The vesting period has been fi xed at three years. The off-setting item to staff costs is the free reserves of equity. The calculation of the fair value takes into account the special vesting conditions.
This item includes expenses from activities not attributable to the primary activities of the Company.
Capinordic A/S is jointly taxed with all Danish subsidiaries under controlling infl uence. Current Danish corporation tax is disaggregated among the jointly taxed enterprises in proportion to their taxable incomes. Enterprises applying tax losses in other enterprises pay joint taxation contributions to the Parent Company corresponding to the tax base of the losses applied, while enterprises whose tax losses are applied by other enterprises receive joint taxation contributions from the Parent Company corresponding to the tax base of the losses applied (full allocation). The jointly taxed enterprises are included in the tax prepayment arrangement.
Tax for the year comprises current tax and changes in deferred tax. The share attributable to the net profi t for the year is recognised in the income statement, and the share attributable to direct equity entries is recognised directly in equity.
If the Capinordic Group is able to claim tax allowances when reporting its taxable income in Denmark or abroad due to share-based payment schemes, the tax effect of such schemes is recognised in tax on net profi t for the year. If the total tax allowance exceeds the total accounting cost, the tax effect of the excess tax allowance is, however, recognised directly in equity.
On initial recognition, fi nancial assets are attributed to one of the following categories:
On initial recognition, fi nancial assets are measured at fair value, which normally corresponds to the consideration paid. Transaction costs are added to fi nancial assets not subsequently measured at fair value over the income statement.
Ordinary purchases and sales of fi nancial instruments are recognised or cease to be recognised at the trade date.
Shares and bonds, etc., included in the trading portfolio are measured at fair value with value adjustments recognised in the income statement under 'Market value and forex translation adjustments'.
Investments in portfolio enterprises are measured at fair value with value adjustments recognised in the income statement under 'Market value and forex translation adjustments' since these are managed on a fair value basis.
Shares and bonds, etc., classifi ed as 'available for sale' are measured at fair value with value adjustments recognised in equity under 'Reserve for fair value adjustment of fi nancial instruments'. On sale or impairment, the reserve is retransferred to the income statement.
prising receivables from other credit institutions and time deposits with central banks are measured at amortised cost.
This item consists of loans and advances where the amount has been disbursed directly to the borrower.
Loans and advances are measured at amortised cost, which usually corresponds to the nominal value less loan fees, etc., and less impairment losses.
Individual write-downs are made when impairment is objectively indicated. The amount written down is the difference between the carrying amount before the impairment and the present value of the future expected payments on the loan.
There is an objective indication of impairment when events occurring in the period from the establishment of the loan or advance to the balance-sheet date indicate a risk of deterioration in future expected cash fl ows from the group, such as non-payment of services.
Where no indication of impairment exists, loans and advances are included in the group-based assessment of the need for impairment of groups of loans and advances with uniform credit characteristics. In the models applied by the Group, downgrading of customers indicates impairment. Loans and advances are divided into groups according to their current rating.
Group-based impairments are calculated by use of parameters applied for the computation of the solvency requirement adjusted for accounting purposes, which implies calculation of the group-based impairment as discounted expected loss series.
A gross approach is applied to identify any need for impairment. This approach refl ects the sum of deterioration of the individual borrowers within the rating classes without taking into consideration that other borrowers may have improved their rating during the period.
If the Group is aware of any deterioration or improvement as at the balance-sheet date which is not yet fully accounted for by the models, the impairment loss will be adjusted accordingly.
Impairment of loans and advances is carried on a corrective account included under loans and advances. Changes to the corrective account are recognised in the income statement
under 'Losses on loans and advances'. In case of subsequent events showing that the impairment was not permanent, the impairment loss will be reversed under 'Losses on loans and advances'.
Loans and advances deemed not to be recoverable are written off. Any such write-off is deducted from the corrective account. Loans and advances are written off when the usual debt collection procedures have been carried out and losses can be quantifi ed following an individual assessment.
Interest on the impaired value of the loans is recognised in the income statement according to the effective interest rate method.
On initial recognition, goodwill is recognised in the balance sheet at cost as described under 'Business combinations'. Subsequently, goodwill is measured at cost less accumulated impairment. Goodwill is not amortised.
The carrying amount of goodwill is allocated to the cash-generating units of the Group at the date of acquisition. Determination of cash-generating units follows the management structure and internal fi nancial management. The carrying amount of goodwill at 1 January 2004 (date of transition to IFRS) was tested for impairment.
Other intangible assets, including intangible assets acquired in connection with business combinations, are measured at cost less accumulated amortisation and impairment.
The cost comprises the acquisition price and expenses directly related to the acquisition until the time when the asset is ready for use. Other intangible assets are amortised on a straight-line basis over their estimated useful lives, assessed at 3-17 years.
Other intangible assets with indeterminable useful lives are not amortised, however, but are tested for impairment once a year. Other intangible assets with indeterminable useful lives include licences issued to acquired enterprises by fi nancial supervisory authorities.
Amortisation is recognised in the income statement under 'Amortisation and depreciation of intangible assets, property, plant and equipment'.
Other plant and operating equipment is measured at cost less accumulated depreciation and impairment.
The cost comprises the acquisition price and expenses directly related to the acquisition until the time when the asset is ready for use.
Depreciation is made on a straight-line basis over the expected useful lives of the assets, assessed at 3-5 years for equipment and 50 years for property.
The depreciation basis takes into account the residual value of the asset and is reduced by any impairment losses. The residual value is calculated on the date of acquisition and revised once a year. If the residual value exceeds the carrying amount of the asset, depreciation will no longer be provided. If the depreciation period or the residual value is changed, the effect on future depreciation will be recognised as a change in accounting estimates.
Depreciation is recognised in the income statement under 'Amortisation and depreciation of intangible assets, property, plant and equipment'.
Investments in Group enterprises and associates are measured at cost in the fi nancial statements of the Parent Company. If the cost exceeds the recoverable amount, the investment is written down to this lower value. The cost is reduced by dividends received in excess of the accumulated earnings after the date of acquisition.
Goodwill and intangible assets with indeterminable useful lives are tested for impairment once a year, the fi rst time before the end of the year of acquisition, and when a need for impairment is indicated.
The carrying amount of goodwill is tested for impairment together with the other non-current assets of the cash-generating unit to which the goodwill is allocated and is written down to the recoverable amount through the income statement if the carrying amount is higher.
The recoverable amount is generally calculated as the present value of the future expected net cash fl ow from the enterprise or activity (cash-generating unit) to which the goodwill is allocated. Impairment losses are recognised in a separate line in the income statement.
The carrying amounts of other non-current assets are assessed every year to determine whether impairment is indicated. In case of such indication, the recoverable amount of the asset is calculated. The recoverable amount is the higher of the fair value of the asset after deducting the expected disposal costs and the value in use.
Impairment losses are recognised if the carrying amount of an asset or a cash-generating unit exceeds the recoverable amount of the asset or unit. Impairment losses are recognised in the income statement under amortisation, depreciation and impairment. Impairment of goodwill is, however, recognised in a separate line in the income statement.
Impairment of goodwill cannot be reversed. Impairment of other assets is reversed if the assumptions and estimates leading to the impairment have changed. Impairment is only reversed if the new carrying amount of the asset does not exceed the carrying amount that the asset would have had after amortisation or depreciation if it had not been written down.
This item includes property, plant and equipment and equity instruments taken over which are not included in the future foundation of the Group's business, but are subject to ongoing sales efforts and expected to be sold within a period of 12 months. All assets held for resale are measured at the lower of cost and the expected sales price less selling costs.
Prepayments comprise costs paid concerning subsequent fi nancial years. Prepayments are measured at cost.
On initial recognition, fi nancial liabilities are attributed to one of the following categories:
On fi rst recognition, fi nancial liabilities are measured at fair value, which normally corresponds to the consideration received. Transaction costs are deducted from fi nancial liabilities not included in the trading portfolio.
Financial liabilities attributed to the trading portfolio are measured at fair value at the balance-sheet date, and fair value adjustments are recognised in the income statement.
Other fi nancial liabilities comprising the items 'Payables to credit institutions and central banks' and 'Deposits and other payables' are measured at amortised cost using the effective interest rate method. This usually corresponds to
Current tax payable and receivable is recognised in the balance sheet as tax calculated on the taxable income for the year, adjusted for tax on the taxable income of previous years and for prepaid tax.
Deferred tax is measured using the balance-sheet liability method on all temporary differences between the carrying amounts and the tax base of assets and liabilities. However, no recognition is made of deferred tax on temporary differences relating to goodwill disallowed for tax purposes and other items if, except at the acquisition of enterprises, such temporary differences arose on the date of acquisition without affecting the results or the taxable income. In cases where it is possible to calculate the tax base according to different tax rules, deferred tax is measured on the basis of the use of the asset or settlement of the liability planned by Management.
Deferred tax assets, including the tax base of tax loss carryforwards, are recognised under other non-current assets at the expected value of their utilisation, either by elimination in tax on future earnings or by offsetting deferred tax liabilities within the same legal tax entity and jurisdiction.
Deferred tax assets are assessed annually and are only recognised if it is likely that they will be utilised.
Deferred tax is adjusted for elimination of unrealised intra-Group gains and losses.
Deferred tax is measured on the basis of the tax rules and tax rates of the relevant countries which will be effective at the balance-sheet date under current legislation when the deferred tax is expected to crystallise as current tax.
Changes in deferred tax due to changes in tax rates are recognised in the income statement.
Provisions under fi nancial guarantees and other liabilities which are uncertain as to size or time of settlement are recognised as provisions when it is likely that the liability will result in an outfl ow of fi nancial resources from the Company, and reliable measurement of the liability is possible.
The liability is calculated as the present value of the best estimate of the costs necessary to discharge the liability. However, fi nancial guarantees are not measured at an amount lower than the commission received for the guarantee, accrued over the term of the guarantee.
Provision for liabilities concerning staff, including anniversaries, senior benefi ts, etc., is made on a statistical actuarial basis. Liabilities due more than 12 months after the period in which they arose are discounted.
Deferred income comprises income concerning subsequent fi nancial years. Deferred income is measured at its nominal value.
Dividends are recognised as a payable at the time of adoption at the Annual General Meeting. The proposed dividends for the fi nancial year are shown as a separate item under equity.
Purchase and selling prices as well as dividends on treasury shares are recognised directly in equity under retained earnings. Capital reduction through the cancellation of treasury shares reduces the share capital by an amount corresponding to the nominal value of the shares. Proceeds from the sale of treasury shares or the issue of shares in Capinordic A/S in connection with the exercise of share options or
employee shares are recognised directly in equity.
In the consolidated fi nancial statements, the reserve for forex translation adjustments comprises gains and losses resulting from the translation of fi nancial statements of foreign enterprises having a functional currency different from the presentation currency of Capinordic A/S (Danish kroner). In the event of sale of the net investment or part thereof, the foreign currency translation adjustments will be recognised in the income statement. The reserve for forex translation adjustments was reset to zero on 1 January 2004 in accordance with IFRS 1.
Reserve for fair value adjustment of fi nancial assets This reserve comprises unrealised fair value adjustments of fi nancial assets available for sale.
The incentive programmes of the Capinordic Group comprise a share option programme.
When the staff of the Capinordic Group are granted a possibility of subscribing for shares at a price lower than the market price, the element of favour is recognised as a charge under 'Staff costs'. The offsetting item is recognised directly in equity. The element of favour is calculated at the date of subscription as the difference between fair value and the subscription price for the shares subscribed.
The cash fl ow statement shows the Group's cash fl ows from operating, investing and fi nancing activities for the year, the year's changes in cash and cash equivalents as well as cash and cash equivalents at the beginning and end of the year. The cash fl ow effect from the acquisition and divestment of enterprises is shown as a separate item under cash fl ow from investing activities. The cash fl ow from acquired enterprises is recognised in the cash fl ow statement from the date of acquisition, and the cash fl ow from divested enterprises is recognised until the date of divestment.
The cash fl ow from operating activities is recognised as the pre-tax profi t or loss, adjusted for non-cash operating items, working capital changes as well as interest and corporation tax paid.
The cash fl ow from investing activities comprises payments relating to the acquisition and divestment of enterprises and activities, the purchase and sale of intangible assets, property, plant and equipment and other non-current assets as well as the purchase and sale of securities not classifi ed as cash and cash equivalents.
The cash fl ow from fi nancing activities comprises changes in the amount or composition of the share capital and related costs as well as the raising of loans, repayments on interestbearing debt, the purchase and sale of treasury shares and payment of dividends to shareholders.
Cash and cash equivalents comprise cash and securities that have a term-to-maturity of less than three months at the date of purchase, that can be transformed into cash without diffi culty and for which the risk of value changes is insignifi cant. The fi gures of the cash fl ow statement cannot be directly derived from the 2004 or 2005 fi gures of the consolidated fi nancial statements. This is due to the fact that the opening balance of each year has been translated at the closing rate of the same year. Changes in cash fl ows caused by exchange differences are thus eliminated.
Information is provided on business segments. Determination of segments follows the Group's management structure and the internal fi nancial management of the Group. Segment information has been prepared in accordance with the Group's accounting policies.
Income/expenses and assets/liabilities in the segments comprise the items directly attributable to the individual segment as well as the items that may be allocated to the individual segment on a reliable basis. Non-allocated items mainly comprise assets and liabilities as well as income and expenses relating to the Group's administrative functions, investing activities, corporation tax, etc.
The non-current assets of a segment comprise the non-current assets which are used directly for the operation of the segment, including intangible assets, property, plant and equipment as well as investments in associates.
The current assets of a segment comprise the current assets which are used directly for the operation of the segment, including trade receivables, other receivables, prepayments and cash. Segment liabilities comprise liabilities resulting from the operation of the segment, including trade payables and other payables.
Earnings per share (EPS) and diluted earnings per share (EPS-D) have been calculated in accordance with IAS 33.
Special ratios for fi nancial enterprises have been calculated in accordance with the guidelines of the Danish Financial Supervisory Authority.
Other ratios are calculated in accordance with 'Recommendations & Financial Ratios 2005' published by the Danish Society of Financial Analysts.
The ratios provided in the Annual Report have been calculated as follows:
| EBTDA | Earnings Before Tax, Depreciation and Amortisation. Earnings before tax and amortisation, depreciation and impairment of intangible assets, property, plant and equipment, but including net interest income. EBTDA refl ects the results of the Group's cash-generating activities. |
|---|---|
| Recurring revenue | Recurring revenue comprises net interest income, management fees from Asset Management and commission income from asset planning services provided by Private Banking and Private Financial Services. Non-recurring revenue includes fee and commission income from Invest- ment Banking, market value and forex translation adjustments and performance based income from Asset Management. |
| Recurring costs | Recurring costs comprises total fi xed and variable costs of the Group, except for performance based bonuses, costs concerning the State Guarantee Scheme, and amortisation and impair- ment of the Group's intangible assets related to the acquisitions made. |
Recurring revenue/cost ratio Recurring revenue Recurring costs Equity ratio Equity excluding minority interests, year-end x 100 Total liabilities and equity, year-end Net profi t for analytical purposes Profi t from ordinary activities after tax less share attributable to minority interests Return on equity Profi t for analytical purposes x 100 Average equity excluding minority interests Earnings per share (EPS) Net profi t for analytical purposes Average number of shares Cash Flow Per Share Cash fl ow from operating activities Average number of shares Equity value per share, year-end Equity excluding minority interests, year-end Number of shares, year-end
Dividends per share Dividend rate x nominal share value 100
| Group | Parent Company | |||||
|---|---|---|---|---|---|---|
| Note | 2008 DKK'000 |
2007 DKK'000 |
2008 DKK'000 |
2007 DKK'000 |
||
| Interest income | 2 | 115,168 | 85,212 | 16,004 | 19,504 | |
| Interest expenses | 3 | (43,797) | (25,131) | (6,941) | (7,662) | |
| Net interest income | 71,371 | 60,081 | 9,063 | 11,842 | ||
| Share dividends, etc. | 4 | 1,558 | 205 | 145,000 | 0 | |
| Fee and commission income | 5 | 350,111 | 270,499 | 0 | 4,889 | |
| Fee and commission expenses | 6 | (49,306) | (23,611) | 0 | (800) | |
| Net interest and fee income | 373,734 | 307,174 | 154,063 | 15,931 | ||
| Market value and translation adjustments | 7 | (55,351) | 53,972 | (2,886) | 45,341 | |
| Other operating income | 8 | 5,205 | 9,003 | 16,273 | 10,557 | |
| Net financials | 323,588 | 370,149 | 167,450 | 71,829 | ||
| Staff costs and administrative expenses | 9 | (272,801) | (212,165) | (36,372) | (28,519) | |
| Losses on loans and advances | 12 | (206,097) | (3,472) | (42,719) | 0 | |
| Other operating expenses | 13 | (4,045) | 0 | 0 | 0 | |
| Profit (loss) before amortisation, depreciation, | ||||||
| impairment and tax (EBTDA) | (159,355) | 154,512 | 88,359 | 43,310 | ||
| Amortisation, depreciation and impairment of intangible assets, | ||||||
| property, plant and equipment | 14 | (333,562) | (50,049) | (144,215) | (440) | |
| Profit (loss) from investments in associates | 22 | (19,915) | (2,207) | 0 | 0 | |
| Profit (loss) before tax | ||||||
| (512,832) | 102,256 | (55,856) | 42,870 | |||
| Tax for the year | 15 | 93,885 | (22,095) | 14,746 | (9,470) | |
| NET PROFIT (LOSS) FOR THE YEAR | (418,947) | 80,161 | (41,110) | 33,400 | ||
| Proposed distribution of net profit (loss) | ||||||
| Minority interests | 31 | 0 | 0 | 0 | ||
| Shareholders of the Parent Company, Capinordic A/S | (418,978) | 80,161 | (41,110) | 33,400 | ||
| Total distribution | (418,947) | 80,161 | (41,110) | 33,400 | ||
| DKK | DKK | |||||
| Earnings per share basic (EPS Basic) | 35 | (3.59) | 0.77 | |||
| Diluted earnings per share (EPS-D) | 35 | (3.59) | 0.76 | |||
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| ASSETS | Note | 31.12.2008 DKK'000 |
31.12.2007 DKK'000 |
31.12.2008 DKK'000 |
31.12.2007 DKK'000 |
| Cash and demand deposits with central banks | 16 | 42,810 | 46,064 | 0 | 0 |
| Receivables from credit institutions and central banks | 17 | 574,074 | 475,744 | 1,863 | 40,330 |
| Loans and advances | 18 | 921,902 | 1,262,407 | 196,171 | 134,541 |
| Bonds at fair value | 19 | 63,068 | 54,832 | 0 | 0 |
| Shares, etc. | 20 | 149,819 | 323,252 | 2,856 | 2,564 |
| Investments in portfolio enterprises | 21 | 100,866 | 81,806 | 60,052 | 81,806 |
| Investments in associates | 22 | 28,505 | 37,739 | 22,354 | 22,354 |
| Investments in Group enterprises | 23 | 0 | 0 | 2,007,590 | 2,114,693 |
| Intangible assets | 24 | 932,998 | 1,285,722 | 9,240 | 0 |
| Property, plant and equipment | 25 | 32,007 | 10,251 | 741 | 973 |
| Current tax assets | 5,302 | 3,028 | 1,178 | 0 | |
| Deferred tax assets | 26 | 47,484 | 0 | 7,973 | 0 |
| Assets held for sale | 27 | 80,570 | 65,594 | 10,194 | 10,194 |
| Other assets | 28 | 176,462 | 186,710 | 11,703 | 17,443 |
| Prepayments | 29 | 24,073 | 16,521 | 2,927 | 1,444 |
| Total assets | 3,179,940 | 3,849,670 | 2,334,842 | 2,426,342 |
| Group | Parent Company | |||||
|---|---|---|---|---|---|---|
| Note | 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | ||
| LIABILITIES AND EQUITY | DKK'000 | DKK'000 | DKK'000 | DKK'000 | ||
| Payables to credit institutions and central banks | 30 | 62,806 | 539,172 | 49,838 | 81,042 | |
| Deposits | 31 | 1,121,507 | 720,670 | 39,809 | 50,448 | |
| Current tax liabilities | 3,017 | 28,721 | 0 | 314 | ||
| Other liabilities | 32 | 49,478 | 82,244 | 8,097 | 11,258 | |
| Deferred income | 33 | 33,911 | 19,786 | 0 | 1,275 | |
| Total payables | 1,270,719 | 1,390,593 | 97,744 | 144,337 | ||
| Provision for deferred tax | 26 | 83,757 | 154,886 | 0 | 8,888 | |
| Provisions relating to guarantees | 4,524 | 0 | 0 | 0 | ||
| Other provisions | 34 | 1,468 | 41 | 0 | 0 | |
| Total provisions | 89,749 | 154,927 | 0 | 8,888 | ||
| Subordinated debt | 14,901 | 0 | 0 | 0 | ||
| Total subordinated debt | 14,901 | 0 | 0 | 0 | ||
| Total liabilities | 1,375,369 | 1,545,520 | 97,744 | 153,225 | ||
| Share capital | 59,445 | 59,445 | 59,445 | 59,445 | ||
| Share premium | 2,184,243 | 2,184,521 | 2,183,989 | 2,184,267 | ||
| Other reserves | (123,946) | (30,056) | 17,404 | 11,806 | ||
| Retained earnings (loss) | (322,522) | 90,240 | (23,740) | 17,599 | ||
| Parent Company's equity interest | 1,797,220 | 2,304,150 | 2,237,098 | 2,273,117 | ||
| Minority interests | 7,351 | 0 | 0 | 0 | ||
| Total equity | 1,804,571 | 2,304,150 | 2,237,098 | 2,273,117 | ||
| Total liabilities and equity | 3,179,940 | 3,849,670 | 2,334,842 | 2,426,342 |
| Group | ||||
|---|---|---|---|---|
| 2007 | ||||
| DKK'000 | ||||
| (512,832) | 102,256 | (55,856) | 42,870 | |
| 47 | (62,448) | (56,820) | (139,661) | (11,842) |
| 333,562 | 50,049 | 144,215 | 440 | |
| 206,097 | 0 | 41,419 | 0 | |
| 19,891 | (61,067) | 21,754 | (45,319) | |
| 8,027 | 3,992 | 1,341 | 1,144 | |
| 19,504 | ||||
| (7,522) | ||||
| 0 | ||||
| (36,090) | (16,968) | (3,316) | (4,933) | |
| (5,658) | ||||
| 9,162 | ||||
| (166) | ||||
| 0 | ||||
| (5,057) | ||||
| 208,984 | 131,212 | 3,101 | (1,719) | |
| (20,250) | (633,895) | 0 | 0 | |
| (25,383) | (1,670) | (11,496) | 0 | |
| (27,263) | (9,926) | (231) | (105) | |
| 277 | 155 | 0 | 0 | |
| 0 | 0 | (27,971) | (423,737) | |
| (25,370) | (9,016) | 0 | (16) | |
| 14,489 | 10,500 | 0 | 10,500 | |
| (55,232) | 0 | 0 | 0 | |
| 38,793 | 0 | 0 | 0 | |
| (21,464) | (84,548) | 0 | (84,548) | |
| 0 | 70,230 | 0 | 70,230 | |
| (427,676) | ||||
| 0 | 0 | 0 | 0 | |
| 14,901 | 0 | 0 | 0 | |
| 7,320 | 514,083 | 0 | 514,083 | |
| (278) | (9,566) | (278) | (9,819) | |
| (8,233) | (43,831) | (1,592) | (35,698) | |
| 13,710 | 460,686 | (1,870) | 468,566 | |
| Profit before tax plant and equipment Share-based payments Interest received Interest paid Dividends received Change in loans and advances Change in securities portfolio Acquisition of enterprises Acquisition of Group enterprises Acquisition of associates Divestment of associates Purchase of assets held for sale Cash flow from investing activities Dividends paid Capital increases Cash flow from financing activities |
Note Losses on loans and advances Market value and translation adjustments Tax paid Change in other assets and liabilities Sale of assets held for sale Divestment of portfolio enterprises Subordinated debt |
2008 DKK'000 103,658 (38,677) 1,558 22,746 134,406 400,837 142,390 (491,395) (121,403) |
2007 DKK'000 81,613 (23,763) 205 79,497 (822,118) 514,549 4,429 354,855 (658,170) |
Parent Company 2008 DKK'000 1,001 (6,340) 145,000 149,557 (59,160) (10,639) (1,385) (75,272) (39,698) |
| Group | Parent Company | |||||
|---|---|---|---|---|---|---|
| Note | 2008 DKK'000 |
2007 DKK'000 |
2008 DKK'000 |
2007 DKK'000 |
||
| Change in cash and cash equivalents Translation adjustment, cash |
101,291 (6,215) |
(66,272) (863) |
(38,467) 0 |
39,171 0 |
||
| Cash and cash equivalents, 1 January | 521,808 | 588,943 | 40,330 | 1,159 | ||
| Cash and cash equivalents, 31 December | 616,884 | 521,808 | 1,863 | 40,330 | ||
| Cash and cash equivalents, 31 December | ||||||
| Cash and demand deposits with central banks Receivables from credit institutions and central banks |
42,810 574,074 |
46,064 475,744 |
0 1,863 |
0 40,330 |
||
| Cash and cash equivalents, 31 December | 616,884 | 521,808 | 1,863 | 40,330 |
| Statement of changes in equity, 31 December 2008 | Group | |||||||
|---|---|---|---|---|---|---|---|---|
| Share capital DKK'000 |
Share premium DKK'000 |
Foreign currency translation adjustments DKK'000 |
Market value adjustments, available for sale DKK'000 |
Retained earnings DKK'000 |
Total DKK'000 |
Minority share holders DKK'000 |
Total DKK'000 |
|
| Equity, 1 January 2008 | 59,445 | 2,184,521 | (17,106) | (12,950) | 90,240 | 2,304,150 | 0 | 2,304,150 |
| Changes in equity | ||||||||
| Foreign currency translation adjustment relating to independent foreign entities |
0 | 0 | (73,674) | 0 | 0 | (73,674) | 0 | (73,674) |
| Market value adjustments of securities available for sale | 0 | 0 | 0 | (28,474) | 0 | (28,474) | 0 | (28,474) |
| Tax relating to market value adjustments of securities available for sale | 0 | 0 | 0 | 8,258 | 0 | 8,258 | 0 | 8,258 |
| Net profit (loss) for the year | 0 | 0 | 0 | 0 | (418,978) | (418,978) | 31 | (418,947) |
| Total comprehensive income | 0 | 0 | (73,674) | (20,216) | (418,978) | (512,868) | 31 | (512,837) |
| Capital increase | 0 | 0 | 0 | 0 | 0 | 0 | 7,320 | 7,320 |
| Non-cash contributions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Issue costs | 0 | (278) | 0 | 0 | 0 | (278) | 0 | (278) |
| Share-based payments | 0 | 0 | 0 | 0 | 8,027 | 8,027 | 0 | 8,027 |
| Treasury shares | 0 | 0 | 0 | 0 | (1,811) | (1,811) | 0 | (1,811) |
| Total changes in equity | 0 | (278) | (73,674) | (20,216) | (412,762) | (506,930) | 7,351 | (499,579) |
| Equity, 31 December 2008 | 59,445 | 2,184,243 | (90,780) | (33,166) | (322,522) | 1,797,220 | 7,351 | 1,804,571 |
| Statement of changes in equity, 31 December 2007 | Group | |||||||
|---|---|---|---|---|---|---|---|---|
| Share capital DKK'000 |
Share premium DKK'000 |
Foreign currency translation adjustments DKK'000 |
Market value adjustments, available for sale DKK'000 |
Retained earnings DKK'000 |
Total DKK'000 |
Minority share holders DKK'000 |
Total DKK'000 |
|
| Equity, 1 January 2007 | 42,467 | 1,307,369 | (193) | 0 | 49,918 | 1,399,561 | 0 | 1,399,561 |
| Changes in equity | ||||||||
| Foreign currency translation adjustment relating to independent foreign entities |
0 | 0 | (16,913) | 0 | 0 | (16,913) | 0 | (16,913) |
| Market value adjustments of securities available for sale | 0 | 0 | 0 | (15,748) | 0 | (15,748) | 0 | (15,748) |
| Tax relating to market value adjustments of securities available for sale | 0 | 0 | 0 | 2,798 | 0 | 2,798 | 0 | 2,798 |
| Net profit (loss) for the year | 0 | 0 | 0 | 0 | 80,161 | 80,161 | 0 | 80,161 |
| Total comprehensive income | 0 | 0 | (16,913) | (12,950) | 80,161 | 50,298 | 0 | 50,298 |
| Capital increases | 7,221 | 382,392 | 0 | 0 | 0 | 389,613 | 0 | 389,613 |
| Non-cash contributions | 9,757 | 504,326 | 0 | 0 | 0 | 514,083 | 0 | 514,083 |
| Issue costs | 0 | (9,566) | 0 | 0 | 0 | (9,566) | 0 | (9,566) |
| Share-based payments | 0 | 0 | 0 | 0 | 3,992 | 3,992 | 0 | 3,992 |
| Treasury shares | 0 | 0 | 0 | 0 | (43,831) | (43,831) | 0 | (43,831) |
| Total changes in equity | 16,978 | 877,152 | (16,913) | (12,950) | 40,322 | 904,589 | 0 | 904,589 |
| Equity, 31 December 2007 | 59,445 | 2,184,521 | (17,106) | (12,950) | 90,240 | 2,304,150 | 0 | 2,304,150 |
| Statement of changes in equity, 31 December 2008 | Parent Company | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Share capital DKK'000 |
DKK'000 | Market value adjustments, Share premium available for sale DKK'000 |
Fair value reserve DKK'000 |
Retained earnings DKK'000 |
Total DKK'000 |
||||
| Equity, 1 January 2008 | 59,445 | 2,184,267 | (69) | 11,875 | 17,599 | 2,273,117 | |||
| Changes in equity 2008 | |||||||||
| Market value adjustments of securities available for sale | 0 | 0 | (1,093) | 0 | 0 | (1,093) | |||
| Tax relating to market value adjustments of securities available for sale | 0 | 0 | 291 | 0 | 0 | 291 | |||
| Net profit (loss) for the year | 0 | 0 | 0 | 0 | (41,110) | (41,110) | |||
| Total comprehensive income | 0 | 0 | (802) | 0 | (41,110) | (41,912) | |||
| Capital increase | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Non-cash contributions | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Issue costs | 0 | (278) | 0 | 0 | 0 | (278) | |||
| Fair value adjustment | 0 | 0 | 0 | 6,400 | (6,400) | 0 | |||
| Share-based payments | 0 | 0 | 0 | 0 | 1,341 | 1,341 | |||
| Treasury shares | 0 | 0 | 0 | 0 | 4,830 | 4,830 | |||
| Total changes in equity 2008 | 0 | (278) | (802) | 6,400 | (41,339) | (36,019) | |||
| Equity, 31 December 2008 | 59,445 | 2,183,989 | (871) | 18,275 | (23,740) | 2,237,098 |
| Statement of changes in equity, 31 December 2007 | Parent Company | ||||||
|---|---|---|---|---|---|---|---|
| Share capital DKK'000 |
DKK'000 | Market value adjustments, Share premium available for sale DKK'000 |
Fair value reserve DKK'000 |
Retained earnings DKK'000 |
Total DKK'000 |
||
| Equity, 1 January 2007 | 42,467 | 1,307,368 | 0 | 30,163 | 465 | 1,380,463 | |
| Changes in equity 2007 | |||||||
| Market value adjustments of securities available for sale | 0 | 0 | (69) | 0 | 0 | (69) | |
| Net profit (loss) for the year | 0 | 0 | 0 | 0 | 33,400 | 33,400 | |
| Total comprehensive income | 0 | 0 | (69) | 0 | 33,400 | 33,331 | |
| Capital increases | 7,221 | 382,392 | 0 | 0 | 0 | 389,613 | |
| Non-cash contributions | 9,757 | 504,326 | 0 | 0 | 0 | 514,083 | |
| Issue costs | 0 | (9,819) | 0 | 0 | 0 | (9,819) | |
| Fair value adjustment | 0 | 0 | 0 | (18,288) | 18,288 | 0 | |
| Share-based payments | 0 | 0 | 0 | 0 | 1,144 | 1,144 | |
| Treasury shares | 0 | 0 | 0 | 0 | (35,698) | (35,698) | |
| Total changes in equity 2007 | 16,978 | 876,899 | (69) | (18,288) | 17,134 | 892,654 | |
| Equity, 31 December 2007 | 59,445 | 2,184,267 | (69) | 11,875 | 17,599 | 2,273,117 |
The calculation of the carrying amounts of certain assets and liabilities requires estimates of the impact of future events on the value of such assets and liabilities at the balance-sheet date. Estimates material to reporting are made in connection with the measurement of the Group's loans, advances and other receivables, the calculation of amortisation, depreciation and impairment, pensions and similar obligations, provisions and contingent liabilities and assets.
The estimates made are based on historical data and assumptions which are deemed by Management to be acceptable; however, in the nature of things, such assumptions are uncertain and unpredictable. The assumptions may be incomplete or inaccurate, and unexpected events or circumstances may occur. The enterprise is also subject to risks and uncertainties that may result in deviations between actual results and estimates. Special risks for the Group are discussed in the 'Management's review'.
The notes disclose information on assumptions concerning the future and other estimation uncertainties at the balance-sheet date implying a substantial risk of changes that may lead to a material adjustment of the carrying amounts of assets or liabilities in the next financial year.
The estimates and assessments made by Management has the greatest impact in connection with the valuation of the following items.
| Group | Parent Company | |||
|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 DKK'000 |
|
| DKK'000 | DKK'000 | DKK'000 | ||
| Loans and advances | 921,902 | 1,262,407 | 196,171 | 134,541 |
| Investments in portfolio enterprises | 100,866 | 81,806 | 60,052 | 81,806 |
| Investments in Group enterprises | 0 | 0 | 2,007,590 | 2,114,693 |
| Intangible assets | 932,998 | 1,285,722 | 9,240 | 0 |
Measurement of these items might be substantially affected by material changes in estimates and assumptions on which the calculation of the values is based. Please see note 24 on intangible assets for a description on impairment tests for intangible assets.
The assessment as to whether impairment of assets available for sale exists is based on individual assessments of the assets comprising both quantitative and qualitative factors relevant to each asset.
| Interest on receivables from credit institutions | 12,576 | 21,825 | 201 | 1,960 |
|---|---|---|---|---|
| Interest on loans, advances and other receivables | 93,557 | 61,400 | 15,656 | 17,544 |
| Bond interest | 4,089 | 1,987 | 0 | 0 |
| Other interest income | 4,946 | 0 | 147 | 0 |
| Interest income | 115,168 | 85,212 | 16,004 | 19,504 |
| 3 Interest expenses | ||||
| Interest payable to credit institutions | 10,492 | 5,071 | 6,064 | 4,895 |
| Interest payable to deposits | 26,162 | 18,033 | 871 | 2,630 |
| Interest on subordinated debt | 1,850 | 0 | 0 | 0 |
| Other interest expenses | 5,293 | 2,027 | 6 | 137 |
| Interest expenses | 43,797 | 25,131 | 6,941 | 7,662 |
| 4 Share dividends, etc. | ||||
| Share dividends, etc | 1,558 | 205 | 145,000 | 0 |
| Share dividends, etc. | 1,558 | 205 | 145,000 | 0 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |
| 5 Fee and commission income | DKK'000 | DKK'000 | DKK'000 | DKK'000 |
| Guarantee commission | 226 | 4,564 | 0 | 4,439 |
| Securities trading and custody accounts | 7,628 | 12,728 | 0 | 0 |
| Wealth and asset management | 207,797 | 107,428 | 0 | 0 |
| Loan fees | 819 | 40 | 0 | 0 |
| Other fee and commission income | 133,641 | 145,739 | 0 | 450 |
| Fee and commission income | 350,111 | 270,499 | 0 | 4,889 |
| 6 Fee and commission expenses | ||||
| Guarantee commission expenses | 85 | 0 | 0 | 0 |
| Fee and other commission expenses | 49,221 | 23,611 | 0 | 800 |
| Fee and commission expenses | 49,306 | 23,611 | 0 | 800 |
| 7 Market value and translation adjustments | ||||
| Bonds | (1,176) | 558 | 0 | 0 |
| Shares, etc | (25,387) | 39,310 | (2,887) | 45,319 |
| Impairment of securities available for sale | (26,989) | 0 | 0 | 0 |
| Foreign currency | (1,799) | 14,104 | 1 | 22 |
| Market value and translation adjustments | (55,351) | 53,972 | (2,886) | 45,341 |
| 8 Other operating income | ||||
| Administrative income | 1,256 | 4,527 | 16,247 | 10,303 |
| Any other operating income | 3,949 | 4,476 | 26 | 254 |
| Other operating income | 5,205 | 9,003 | 16,273 | 10,557 |
| 9 Staff costs and administrative expenses | ||||
| Number of employees | ||||
| Beginning of year | 198 | 70 | 8 | 2 |
| Mid-year | 220 | 171 | 10 | 5 |
| Year-end | 251 | 198 | 16 | 8 |
| Average number of employees | 223 | 146 | 11 | 5 |
| Salaries and remuneration of Executive and Supervisory Boards | ||||
| Executive Board | 9,042 | 14,500 | 9,042 | 14,500 |
| Supervisory Board | 2,056 | 2,294 | 687 | 800 |
| Share-based payments, Executive Board | 476 | 476 | 476 | 476 |
| Share-based payments, Supervisory Board | 378 | 378 | 378 | 378 |
| Salaries and remuneration of Executive and Supervisory Boards | 11,952 | 17,648 | 10,583 | 16,154 |
| Staff costs | ||||
| Salaries | 134,427 | 130,131 | 19,259 | 22,964 |
| Pensions | 7,236 | 3,700 | 222 | 0 |
| Social security costs | 16,911 | 13,804 | 1,916 | 1,159 |
| Staff costs | 158,574 | 147,635 | 21,397 | 24,123 |
| Other administrative expenses Other administrative expenses |
114 227 114,227 | 64 530 , | 14 975 , | 4 396 , |
| Staff costs and administrative expenses | 272,801 | 212,165 | 36,372 | 28,519 |
| 10 Share-based payments | Supervisory and Executive Boards |
Executive employees |
Other employees |
Total |
|---|---|---|---|---|
| Share option programme 2005 | ||||
| Grant, 24 October 2005 | 390,000 | 126,000 | 276,500 | 792,500 |
| Charge for the year | 491 | 211 | 463 | 1,165 |
The Company's Supervisory Board resolved on 24 October 2005 to implement a share option programme in accordance with Article 9b of the Articles of Association. A total number of 792,500 share options have been issued, each entitling its holder to buy one Capinordic A/S share at a price of DKK 11.80. When using the Black-Scholes formula, the market value of the programme can be calculated at DKK 3.7m based on an interest rate of 2.54% and an expected volatility of the Capinordic A/S share of 56%. The programme is expensed over the 3-year vesting period.
The share options issued were granted to the members of the Supervisory and Executive Boards of Capinordic A/S and to the employees of Unitfond AB on 24 October 2005.
The share option programme is incentive-based and the award of share options is not related to specific performance goals. The employees of Unitfond AB may not exercise the share options until three years after the date of grant. The exercise period is two years calculated from three years from the date of grant. The employee must be employed with the company at the date of exercise.
Reference is made to Stock Exchange Announcement No. 26/2005 of 24 October 2005.
| Supervisory and Executive Boards |
Executive employees |
Other employees |
Total | |
|---|---|---|---|---|
| Share option programme 2006 | ||||
| Grant, 26 October 2006 | 224,500 | 625,000 | 483,834 | 1,333,334 |
| Charge for the year Charge for the year |
363 | 1 178 1,178 |
685 | 2 226 2,226 |
| The programme comprises 1,333,334 share options, each entitling its holder to subscribe for one share of a nominal value of DKK 0.50 in Capinordic A/S. On |
exercise of the share options, the strike price for the shares is DKK 36.09. When using the Black-Scholes formula, the market value of the programme can be calculated at DKK 8.1m based on an interest rate of 3.98% and an expected volatility of the Capinordic A/S share of 30%. The programme is expensed over the 3-year vesting period.
The subscription price amounts to DKK 31.18 and has been fixed as a weighted average over ten trading days of the price quoted for Capinordic A/S up to and including 25 October 2006.
The share options have been awarded to all employees, including the Group Executive Board of the Capinordic Group, except the employees of Unitfond AB who have already been awarded share options, cf. Article 9b of the Articles of Association of the Company.
No share options have been granted to the Supervisory Board of the Company.
The share options vest three years after the date of grant, provided that the relevant employee is still employed with the Company at the date of vesting. The share options may be exercised for a period of 24 months from the date of vesting in four trading windows of four weeks, corresponding to insider trading windows. After exercise of the share options, Capinordic A/S will apply for admission of the shares to trading on the OMX Nordic Exchange Copenhagen as soon as possible.
Please refer to Stock Exchange Announcement No. 36/2006 of 27 October 2006 for a detailed description of the programme.
| 10 Share-based payments (continued) Share option programme 2007 |
Supervisory and Executive Boards |
Executive employees |
Other employees |
Total |
|---|---|---|---|---|
| Grant, 20 November 2007 | 0 | 1,190,000 | 1,770,000 | 2,960,000 |
| Charge for the year | 0 | 1,977 | 2,659 | 4,636 |
The Supervisory Board of Capinordic A/S resolved on 20 November 2007 to make partial use of its authority in Article 9 of the Company's Articles of Association to implement a share option programme.
The programme comprises 2,960,000 share options, each entitling its holder to subscribe for 1 share of a nominal value of DKK 0.50 in Capinordic A/S. On exercise of the share options, the strike price for the shares is DKK 22.14. When using the Black-Scholes formula, the market value of the programme can be calculated at DKK 15.6m based on an interest rate of 4.81% and an expected volatility of the Capinordic A/S share of 25%. The programme is expensed over the 3-year vesting period.
The allotment price, which corresponds to the strike price, is DKK 22.14 and has been fixed as a weighted average over ten trading days of the price quoted for shares in Capinordic A/S up to and including 19 November 2007.
Please refer to Stock Exchange Announcement No. 45/2007 of 20 November 2007 for a detailed description of the programme.
| Supervisory and | Executive | Other | Total | |
|---|---|---|---|---|
| Executive Boards | employees | employees | ||
| Total share-based payments | 854 | 3,366 | 3,807 | 8,027 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 2008 DKK'000 |
2007 DKK'000 |
2008 DKK'000 |
2007 DKK'000 |
|
| 11 Fee to auditors appointed by the General Meeting | ||||
| Statutory audit | 2,393 | 2,261 | 574 | 665 |
| Other services Other services | 3 203 , | 2 416 , | 506 | 899 |
| Fee to auditors appointed by the General Meeting | 5,596 | 4,677 | 1,080 | 1,564 |
| 12 Losses on loans and advances | ||||
| Realised losses on loans and advances for the year | 20 | 0 | 0 | 0 |
| Individual loan impairment losses for the year, including reversal of impairment | 202,281 | 3,472 | 42,719 | 0 |
| Gruop-based loan impairment losses for the year, including reversal of impairment | 1,848 | 0 | 0 | 0 |
| Danish Contingency Committee for Winding Up and Transfer of Banks and Savings Banks. | 1,948 | 0 | 0 | 0 |
| Losses on loans and advances | 206,097 | 3,472 | 42,719 | 0 |
| 13 Other operating expenses | ||||
| Danish Contingency Committee for Winding Up and Transfer of Banks and Savings | ||||
| Banks, regular guarantee commission | 4,045 | 0 | 0 | 0 |
| Other operating expenses | 4,045 | 0 | 0 | 0 |
| 14 Amortisation, depreciation and impairment of intangible assets, property, plant and equipment |
||||
| Amortisation of intangible assets | 51,723 | 43,536 | 143,752 | 0 |
| Impairment of intangible asseets | 273,030 | 0 | 0 | 0 |
| Depreciation of property, plant and equipment | 8,809 | 6,513 | 463 | 440 |
| Amortisation, depreciation and impairment of intangible assets, | ||||
| property, plant and equipment | 333,562 | 50,049 | 144,215 | 440 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 2008 DKK'000 |
2007 DKK'000 |
2008 DKK'000 |
2007 DKK'000 |
|
| 15 Tax for the year | ||||
| Current tax on profit for the year | 8,560 | 34,045 | 1,933 | 607 |
| Deferred tax | (102,825) | (11,564) | (16,571) | 9,296 |
| Tax relating to previous years | 380 | (386) | (108) | (433) |
| Reversal of impairment losses relating to deferred tax assets | 0 | 0 | 0 | 0 |
| Adjustment of tax asset | 0 | 0 | 0 | 0 |
| Tax for the year | (93,885) | 22,095 | (14,746) | 9,470 |
| Breakdown of tax on profit for the year: | ||||
| Calculated 25% tax on profit for the year before tax | (128,208) | 25,564 | (13,964) | 10,718 |
| Tax effect of: | ||||
| Other non-deductible costs | 3,328 | 2,268 | 418 | 389 |
| Non-taxable income | 0 | 0 | (36,250) | 0 |
| Impairment of intangible assets | 25,396 | 0 | 35,374 | 0 |
| Profit from investments in associates | 5,900 | 552 | 0 | 0 |
| Higher/lower tax rates in foreign Group enterprises | (1,575) | 246 | 0 | 0 |
| Capitalised costs relating to the acquisition of Group enterprises | (216) | (1,351) | (216) | (1,351) |
| Adjustment of deferred tax, changed tax rate | 0 | (8,218) | 0 | 148 |
| Tax relating to previous years | 1,490 | 3,034 | (108) | (434) |
| Reversal of impairment losses relating to deferred tax assets | 0 | 0 | 0 | 0 |
| Tax on profit for the year | (93,885) | 22,095 | (14,746) | 9,470 |
| Effective tax rate | 18% | 22% | 26% | 22% |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 DKK'000 |
31.12.2007 DKK'000 |
31.12.2008 DKK'000 |
31.12.2007 DKK'000 |
|
| 16 Cash and demand deposits with central banks | ||||
| Notes and coins | 6 | 10 | 0 | 0 |
| Demand deposits with central banks | 42,804 | 46,054 | 0 | 0 |
| Cash and demand deposits with central banks | 42,810 | 46,064 | 0 | 0 |
| 17 Receivables from credit institutions and central banks | ||||
| Demand deposits with banks | 574,074 | 475,744 | 1,863 | 40,330 |
| Receivables from credit institutions and central banks | 574,074 | 475,744 | 1,863 | 40,330 |
| 18 Loans and advances | ||||
| Loan accounts with variable drawing rights | 816,800 | 125,433 | 166,597 | 94,358 |
| Any other loans and advances | 312,703 | 1,140,446 | 72,293 | 40,183 |
| Impairment losses | (207,601) | (3,472) | (42,719) | 0 |
| Loans and advances | 921,902 | 1,262,407 | 196,171 | 134,541 |
| Impairment losses Impairment |
||||
| Individual impairment losses | 205,753 | 3,472 | 42,719 | 0 |
| Group-based impairment losses | 1,848 | 0 | 0 | 0 |
| Impairment losses year-end | 207,601 | 3,472 | 42,719 | 0 |
| Individual impairment losses | ||||
| Individual impairment losses at beginning of year | 3,472 | 0 | 0 | 0 |
| New and increased impairment losses | 202,281 | 3,472 | 42,719 | 0 |
| Reversal of impairment losses | 0 | 0 | 0 | 0 |
| Individual impairment losses year-end | 205,753 | 3,472 | 42,719 | 0 |
| Group-based impairment losses | ||||
| Group-based impairment losses at beginning of year | 0 | 0 | 0 | 0 |
| New and increased impairment losses | 1,848 | 0 | 0 | 0 |
| Reversal of impairment losses | 0 | 0 | 0 | 0 |
| Group-based impairment losses year-end | 1,848 | 0 | 0 | 0 |
| Reasons for impairment resulting in individual writedowns | ||||
| Bankruptcy | 38.57% | 0.00% | 77.85% | 0.00% |
| Debt collection | 8.36% | 0.00% | 22.15% | 0.00% |
| Composition with creditors | 21.54% | 0.00% | 0.00% | 0.00% |
| General signs of weakness | 31.52% | 100.00% | 0.00% | 0.00% |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| 19 Bonds at fair value | ||||
| Other fixed-rate government bonds | 56,798 | 49,867 | 0 | 0 |
| Bonds issued by credit institutions | 6,270 | 4,965 | 0 | 0 |
| Bonds at fair value | 63,068 | 54,832 | 0 | 0 |
| 20 Shares, etc. | ||||
| Shares listed on the OMX Nordic Exchange Copenhagen | 121,306 | 207,609 | 1,012 | 2,564 |
| Investment fund shares | 5,740 | 99,127 | 1,471 | 0 |
| Shares listed on other stock exchanges | 4,964 | 4,872 | 0 | 0 |
| Other shares | 10,750 | 110 | 373 | 0 |
| Unlisted investment fund shares | 7,059 | 11,534 | 0 | 0 |
| Shares, etc. | 149,819 | 323,252 | 2,856 | 2,564 |
| 21 Investments in portfolio enterprises | ||||
| Cost, 1 January | 46,085 | 0 | 45,340 | 0 |
| Additions for the year | 21,464 | 110,386 | 0 | 109,641 |
| Disposals for the year | 0 | (64,301) | 0 | (64,301) |
| Cost, 31 December | 67,549 | 46,085 | 45,340 | 45,340 |
| Accumulated value adjustments, 1 January | 35,721 | 0 | 36,466 | 0 |
| Fair value adjustment of listed portfolio enterprises | (28,154) | 23,846 | (28,154) | 24,591 |
| Fair value adjustment of unlisted portfolio enterprises | 25,750 | 11,875 | 6,400 | 11,875 |
| Accumulated value adjustments, 31 December | 33,317 | 35,721 | 14,712 | 36,466 |
| Carrying amount, 31 December | 100,866 | 81,806 | 60,052 | 81,806 |
Fair value of unlisted portfolio enterprises has been calculated in accordance with recognised valuation techniques. Se also the accounting policies used.
| Ownership interests in portfolio enterprises of more than 20%: | Ownership interests (Group) | Ownership interests (Parent Company) |
||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| Mercon A/S | 40% | 40% | 40% | 40% |
| SBS Estates A/S | 43% | 0% | 0% | 0% |
| Carrying amount of portfolio enterprises in which the ownership interest is more than 20%. | Carrying amount (Group) | Carrying amount (Parent Company) |
||
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| Mercon A/S | 38,522 | 32,122 | 38,522 | 32,122 |
| SBS Estates A/S | 40,814 | 0 | 0 | 0 |
| Carrying amount of portfolio enterprises in which the ownership interest is more than 20% |
79,336 | 32,122 | 38,522 | 32,122 |
| 21 Investments in portfolio enterprises (continued) | SBS Estates A/S |
Mercon A/S |
|---|---|---|
| Latest published financial statements | 2007 | 2007 |
| Revenue | 0 | * |
| Profit before tax | (2,095) | 35 |
| Tax on profit for the year | (17) | (13) |
| Net profit for the year | (2,112) | 22 |
| Total assets | 28,727 , |
8,541 , |
| Total liabilities | 26,699 | 440 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| 22 Investments in associates | ||||
| Cost, 1 January | 42,554 | 66,207 | 22,354 | 55,007 |
| Additions for the year | 25,370 | 9,016 | 0 | 16 |
| Disposals for the year | (14,489) | (32,669) | 0 | (32,669) |
| Cost, 31 December | 53,435 | 42,554 | 22,354 | 22,354 |
| Accumulated value adjustments, 1 January | (4,815) | 1,231 | 0 | 0 |
| Share of profit for the year | (5,580) | (2,207) | 0 | 0 |
| Other value adjustments | (14,535) | (2,869) | 0 | 0 |
| Disposals for the year | 0 | (970) | 0 | 0 |
| Accumulated value adjustments, 31 December | (24,930) | (4,815) | 0 | 0 |
| Carrying amount, 31 December | 28,505 | 37,739 | 22,354 | 22,354 |
| I-nvestor Danmark A/S | 23,833 | 23,204 | 22,354 | 22,354 |
| K/S Amalieparken | 0 | 14,335 | 0 | 0 |
| Ejendomsselskabet Ørestad Syd A/S | 0 | 200 | 0 | 0 |
| Core Focus A/S | 4,672 | 0 | 0 | 0 |
| Investments in associates | 28,505 | 37,739 | 22,354 | 22,354 |
| Ownership interests (Parent | |||||
|---|---|---|---|---|---|
| Ownership interests (Group) | Company) | ||||
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | ||
| I-nvestor Danmark A/S | 29.50% | 29.50% | 29.50% | 29.50% | |
| K/S Amalieparken | 40.00% | 40.00% | 40.00% | 40.00% | |
| Ejendomsselskabet Ørestad Syd A/S | 40.00% | 40.00% | 40.00% | 40.00% | |
| Core Focus A/S** |
I-nvestor Danmark A/S |
K/S Amalieparken |
selskabet Ørestad Syd A/S |
|---|---|---|---|
| 2007 | 2007 | 2006/07 | |
| * | * | 0 | |
| 2,804 | (8,132) | (8) | |
| (597) | 0 | 2 | |
| 2,207 | (8,132) | (6) | |
| 3,350 | 158,550 | 30,913 | |
| 2,237 | 148,391 | 30,719 | |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| 23 Investments in Group enterprises | ||||
| Cost, 1 January | 0 | 0 | 2,114,693 | 1,301,343 |
| Additions for the year | 0 | 0 | 34,393 | 813,350 |
| Disposals for the year | 0 | 0 | 0 | 0 |
| Cost, 31 December | 0 | 0 | 2,149,086 | 2,114,693 |
| Impairment, 1 January | 0 | 0 | 0 | 0 |
| Impairment losses for the year | 0 | 0 | (141,496) | 0 |
| Impairment, 31 December | 0 | 0 | (141,496) | 0 |
| Carrying amount, 31 December | 0 | 0 | 2,007,590 | 2,114,693 |
| Ownership interest | ||||
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| Capinordic Bank A/S, Gentofte, Denmark | 100% | 100% | 1,202,534 | 1,202,534 |
| Nordisk Fondservice AB, Umeå, Sweden | *100% | 100% | 311,982 | 276,961 |
| Monetar Pensionsförvaltning AB, Stockholm, Sweden | 100% | 100% | 215,727 | 215,727 |
| Capinordic Capital Fondsmæglerselskab A/S, Copenhagen, Denmark | 100% | 100% | 59,059 | 139,993 |
| Dansk O.T.C. Fondsmæglerselskab A/S, Horsens, Denmark | 100% | 100% | 40,000 | 87,012 |
| Aktie- & Valutainvest ApS, Hellerup, Denmark | 100% | 100% | 86,604 | 86,604 |
| CSV Invest ApS, Gentofte, Denmark | 100% | 100% | 48,511 | 62,061 |
| Unitfond AB, Helsingborg, Sweden | *0% | 100% | 0 | 35,021 |
| Capinordic Asset Management AB, Stockholm, Sweden | 100% | 100% | 8,274 | 8,274 |
| Capinordic Property Management A/S, Gentofte, Denmark | 100% | 100% | 506 | 506 |
| Nordic Brokers Association AB, Stockholm, Sweden | 53% | 0% | 8,014 | 0 |
| Bio Fund Management OY, Helsinki, Finland | 99% | 0% | 26,379 | 0 |
| Investments in Group enterprises | 2,007,590 | 2,114,693 |
* Nordisk Fondservice AB and Unitfond AB merged during the financial year with Nordisk Fondservice AB as the continuing company.
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| 24 Intangible assets | ||||
| Breakdown of carrying amount, 31 December: | ||||
| Goodwill | 593,703 | 733,519 | 0 | 0 |
| Marketing-related intangible assets | 2,215 | 3,751 | 0 | 0 |
| Customer-related intangible assets | 287,526 | 504,332 | 0 | 0 |
| Contract-based intangible assets | 30,008 | 23,895 | 9,240 | 0 |
| Technology-based intangible assets | 19,546 | 20,225 | 0 | 0 |
| Carrying amount, 31 December | 932,998 | 1,285,722 | 9,240 | 0 |
Intangible assets comprise acquired intangible assets only.
At 31 December 2008, Management tested the carrying amount of intangible assets for impairment, including goodwill deriving from completed business combinations.
The recoverable amount is based on the value in use as fixed by the application of expected earnings (EBTDA) and net cash flow based on budgets and forecasts for the years 2009 to 2013, approved by Management. Budgets and forecasts are based on specific assumptions for the individual cash-generating units.
The budgets and forecasts prepared are based on historical data, the expected future business development and other assumptions deemed by Management to be acceptable; however, in the nature of things, such assumptions are uncertain and unpredictable. The assumptions may be incomplete or inaccurate, and unexpected events or circumstances may occur. The enterprise is also subject to risks and uncertainties that may result in deviations between actual results and estimates. Special risks for the Group are discussed in the 'Management's review'.
A five-year budget period and a terminal period have been applied. An individually fixed discount rate before tax of between 11.6% and 16.19% has been applied for discounting to net present value. Supplementary sensitivity analyses have been made of the assumptions applied to support the carrying amount of intangible assets in case of material changes to the assumptions.
In the nature of things, such forecasts are subject to some uncertainty. Please refer to note 1 for a description thereof.
The Group's future earnings depend to some degree on international capital market developments. In view of the still unstable and uncertain capital markets, the Group has adjusted the impairment tests applied to intangible assets, resulting in the following impairment of goodwill and customer-related intangible assets:
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| Capinordic Bank A/S (business segment banking) | 130,065 | 0 | 0 | 0 |
| Capinordic Capital Fondsmæglerselskab A/S (business segment asset management) | 78,133 | 0 | 0 | 0 |
| Dansk O.T.C. Fondsmæglerselskab A/S (business segment banking) | 51,282 | 0 | 0 | 0 |
| CSV Invest ApS (business segment banking) | 13,550 | 0 | 0 | 0 |
| Impairment losses for the year p y |
273,030 , |
0 | 0 | 0 |
| Goodwill | ||||
| Cost, 1 January | 733,519 | 282,638 | 0 | 0 |
| Additions for the year | 0 | 0 | 0 | 0 |
| Additions for the year deriving from business combinations | 1,786 | 459,658 | 0 | 0 |
| Disposals for the year | 0 | 0 | 0 | 0 |
| Foreign currency translation adjustments | (40,019) | (8,777) | 0 | 0 |
| Cost, 31 December | 695,286 | 733,519 | 0 | 0 |
| Accumulated impairment, 1 January | 0 | 0 | 0 | 0 |
| Impairment losses for the year | (101,583) | 0 | 0 | 0 |
| Accumulated impairment, 31 December | (101,583) | 0 | 0 | 0 |
| Carrying amount, 31 December | 593,703 | 733,519 | 0 | 0 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 24 Intangible assets (continued) | 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| Goodwill has been allocated to the following cash-generating units: | ||||
| Capinordic Bank A/S | 302,995 | 280,892 | 0 | 0 |
| Unitfond AB | 0 | 18,949 | 0 | 0 |
| Capinordic Property Management A/S | 13,555 | 13,555 | 0 | 0 |
| CSV Invest ApS | 0 | 13,550 | 0 | 0 |
| Capinordic Capital Fondsmæglerselskab A/S | 25,075 | 93,345 | 0 | 0 |
| Dansk O.T.C. Fondsmæglerselskab A/S | 0 | 41,866 | 0 | 0 |
| Private Financial Services* | 215,520 | 0 | 0 | 0 |
| Nordisk Fondservice AB | 0 | 130,905 | 0 | 0 |
| Monetar Pensionsförvaltning AB | 0 | 140,441 | 0 | 0 |
| Capinordic Asset Management AB | 34,770 | 16 | 0 | 0 |
| Bio Fund Management OY | 1,788 | 0 | 0 | 0 |
| Non-allocated (the Capinordic Group) | 0 | 0 | 0 | 0 |
| Carrying amount, 31 December | 593,703 | 733,519 | 0 | 0 |
* Private Financial Services consists of the companies Nordisk Fondservice AB and Monetar Pensionsförvaltning AB.
| Earnings growth in terminal | ||||
|---|---|---|---|---|
| Assumptions applied for cash-generating units: | Discount rates | period | ||
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| Capinordic Bank A/S | 12.17% | 8.82% | 2.00% | 2.00% |
| Unitfond AB | - | 8.72% | - | 2.00% |
| Capinordic Property Management ApS | 11.71% | 12.82% | 2.00% | 2.00% |
| CSV Invest ApS | - | 11.82% | - | 2.00% |
| Capinordic Capital Fondsmæglerselskab A/S | 16.19% | 14.70% | 2.00% | 2.00% |
| Dansk O.T.C. Fondsmæglerselskab A/S | - | 12.07% | 2.00% | 2.00% |
| Private Financial Services | 12.20% | - | 2.00% | - |
| Nordisk Fondservice AB | - | 11.72% | 2.00% | 2.00% |
| M Monetar Pensionsförvaltning AB t P i fö lt i AB |
- | 12 22% 12.22% |
2 00% 2.00% |
2.00% 2 00% |
| Capinordic Asset Management AB | 12.27% | - | 2.00% | - |
| Bio Fund Management OY | 11.60% | - | 2.00% | - |
| Non-allocated (the Capinordic Group) | - | - | 2.00% | 2.00% |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| 24 Intangible assets (continued) | DKK'000 | DKK'000 | DKK'000 | DKK'000 |
| Marketing-related intangible assets | ||||
| Cost, 1 January | 6,367 | 2,000 | 0 | 0 |
| Additions for the year | 0 | 0 | 0 | 0 |
| Additions for the year deriving from business combinations | 798 | 4,434 | 0 | 0 |
| Disposals for the year | 0 | 0 | 0 | 0 |
| Foreign currency translation adjustments | (326) | (67) | 0 | 0 |
| Cost, 31 December | 6,839 | 6,367 | 0 | 0 |
| Accumulated impairment, 1 January | 0 | 0 | 0 | 0 |
| Impairment losses for the year | (594) | 0 | 0 | 0 |
| Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
| Accumulated impairment, 31 December | (594) | 0 | 0 | 0 |
| Accumulated amortisation, 1 January | (2,616) | 0 | 0 | 0 |
| Amortisation for the year | (1,571) | (2,625) | 0 | 0 |
| Foreign currency translation adjustments | 157 | 9 | 0 | 0 |
| Accumulated amortisation, 31 December | (4,030) | (2,616) | 0 | 0 |
| Carrying amount, 31 December | 2,215 | 3,751 | 0 | 0 |
| To be amortised over | 0-5 years | 0-5 years | 0-5 years | 0-5 years |
Marketing-related intangible assets comprise trademarks rights, name rights, domain names, non-competition clauses, etc.
| Cost, 1 January | 543,681 | 250,729 | 0 | 0 |
|---|---|---|---|---|
| Additions for the year | 0 | 0 | 0 | 0 |
| Additions for the year deriving from business combinations | 21,210 | 299,669 | 0 | 0 |
| Disposals for the year | 0 | 0 | 0 | 0 |
| Foreign currency translation adjustments | (33,564) | (6,717) | 0 | 0 |
| Cost, 31 December | 531,327 | 543,681 | 0 | 0 |
| Accumulated impairment, 1 January | 0 | 0 | 0 | 0 |
| Impairment losses for the year | (168,853) | 0 | 0 | 0 |
| Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
| Accumulated impairment, 31 December | (168,853) | 0 | 0 | 0 |
| Accumulated amortisation, 1 January | (39,349) | (10,115) | 0 | 0 |
| Amortisation for the year | (39,002) | (29,457) | 0 | 0 |
| Foreign currency translation adjustments | 3,403 | 223 | 0 | 0 |
| Accumulated amortisation, 31 December | (74,948) | (39,349) | 0 | 0 |
| Carrying amount, 31 December | 287,526 | 504,332 | 0 | 0 |
| To be amortised over To be amortised |
6-17 years 6-17 |
10-17 years 10-17 |
10-17 years 10-17 |
10-17 years 10-17 |
Customer-related intangible assets comprise customer relationships, etc.
| 31.12.2007 | |||
|---|---|---|---|
| DKK'000 | DKK'000 | DKK'000 | DKK'000 |
| 1,266 | |||
| 14,246 | 0 | 11,496 | 0 |
| 0 | |||
| 0 | |||
| (218) | (48) | 0 | 0 |
| 50,216 | 36,188 | 12,762 | 1,266 |
| 0 | 0 | 0 | 0 |
| 0 | |||
| 0 | 0 | 0 | 0 |
| (2,000) | 0 | 0 | 0 |
| (1,266) | |||
| 0 | |||
| (18,208) | (12,293) | (3,522) | (1,266) |
| 30,008 | 23,895 | 9,240 | 0 |
| 0-10 years | 0-10 years | 0-5 years | 0-5 years |
| 0 | |||
| 0 | |||
| 0 | |||
| 0 | |||
| 0 | |||
| (2,723) | (515) | 0 | 0 |
| 28,431 | 25,154 | 0 | 0 |
| (4,929) | 0 | 0 | 0 |
| 0 | (822) | 0 | 0 |
| (5,235) | (4,175) | 0 | 0 |
| 769 | 0 | 0 | 0 |
| 510 | 68 | 0 | 0 |
| (8,885) | (4,929) | 0 | 0 |
| 19,546 | 20,225 | 0 | 0 |
| 31.12.2008 36,188 0 0 (2,000) (12,293) (5,915) 25,154 0 5,941 846 (787) |
Group 31.12.2007 21,411 14,825 0 0 (4,766) (7,527) 0 8,129 1,670 15,870 0 |
Parent Company 31.12.2008 1,266 0 0 0 (1,266) (2,256) 0 0 0 0 0 |
Technology-based intangible assets comprise computer software etc.
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| 25 Property, plant and equipment | DKK'000 | DKK'000 | DKK'000 | DKK'000 |
| Breakdown of carrying amount, 31 December: Property |
21,105 | 0 | 0 | 0 |
| Plant and equipment | 10,902 | 10,251 | 741 | 973 |
| Carrying amount, 31 December | 32,007 | 10,251 | 741 | 973 |
| Property | ||||
| Cost, 1 January | 0 | 0 | 0 | 0 |
| Additions for the year | 21,315 | 0 | 0 | 0 |
| Additions for the year deriving from business combinations | 0 | 0 | 0 | 0 |
| Disposals for the year | 0 | 0 | 0 | 0 |
| Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
| Cost, 31 December | 21,315 | 0 | 0 | 0 |
| Accumulated depreciation, 1 January | 0 | 0 | 0 | 0 |
| Depreciation for the year | (210) | 0 | 0 | 0 |
| Depreciation of assets sold/discontinued | 0 | 0 | 0 | 0 |
| Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
| Accumulated depreciation, 31 December | (210) | 0 | 0 | 0 |
| Carrying amount, 31 December | 21,105 | 0 | 0 | 0 |
| Plant and equipment q p | ||||
| Cost, 1 January | 20,083 | 19,389 | 1,600 | 1,837 |
| Correction relating to previous years | 0 | (8,296) | 0 | 0 |
| Additions for the year deriving from business combinations Additions for the year |
5,811 449 |
7,907 2,019 |
231 0 |
105 0 |
| Disposals for the year | (379) | (803) | 0 | (342) |
| Foreign currency translation adjustments | (631) | (133) | 0 | 0 |
| Cost, 31 December | 25,333 | 20,083 | 1,831 | 1,600 |
| Accumulated foreign currency translation adjustments, 1 January | 0 | (133) | 0 | (137) |
| Correction relating to previous years | 0 | (4) | 0 | 0 |
| Foreign currency translation adjustments | 0 | 137 | 0 | 137 |
| Accumulated foreign currency translation adjustments, 31 December | 0 | 0 | 0 | 0 |
| Accumulated depreciation, 1 January | (9,832) | (4,790) | (627) | (392) |
| Correction relating to previous years | 0 | 993 | 0 | 0 |
| Depreciation for the year | (5,055) | (6,439) | (463) | (440) |
| Depreciation of assets sold/discontinued | 96 | 340 | 0 | 205 |
| Foreign currency translation adjustments | 360 | 64 | 0 | 0 |
| Accumulated depreciation, 31 December | (14,431) | (9,832) | (1,090) | (627) |
| Carrying amount, 31 December | 10,902 | 10,251 | 741 | 973 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| 26 Deferred tax | ||||
| Deferred tax, 1 January | 154,886 | 74,678 | 8,888 | (408) |
| Tax relating to previous years | (817) | 780 | 0 | 148 |
| Adjustment for the year | (111,083) | (11,564) | (16,861) | 9,148 |
| Deferred tax relating to business combinations | 4,383 | 90,992 | 0 | 0 |
| Write-down to fair value | (11,096) | 0 | 0 | 0 |
| Deferred tax | 36,273 | 154,886 | (7,973) | 8,888 |
| Breakdown of deferred tax: | ||||
| Intangible assets | 83,285 | 143,877 | (341) | (226) |
| Property, plant and equipment | (261) | 1,507 | 36 | 15 |
| Securities etc | (2,165) | 10,050 | 3,302 | 9,099 |
| Current assets | (12,190) | 0 | (10,970) | 0 |
| Share option programme | 0 | 0 | 0 | 0 |
| Payables | (565) | (548) | 0 | 0 |
| Tax losses | (31,831) | 0 | 0 | 0 |
| Deferred tax | 36,273 | 154,886 | (7,973) | 8,888 |
| Deferred tax in the financial statements | ||||
| Deferred tax (liability) | 83,757 | 154,886 | 0 | 8,888 |
| Deferred tax (other assets) | (47,484) | 0 | (7,973) | 0 |
| Deferred tax | 36,273 | 154,886 | (7,973) | 8,888 |
The year 2008 was characterised by unusual events, which were the main reason for the tax loss. Recognition of the deferred tax asset is based on the Group's The year 2008 was characterised by unusual which were the main reason for the tax Recognition of the deferred tax asset is based on the Group s forecasts and budgets, according to which the tax loss realised can be utilised to reduce future years' tax payments.
| Cost, 1 January Additions for the year Disposals for the year |
65,594 55,232 (38,793) |
0 65,594 0 |
10,194 0 0 |
0 10,194 0 |
|---|---|---|---|---|
| Cost, 31 December | 82,033 | 65,594 | 10,194 | 10,194 |
| Accumulated value adjustments, 1 January Other value adjustments |
0 (1,463) |
0 0 |
0 0 |
0 0 |
| Accumulated value adjustments, 31 December | (1,463) | 0 | 0 | 0 |
| Carrying amount, 31 December | 80,570 | 65,594 | 10,194 | 10,194 |
Assets held for sale are assets acquired for the purpose of sale.
This item includes assets held for more than one year, which is due to current market conditions. They are expected to be sold within one year.
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| 28 Other assets | DKK'000 | DKK'000 | DKK'000 | DKK'000 |
| Other various debtors | 160,984 | 133,873 | 0 | 0 |
| Other assets | 8,759 | 40,692 | 11,703 | 17,443 |
| Interest and commission receivable | 6,719 | 12,145 | 0 | 0 |
| Other assets | 176,462 | 186,710 | 11,703 | 17,443 |
| Breakdown: | ||||
| Current assets | 176,462 | 186,710 | 11,703 | 17,443 |
| Non-current assets | 0 | 0 | 0 | 0 |
| Other assets | 176,462 | 186,710 | 11,703 | 17,443 |
| 29 Prepayments | ||||
| Other prepayments | 24,073 | 16,521 | 2,927 | 1,444 |
| Prepayments | 24,073 | 16,521 | 2,927 | 1,444 |
| Breakdown: | ||||
| Current prepayments | 24,073 | 16,521 | 2,927 | 1,444 |
| Non-current prepayments | 0 | 0 | 0 | 0 |
| Prepayments | 24,073 | 16,521 | 2,927 | 1,444 |
| 30 Payables to credit institutions and central banks | ||||
| Payables to central banks on demand Payables to credit institutions on demand |
6,895 55,911 |
49,917 489,255 |
0 49,838 |
0 81,042 |
| Payables to credit institutions and central banks | 62,806 | 539,172 | 49,838 | 81,042 |
| Breakdown: | ||||
| Current payables to credit institutions and central banks | 56,806 | 539,172 | 49,838 | 81,042 |
| Non-current payables to credit institutions and central banks | 6,000 | 0 | 0 | 0 |
| Payables to credit institutions and central banks | 62,806 | 539,172 | 49,838 | 81,042 |
| 31 Deposits | ||||
| On demand | 439,544 | 322,767 | 39,809 | 0 |
| Deposits at notice | 57,620 | 0 | 0 | 0 |
| Time deposits | 599,479 | 376,106 | 0 | 50,448 |
| Special deposits | 24,864 | 21,797 | 0 | 0 |
| Deposits | 1,121,507 | 720,670 | 39,809 | 50,448 |
| Breakdown: | ||||
| Current deposits Non-current deposits |
1,100,918 20,589 |
720,174 496 |
39,809 0 |
50,448 0 |
| Deposits | 1,121,507 | 720,670 | 39,809 | 50,448 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| 32 Other liabilities | DKK'000 | DKK'000 | DKK'000 | DKK'000 |
| Payables to consolidated companies | 0 | 0 | 2,757 | 0 |
| Various creditors | 7,403 | 11,977 | 2,297 | 0 |
| Unclaimed dividends/interest on guarantee capital from previous years | 533 | 0 | 0 | 0 |
| Lease obligations | 0 | 33 | 0 | 0 |
| Interest and commission payable | 484 | 0 | 0 | 0 |
| Other expenses payable | 41,058 | 70,234 | 3,043 | 11,258 |
| Other liabilities | 49,478 | 82,244 | 8,097 | 11,258 |
| Breakdown: | ||||
| Other current liabilities | 49,478 | 82,244 | 8,097 | 11,258 |
| Other non-current liabilities | 0 | 0 | 0 | 0 |
| Other liabilities | 49,478 | 82,244 | 8,097 | 11,258 |
| 33 Deferred income | ||||
| Prepaid interest and commission Other deferred income |
0 33,911 |
1,275 18,511 |
0 0 |
1,275 0 |
| Deferred income | 33,911 | 19,786 | 0 | 1,275 |
| Breakdown: | ||||
| Current deferred income | 33,911 | 19,786 | 0 | 1,275 |
| Non-current deferred income | 0 | 0 | 0 | 0 |
| Deferred income | 33,911 | 19,786 | 0 | 1,275 |
| 34 Other provisions | ||||
| Provisions, 1 January Adjustment for the year |
41 1,427 |
951 (910) |
0 0 |
951 (951) |
| Other provisions | 1,468 | 41 | 0 | 0 |
| 35 Earnings per share | ||||
| Net profit (loss) for the year | (418,947) | 80,161 | ||
| Share of consolidated profit attributable to minority interests | 31 | 0 | ||
| Share of net profit (loss) for the year attributable to the Capinordic Group | (418,978) | 80,161 | ||
| Average number of shares | ||||
| Average number of shares | 118,890 | 105,471 | ||
| Average number of treasury shares | (2,069) | (930) | ||
| Average number of shares outstanding | 116,821 | 104,541 | ||
| Average dilutive effect of outstanding share options | 3,753 | 1,128 | ||
| Average number of shares outstanding, diluted | 120,574 | 105,669 | ||
| Earnings per share (EPS) of DKK 0.50 | (3.59) | 0.77 | ||
| Diluted earnings per share (EPS-D) of DKK 0.50 | (3.59) | 0.76 | ||
| Dividends per share | 0.00 | 0.00 | ||
Share options issued in 2006 are not included in the calculation at year- ti i d i 2006 t i ldd i th l l ti t end 2007 and 2008 as the share options have no dilutive effect. The share option d 2007 d 2008 th h ti h dil ti ff t Th h ti s may have a dilutive effect in future. Please refer to the description of share option programmes under 'Shareholder information' in the 'Management's review'.
The Capinordic Group had a holding of 3,664,885 shares in Capinordic A/S at 31 December 2008. The net addition for 2008 totalled 1,817,427 treasury shares, and the market value at 31 December 2008 was DKK 11m. In 2007, a net total of 1,847,458 treasury shares were acquired.
The Parent Company has provided a payment guarantee of DKK 35m and a letter of indemnity of DKK 55m.
The Group has deposited securities of a carrying amount at 31 December 2008 of DKK 51m as security for balances with banks.
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| 38 Other financial liabilities and contingent liabilities | ||||
| Other financial liabilities | ||||
| Leases (minimum payments): | ||||
| Due within 1 year | 6,728 | 4,357 | 0 | 0 |
| Due within 1-5 years | 20,031 | 16,754 | 0 | 0 |
| Due after 5 years | 10,363 | 18,742 | 0 | 0 |
| Total | 37,122 | 39,853 | 0 | 0 |
| Lease expenses charged to the income statement | 7,063 | 5,541 | 0 | 0 |
Rental obligations relating to leased premises run for 8 years.
The Gro p is not a part to an pending la s its other than pending enforcement proceedings instit ted b the Gro p The Compan is a part to some disp tes The Group is not a party to any pending lawsuits other than pending enforcement proceedings instituted by the Group. The Company is a party to some disputesand has obtained legal assistance in that connection. The Company expects no loss to the Company from the outcome of the disputes [any potential loss has been incorporated into the valuation basis of the relevant assets and liabilities]. The expectation is supported by the legal opinions received.
| Total | 175,053 | 275,867 | 0 | 0 |
|---|---|---|---|---|
| Issue guarantees | 12,150 | 43,634 | 0 | 0 |
| Transfer of Banks and Savings Banks | 36,053 | 0 | 0 | 0 |
| Loss guarantee to the Danish Contingency Committee for Winding Up and | ||||
| Financial guarantees | 83,384 | 0 | 0 | 0 |
| Irrevocable credit commitments | 43,466 | 232,233 | 0 | 0 |
Please refer to the Management's review for a description of post-period events.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | ||
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | ||
| 41 Financial instruments recognised | |||||
| Loans and advances | |||||
| Cash and demand deposits with central banks | 42,810 | 46,064 | 0 | 0 | |
| Receivables from credit institutions and central banks | 574,074 | 475,744 | 1,863 | 40,330 | |
| Loans and advances | 921,902 | 1,262,407 | 196,171 | 134,541 | |
| Other assets | 176,462 | 186,710 | 11,703 | 17,443 | |
| Loans and advances | 1,715,248 | 1,970,925 | 209,737 | 192,314 | |
| Financial assets available for sale | |||||
| Bonds at fair value | 0 | 49,867 | 0 | 0 | |
| Shares, etc | 106,632 | 126,463 | 2,856 | 2,564 | |
| Financial assets available for sale | 106,632 | 176,330 | 2,856 | 2,564 | |
| Financial assets at fair value recognised in the income statement | |||||
| Shares etc | 43,187 | 196,789 | 0 | 0 | |
| Bonds at fair value | 63,068 | 4,965 | 0 | 0 | |
| Investments in portfolio enterprises | 100,866 | 81,806 | 60,052 | 81,806 | |
| Financial assets at fair value recognised in the income statement | 207,121 | 283,560 | 60,052 | 81,806 | |
| Other liabilities | |||||
| Payables to credit institutions and central banks | 62,806 | 539,172 | 49,838 | 81,042 | |
| Deposits |
1,121,507 507 |
720 720,670 |
39,809 | 50,448 | |
| Other liabilities | 49,478 | 82,244 | 8,097 | 11,258 | |
| Other liabilities | 1,233,791 | 1,342,086 | 97,744 | 142,748 |
The fair value of loans is presumed to be lower than the carrying amount, but due to current market conditions it is difficult to measure it.
The fair value of other financial instruments recognised largely equals the carrying amount.
| Recognised capital gains and losses on financial instruments | (83,825) | 38,224 | (3,979) | 45,272 |
|---|---|---|---|---|
| Financial assets available for sale Market value adjustment taken to equity Reclassified gains and losses from equity to income statement |
(28,474) (26,989) |
(15,748) 0 |
(1,093) 0 |
(69) 0 |
| Trading portfolio Portfolio investments |
(25,958) (2,404) |
12,322 41,650 |
18,868 (21,754) |
2,946 42,395 |
| Financial assets at fair value through results |
The Group is exposed to credit risks relating to the following balance-sheet and non-balance-sheet items. Reference is made to the section on 'Credit risk' in the Management's review for a description of the origin and management of credit risks.
| Group | Parent Company | ||||||
|---|---|---|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | ||||
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | ||||
| Balance-sheet items | |||||||
| Cash and demand deposits with central banks | 42,810 | 46,064 | 0 | 0 | |||
| Receivables from credit institutions and central banks | 574,074 | 475,744 | 1,863 | 40,330 | |||
| Loans and advances | 921,902 | 1,262,407 | 196,171 | 134,541 | |||
| Other assets | 176,462 | 186,710 | 11,703 | 17,443 | |||
| Non-balance-sheet items | |||||||
| Irrevocable credit commitments | 43,466 | 232,233 | 0 | 0 | |||
| Financial guarantees | 83,384 | 0 | 0 | 0 | |||
| Loss guarantee to the Danish Contingency Committee for Winding Up and | |||||||
| Transfer of Banks and Savings Banks | 36,053 | 0 | 0 | 0 | |||
| Other guarantees | 12,150 | 43,634 | 0 | 0 | |||
| Total | 1,890,301 | 2,246,792 | 209,737 | 192,314 |
At year-end 2008, the Group had deposited DKK 616.9m with other credit institutions. More than 90 per cent of the funds deposited are placed with Danmarks Nationalbank or with credit institutions which are members of the Danish Contingency Committee for Winding Up and Transfer of Banks and Savings Banks and thereby comprised by the Danish State Guarantee Scheme. The remainder is placed with foreign banks with a high credit rating.
| Breakdown of credit risks on loans and advances by sectors and industries | Increase (%), Group | Increase (%), Parent Company | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |||||||||
| Finance and investment | 40% | 25% | 92% | 70% | ||||||||
| Property | 33% | 22% | 8% | 30% | ||||||||
| Industri and production | 1% | 1% | 0% | 0% | ||||||||
| Trade and service | 6% | 5% | 0% | 0% | ||||||||
| Infrastructure | 8% | 17% | 0% | 0% | ||||||||
| Other | 4% | 0% | 0% | 0% | ||||||||
| Private | 8% | 30% | 0% | 0% | ||||||||
The exposure to an individual customer or a group of related customers may not exceed 25% of the consolidated capital base after deduction of particularly secure claims, see section 145 of the Danish Financial Business Act. In addition, the total amount of exposures which exceed 10% of the capital base after deduction of particularly secure claims may not exceed 800% of the capital base. The Group must report the utilisation of these rules to the Financial Supervisory Authority once every quarter.
Total..................................................................................................................................... 100% 100% 100% 100%
At 31 December 2008, the Group's credit exposure to commitments amounting to 10% or more of the base capital was DKK 375m, corresponding to 45% of the Group's base capital.
The Group follows up on a continuous basis on all its exposures to credit facilities granted. This ongoing follow-up contributes to ensuring that any negative trends will be identified as quickly as possible, thereby minimising the risk of losses. The monitoring comprises both analyses of the financial situation and conduct of the individual customer. This information forms the basis of the risk classification, which is given to the individual customer and subsequently updated/maintained on an ongoing basis.
Credit scoring of Group customers is managed by the Credit Department, but made on the basis of data collected by the individual account manager, which is then processed and entered into the credit scoring model of the Group. The model is made as a statistical calculation on the basis of the data entered showing the probability that the customer will fail to meet its liabilities to the Group.
The model used has seven credit grades as well as a category of bankrupt. The top four grades cover exposures characterised as being from "Good" to "Extremely Strong". The lower three grades cover exposures with less good credit rating. Particularly the two lowest grades contain high-risk loans and loans in default. A high-risk loan need not imply an increased risk of loss because it may be hedged by collateral compensating for the risk.
| Classification of customers, grades | Probability of default * | Probability of default * | ||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| Extremely Strong (A+) | 0.10% | 0.04% | 0.10% | 0.04% |
| Very Strong (A) | 0.21% | 0.10% | 0.21% | 0.10% |
| Strong (A-) | 0.40% | 0.26% | 0.40% | 0.26% |
| Good (B+) | 1.59% | 0.52% | 1.59% | 0.52% |
| Marginal (B) | 7.60% | 1.91% | 7.60% | 1.91% |
| Weak (B-) | 22.40% | 9.70% | 22.40% | 9.70% |
| Extremely weak (C) | 92.61% | 25.70% | 92.61% | 25.70% |
| Defaulted (D) | 100.00% | 100.00% | 100.00% | 100.00% |
* The average probability of default expresses the probability of the default of an exposure with a given rating.
| Classification of customers, percentage breakdown | Probability of default * | Probability of default * | ||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| Extremely Strong (A+) | 0.00% | 0.00% | 0.00% | 0.00% |
| Very Strong (A) | 4.47% | 18.50% | 0.00% | 0.00% |
| Strong (A-) | 2.02% | 27.36% | 0.00% | 0.00% |
| Good (B+) | 20.08% | 23.48% | 84.92% | 70.00% |
| Marginal (B) | 13.43% | 27.70% | 0.00% | 30.00% |
| Weak (B-) | 17.16% | 2.96% | 0.00% | 0.00% |
| Extremely weak (C) | 31.25% | 0.00% | 7.65% | 0.00% |
| Defaulted (D) | 11.59% | 0.00% | 7.43% | 0.00% |
It should be emphasised that an exposure with a customer rated C does not necessarily imply that the Group has a greater risk of loss than an exposure with a customer rated higher. An exposure with a customer rated C will thus imply compensation in the form of higher collateral from the customer and a higher interest rate in favour of the Group. Therefore, there is not necessarily any correlation between the customer's rating and the quality of the exposure.
Loans, advances and collateral are subject to ongoing assessment, and if relevant the Group applies any options available to reduce the risk on the Group's total lending activities. Collateral mainly consists of charges on listed securities and mortgages on real property, letters of indemnity and cash deposits. The Group also makes use of guarantees and charges on movable property and chattel mortgages. The Group takes into account the uncertainty related to computation of the value of the collateral by reducing the value by haircuts applied to the individual asset categories. The uncertainty is computed manually for types of collateral for which no model for valuation of the collateral is available.
In H2 2008, the Group was hit by the international financial crisis, which has affected the quality of the loan portfolio. The Group thus assessed that it was necessary to make individual writedowns for impairment totalling DKK 203m.
At the balance-sheet date, the Group had no substantial overdue exposures that had not been written down for impairment.
Management's review has a section on 'Liquidity risk' describing the origin and management of liquidity risks.
| Group 2008 | Payables to credit central banks |
Deposits and institutes and other payables |
Other liabilities |
Total |
|---|---|---|---|---|
| Due within 0-3 months | 56,806 | 1,042,323 | 83,963 | 1,183,092 |
| Due within 3-12 months | 0 | 58,595 | 10,470 | 69,065 |
| Due within 1-5 years | 0 | 1,867 | 1,528 | 3,395 |
| Due after 5 years | 6,000 | 18,722 | 0 | 24,722 |
| Non-allocated | 0 | 0 | 0 | 0 |
| Total financial liabilities | 62,806 | 1,121,507 | 95,961 | 1,280,274 |
The Group has adequate demand deposits to honour its liabilities.
| Payables to credit | Deposits and | Other | Total | |
|---|---|---|---|---|
| institutes and other payables | liabilities | |||
| Group 2007 | central banks | |||
| Due within 0-3 months | 539,172 | 719,466 | 309,662 | 1,568,300 |
| Due within 3-12 months | 0 | 708 | 32,276 | 32,984 |
| Due within 1-5 years | 0 | 496 | 1,260 | 1,756 |
| Due after 5 years | 0 | 0 | 0 | 0 |
| Non-allocated | 0 | 0 | 0 | 0 |
| Total financial liabilities | 539,172 | 720,670 | 343,198 | 1,603,040 |
| Parent Company 2008 | Payables to credit central banks |
Deposits and institutes and other payables |
Other liabilities |
Total |
|---|---|---|---|---|
| Due within 0-3 months | 49,838 | 39,809 | 8,097 | 97,744 |
| Due within 3-12 months | 0 | 0 | 0 | 0 |
| Due within 1-5 years | 0 | 0 | 0 | 0 |
| Due after 5 years | 0 | 0 | 0 | 0 |
| Non-allocated | 0 | 0 | 0 | 0 |
| Total financial liabilities | 49,838 | 39,809 | 8,097 | 97,744 |
| Parent Company 2007 | Payables to credit central banks |
Deposits and institutes and other payables |
Other liabilities |
Total |
| Due within 0-3 months | 81,042 | 50,448 | 11,572 | 143,062 |
| Due within 3-12 months | 0 | 0 | 0 | 0 |
| Due within 1-5 years | 0 | 0 | 0 | 0 |
| Due after 5 years | 0 | 0 | 0 | 0 |
| Non-allocated | 0 | 0 | 0 | 0 |
| Total financial liabilities | 81,042 | 50,448 | 11,572 | 143,062 |
The Group assumes different kinds of market risks, including interest risk, currency risk and share risk, in connection with trades and placements.
The Group uses a parametric variance-covariance value-at-risk matrix for calculating the market risk. This method is recognised as a well-documented and good method for calculating the market risk. Most of the positions of the Bank are conventional types of assets. As regards conventional assets, the market prices are used to calculate risk. As regards non-conventional products, delta equivalent cash flows are applied.
The model is based on historical data retrieved from the Group's systems. All the historical data available to the Group have been used for estimation of the model. Reference is made to the section on 'Market risks' in the Management's review for a description of the origin and management of market risks.
At the end of 2008, the aggregate value-at-risk (VaR) of the Group totalled: (The VaR is based on a confidence interval of 99% for a 10-day holding)
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | ||
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | ||
| Market risks (VaR) | |||||
| Share | 16,090 | 20,895 | 7,279 | 11,060 | |
| Foreign currency | 90 | 816 | 0 | 0 | |
| Interest rate | 1,821 | 411 | 0 | 0 | |
| Diversification | (2,308) | (900) | 0 | 0 | |
| Total | 15,693 | 21,222 | 7,279 | 11,060 | |
| 47 Cash flow statement – adjustments | |||||
| Interest received | (103,658) | (81,613) | (1,001) | (19,504) | |
| Interest paid | 38,677 | 24,998 | 6,340 | 7,662 | |
| Dividends received received |
(1 558) (1,558) |
(205) (205) |
(145 000) (145,000) |
0 0 |
|
| Other adjustments | 4,091 | 0 | 0 | 0 | |
| Cash flow statement – adjustments | (62,448) | (56,820) | (139,661) | (11,842) |
Please see the differential amounts pursuant to section 8 of the Executive Order on the Application of International Financial Reporting Standards for Companies Falling within the Danish Financial Business Act on the Company's website www.capinordic.com.
| 49 Foreign exchange key | Average exchange rate | Exchange rate on balance sheet date |
||
|---|---|---|---|---|
| 2008 | 2008 | 31.12.2008 | 31.12.2007 | |
| EUR | 745.60 | 745.06 | 745.06 | 745.66 |
| GBP | 939.73 | 1,089.81 | 764.79 | 1,014.78 |
| NOK | 91.02 | 92.99 | 75.72 | 93.51 |
| SEK | 77.73 | 80.57 | 68.04 | 78.92 |
| USD | 509.86 | 544.56 | 528.49 | 507.53 |
| Group | |
|---|---|
| 31.12.2007 | 31.12.2008 |
| DKK'000 | DKK'000 |
| Net interest and fee income | 373,734 | 307,174 |
|---|---|---|
| Market value and translation adjustments | (55,351) | 53,972 |
| Staff costs and administrative expenses | 272,801 | 212,165 |
| Losses on loans and advances | 206,097 | 3,472 |
| Profit (loss) from investments in associates | (19,915) | (2,207) |
| Net profit (loss) for the year | (418,947) | 80,161 |
| Loans and advances | 921,902 | 1,262,407 |
| Equity | 1,797,220 | 2,304,150 |
| Total assets | 3,179,940 | 3,849,670 |
| Risk-weighted assets, total | 1,822,807 | 2,124,470 |
| RATIOS | ||
| Capital base relative to minimum capital requirement | 22.48 | 27.23 |
| Capital adequacy ratio | 45.95 | 47.80 |
| Core capital ratio | 45.13 | 47.80 |
| Return on equity before tax | (22.69) | 5.22 |
| Return on equity after tax | (18.54) | 4.09 |
| Income/cost ratio (DKK) | 0.37 | 1.39 |
| Interest rate exposure (%) | (0.15) | 0.07 |
| Currency position (DKK'000) | 4,250 | 15,020 |
| Foreign currency exposure (%) | 0.52 | 1.48 |
| Loans/deposits ratio | 1.01 | 1.76 |
| Loans and advances to equity ratio | 0.63 | 0.55 |
| Lending growth rate for the year | (26.97) | 186.72 |
| Excess coverage relative to statutory cash requirement | 427.21 | 316.36 |
| Sum of major commitments | 0.45 | 0.67 |
| Lending impairment rate | 15.82 | 0.00 |
| RATIOS FOR LISTED COMPANIES | ||
| Earnings per share basic (EPS Basic) | (3.59) | 0.77 |
| Equity value per share | 15.60 | 19.69 |
| Dividends per share | 0.00 | 0.00 |
| Price/earnings per share | (0.83) | 27.66 |
| Price/equity value per share | 0.19 | 1.10 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | |
| 51 Related parties | ||||
| All transactions with related parties are made on an arm's length basis. | ||||
| Related parties with significant influence over Capinordic A/S | ||||
| No shareholder had a significant interest in Capinordic A/S during the financial year. | ||||
| The following transactions were made between Capinordic A/S and related parties during the financial year: | ||||
| Related parties with significant influence | ||||
| Fee and commission income | 0 | 8,847 | 0 | 0 |
| Group companies | ||||
| Purchase of services | 0 | 0 | 0 | 2,103 |
| Interest income | 0 | 0 | 6,851 | 7,058 |
| Interest expenses | 0 | 0 | 2,929 | 2,698 |
| Other operating income | 0 | 0 | 16,162 | 10,311 |
| Purchase of services | 0 | 0 | 1,476 | 4,166 |
| Purchase of shares | 0 | 0 | 11,794 | 35,698 |
| Sale of shares | 0 | 0 | 10,202 | 0 |
| Receivables from credit institutions and central banks | 0 | 0 | 1,736 | 0 |
| Loans and advances | 0 | 0 | 166,597 | 134,372 |
| Other assets | 0 | 0 | 11,447 | 6,028 |
| Payables to credit institutions and central banks | 0 | 0 | 0 | 35,300 |
| Other liabilities | 0 | 0 | 2,449 | 0 |
| Associates | ||||
| Purchase of services | 180 | 226 | 180 | 0 |
| Interest expenses | 0 | 8 | 0 | 0 |
| Fee and commission income | 0 | 9,350 | 0 | 0 |
| Executive or Supervisory Board and companies cont p y p rolled by Executive or Supervisory Board members y p |
y | |||
| Interest income | 10,560 | 11,324 | 0 | 0 |
| Interest expenses | 9,450 | 2,927 | 0 | 0 |
| Fee and commission income | 21,920 | 24,302 | 0 | 4,389 |
| Other operating income | 0 | 240 | 0 | 240 |
| Purchase of services | 450 | 4,992 | 0 | 0 |
| Purchase of shares | 118,289 | 6,570 | 0 | 6,570 |
| Sale of shares | 154,132 | 162,350 | 0 | 70,300 |
| Loans and advances | 0 | 173,063 | 0 | 0 |
| Other assets | 0 | 14,079 | 0 | 0 |
| Deposits | 41,270 | 206,119 | 0 | 0 |
| Other liabilities | 0 | 200 | 0 | 0 |
| Securities | 87,843 | 0 | 0 | 0 |
All deposits, loans and advances have been granted on an arm's length basis against suitable security and at an interest rate in conformity with the market rate.
Fee and commission income relates to payment for services provided in connection with the issuance of shares, custody fees, market maker agreements, etc.
The purchase and sale of shares with companies controlled by members of the Executive and Supervisory Boards concern the trading in shares and other instruments by NCom A/S and HFI-Invest A/S arranged for in connection with Investment Banking assignments.
For further details about additions and disposals of investments in associates and Group enterprises, please see notes 22 og 23.
Other than the above, no transactions have been made with members of the Executive or Supervisory Board, executive employees, major shareholders, Group enterprises or other related parties in the course of the financial year except for intra-Group transactions that have been eliminated in the consolidated financial statements and usual remuneration to the Executive and Supervisory Boards.
The Group has adjusted its organisation and business activities, structuring the Group into the following business areas: Banking, Private Financial Services and Asset Management, for which reason the segmentation is determined by the products.
| Private Financial |
Asset | Not | Group | |||
|---|---|---|---|---|---|---|
| Income statement | Banking | Services | Management | allocated | Elimination | total |
| Net interest income | 61,315 | 1,844 | 1,203 | 7,009 | 0 | 71,371 |
| Share dividends, etc. | 1,492 | 0 | 66 | 145,000 | (145,000) | 1,558 |
| Fee and commission income | 151,252 | 120,544 | 86,344 | 1,577 | (9,606) | 350,111 |
| Fee and commission expenses | (2,633) | (49,806) | (6,368) | 0 | 9,501 | (49,306) |
| Net interest and fee income | 211,426 | 72,582 | 81,245 | 153,586 | (145,105) | 373,734 |
| Market value and translation adjustments | (54,276) | 0 | (1,651) | 576 | 0 | (55,351) |
| Other operating income | 3,391 | 741 | 45 | 16,273 | (15,245) | 5,205 |
| Net financials | 160,541 | 73,323 | 79,639 | 170,435 | (160,350) | 323,588 |
| Staff costs and administrative expenses | (158,947) | (46,009) | (47,928) | (35,281) | 15,364 | (272,801) |
| Losses on loans and advances | (192,864) | 0 | 0 | (13,233) | 0 | (206,097) |
| Other operating expenses | (4,045) | 0 | 0 | 0 | 0 | (4,045) |
| Profit before amortisation, depreciation, | ||||||
| impairment and tax (EBTDA) | (195,315) | 27,314 | 31,711 | 121,921 | (144,986) | (159,355) |
| Amortisation, depreciation and impairment of intangible assets, property, plant and equipment |
(227,710) | (19,381) | (83,748) | (2,723) | 0 | (333,562) |
| Profit before tax | (429,234) | 7,933 | (52,037) | 105,492 | (144,986) | (512,832) |
| Total assets | 2,450,372 | 494,861 | 205,198 | 88,399 | (58,890) | 3,179,940 |
|---|---|---|---|---|---|---|
| Total liabilities | 1,252,610 | 92,804 | 30,007 | 58,838 | (58,890) | 1,375,369 |
| Banking | Private Financial Services |
Asset Management |
Not allocated |
Elimination | Group total |
|
|---|---|---|---|---|---|---|
| Income statement | ||||||
| Net interest income | 52,834 | 624 | 60 | 6,563 | 0 | 60,081 |
| Share dividends, etc. | 186 | 0 | 19 | 0 | 0 | 205 |
| Fee and commission income | 181,817 | 77,666 | 18,627 | 0 | (7,611) | 270,499 |
| Fee and commission expenses | (5,297) | (24,147) | (28) | 0 | 5,861 | (23,611) |
| Net interest and fee income | 229,540 | 54,143 | 18,678 | 6,563 | (1,750) | 307,174 |
| Market value and translation adjustments | 56,738 | 0 | (1,817) | (949) | 0 | 53,972 |
| Other operating income | 6,623 | 1,024 | 18 | 11,621 | (10,283) | 9,003 |
| Net financials | 292,901 | 55,167 | 16,879 | 17,235 | (12,033) | 370,149 |
| Staff costs and administrative expenses | (140,365) | (42,577) | (15,709) | (23,519) | 10,005 | (212,165) |
| Losses on loans and advances | 0 | 0 | 0 | (3,472) | 0 | (3,472) |
| Other operating expenses | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit before amortisation, depreciation, impairment and tax (EBTDA) |
152,536 | 12,590 | 1,170 | (9,756) | (2,028) | 154,512 |
| Amortisation, depreciation and impairment of intangible assets, | ||||||
| property, plant and equipment | (35,540) | (13,342) | (727) | (440) | 0 | (50,049) |
| Profit before tax | 116,996 | (752) | 443 | (12,403) | (2,028) | 102,256 |
| Total assets | 3,021,875 | 617,270 | 178,640 | 122,607 | (90,722) | 3,849,670 |
|---|---|---|---|---|---|---|
| Total liabilities | 1,416,026 | 110,610 | 15,494 | 93,904 | (90,514) | 1,545,520 |
Prices relating to inter-segment transfers of goods and services are fixed on an arm's length basis.
Capinordic Group acquired a number of enterprises in 2008. The table below discloses information concerning the acquired companies pursuant to the International Financial Reporting Standards (IFRS 3).
| Enterprises acquired: | Registered office | Transfer acquisition |
Acquired percentage of voting rights |
Cost (DKK'000) |
Consolidated profit (loss) * (DKK'000) |
|---|---|---|---|---|---|
| Bio Fund Management Oy | Helsinki | 27.02.2008 | 100.00% | 26,379 | (1,399) |
| Factor Insurance Brokers AB | Stockholm | 1.12.2008 | 100.00% | 5,924 | (57) |
* Consolidated profit from the acquisition date to the balance-sheet date. If the companies taken over had been included in the consolidation for the entire accounting period, the total net interest and fee income of the Group would have amounted to DKK 376,313 thousand, and the profit after tax would have been DKK -416,192 thousand.
For a detailed description of the activities, etc., of the enterprises acquired, please see the Stock Exchange Announcements previously published.
| Cost of enterprises acquired (DKK'000): | Total cost | ||||
|---|---|---|---|---|---|
| Quantity of shares |
Equity instruments |
Cash payment |
Other costs, etc. |
for business combination |
|
| Bio Fund Management Oy * | 419,739 | 6,422 | 18,641 | 1,316 | 26,379 |
| Factor Insurance Brokers AB | 0 | 0 | 5,924 | 0 | 5,924 |
* The purchase agreement on the acquisition of Bio Fund Management Oy comprises an earn-out. At 31 December 2008 it was assessed that this earn-out will not crystallise, and it is therefore not included in the cost.
The various agreements on acquisition of the individual companies determined both the subscription prices for and the number of shares in Capinordic A/S paid as consideration to the respective sellers.
In terms of company law, the new shares in Capinordic A/S were subscribed for at a price corresponding to the market price for shares in Capinordic A/S at the effective date of the individual agreements in accordance with the subscription price rules of the Danish Public Companies Act and in accordance with the authority of the Supervisory Board.
For accounting purposes, the cost of the respective business combinations is calculated at the acquisition date, and the value of equity instruments issued is calculated at the market price on the acquisition date. Therefore, the value calculated at the date of the agreement and the carrying amount at the acquisition date may differ.
| Amounts recognised at acquisition date (DKK'000): | Bio Fund Management Oy | Factor Insurance Brokers AB | ||
|---|---|---|---|---|
| Value before | Value at | Value before | Value at | |
| business | date of | business | date of | |
| combination | acquisition | combination | acquisition | |
| Cash and | ||||
| demand deposits with central banks | 0 | 0 | 0 | 0 |
| Receivables from credit institutions and central banks | 5,173 | 5,173 | 0 | 0 |
| Loans, advances and other receivables at amortised cost | 0 | 0 | 0 | 0 |
| Bonds at fair value | 0 | 0 | 0 | 0 |
| Shares, etc. | 8,789 | 7,228 | 0 | 0 |
| Investments in Group enterprises | 0 | 0 | 0 | 0 |
| Goodwill * | 0 | 1,786 | 0 | 0 |
| Other intangible assets | 45 | 16,903 | 5,951 | 5,951 |
| Property, plant and equipment | 201 | 201 | 248 | 248 |
| Current tax assets | 0 | 0 | 0 | 0 |
| Deferred tax assets | 0 | 0 | 0 | 0 |
| Other assets | 6,404 | 6,404 | 4,112 | 4,112 |
| Prepayments | 0 | 0 | 407 | 407 |
| Payables to credit institutions and central banks | 0 | 0 | 0 | 0 |
| Deposits and other payables | 0 | 0 | 0 | 0 |
| Current tax liabilities | 75 | 75 | 0 | 0 |
| Other liabilities | 1,692 | 1,692 | 4,794 | 4,794 |
| Deferred income | 5,166 | 5,166 | 0 | 0 |
| Provisions | 0 | 4,383 | 0 | 0 |
| Total acquisition price | 26,379 | 5,924 |
* Goodwill for Bio Fund Management Oy was recognised at DKK 7,367 thousand in the published 2008 interim financial reports. In connection with the final allocation of the cost, an adjustment to other intangible assets has been made.
The allocation gives rise to the following comments:
Bio Fund Management Oy is the portfolio manager of a number of life science venture funds. Through these venture funds, Bio Fund has invested in 47 companies, mainly in the Nordic countries, but also in the rest of Europe and North America. The acquisition of Bio Fund will make Capinordic a notable provider of life science investment products. Future collaboration with the other Group subsidiaries will enable Bio Fund to expand its existing business substantially, and the existing subsidiaries of the Group will be able to offer investments in the attractive life sciences market.
The acquisition of Factor Insurance Brokers AB was assessed to imply a strengthening of the distribution within the sale of insurance policies for the Capinordic Group.
Name: Capinordic A/S Address: Strandvejen 58, P.O. Box 69 Postal code, city, country: 2900 Hellerup, Denmark Tel.: +45 8816 3000 Fax: +45 8816 3003 Website: www.capinordic.com E-mail: [email protected]
Central Business Register No.: 13 25 53 42 Date of foundation: 1 July 1989 Registered offi ce: Gentofte
Supervisory Board
Lasse Lindblad, CEO
PricewaterhouseCoopers Statsautoriseret Revisionsaktieselskab Strandvejen 44 2900 Hellerup Denmark
2008 Annual Report 23 March 2009 Annual General Meeting 21 April 2009 Q1 Interim Financial Report 13 May 2009 Q2 Interim Financial Report 18 August 2009 Q3 Interim Financial Report 17 November 2009
Member of the Supervisory Board since 15 March 2005 Most recently re-elected in 2008.
Claus Ørskov is an attorney entitled to appear before the Danish Supreme Court.
Member of the supervisory boards of:
Foreningen Capinordic Europæiske Ejendomme F.M.B.A. >
Member of the executive boards of:
Lars Öijer, Deputy Chairman Member of the Supervisory Board since 9 August 2005 Most recently re-elected in 2008.
Lars Öijer is a graduate of economics and business administration and has had a long career in the fi nancial sector in Sweden. He is a member of the supervisory boards of several Swedish companies and is not a member of the supervisory boards of any Danish companies other than Capinordic A/S and Capinordic Bank A/S.
Member of the supervisory boards of:
Frédéric de Mevius Member of the Supervisory Board since 17 April 2008.
Frédéric de Mevius holds a B.A. in Economics and, among other posts, has been a member of the Board of Directors of InBev NV/SA and Executive Director at Lehman Brothers in New York and London. Frédéric de Mevius is the CEO of Verlinvest S.A. and is currently mandated as director, managing director and/or member of the supervisory boards of a number of companies in which Verlinvest SA or one of its subsidiaries has invested. He is not a member of the supervisory boards of any Danish companies other than Capinordic A/S.
Mandated as director, managing director and/or member of the supervisory boards of:
Orpar SA >
Spa & Salon International Limited >
Member of the Supervisory Board since 20 June 2006. Most recently re-elected in 2008.
Ole Vagner has had a comprehensive career in the fi nancial sector, including the position of Bank Manager of SJL-Banken/Almindelig Brand Bank. In addition, he is the founder and former Group CEO of Keops A/S.
Member of the supervisory boards of:
Handels- og Investeringsselskabet Hegedal A/S >
Helgstrand Dressage A/S >
Following a change in the group of shareholders at the end of 2004, Lasse Lindblad took up his position as CEO of the Capinordic Group and headed the subsequent reorganisation of Capinordic.
Lasse Lindblad is a graduate of fi nancing, and in addition to many years of experience from the fi nancial sector he has previously been the CEO of AntibodyShop A/S and Bio-Porto A/S. Most recently, he was the promoter of the Stock exchange listing and restructuring of Renewagy A/S, and as a member of the Supervisory Board of Colexon Energy AG he has contributed to the company's turn-around.
Pursuant to section 28a of the Danish Securities Trading Act, Capinordic A/S has to report information on transactions in the Capinordic share by executive employees and related parties of such executive employees.
The holdings of shares and options in Capinordic A/S owned by members of the Supervisory and Executive Boards or companies under their management or control are stated in the table below.
| Name | 1 Jan. 2008 | 31 Dec. 2008 | Options |
|---|---|---|---|
| Supervisory Board | |||
| Claus Ørskov | 442,950 | 442,950 | 0 |
| Lars Öijer | 0 | 0 | 0 |
| Frédéric de Mevius | 8,927,270 | 11.881,700 | 0 |
| Ole Vagner | 8,765,700 | 11,881,700 | 0 |
| Executive Board | |||
| Lasse Lindblad | 6.611.787 | 6.611.787 | 112.250 |
| Date | Subject |
|---|---|
| 2008-12-29 | Financial Calendar Capinordic A/S: Financial calendar for the year 2009 |
| 2008-12-23 | Insider transactions: Reporting of insider transactions in shares issued by Capinordic A/S |
| 2008-12-22 | Major shareholder announcements: Notice from Erik Damgaard Porteføljeinvest A/S |
| 2008-12-22 | Changes in Management/Auditors: Change of the Supervisory Board of Capinordic A/S |
| 2008-12-09 | Insider transactions: Reporting of insider transactions in shares issued by Capinordic A/S |
| 2008-12-05 | Insider transactions: Reporting of insider transactions in shares issued by Capinordic A/S |
| 2008-11-25 | Interim Financial Reports: Increased activity level and growth potential, but downward adjustment as a result of fi nancial turbulence |
| 2008-09-01 | Major shareholder announcements: Notice from Steen Bryde |
| 2008-08-27 | Insider transactions: Company announcement No. 13/2008 |
| 2008-08-27 | Major shareholder announcements: Notice concerning Capinordic A/S |
| 2008-08-26 | Interim Financial Reports: Capinordic's best quarter so far – in a market displaying a negative trend |
| 2008-06-27 | Company announcements: Capinordic Bank licensed to operate a branch in Sweden |
| 2008-06-23 | Insider transactions: Company announcement No. 10/2008 |
| 2008-05-20 | Interim Financial Reports: Customer infl ow develops positively in negative market |
| 2008-04-30 | Articles of Association of 17 April 2008 |
| 2008-04-17 | Changes in Management/Auditors: Frédéric de Mevius elected to the Supervisory Board of Capin ordic A/S |
| 2008-04-17 | Minutes of Annual General Meeting: Agenda and proceedings |
| 2008-04-09 | Calls for general meetings: Agenda for Annual General Meeting of Capinordic A/S |
| 2008-03-28 | 2007 Annual Report |
| 2008-02-27 | Company announcements: Acquisition of BioFund Management Oy is fi nal – one of the leading Nor dic managers within the life sciences |
| 2008-01-14 | Changes in Management/Auditors: Change in the Executive Board of Capinordic A/S |
| 2008-01-02 | Insider transactions: Reporting of insider transactions in shares issued by Capinordic A/S |
| 2008-01-02 | Insider transactions: Reporting of insider transactions in shares issued by Capinordic A/S |
Strandvejen 58 P.O. Box 69 2900 Hellerup Denmark Tel.: +45 8816 3000 Fax: +45 8816 3003 [email protected] www.capinordic.com
Central Business Register No.: 13255342 VAT No.: DK13255342 Registered offi ce: Gentofte
Lasse Lindblad, CEO
Investor relations & Accounts: Brian Steffensen, Group CFO [email protected] Private Financial Services: Anders Conradzon, Managing Director
Monetar Pensionsförvaltning AB Strandvägen 5B 114 51 Stockholm Sweden Tel.: +46 (0)8 54 58 02 40 Fax: +46 (0)8 66 14 350 [email protected] www.monetar.se
Company Register No.: 556643-6209 VAT No.: SE556643-6209 Registered offi ce: Stockholm County, Stockholm Municipality
Anders Conradzon, CEO
Storgatan 7A, Umeå P.O. Box 508 901 10 Umeå Sweden Tel.: +46 (0)90 77 38 00 Fax: +46 (0)90 77 88 45 [email protected] www.fondservice.se
Company Register No.: 556629-0101 VAT No.: SE556629-0101 Registered offi ce: Västerbotten County, Umeå Municipality
Thomas Fjällström, CEO
Asset Management: Steen Jakobsen, Group CIO & Managing Director
Capinordic Asset Management AB Strandvägen 5B 114 51 Stockholm Sweden Tel.: +46 (0)8 50 90 07 80 Fax: +46 (0)8 50 90 07 89 [email protected] www.capinordic-am.se
Company Register No.: 556704-6395 VAT No.: SE556704-6395 Registered offi ce: Stockholm County, Stockholm Municipality
Thomas Fjällström, CEO
Capinordic Capital Fondsmæglerselskab A/S Store Kongensgade 81A, 1st fl oor 1264 Copenhagen K
Denmark Tel.: +45 5577 7000 Fax: +45 5577 7097 [email protected] www.sr.dk
Central Business Register No.: 27460798 VAT No.: DK27460798 Registered offi ce: Copenhagen
Jesper Christiansen, CEO
Kongevejen 151-153 2830 Virum Denmark Tel.: +45 4358 3200 Fax: +45 4339 6885 www.capinordicpropertymanagement.dk
Central Business Register No.: 28866410 VAT No.: DK28866410 Registered offi ce: Virum
Michael Secher, CEO
Mikonkatu 4, 3rd fl oor P.O. Box 164 00101 Helsinki Finland Tel.: +358 925 14 460 Fax: +385 925 144 620 [email protected] www.biofund.fi
Company register No.: FI 10886191 VAT No.: FI 10886191-1 Registered offi ce: Helsinki
Seppo Mäkinen, Managing Partner
Capinordic Bank A/S Strandvejen 58 P.O. Box 2900 Hellerup Denmark Tel.: +45 8816 3000 Fax: +45 8816 3003 [email protected] www.capinordicbank.dk
Central Business Register No.: 10904390 VAT No.: DK10904390 Registered offi ce: Gentofte
Henrik Juul, CEO
Dansk O.T.C. Fondsmæglerselskab A/S Horsens Hus Holmboes Allé 1 8700 Horsens
Denmark Tel.: +45 7561 2166 Fax: +45 7562 9511 [email protected] www.danskotc.dk
Central Business Register No.: 10 50 86 49 VAT No.: DK10508649 Registered offi ce: Horsens
Claus N. Sørensen, CEO
Strandvejen 58 P.O. Box 69 2900 Hellerup Denmark Tel.: +45 3929 2500 Fax: +45 3929 2503
Central Business Register No.: 29917116 VAT No.: DK29917116 Registered offi ce: Gentofte
Torben Lyst, CEO
P.O. Box 69 2900 Hellerup Denmark Tel.: +45 3929 25 00 Fax: +45 3929 2503
Central Business Register No.: 19029441 VAT No.: DK19029441 Registered offi ce: Gentofte
Torben Lyst, CEO
Capinordic A/S · Strandvejen 58 · P.O. Box 69 · DK · 2900 Hellerup Tel. +45 8816 3000 · Fax +45 8816 3003 · www.capinordic.com
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