Annual / Quarterly Financial Statement • Mar 17, 2016
Annual / Quarterly Financial Statement
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Annual Report 2015
of InVision AG as of 31 December 2015 in accordance with IFRS and § 315a of the German Commercial Code as well as the Group management report pursuant to § 315 of the German Commercial Code
of InVision AG as of 31 December 2015 in accordance with IFRS and § 315a of the German Commercial Code as well as the Group management report pursuant to § 315 of the German Commercial Code
Consolidated Statement of Comprehensive Income
Consolidated Cash Flow Statement
Consolidated Statement of Equity
| (in TEUR) | 2015 | 2014 | ∆ |
|---|---|---|---|
| Revenues | 12,708 | 13,409 | -5% |
| Subscriptions | 10,483 | 9,467 | 11% |
| Projects | 2,225 | 3,942 | -44% |
| R&D Expenses | 5,560 | 4,970 | 12% |
| as a % of revenues | 44% | 37% | 7 PP |
| EBIT | 2,676 | 4,124 | -35% |
| as a % of revenues | 21% | 31% | -10 PP |
| Consolidated result | 2,156 | 4,282 | -50% |
| as a % of revenues | 17% | 31% | -14 PP |
| Operating cash flow | 2,334 | 3,089 | -24% |
| as a % of revenues | 18% | 23% | -5 PP |
| Earnings per share (in EUR) | 0.96 | 1.94 | -51% |
| (in TEUR) | 31 Dec 2015 | 31 Dec 2014 | ∆ |
| Balance sheet total | 14,243 | 15,239 | -7% |
| Liquid funds | 1,405 | 3,388 | -59% |
| Equity | 8,376 | 8,455 | -1% |
| as a % of balance sheet total | 59% | 55% | 4 PP |
| Assets | Note | 31 Dec 2015 | 31 Dec 2014 |
|---|---|---|---|
| A. Short-term assets | |||
| 1. Liquid funds | (23) | 1,404,551 | 3,387,696 |
| 2. Securities | (24) | 0 | 1,000,000 |
| 3. Trade receivables | (25) | 2,755,752 | 2,033,144 |
| 4. Income tax claims | (26) | 97,561 | 123,844 |
| 5. Prepaid expenses and other short-term assets | (27) | 171,634 | 185,214 |
| Total short-term assets | 4,429,498 | 6,729,898 | |
| B. Long-term assets | |||
| 1. Intangible assets | (28) | 582,612 | 702,864 |
| 2. Tangible assets | (29) | 8,808,971 | 6,806,481 |
| 3. Deferred taxes | (31) | 386,555 | 962,060 |
| 4. Other long-term assets | (32) | 35,056 | 37,429 |
| Total long-term assets | 9,813,194 | 8,508,834 | |
| Total assets | 14,242,692 | 15,238,732 | |
| Equity and liabilities | Note | 31 Dec 2015 | 31 Dec 2014 |
| A. Short-term liabilities | |||
| 1. Trade payables | (34) | 116,231 | 136,805 |
| 2. Provisions | (35) | 627,617 | 917,039 |
| 3. Income tax liabilities | (35) | 20,773 | 22,506 |
| 4. Short-term share of deferred income and other short-term liabilities | (36) | 1,852,296 | 1,707,839 |
| Total short-term liabilities | 2,616,917 | 2,784,189 | |
| B. Long-term liabilities | |||
| Liabilities to financial institutions | (37) | 3,250,000 | 4,000,000 |
| Total long-term liabilities | 3,250,000 | 4,000,000 | |
| C. Equity | |||
| 1. Subscribed capital | (38) | 2,235,000 | 2,235,000 |
| 2. Reserves | (39) | 1,191,184 | 9,306,292 |
| 3. Equity capital difference from currency translation | (40) | -366,655 | -391,335 |
| 4. Group/consolidated result | 5,316,246 | -2,695,414 | |
| Total equity | 8,375,775 | 8,454,543 | |
| Total equity and liabilities | 14,242,692 | 15,238,732 |
| 1 Jan - 31 Dec | 1 Jan - 31 Dec | ||
|---|---|---|---|
| Note | 2015 | 2014 | |
| 1. Revenues | (41) | 12,707,639 | 13,408,790 |
| 2. Other operating income | (42) | 129,697 | 815,266 |
| 3. Cost of materials/cost of goods and services purchased | (43) | -373,738 | -246,879 |
| 4. Personnel expenses | (44) | -6,321,870 | -6,546,807 |
| 5. Amortisation/depreciation of intangible and tangible assets | (45) | -526,468 | -379,156 |
| 6. Other operating expenses | (46) | -2,939,655 | -2,926,783 |
| 7. Operating result (EBIT) | 2,675,605 | 4,124,431 | |
| 8. Financial result | (47) | -40,455 | -32,417 |
| 9. Currency losses/gains | 33,110 | -39,183 | |
| 10. Result before taxes (EBT) | 2,668,260 | 4,052,831 | |
| 11. Income tax | (48) | -536,708 | 150,254 |
| 12. Consolidated net profit | 2,131,552 | 4,203,085 | |
| 13. Exchange rate differences from converting foreign financial statements | 24,680 | 78,641 | |
| 14. Consolidated result | 2,156,232 | 4,281,726 | |
| Earnings per share | 0.96 | 1.94 |
| 1 Jan - 31 Dec 2015 |
1 Jan - 31 Dec 2014 |
|
|---|---|---|
| 1. Cash flow from operating activities | ||
| Consolidated net loss/profit | 2,131,552 | 4,203,085 |
| + Depreciation and amortisation of fixed assets | 526,468 | 379,156 |
| -/+ Profits/losses from the disposal of intangible and tangible assets | 36 | -85,005 |
| -/+ Decrease/increase in provisions | -289,422 | -518,753 |
| +/- Decrease/increase in deferred taxes | 575,505 | -73,670 |
| -/+ Other non-cash income/expenses | -52,336 | -75,444 |
| -/+ Increase/decrease in inventories and trade receivables | -722,608 | -458,773 |
| -/+ Increase/decrease in other assets and prepaid expenses | 15,953 | -43,664 |
| +/- Decrease/increase in income tax claims/liabilities | 24,550 | -127,606 |
| -/+ Increase/decrease in trade payables | -20,574 | -183,792 |
| +/- Decrease/increase in other liabilities and deferred income | 144,457 | 73,218 |
| Cash flow from operating activities | 2,333,581 | 3,088,752 |
| 2. Cash flow from investing activities | ||
| - Payments made for investments in tangible fixed assets | -2,368,944 | -6,332,005 |
| - Payments made for investments in intangible assets | -838 | -16,645 |
| + Payments received from sale of securities | 1,000,000 | 0 |
| - Payments made for investments in securities | 0 | -1,000,000 |
| + Payments received from the disposal of intangible and tangible assets | 13,866 | 150,478 |
| + Increase in cash and cash equivalents due to changes in group consolidation | 0 | 11 |
| Cash flow from investing activities | -1,355,916 | -7,198,161 |
| 3. Cash flow from financing activities | ||
| + Additions to long-term financing liabilities | 0 | 4,000,000 |
| - Payments made for redemption of long-term financing liabilities | -750,000 | 0 |
| - Payments made in order to repurchase the Company's outstanding shares | 0 | -228,330 |
| + Payments received from equity contributions (issuance of Company's shares) | 0 | 4,695,604 |
| - Payments made to shareholders of InVision AG | -2,235,000 | -5,587,500 |
| Cash flow from financing activities | -2,985,000 | 2,879,774 |
| Change in cash and cash equivalents | -2,007,335 | -1,229,635 |
| Effect of foreign exchange rate changes on cash and cash equivalents | 24,190 | 41,453 |
| Cash and cash equivalents at the beginning of the period | 3,387,696 | 4,575,878 |
| Cash and cash equivalents at the end of the period | 1,404,551 | 3,387,696 |
| Equity capital difference | |||||
|---|---|---|---|---|---|
| Subscribed | from currency | ||||
| capital | Reserves | translation Profit/Losses | Equity | ||
| 31 December 2013 | 2,147,133 | 10,470,785 | -469,976 | -6,898,499 | 5,249,443 |
| Repurchase of the Company's outstanding shares |
-7,991 | -220,339 | 0 | 0 | -228,330 |
| Sale of the Company's outstanding shares |
95,858 | 4,744,971 | 0 | 0 | 4,840,829 |
| Transaction costs for the sale of the Company's outstanding shares |
0 | -145,225 | 0 | 0 | -145,225 |
| Deferred taxes on transaction costs |
0 | 43,600 | 0 | 0 | 43,600 |
| Increase of subscribed capital | 5,587,500 | -5,587,500 | 0 | 0 | 0 |
| Statutory subcribed capital decrease |
-5,587,500 | 0 | 0 | 0 | -5,587,500 |
| 2,235,000 | 9,306,292 | -469,976 | -6,898,499 | 4,172,817 | |
| Consolidated net profit | 0 | 0 | 0 | 4,203,085 | 4,203,085 |
| Equity capital difference from currency translation |
0 | 0 | 78,641 | 0 | 78,641 |
| Total of costs and income | 0 | 0 | 78,641 | 4,203,085 | 4,281,726 |
| 31 December 2014 | 2,235,000 | 9,306,292 | -391,335 | -2,695,414 | 8,454,543 |
| Dividend payment | 0 | 0 | 0 | -2,235,000 | -2,235,000 |
| 2,235,000 | 9,306,292 | -391,335 | -4,930,414 | 6,219,543 | |
| Consolidated net profit | 0 | 0 | 0 | 2,131,552 | 2,131,552 |
| Equity capital difference from currency translation |
0 | 0 | 24,680 | 0 | 24,680 |
| Total of costs and income | 0 | 0 | 24,680 | 2,131,552 | 2,156,232 |
| Offsetting of reserves against group result |
0 | -8,115,108 | 0 | 8,115,108 | 0 |
| 31 December 2015 | 2,235,000 | 1,191,184 | -366,655 | 5,316,246 | 8,375,775 |
to the Consolidated Financial Statements of InVision AG as of 31 December 2015 in accordance with IFRS and § 315a of the German Commercial Code
InVision Aktiengesellschaft, Düsseldorf (hereinafter also referred to as "InVision AG" or the "Company"), together with its subsidiaries (hereinafter also referred to as the "InVision Group" or the "Group"), develops and markets products and services for optimising workforce management, increasing the productivity, improving the quality of work, and reducing costs, and is mainly active in Europe and the United States.
The Company's registered offices are located at Speditionstraße 5, 40221 Düsseldorf, Germany. It is recorded in the Commercial Register of the Local Court of Düsseldorf under registration number HRB 44338. InVision AG has been listed in the prime standard segment of the Frankfurt Stock Exchange under securities identification number 585969 since 18 June 2007.
The IFRS consolidated financial statements are expected to be approved by the Supervisory Board of InVision AG on 11 March 2016 and then cleared for publication on 17 March 2016.
Because it is listed on a regulated market, InVision AG prepares its consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS). The consolidated financial statements as of 31 December 2015 were prepared in accordance with the IFRS, which were promulgated by the International Accounting Standards Board (IASB), in force on the balance sheet closing date, and applicable in the European Union. The designation "IFRS" also encompasses the still valid International Accounting Standards (IAS), as well as the interpretations of the Standing Interpretations Committee (SIC) and of the International Financial Reporting Interpretations Committee (IFRIC). The requirements prescribed under § 315a of the German Commercial Code (HGB) must also be observed.
All provisions of the IFRS, IAS, IFRIC and SIC, which are valid for fiscal year ending 31 December 2015, have been applied in the consolidated financial statements.
In fiscal year 2015, the following provisions under the IAS/IFRS/IFRIC were endorsed by the EU for adoption into EU law and/or must be applied for the first time. Most of them have little or no effect on the consolidated financial statements of InVision AG.
| IFRS | Material effect |
|---|---|
| IFRIC 21 Levies | None |
| Amendments to IFRS 3, IFRS 13, IAS 40 in line with Annual Improvements, Cycle 2011-2013) | None |
The following amendments of the IASB were not adopted early in the existing consolidated financial statements. Where amendments affect InVision AG, the future effects on the consolidated financial statements are examined. In most of these cases, the EU has also not yet endorsed the amendments.
| IFRS | Material effect |
|---|---|
| Amendments in line with Annual Improvements, Cycle 2010-2012 | None |
| Amendements to IAS 19 Employee Benefits | None |
| IFRS 14 Regulatory Deferral Accounts | None |
| Amendments to IFRS 11 Joint Arrangements | None |
| Amendments to IAS 16 Property, Plant and Equipment and IA S38 Intangible Assets | None |
| IFRS 15 Revenue from Contracts with Customers | None |
| Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture | None |
| IFRS 9 Financial Instruments | None |
| Amendments to IAS 27 Equity Method in Separate Financial Statements | None |
| Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures |
None |
| Amendments in line with Annual Improvements, Cycle 2012-2014 | None |
| Amendments to IAS 1 Presentation of Financial Statements | None |
| Amendments to IFRS 10, IFRS 12 and IAS 28 Consolidation Exception for Investment Entities | None |
| Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses | None |
| Amendments to IAS 7 Statement of Cash Flows | None |
| IFRS 16 Leases | None |
The consolidated financial statements cover InVision AG as well as the following subsidiaries:
InVision AG holds a direct 100% ownership interest in each of the consolidated subsidiaries.
With retroactive effect as of 1 January 2015, and with entry in the commercial register dated 22 June 2015, InVision Software (Deutschland) GmbH was merged with InVision AG by means of an absorption merger, by transferring the entirety of its assets, according to the provisions of the German Transformation Act (UmwG).
InVision Software GmbH, Vienna, Austria was liquidated and deleted from the company register (Handelsgericht Wien, FN 286193y) on 16 December 2015 and is no longer part of the group of consolidated companies as of this date.
The consolidated financial statements comprise the annual financial statements of InVision AG and its subsidiaries as of 31 December of each fiscal year. The annual financial statements of the subsidiaries are prepared while applying the uniform accounting and valuation methods as of the same balance sheet closing date as the annual financial statements of the parent company.
The balance sheet closing date of all subsidiaries integrated into the consolidated financial statements is 31 December of the applicable fiscal year in question.
All account balances, transactions, income, expenses, profits and losses from intra-group transactions, which are included in the book value of assets, are eliminated in full.
Subsidiaries are fully consolidated as of the date of their formation or acquisition (i.e., as of the date on which the Group acquires control over them), provided that they are not of minor importance for the Group's net assets, financial position and results of operations. The inclusion of these subsidiaries in the consolidated accounts ends as soon as the parent company's control no longer exists.
Newly-formed subsidiaries are consolidated using the acquisition method pursuant to IFRS 3. Under that method, acquisition costs of the business combination are apportioned to the identifiable assets, which are acquired, and to the identifiable liabilities, which are assumed, based on their fair values as of the date of acquisition. The expenses and income, which have accrued since the acquisition, are included in consolidated accounts.
The consolidated financial statements were prepared on the basis of historical acquisition or production costs (costs). Historical costs are based in general on the fair value of the consideration paid in exchange for the asset.
The consolidated balance sheet was structured according to short-term and long-term assets and liabilities. The consolidated statement of comprehensive income is prepared using the cost of production method.
The consolidated financial statements are prepared in euro because the majority of the Group transactions are based on that currency. Unless otherwise indicated, all figures herein have been rounded up or down to the nearest thousand (TEUR, T€) in accordance with standard commercial practices. The figures are shown in euro (EUR, €), in thousand euro (TEUR, T€) or in million euro (MEUR, m€).
Each company within the Group stipulates its own functional currency. The items reported in the financial statements of each company are valued using that functional currency. Foreign currency transactions are initially converted into the functional currency at the currency spot rate applicable on the date of the transaction.
Monetary assets and liabilities denominated in a foreign currency will be converted into the functional currency at the exchange rate applicable on each relevant reporting date. All differences in the exchange rate are recognised in equity. This treatment does not apply to any exchange rate differences arising from foreign currency transactions, if they are used to hedge a net investment of a foreign operation. These differences are recognised directly in equity capital until the net investment is sold, and recognised in the period results only after such sale. Any deferred taxes resulting from the currency differences of such foreign currency credits will also be recognised directly in equity capital. Non-monetary items, which are valued at historical costs in a foreign currency, are converted at the exchange rate applicable on the date of the transaction. Non-monetary items, which are reported at fair value in a foreign currency, are converted at the exchange rate applicable on the date the fair value was calculated.
Assets and liabilities of foreign operations are converted into euro as of the balance sheet (reporting) date. The conversion of income and expenses shall be made at the average exchange rate for the fiscal year. Any differences resulting from these currency conversions will be booked as a separate component of the equity capital account.
Any goodwill acquired with the purchase of a foreign operation and any adjustments in the book value of the assets and liabilities, which resulted from that transaction in order to accord with fair value, will be converted at the exchange rate applicable on the reporting date.
| Currency | Exchange rate on reporting date 2015 |
Exchange rate on reporting date 2014 |
Average annual exchange rate 2015 |
Average annual exchange rate 2014 |
|---|---|---|---|---|
| USD | 1.0906 | 1.2141 | 1.1101 | 1.3291 |
| GBP | 0.7367 | 0.7789 | 0.7262 | 0.8064 |
| SEK | 9.1806 | 9.393 | 9.3511 | 9.0995 |
The following exchange rates were used (per EUR 1.00):
Acquired intangible assets are valued at the time of their receipt according to their cost of acquisition or cost of production.
Internally produced intangible assets are recognised when they are identified and when it is likely that the group will receive a future economic benefit from the asset and the asset's acquisition and production costs can be reliably determined. For subsequent valuations, the value of the intangible assets is recognised at the acquisition or production costs of those assets, less the accumulated amortisation and less the accumulated impairment costs (shown under the amortisation item). Intangible assets are amortised on a straight-line basis over their estimated usable life (3 to 15 years). The amortisation period and amortisation method are reviewed at the end of each fiscal year.
When producing new software and further developing existing software, the InVision Group cannot clearly and unequivocally delineate the relevant software because the knowledge and improvements gained from producing new software and from the continued development of existing software are incorporated into other InVision Group products. Since not all criteria pursuant to IAS 38.57 were met by 31 December of the fiscal year, no development costs were capitalised.
Tangible assets (land and buildings as well as computer hardware, tenant installations, furnishings and equipment) are recognised at the cost of acquisition or production less the accumulated depreciation. These assets are depreciated on a straight-line basis over the estimated useful life of the individual asset. The useful life for buildings is 9 to 33 years, for computer hardware 3 to 5 years, and for furnishings and equipment, 5 to 13 years. Tenant installations are depreciated over the term of the lease or over their useful life, if that period is shorter.
Subsequent expenditures made for a tangible asset are recognised at the costs of acquisition, if it is likely that the Group will receive a future economic benefit from it, and the costs for the asset can be reliably determined. Costs for repairs and maintenance, which do not increase the estimated useful life of the tangible asset, are recognised in the period in which they are incurred and are reported on the income statement.
The determination of whether a contract is or contains a lease is made on the basis of the economic content of the contract, and requires an assessment about whether the fulfilment of the contract depends on the use of a specific asset or assets and whether the contract grants a right to use the asset.
Any asset under a finance lease, according to which virtually all property-related risks and opportunities relating to the transferred asset are transferred to the Group, is recognised as an asset at the commencement of the lease term and valued at the lower of the then-current fair market value of the asset or the present cash value of the minimum lease payments to be made thereunder. These assets are subject to scheduled depreciation over the shorter of the two aforementioned time periods: i.e., the term of the lease or the economic useful life of the leased property. Lease payments are separated into their components of either financing costs and amortisation of the lease obligation in such a manner that the remaining residual book value of the lease will incur a constant rate of interest. The remaining leasing obligations as of the balance sheet closing date are itemised in the balance sheet according to their remaining terms to maturity.
Lease payments under operating leases are booked in the income statement as expenses arising over the term of the lease.
Borrowing costs are recognised as an expense in the period in which they are incurred, unless the borrowing costs were incurred for the purchase, construction or production of qualified assets. In that case, the borrowing costs will be added to the production costs for such assets. During the fiscal year, the InVision Group had neither acquired nor produced qualified assets.
Non-financial assets are tested for impairment if facts or changes in circumstances suggest that the book value of an asset might no longer be recoverable. For the impairment test, the recoverable amount of the asset or the cash-generating unit must be determined. The recoverable amount is either the fair value less the costs to sell or the value in use, whichever value is higher. The fair value less the costs to sell is defined as the price which two informed, contractually-willing and independent business partners could achieve (less the cost to sell) when selling an asset or a cash-generating unit. The value in use of an asset or a cash-generating unit is calculated by determining the present cash value of the estimated future cash flow based on the current use of the asset or unit. If the recoverable value is less than the book value, then the difference will be immediately written off and entered in the income statement.
The impairment of a particular asset (except for goodwill), which had been previously recognised to profit and loss, will be reversed, if there is evidence that the impairment no longer exists or that the amount of the impairment has declined. The recoverable amount will be recognised as income in the income statement. The recoverable amount (or the reduction in the amount of the impairment) of an asset will be recognised, however, only to the extent that it does not exceed the book value, which would have resulted had no impairment been previously recognised (including the effects from amortisation or depreciation).
Financial assets within the meaning of IAS39 are either financial assets at fair value through profit or loss, loans and receivables, heldto-maturity investments, or available-for-sale financial assets. Financial assets will be measured at fair value the first time they are recognised.
The classification of the financial assets into the measurement categories depends on their nature and their purpose of use, and will be made upon their initial recognition. To the extent it permissible and required, reclassifications are made at the end of the fiscal year.
All standard market purchases and sales of financial assets are recognised on the trade date; in other words, on the day on which the Group has entered into the obligation to purchase or sell the asset. Standard market purchases and sales are purchases and sales of financial assets, which prescribe the delivery of assets within a period of time that is set by market rules or market conventions.
Extended loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. These assets are measured at amortised costs using the effective interest method. Any gains or losses are recognised in the results for the period, if the loans and receivables have been derecognised or impaired or it has been done in connection with amortisation.
Financial assets are tested for impairment as of each balance sheet date. If it is likely that with respect to financial assets recognised at their amortised costs, the Company will be unable to collect all of the amounts, which are owed under loans, receivables or heldto-maturity investments pursuant to applicable contract terms and conditions, an impairment or write-down of the receivables will be recognised on the income statement. The impairment loss is defined as the difference between the asset's book value and the present cash value of the anticipated future cash flows calculated using the effective interest method. The book value of the asset is reduced using a value adjustment account. The impairment loss will be recognised on the income statement. An impairment previously recognised as a cost will be reversed into income on the income statement, if some of the value subsequently recovered (or a reduction in the impairment amount) can be objectively attributed to the set of facts that transpired following the original impairment. Any recovered value will be recognised, however, only to the extent that it does not exceed the amount of the amortised cost which would have resulted had the impairment not occurred. The financial asset will be derecognised, if it is classified as nonrecoverable.
As in the previous year, the book values of the assets and liabilities for the most part match their fair values.
Short-term financial assets comprise accounts receivable and other receivables. A bad debt allowances for accounts receivable will be made if it is likely that the total amount of the original invoice cannot be collected. The amount of the bad debt allowances will be the face value of the account less the realisable amount that equals the present cash value of the anticipated cash flows.
Assets are recognised at their face or nominal value, but will be separately discounted in value if they are subject to identifiable risks.
Cash and cash equivalents consist of credit balances held with financial institutions as well as securities which may be redeemed for cash on short notice. These credit balances held with financial institutions are measured at face or nominal value.
The actual tax refund claims and tax debts for the current period and for earlier periods must be valued at the amount at which a refund is expected from the tax authorities or a payment must be made to the tax authorities.
Deferred taxes are recognised under the liabilities method for all temporary differences between the tax basis of the assets / liabilities and their respective book values in the IFRS financial statements. In addition, any deferred taxes based on losses carried forward are entered on the balance sheet.
Deferred taxes are valued according to the tax rates (and tax regulations), which are effective as of the balance sheet closing date or which have for the most part been enacted into law, and which are expected to be valid and binding on the date the deferred tax receivable is realised and/or the deferred tax liability is settled.
Deferred tax receivables are recognised in an amount at which it is likely that taxable income will be available for crediting against the temporary differences.
The valuation of deferred tax assets for loss carry-forwards and for deductible temporary differences depends on the future taxable earnings of the InVision Group companies. The estimate regarding such taxable earnings is made as of the balance sheet date taking into account the respective business perspectives. For purposes of capitalising deferred taxes based on the losses carried forward, only those tax loss carry-forwards will be recognised, which are very likely to be applied.
A provision is shown only if the Company has a present, statutory or de facto obligation (liability) based a past event, if it is likely that the fulfilment of the obligation will lead to an outflow of funds representing an economic benefit, and if a reliable estimate of the amount of the obligation can be made. If no provision could be created because one of the criteria mentioned was not fulfilled, then the liabilities in question will be reported as contingent liabilities.
Provisions are examined on each balance sheet closing date and adjusted to accord with the best estimate as of that date. If there is an expectation that the expenditures, which are required to satisfy a deferred liability, will be reimbursed either in whole or in part by another party, then the reimbursement will be recognised only when it is nearly certain that the Group will receive the
Liabilities comprise long-term liabilities to financial institutions, trade payables, tax liabilities, interest owed, liabilities owed to employees, and other liabilities. When such items are recognised for the first time, they are booked at their cost of acquisition, which corresponds to the fair value of the consideration received. All liabilities are measured in subsequent years at the adjusted cost of acquisition under the effective interest method. The liability is derecognised when it has been settled, cancelled or expired.
The InVision Group's revenues are generated primarily by providing the following services:
The revenues are reported less any early payment discounts, customer bonuses and rebates. Agreements with several components (e.g. subscriptions and services) are internally allocated to their individual components, and revenues are recognised on the basis of those individual components.
Revenues are generally recognised when the sales price is determined or determinable, no significant duties exist and the collection of the receivables is likely. Income from subscriptions is recognised on a straight-line basis pro rata temporis throughout the period of time for which they were calculated. Income from the perpetual transfer of rights of use is generally recognised as soon as the relevant licence key is delivered. Income from projects are recognised as soon as the service is provided.
Costs are recognised when the good or service is used or at the time they were generated. Interest is recognised as either an expense and/or income according to the period in which it arose under the effective interest method. Rental payment costs under operating leases are likewise recognised on a straight-line basis over the entire term of the lease, irrespective of the payment arrangements made under such leases.
Contingent liabilities are either potential obligations, which could result in an outflow of resources but the existence of which must be confirmed through the occurrence or non-occurrence of one or more future events, or current obligations, which do not satisfy the recognition criteria of the liability. These items are listed separately in the notes, unless the possibility that resources with economic benefits will be lost is unlikely. There were no contingent liabilities in the fiscal year.
In connection with business combinations, contingent liabilities are recorded as liabilities on the balance sheet pursuant to IFRS3.37, if the fair value can be reliably calculated.
Contingent receivables are not recognised in the financial statements. They are, however, listed in the notes, if the receipt of economic benefits is likely.
When preparing the consolidated financial statements, some assumptions and estimates must be made, which have an effect on the amount and reporting of the recognised assets and liabilities, the income and expenses, and the contingent liabilities for the reporting period. These assumptions relate primarily to the assessment of the carrying value of assets, the assessment of deferred tax assets, the percentage-of-completion measurement with respect to jobs in progress, uniform group determination of the economic useful lives of tangible assets, and the recognition and measurement of provisions. The assumptions and estimates are based on premises delivered from available information at the time in question. The basis for the anticipated future business development is the circumstances present at the time the consolidated financial statements are prepared in a realistic scenario of the future development of the overall environment. If these overall conditions deviate from the assumptions made and cannot be influenced by management, then the resulting figures could deviate from the originally anticipated estimates.
Liquid funds contain only those payment instruments, which have a term to maturity of less than six months calculated from the date of purchase. As in the previous year, cash and cash equivalents consist solely of credit balances held with financial institutions.
The securities held on 31 December 2014 in the amount of € 1 million were disposed during the year 2015.
Trade receivables (net) have a term to maturity of up to one year, they are adjusted when needed and consist of the following items:
| 31 Dec 2015 | 31 Dec 2014 | |
|---|---|---|
| Trade receivables | 2,819 | 2,044 |
| Bad debt allowances | -63 | -11 |
| Total | 2,756 | 2,033 |
The income tax claims include refund claims of various subsidiaries.
| 31 Dec 2015 | 31 Dec 2014 | |
|---|---|---|
| Prepaid and deferred items | 168 | 132 |
| Other miscellaneous assets | 4 | 53 |
| Gesamt | 172 | 185 |
Intangible assets consist primarily of software and industrial property rights acquired in exchange for consideration. These assets are valued at their historical cost of acquisition, less the scheduled amortisation. With respect to scheduled amortisation, the software acquired in exchange for consideration and the industrial property rights were amortised over their expected useful lives (3 to 15 years).
Tangible assets consist of land and buildings, furnishings and office equipment, which are recognised at their historical costs of acquisition, less any scheduled depreciation if the assets are subject to wear and tear. Tangible assets are depreciated on a straightline basis over their useful lives (3 to 33 years). The carrying value of the tangible assets is subject to impairment testing. None of the assets have been subject to non-scheduled depreciation.
| Fiscal year 2015 | 01 Jan 2015 | Additions | Disposals | Currency differences |
31 Dec 2015 |
|---|---|---|---|---|---|
| Concessions, industrial property rights and similar rights and assets as well as licences to such rights and assets |
|||||
| Gross | 1,298 | 1 | 60 | 70 | 1,309 |
| Value adjustment | 595 | 172 | 60 | 19 | 726 |
| Net | 703 | -171 | 0 | 51 | 583 |
| Other equipment, furnishings and office equipment |
|||||
| Gross | 7,411 | 2,369 | 251 | 5 | 9,534 |
| Value adjustment | 605 | 354 | 237 | 3 | 725 |
| Net | 6,806 | 2,015 | 14 | 2 | 8,809 |
| Long-term assets | |||||
| Gross | 8,709 | 2,370 | 311 | 75 | 10,843 |
| Value adjustment | 1,200 | 526 | 297 | 22 | 1,451 |
| Net | 7,509 | 1,844 | 14 | 53 | 9,392 |
| Fiscal year 2014 | 01 Jan 2014 | Additions | Disposals | Currency differences |
31 Dec 2014 |
|---|---|---|---|---|---|
| Concessions, industrial property rights and similar rights and assets as well as licences to such rights and assets |
|||||
| Gross | 1,360 | 17 | 149 | 72 | 1,298 |
| Value adjustment | 508 | 167 | 96 | 18 | 595 |
| Net | 852 | -150 | 53 | 54 | 703 |
| Other equipment, furnishings and office equipment |
|||||
| Gross | 1,224 | 6,332 | 154 | 9 | 7,411 |
| Value adjustment | 527 | 212 | 142 | 8 | 605 |
| Net | 697 | 6,120 | 12 | 1 | 6,806 |
| Long-term assets | |||||
| Gross | 2,584 | 6,349 | 303 | 81 | 8,709 |
| Value adjustment | 1,035 | 379 | 238 | 26 | 1,200 |
| Net | 1,549 | 5,970 | 65 | 55 | 7,509 |
The following table sets forth the status of the deferred tax assets according to the balance sheet items:
| 31 Dec 2015 | 31 Dec 2014 | |
|---|---|---|
| Deferred taxes based on temporary differences from licence valuations | 94 | 30 |
| Deferred taxes based on losses carried forward | 293 | 932 |
| Total | 387 | 962 |
The tax loss carry-forwards for the Group totalled TEUR 10,122 (previous year: TEUR 12,383). Of this amount, TEUR 1,278 was valued (previous year: TEUR 5,291), and thereupon TEUR 293 (previous year: TEUR 932) was recognised as deferred taxes. For the TEUR 8,843 in other losses carried forward (previous year: TEUR 7,092), no deferred taxes were recognised.
Other long-term assets consist only of security deposits paid for leased office space.
The expenses for research and development came to TEUR 5,560 (previous year: TEUR 4,970) in the fiscal year.
The short-term liabilities are allocated as follows:
| 2015 | 2014 | |
|---|---|---|
| Trade payables | 116 | 137 |
| Provisions | 628 | 917 |
| Income tax liabilities | 21 | 23 |
| Deferred income | 1,516 | 1,323 |
| Other liabilities | 336 | 384 |
| Total | 2,617 | 2,784 |
The deferred income items involve previously recognised invoiced amounts for subscription services for the respective next year and deferred projetc revenues.
Income tax liabilities and provisions developed as follows:
| 01 Jan 2015 | Utilisation | Transfer | Reversal | Allocation | Currency difference | 31 Dec 2015 | |
|---|---|---|---|---|---|---|---|
| Income tax liabilities | 23 | 6 | 0 | 0 | 4 | 0 | 21 |
| Provisions for: | |||||||
| - Personnel expenses | 219 | 177 | 0 | 19 | 26 | 1 | 50 |
| - Annual accounts costs | 98 | 97 | -2 | 1 | 100 | 1 | 97 |
| - Outstanding invoices | 50 | 48 | 0 | 2 | 48 | 0 | 48 |
| - Trade associations | 14 | 13 | 0 | 1 | 14 | 0 | 14 |
| - Other | 536 | 44 | 2 | 112 | 36 | 0 | 418 |
| Total provisions | 917 | 379 | 0 | 135 | 223 | 2 | 628 |
| Total | 940 | 385 | 0 | 135 | 227 | 2 | 649 |
The provisions for personnel expenses related primarily to holiday entitlements.
Deferred income and other liabilities are short-term and are allocated as follows:
| 2015 | 2014 | |
|---|---|---|
| Deferred income | 1,516 | 1,323 |
| Value added tax | 234 | 189 |
| Payroll tax | 62 | 85 |
| Social security charges | 40 | 70 |
| Salaries | 0 | 4 |
| Other liabilities | 0 | 37 |
| Total | 1,852 | 1,708 |
The bank loan in the amount of TEUR 4,000 that was raised in fiscal year 2014 to finance the commercial property for own use was reduced by scheduled repayments to TEUR 3,250 as of 31 December 2015.
The registered share capital of InVision AG is reported as the subscribed capital. The subscribed capital is divided into 2,235,000 nopar value shares (Stückaktie), each such share representing a notional amount of EUR 1.00 of the Company's registered share capital. At the end of the reporting period, the Company holds no treasury shares.
The Executive Board is authorised, with the consent of the Supervisory Board, to increase the registered share capital one or more times by up to EUR 1,117,500 (Authorised Capital Account 2015) on or before 17 May 2020.
Pursuant to the shareholder resolution adopted on 18 May 2015, the registered share capital was conditionally increased by up to EUR 1,117,500 (Conditional Capital Account 2015). Pursuant to a shareholder resolution also adopted on 18 May 2015, the Company was authorised to buy-back its own shares in a quantity representing up to 10 percent of the registered share capital as it existed at the time the resolution was adopted. The authorisation will remain in effect until 17 May 2020.
The reserves include the net proceeds from the capital increase carried out on 18 June 2007 in connection with the Company's initial listing on the Frankfurt Stock Exchange. The reserves also include IPO costs (while factoring in tax effects), purchase and sale of the Company's own treasury shares and capital increases from company funds in previous years, and are not included in profit and loss. By merging the other profit reserves and legal profit reserves, the total reserves were at TEUR 9,306 at the beginning of the financial period. In fiscal year 2015, TEUR 8,115 were taken from the reserves in favour of the group result.
The equity difference from currency conversion is a result of converting on the basis of the modified closing date method [modifizierte Stichtagsmethode]. The difference arises from conversion of the items on the income statement of those subsidiaries, which rendered their accounts in a foreign currency, at the average exchange rate and the conversion of the items of equity capital of those subsidiaries at the historical rate of the initial consolidation, on the one hand, and the exchange rate on the reporting date [Stichtagskurs], on the other hand.
Revenues categorised as follows:
| By Business Activities | 2015 | 2014 |
|---|---|---|
| Subscriptions | 10,483 | 9,467 |
| Projects | 2,225 | 3,942 |
| Total | 12,708 | 13,409 |
By now, there is an integrated sales and marketing organisation for all products and services of the Group. Thus, a categorisation of revenues by regions as provided in previous years, was not carried out for fiscal year 2015.
Other operating income is broken down as follows:
| 2015 | 2014 | |
|---|---|---|
| Income from property | 55 | 98 |
| Income from reducing bad debt allowances | 4 | 82 |
| Post-selling income from consulting brand "Core Practice" | 0 | 422 |
| Income from changes in group consolidation | 0 | 56 |
| Income attributable to other periods | 28 | 33 |
| Other miscellaneous income | 43 | 124 |
| Total | 130 | 815 |
The costs of materials incurred are project-specific goods and services supplied by independent enterprises.
Personnel expenses consisted of the following:
| 2015 | 2014 | |
|---|---|---|
| Wages and salaries | 5,379 | 5,607 |
| Social charges and other pension provisions | 943 | 940 |
| Total | 6,322 | 6,547 |
| - of which for pensions (direct insurance) | 54 | 31 |
The direct insurance policies are classified as a defined contribution plan.
No tangible or intangible assets were subject to impairment. Thus, only scheduled amortisation and depreciation is shown under this item.
Other operating expenses are itemised as follows:
| 2015 | 2014 | |
|---|---|---|
| Office space expenses | 854 | 709 |
| Cloud services | 512 | 280 |
| Marketing and advertising costs | 307 | 293 |
| Travel expenses | 274 | 254 |
| Consulting costs | 258 | 306 |
| Communication expenses | 155 | 134 |
| Vehicle expenses | 114 | 166 |
| Receivable write-offs and bad debt allowances | 76 | 12 |
| Leasing and maintenance costs | 20 | 248 |
| Post-selling expenses from consulting brand "Core Practice" | 0 | 422 |
| Creation of provisions for project-related risks | 0 | 34 |
| Income from reversing or liquidating provisions | -135 | -414 |
| Other expenses | 505 | 483 |
| Total | 2,940 | 2,927 |
The financial result is divided into the following:
| 2015 | 2014 | |
|---|---|---|
| Interest and similar income | 18 | 24 |
| Interest and similar expenses | -58 | -56 |
| Total | -40 | -32 |
Debt capital costs are recognised as an expense in the period in which they are incurred.
Income taxes are divided as follows:
| 2015 | 2014 | |
|---|---|---|
| Income tax | -39 | -76 |
| Deferred tax | 576 | -74 |
| Total | 537 | -150 |
Detailed information about the deferred tax assets and liabilities, which must be set aside, can be found in note 31 above. The basis, upon which the deferred taxes were set aside, is an income tax rate of 30 percent for the domestic corporation and the future local tax rate for the foreign subsidiaries. It is also assumed that on the basis of the current tax legislation, any existing tax loss carryforwards may continue to be used indefinitely into the future. The deferred tax assets will be reduced in the future by the recognised tax loss carry-forwards to the extent that the Company generates profits.
The actual tax rate is computed as follows:
| 2015 | 2014 | |
|---|---|---|
| Consolidated net income before taxes | 2,668 | 4,053 |
| Income tax | 537 | -150 |
| Actual tax rate | 20% | -4% |
The difference between the theoretical income tax expense (when applying the tax rate applicable to the InVision Group) and the reported income tax expense may be attributed to the following causes:
| 2015 | 2014 | |
|---|---|---|
| Result before income tax | 2,668 | 4,053 |
| Theoretical income tax expense based on the tax rate of the parent company | 800 | 1,216 |
| Effects of losses carried forward | 655 | -808 |
| International tax rate differences | -714 | -523 |
| Other tax effects | -204 | -35 |
| Total | 537 | -150 |
The cash flow statement shows changes in the cash position of the InVision Group in the fiscal year due to incoming and outgoing cash payments. Under IAS7, cash flow is distinguished between cash flow from operating activities, cash flow from investing activities and cash flow from financing activities.
The net financial position, as reflected in the cash flow statement, consists of all liquid funds, which are reported on the balance sheet (i.e., cash on hand and credit balances at financial institutions) and which can be reduced to cash within three months (calculated from the date acquired) without causing any significant fluctuation in value, less any short-term financial liabilities. The cash flows from investing and financing activities are computed directly (i.e., on a cash basis). In contrast, cash flow from operating activities is derived indirectly from the results for the period. Cash flow from operating activities includes the following incoming and outgoing payments:
| 2015 | 2014 | |
|---|---|---|
| Interest received | 18 | 24 |
| Interest paid | -58 | -56 |
| Income taxes received/paid | 63 | -124 |
The net financial position shown in the cash flow statement represents total liquid funds as reported in the consolidated cash flow statement.
As of the balance sheet closing date, other financial obligations arised from lease agreements, mostly related to tangible assets and office space, for the following amounts:
| < 1 year | 1 to 5 years | Total | |
|---|---|---|---|
| Obligations as lessee | 218 | 392 | 610 |
| 50. Contingent liabilities | |||
| 2015 | 2014 | ||
| Non-payment guarantee | 93 | 92 | |
The financial liabilities existing in the Group are a bank loan for financing a commercial property for own use and short-term liabilities arising from accounts payable. The significant financial assets of the Group consist of cash and cash equivalents and accounts receivable. The book value of these positions, represents the maximum default risk and totals TEUR 4,160 (previous year: TEUR 6,421). Business relationships are established with creditworthy contracting parties (counter-parties) only. In order to evaluate the creditworthiness of counter-parties (above all, large customers), the Group relies on available financial information and on its own internal trading records. The Group holds trade receivables against a number of customers from a wide range of industries and regions. Credit assessments regarding the financial strength of the receivables are constantly performed. The typical terms of payment granted (with no discounts or deductions) are 30 days. With respect to all trade receivables, which were overdue by more than 45 days as of the balance sheet date and involve a default risk, bad debt allowances were created.
Neither in 2015 nor in 2014 did the Company hold any assets for trading purposes and any financial liabilities, which were recognised in the income statement at their fair value. The Group also did not execute any derivatives or hedging transactions. Reclassifications were not made either in 2015 or in 2014.
There were no significant differences between the book value of the financial assets and liabilities reported and the fair values.
The Group manages its capital (equity capital plus debt capital less cash and cash equivalents) with the goal of using financial flexibility to achieve its growth targets while at the same time optimising its financing costs. The overall capital management strategy has remained the same as in the previous year.
Management reviews the capital structure at least once each half-year. The review covers the costs of capital, the security and collateral provided, and the open credit lines and credit opportunities.
During the reporting year, the capital structure may be shown as follows:
| 31 Dec 2015 | 31 Dec 2014 | |
|---|---|---|
| Equity capital | 8,376 | 8,455 |
| - as a percentage of total capital | 59% | 55% |
| Liabilities | 5,867 | 6,784 |
| - as a percentage of total capital | 41% | 45% |
| Short-term liabilities | 2,617 | 2,784 |
| - as a percentage of total capital | 18% | 18% |
| Net gearing* | 53% | 40% |
(*) calculated as the ratio of liabilities (less any cash and cash equivalents) to equity capital
The Group's equity ratio target is 50 percent.
The monitoring of finance risk is handled by management on a centralised basis. Individual financial risks are generally reviewed at least once each quarter.
The Group's primary risks resulting from financial instruments involve liquidity and credit risks. As a rule, business transactions are executed only with creditworthy contracting parties. Moreover, the amounts of any receivables are constantly monitored in order to avoid exposing the InVision Group to any significant credit risk. The maximum default risk is limited to the book value of the asset as reported in the balance sheet.
The Group manages liquidity risks by holding adequate reserves, monitoring and maintaining credit agreements, and planning and coordinating incoming and outgoing payments.
Market risks can arise from changes in exchange rates (currency risk) or interest rates (interest risk). Given the limited relevance these risks have for the Group, the Group has not heretofore hedged such risks using derivative financial instruments. These risks are managed through constant monitoring. Currency risks are largely avoided by virtue of the fact that the Group invoices primarily in euro or in the local currency. As of the balance sheet date, the receivables denominated in foreign currencies equalled TEUR 175 (previous year: TEUR 304) and the payables denominated in foreign currencies equalled TEUR 49 (previous year: TEUR 18). Had the euro appreciated by 10 percent compared to other currencies relevant to the Group as of 31 December 2015, then the pre-tax result would have been TEUR 21 (previous year: TEUR 30) lower.
There were no transactions involving goods and services between closely related enterprises and persons, neither in the reporting period or the previous year.
After the close of the fiscal year, no further specific transactions occurred, which would be of material importance for the consolidated financial statements.
In fiscal year 2015, the Company employed on average 91 employees (previous year: 104), not including the Executive Board.
The following persons were members of the Executive Board in the fiscal year:
In the fiscal year, the Executive Board members received the following remuneration benefits:
| In EUR | 2015 | 2014 |
|---|---|---|
| Peter Bollenbeck | 207,744 | 209,000 |
| of which fixed salary | 180,000 | 180,000 |
| of which other benefits | 27,744 | 29,000 |
| Armand Zohari | 207,828 | 207,762 |
| of which fixed salary | 180,000 | 180,000 |
| of which other benefits | 27,828 | 27,762 |
| Total remuneration Executive Board | 415,572 | 416,762 |
The Executive Board holds, either directly or indirectly, 55.9 percent of the Company's registered share capital.
The Supervisory Board consists of:
Dr. Thomas Hermes is the supervisory board chairman of the registered housing association known as Wohnungsgenossenschaft Essen-Nord e.G., Essen. Matthias Schroer and Prof. Dr. Wilhelm Mülder do not sit on any other supervisory boards.
The remuneration benefits paid to the Supervisory Board in the fiscal year consist of the following:
| In EUR | 2015 | 2014 |
|---|---|---|
| Dr. Thomas Hermes | 12,000 | 12,000 |
| of which fixed compensation | 10,000 | 10,000 |
| of which meeting fees and expenditures | 2,000 | 2,000 |
| Matthias Schroer | 9,500 | 9,500 |
| of which fixed compensation | 7,500 | 7,500 |
| of which meeting fees and expenditures | 2,000 | 2,000 |
| Prof. Dr. Wilhelm Mülder | 7,000 | 7,000 |
| of which fixed compensation | 5,000 | 5.000 |
| of which meeting fees and expenditures | 2,000 | 2,000 |
| Total compensation Supervisory Board | 28,500 | 28,500 |
Otherwise in the fiscal year, the Supervisory Board members were not granted any loans or provided any advances for future payments, and no contingent liabilities were incurred for the benefit of such persons.
The fee for the Company's annual accounts auditor, which was recognised for fiscal year 2015, consists of the following:
| 2015 | 2014 | |
|---|---|---|
| Auditing service for the annual accounts | 50 | 50 |
| Tax advisory services | 5 | 22 |
| Total | 55 | 72 |
Since the internal and external business processes for all products and services are to the largest extent identical, they collectively represent a single operating segment within the meaning of IFRS8.
The Executive Board and the Supervisory Board propose to carry forward the group result to new account.
On 28 January 2016, the Executive Board and Supervisory Board issued a statement under § 161 of the German Stock Corporation Act regarding the extent to which it has elected to comply with the recommendations of the "Government Commission of the German Corporate Governance Code" and published this statement on the Internet at www.invision.de/investors.
To the best of our knowledge and in accordance with the applicable reporting principles for financial reporting, the consolidated financial statements give a true and fair view of the Group's assets, liabilities, financial position and results of operation, and the Group's management report includes a fair review of the development and performance of the business, together with a description of the principal opportunities and risks related to the anticipated development of the Group for the remainder of the fiscal year.
Düsseldorf, 4 March 2016
Peter Bollenbeck Armand Zohari
The following management report was prepared in accordance with the requirements under § 315 of the German Commercial Code (HGB) and contains information about InVision AG, Düsseldorf (hereinafter also referred to as "AG" or "Company"), and its consolidated subsidiaries (hereinafter together with the Company also collectively referred to as "InVision", "InVision Group" or "the Group"). As the Group's parent company, InVision AG performs group management functions and, at the same time, is the key member of the InVision Group. The explanations below generally relate to the Group, unless there has been an express reference to the Company itself.
The InVision Group develops and markets products and services for optimising workforce management, increasing the productivity, improving the quality of work, and reducing costs, and is mainly active in Europe and the United States.
On 31 December 2015, InVision employed 88 employees worldwide (including the Executive Board members). Compared to the end of the previous year, the number of employees declined by 12 percent (31 December 2014: 100 employees). At the end of the year, 56 employees (31 December 2014: 65 employees) were employed in Germany, while 32 employees (31 December 2014: 35 employees) were employed in foreign subsidiaries.
The research and development costs in the fiscal year totalled TEUR 5,560 and increased by 12 percent (previous year: TEUR 4,970). Research and development costs as a percentage of revenues are 44 percent (previous year: 37 percent).
The Company's registered share capital equals EUR 2,235,000 and is divided into 2,235,000 no-par value bearer shares. Each such share represents a notional share of the registered share capital of EUR 1.00. Each share entitles the holder to a single vote. Shareholders may exercise their rights and cast their votes at the Annual Shareholders' Meeting in accordance with the Company's articles of association and the statutory rules.
Pursuant to a resolution adopted by the Company's Shareholders' Meeting on 18 May 2015, the Executive Board was authorised in accordance with § 4 (4) of the Company's articles of association but subject to the consent of the Company's Supervisory Board, to increase the Company's registered share capital one or more times by a total of up to EUR 1,117,500 on or before 17 May 2020 and to do so by issuing new, no-par bearer shares in exchange for cash and/or non-cash capital contributions (Authorised Capital Account 2015). Shareholders must generally be granted a pre-emptive right, which gives them an indirect option to subscribe shares (§ 186 (5) AktG). The Executive Board is authorised, however, with the consent of the Supervisory Board, to exclude the shareholders' preemptive right to subscribe shares in the following cases:
Pursuant to a shareholder resolution adopted on 18 May 2015, the registered share capital was increased conditionally by up to EUR 1,117,500 (Conditional Capital Account 2015). The conditional capital increase must carried out only to the extent that the creditors, to whom convertible or warrant-lined bonds were issued by the Company on the basis of the authorising resolution of the Shareholders' Meeting on 18 May 2015, exercise their conversion rights on or before 17 May 2020 and the Company has not satisfied the conversion claim in some other manner. The new shares will be entitled to draw dividends as of the beginning of the fiscal year in which they are issued. The Executive Board is authorised, with the consent of the Supervisory Board, to stipulate the details concerning the implementation of the respective conditional capital increase.
Pursuant to the shareholder resolution adopted on 18 May 2015, the Company was authorised to buy back its own shares in an amount representing a 10 percent pro rata amount of the registered share capital of EUR 223,500. The repurchased shares, together with the other treasury shares, which the Company has previously acquired and still holds or which must be attributed to the Company under § 71a et seq. AktG, cannot exceed 10 percent of the Company's registered share capital. The authorisation is in effect until 17 May 2020. The shares purchased on the basis of the authorisation may be used for all legally permissible purposes.
The authorisation to buy back the Company's own shares was granted to the Company in order, inter alia, to flexibly adjust the equity capital to meet the changing business needs and to be able react to favourable stock market conditions. In addition, the acquired shares may be used as consideration when acquiring companies or when making equity investments in companies.
On the reporting date, the Company did not hold any treasury shares.
To the Company's knowledge, as of 31 December 2015, the following shareholders held more than 10 percent of the Company's registered share capital:
Executive Board members are appointed and dismissed in accordance with §§ 84 et seq. of the AktG. Pursuant to § 6 (1) of the articles of association, the Executive Board consists of at least two persons. Alternative members of the Executive Board may be appointed. Pursuant to § 6 (2) of the articles of association, the Supervisory Board is responsible for determining the number of, and appointing the regular Executive Board members and alternate Executive Board members and has the authority to revoke such appointments. The Supervisory Board is also responsible for selecting a member of the Executive Board to serve as that body's chairman and for selecting other Executive Board members to serve that body's deputy chairmen.
Amendments to the articles of association are adopted by the Shareholders' Meeting if, in accordance with § 179 AktG, a majority of at least three-quarters of the registered share capital represented at the meeting votes in favour of the amendment.
Pursuant to § 10 (2) of the articles of association, the Supervisory Board is authorised to amend the articles, provided the amendment involves only the wording. Pursuant to § 21 (1) of the articles of association, the shareholder resolutions require a simple majority of the votes cast, unless the laws prescribe another majority. In those cases in which the laws require a majority of the registered share capital represented at the time the resolution is adopted, a simple majority of the represented registered share capital will suffice, unless the laws prescribe a higher majority.
There are no significant agreements which are subject to a restriction relating to a change of control resulting from a takeover offer. Likewise, no agreements for indemnifying employees or members of the Executive Board in the event of a takeover offer have been reached.
According to the International Monetary Fund, the economic output in the euro area increased by 1.6 percent in 2015, whereas the economic output in the United States increased by 2.6 percent.
Consolidated revenues during the reporting year equalled TEUR 12,708 (previous year: TEUR 13,409) and therefore decreased by 5 percent. Revenues from subscriptions increased by 11 percent to TEUR 10,483 (previous year: TEUR 9,467). Project revenues decreased by 44 percent to TEUR 2,225 (previous year: TEUR 3,942).
Personnel expenses declined in the reporting year to TEUR 6,322 (previous year: TEUR 6.547).
Other operating expenses were at TEUR 2,940 (previous year: TEUR 2,927) and remained almost on the same level of the previous year. Office space expenses increased by 20 percent to TEUR 854 (previous year: TEUR 709). Consulting expenses declined by 16 percent to TEUR 258 (previous year: TEUR 306). Communication expenses increased by 16 percent to TEUR 155 (previous year: TEUR 134). Due to the expansion of the business activities with cloud products, expenses for cloud services increased by 83 percent to TEUR 512 (previous year: TEUR 280). Leasing and maintenance expenses declined by 92 percent to TEUR 20 (previous year: TEUR 248). Miscellaneous expenses decreased by 5 percent to TEUR 505 (previous year: TEUR 483). The income from reversing of provisions decreased by 67 percent to TEUR 135 (previous year: TEUR 414).
The operating result (EBIT) decreased in the reporting period by 35 percent to TEUR 2,676 TEUR (previous year: TEUR 4,124). The EBIT margin decreased in the reporting period to 21 percent (previous year: 31 percent).
Interest income decreased to TEUR 18 (previous year: TEUR 24) and the interest expense slightly increased to TEUR 58 (previous year: TEUR 56).
In fiscal year 2015, consolidated net profit equalled TEUR 2,132 (previous year: TEUR 4,203).
Overall, business development in the fiscal year of 2015 was in line with expectations.
Earnings per share were EUR 0.96 (previous year: EUR 1.94), based on an average of 2,235,000 shares in 2015 (previous year: 2,208,515 shares).
Primarily due to significantly increased payments made for investing activities and payments to shareholders liquid funds decreased to TEUR 1,405 (previous year: TEUR 3,388) as of the end of the fiscal year. The securities that were held as current assets at the end of last fiscal year, worth TEUR 1,000, were sold during the year of 2015.
Trade receivables increased by 36 percent to TEUR 2,756 (previous year: TEUR 2,033). The income tax claims decreased to TEUR 98 (previous year: TEUR 124). The prepaid expenses and other short-term assets decreased by 7 percent to TEUR 172 (previous year: TEUR 185). During the reporting year, intangible assets decreased to TEUR 583 (previous year: TEUR 703) due to depreciation. Due to the capitalisation of the renovation and settings of the commercial property for own use that was purchased in the previous fiscal year, tangible assets increased to TEUR 8,809 (previous year: TEUR 6,806). Deferred tax assets decreased by 60 percent to TEUR 387 (previous year: TEUR 962).
Trade payables declined by 15 percent to TEUR 116 (previous year: TEUR 137). The provisions decreased by 32 percent to TEUR 628 (previous year: TEUR 917). The tax reserves remained almost unchanged at TEUR 21 (previous year: TEUR 23). The short-term share of the deferred income and other short-term liabilities increased by 8 percent to TEUR 1,852 (previous year: TEUR 1,708).
The long-term bank loan in the amount of TEUR 4,000, that was raised in the previous year to partly finance a commercial property for own use, was repaid as scheduled in fiscal year 2015 and totalled TEUR 3,250 at the balance sheet date.
During the financial year, reserves of the amount of TEUR 8,115 were offset against the group result. Thus, the reserves amounted to TEUR 1,191 (previous year: EUR 9.306) and profit totalled to TEUR 5,316 (previous year: TEUR -2.695), at the end of the reporting period.
The balance sheet total as of 31 December 2015 equalled TEUR 14,243 (previous year: TEUR 15,239). Equity capital is now at TEUR 8,376 (previous year: TEUR 8,455), and the equity ratio equals 59 percent (previous year: 55 percent).
Cash flow from operating activities reached TEUR 2,334 in the reporting period (previous year: TEUR 3,089) and corresponds to a share of 18 percent of the Group revenues (previous year: 23 percent).
InVision Software (Deutschland) GmbH was merged with InVision AG on 1 January 2015. InVision Software GmbH, Vienna, Austria, was deleted from the commercial register, Vienna, on 16 December 2015, and is no longer part of the group of consolidated companies as of that date.
In addition to the reimbursement of expenditures which they incurred in discharging their official duties, the members of the Company's Supervisory Board are paid a fixed fee of EUR 5,000. The Chairman of the Supervisory Board receives twice that amount, and the Deputy Chairman receives one and one-half times that amount. The fee is paid after the fiscal half-year has ended. Any value added tax charged on the costs for reimbursement and fees is reimbursed.
The Executive Board compensation consists of a fixed-base salary, which increases if contractually defined revenue thresholds are met. Executive Board members also have a right to use a car leased by the Company. Furthermore, the Executive Board members will be paid an allowance to cover their costs for health insurance and long-term care insurance. The Company has also taken out private liability insurance to cover the Executive Board members, if those members do not have their own personal liability insurance protection. Moreover, the Company has executed a D&O insurance policy with a deductible.
Principles of risk management and of accounting-related internal control system
For the InVision Group, a comprehensive and self-contained risk management programme is a significant component of the Group's corporate strategy. A company-wide monitoring system ensures the systematic identification and assessment of risks regarding any likelihood of occurrence or the possible quantitative effects on corporate value.
Risk management is intended to identify, at an early stage, specifically any risks which threaten the Company's very existence in an effort to launch effective counter-measures for avoiding the risks. Another goal is to minimise the possible adverse effects, which all risks could have on the net assets, financial position and results of operation, while largely preserving the corresponding opportunities.
Potential counter-measures for dealing with risk include, for example, avoiding high-risk activities, reducing individual areas of potential risk by utilising commercial alternatives with a lower potential for risk, diversifying and limiting individual risks, and shifting risks onto insurance carriers or contracting parties.
The Executive Board is responsible for administering the risk management. A fundamental review of all risks is made once each year, at least. There are standardised accounting rules used in the Group's companies, the compliance with which is continuously monitored. This also guarantees that the accounts conform to the standard accounting rules applicable from time to time. An internal ad hoc report is prepared in the event that there are significant changes or newly emerged risks. All risk-relevant topics and the thencurrent economic situation over time are constantly monitored. If necessary, operational teams or external experts are called in to participate.
The risk management is described and stipulated in a group risk management policy and its suitability and functionality is reviewed each year in connection with the audit of the annual financial statements.
Since 2011, InVision increasingly offers cloud-based services. If customers do not accept this offering, due to data security issues or any other considerations in principle, revenues of the InVision Group could permanently decrease accordingly.
InVision relies on seasoned and well-trained teams of employees. The future success of InVision will also depend on finding and retaining, on a long-term basis, highly qualified employees. The competition for employees with scientific, technical or industryspecific expertise is quite intense. It is therefore possible that the Company will be unable to promptly recruit new staff on the open labour market and that this may give rise to additional costs. The loss of qualified staff or long-term difficulties in hiring suitable employees could result in InVision's inability to successfully implement important decisions and courses of action, which in turn would impair its business operations. This particularly applies in the case of a zombie apocalypse.
The aforementioned risks, both individually and collectively, could have adverse effects on the net assets, financial position and results of operation of the Company and of the InVision Group as a whole.
After the end of the fiscal year, there was no special transaction which would be of material importance to the annual financial statements.
According to the forecasts made by the International Monetary Fund, the economic output in the euro area will increase by 1.8 percent in 2016, whereas the economic output in the United States will increase by 2.7 percent.
For the upcoming years, InVision expects a stable demand for the products of the InVision Group. For 2016 and 2017 each, the Executive Board expects a decline in project revenues and an increase in subscription revenues as well as an increase in profits.
Düsseldorf, 4 March 2016
Peter Bollenbeck Armand Zohari
We have audited the consolidated financial statements prepared by InVision Aktiengesellschaft – consisting of the balance sheet, income statement, statement of changes in equity, the cash flow statement and the notes to the consolidated financial statements together with the Group management report – for the period 1 January 2015 through 31 December 2015. The preparation of the consolidated financial statements and the Group management report in accordance with IFRS, as adopted by the EU, and with the additional requirements of the German Commercial Code under § 315a (1) HGB is the responsibility of the Executive Board of InVision Aktiengesellschaft. Our responsibility is to express an opinion on the IFRS consolidated financial statements and the Group management report based on our audit.
We have conducted our audit of the consolidated financial statements in accordance with § 317 HGB and the German generally accepted standards for the audits of financial statements promulgated by the German Institute of Auditors (Institute of Wirtschaftsprüfer or IDW). Those standards require that we plan and perform the audit such that any misstatements and violations, which materially affect the presentation of the net assets, financial position and results of operation in the IFRS consolidated financial statements and Group management report, are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of the audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the Group management report are examined primarily on a test basis within the framework of the audit. The audit includes the assessment of the annual financial statements of the companies included in the consolidated financial statements, the determination of the companies to be included in the consolidation, the accounting and consolidation principles used and significant estimates made by statutory representatives, as well as the evaluation of the overall presentation of the IFRS consolidated financial statements and the Group management report. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS, as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a (1) HGB and give a true and fair view of the net assets, financial position and results of operation of the Group in accordance with these requirements. The Group management report is consistent with the IFRS consolidated financial statements and as a whole provides a suitable view of the Company's situation and suitably presents the opportunities and risks of future development.
Düsseldorf, 4 March 2016
RSM Verhülsdonk GmbH Wirtschaftsprüfungsgesellschaft - Steuerberatungsgesellschaft
Grote - Wirtschaftsprüfer
Schmitz - Wirtschaftsprüfer
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