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Bure Equity

Annual Report Mar 31, 2017

2899_10-k_2017-03-31_2d714026-6fcc-481b-a378-e26fddfad018.pdf

Annual Report

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Welcome to Bure Equity AB

Contents

  • 2 Bure's portfolio companies
  • 4 Highlights of 2016
  • 6 Comments from the Chairman and CEO
  • 9 Bure's operations
  • 11 Portfolio development in 2016
  • 14 Bure's net asset value
  • 15 Portfolio companies, listed
  • 18 Portfolio companies, unlisted
  • 21 The Bure share – historical overview 1993 – 2016
  • 24 Corporate governance
  • 28 Board of Directors
  • 30 Employees
  • 31 Five-year overview
  • 32 Administration report
  • 37 Consolidated statement of comprehensive income, Group
  • 38 Balance sheet, Group
  • 40 Income statement, Parent Company
  • 41 Balance sheet, Parent Company
  • 42 Statement of changes in equity, Group
  • 43 Statement of changes in equity, Parent Company
  • 44 Cash flow statement
  • 45 Notes
  • 64 Auditor's report
  • 68 Definitions
  • 69 Shareholder information

CAVOTEC – is a global engineering group that delivers power transmission, distribution and control technologies that form the link between fixed and mobile equipment in the Ports & Maritime, Airports, Mining & Tunnelling, Automation and General Industrial sectors.

BURE FINANCIAL SERVICES – is a wholly owned subsidiary that invests in financial operations and assets.

Bure builds successful companies.

Our portfolio is made up of ten companies, of which six are listed. We present them here.

VITROLIFE – is an internationally active medtech group. Vitrolife develops, produces and markets products for fertility treatment.

MEDCAP – owns and develops companies in the Life Science sector.

Building companies is our passion and our focus.

XVIVO PERFUSION – is an internationally active medical technology company focused on developing optimised solutions for organ, tissue and cell preservation in connection with transplantation.

LAURITZ.COM – is the Nordic region's largest online auction house for antiquities, art, design and home luxury.

MYCRONIC – develops and manufactures laser-based pattern generators for production of photomasks and advanced surface mounting equipment for flexible electronics production.

BURE GROWTH – is a wholly owned subsidiary that invests in development companies.

INVESTMENT AB BURE – is a wholly owned subsidiary that owns and manages leasing of locomotives.

MERCURI INTERNATIONAL – is Europe's leading sales and management training consultancy, with operations worldwide.

Highlights of 2016

2016 was yet another successful year for Bure when net asset value grew by SEK 1Bn, or 16.4 per cent. Bure's share price performance was even better, showing a total return of 54.7 per cent, equal to an increase of SEK 2.4Bn including share dividends. Bure's share was thus traded at a premium against net asset value of 2 per cent at year-end 2016, compared to a discount of 20 per cent at the beginning of the year.

Shareholder value

  • Total return on the Bure share was 54.7 per cent, compared to an increase of 9.6 per cent for the SIX Return Index.
  • Net asset value per share increased by 16.4 per cent to SEK 101.74 (87.40). In addition, Bure paid an ordinary dividend of SEK 1.00 per share and an extraordinary dividend of SEK 1.00 per share in 2016.
  • Net asset value grew by SEK 994M to SEK 7,054M. Value growth including share dividends totalling SEK 139M amounted to SEK 1,133M.
  • Consolidated profit after tax was SEK 1,173M (2,940). Basic earnings per share amounted to SEK 16.92 (41.98).
  • The Board proposes that the 2017 AGM approve an ordinary dividend of SEK 1.50 (1.00) and an extraordinary dividend of SEK 0.50 (1.00) per share.

Investing activities

  • Bure acquired 2.75 million shares in Cavotec for SEK 55.1M and increased its holding from 13.1 per cent to 16.6 per cent.
  • Bure acquired 4.6 million shares in Lauritz.com for SEK 68.9M, which corresponds to a holding of 11.3 per cent.
  • Bure acquired 0.4 million shares in MedCap for SEK 11.2M and increased its holding from 20.0 per cent to 22.7 per cent.
  • Bure Growth acquired shares in Life Genomics AB , which offers genetic tests to the healthcare sector and the public. The investment amounted to SEK 7M and the holding is 28 per cent.
  • At 31 December 2016 Bure had investable capital of over SEK 700M.

Net asset value per share at 31 December 2016 SEK M

Listed portfolio companies
Cavotec 279
Lauritz.com 37
MedCap 106
Mycronic 2,873
Vitrolife 1,823
Xvivo Perfusion 430
Total 5,548
Unlisted portfolio companies
Bure Financial Services 252
Bure Growth 37
Investment AB Bure 222
Mercuri International Group 114
Total 625
Treasury 881
Total net asset value 7,054

Bure's total return in 2016

A good owner

A good owner creates security and confidence in the future, and gives businesses time to develop. A good owner plays an active role that is based on in-depth engagement and a strong presence in the portfolio companies.

Comments from the Chairman and CEO

Total return on the Bure share in 2016 amounted to 54.6 per cent, giving Bure a top placement among investment companies on the Stockholm Stock Exchange. In a longer perspective, Bure has produced a total return of 457 per cent over the past five-year period.

Portfolio performance in 2016

Bure's net asset value rose by 16.4 per cent in 2016, equal to an increase in value of SEK 1Bn to SEK 7Bn. Once again, Bure's key holdings Mycronic, Vitrolife and Xvivo Perfusion accounted for most of the value growth. However, the greatest source of satisfaction is that the portfolio companies advanced their positions during the year through the combined effects of robust sales growth and several acquisitions.

A "good owner" is a new concept that you use in the annual report. What does it mean?

Henrik: I don't know that it's a generally accepted term, but it is used in parts of the financial market as a way of categorising different owner companies. And it's a concept that is well suited to Bure, partly as a way of defining Bure's position in the investment market and partly for giving the companies we look at an idea of what Bure stands for. According to

Bure, a good owner is one that takes primary responsibility for building companies in a long-term perspective. The approaches for succeeding at this can vary depending on a company's phase of maturity, type of business, etc. In the annual report we have chosen to highlight four cornerstones that are essential to our ownership philosophy: a long-term approach, commitment and responsibility, adapted leadership and financial strength.

Patrik: The financial market is highly proficient at setting labels on different phenomena. We have been working determinedly and energetically, for many years and in various ways, and the highlighted concepts very accurately describe the ownership processes that together create the conditions for successful business.

Would you say that your dependency on two individual companies is a problem?

Henrik: In a perfect world it might not be ideal to have a portfolio where two companies account for around two thirds of total net asset value. But I think it's important to understand that an investment company like Bure has scope to act in ways other than fund structures and similar. My ambition as CEO is to generate a healthy long-term return for the shareholders. And in view of that, I don't see the logic in selling off holdings that are performing well from both an operational and value standpoint. On the contrary, this is precisely the type of companies Bure should own.

Patrik: Bure has had the pleasure of following the fantastic successes in Mycronic and Vitrolife for many years. And the fact that both companies now account for a large share of Bure's net asset value is a testimony to their superb performance. This is something we should celebrate!

An outstanding year, but only a few minor new investments.

Henrik: It's true that we didn't make any major new investments in 2016, but there was a high level of activity in working with potential acquisitions and we advanced to a late stage of the process in several cases. The main reason for not closing these deals is most likely that we've found it hard to accept the generally high valuation expectations. Getting the right "timing" with respect to value is critical in new investments and a momentum-driven market like that we saw in 2016 makes this difficult. The valuation multiples rose continuously during the year without always, in our opinion, having a direct connection to the underlying companies' development and performance. This has forced many investors to continue far out onto the risk curve. Bure creates security and confidence in the future. Bure gives businesses time to develop. Bure is also active and engaged in the portfolio companies.

"Bure creates security and confidence in the future. Bure gives businesses time to develop. Bure is also active and engaged in the portfolio companies."

What are your thoughts on the proposed dividend?

Patrik: For many years Bure has been working with different ways of distributing values to its shareholders. On page 21 we present a historical overview. Over the past five-year period Bure repurchased a large volume of shares as a result of the company's high "net asset value discount". But in the past year Bure was valued more in line with the underlying assets, for which reason it has been more natural to shift the focus to traditional cash dividends. The ambition is for cash dividends, over time, to reflect the dividend flows Bure earns on its investments. With the Board's proposal for a total dividend of SEK 2 per share, the direct return is around 2 per cent.

2017, what are your views on the market outlook?

Henrik: 2016 brought a break in what was probably a 35-year period of continuously falling interest rates. This will most likely affect the stock market in the years ahead, particularly the valuation multiples. In 2016 we anticipated high volatility and to a certain extent this proved to be the case. But what we really saw in 2016 were major differences in performance between sectors. The cyclical sectors were those that gained most, especially in the second half of the year, and without this upswing the index would have been negative for 2016. The leading indicators also point out high activity in both the industrial and service sectors, alongside all of the political instability above all in the USA and Europe. However, I personally see this optimism with a certain wariness. The Swedish stock market has now risen five years in a row, which hasn't happened since the 1990s.

Patrik: Small and mid-sized companies have continued to perform well. The financial statistics now being presented are promising for growth in the year ahead and corporate earnings forecasts are being adjusted upwards. The only causes for concern are that expectations are high, interest rates are artificially low and we have a had a strong market boom, with new "all-time-highs", over the past five-year period. At the moment, it's only a drawback to have weathered a number of "financial crashes" in the past 30 years. This far into the financial cycle we should normally be more cautious, but increasingly aggressive assumptions are needed to take home the deals we are looking at. In this scenario, Bure will "hurry slowly".

What will be Bure's focus in 2017?

Henrik: I have great respect for the fact that valuations and share prices move both up and down. In these times of heightened uncertainty, it feels natural to concentrate on companies, markets and people we know. My focus, as earlier, will be on helping our portfolio companies to optimise their development through ongoing engagement and responsibility. If we continue to reap success in our portfolio companies, I believe this will also underline Bure's comparative advantages as a partner and owner. And this, in turn, will create exciting investment opportunities in the future.

Stockholm, 15 March 2017

Patrik Tigerschiöld Henrik Blomquist Board Chairman CEO

Long-term

A long-term approach is vital for a company's success. Bure's ownership philosophy is based on a long-term perspective and helping businesses to realise their full potential.

Bure's operations

Business mission and objectives

Bure is an investment company and a good owner. By actively building successful companies and businesses in the long term, Bure creates a healthy return for its shareholders.

Bure's objectives are:

  • To create a sustainable, long-term total return for Bure's shareholders.
  • To be a competitive investment alternative in the stock market.

Bure's business model

The foundation for Bure's business model is the ownership philosophy that has evolved over our 25-year history. The ownership philosophy is shaped by in-depth engagement and a strong presence in the portfolio companies. In this way, we build far-reaching expertise about the industries where we are active. The current portfolio includes several companies where we have been involved for many years and contributed to successful development. At the overall level, our ownership philosophy is based on the following cornerstones:

A long-term approach:

A long-term approach is a vital ingredient in building successful companies. Short-term speculation can lead to decisions that are wrong for a portfolio company in a longer perspective. The courage to invest, have patience and show respect creates good conditions for building industrially successful companies and therefore also substantial values.

But building for the long term should not be equated with working slowing. On the contrary, a long-term approach places higher demands on professional conduct and entrepreneurial follow-up, which build structural capital and competitive advantages.

Commitment and responsibility:

As a principal owner, we work according to a clear agenda with a focus on the respective holdings' long-term business strategies and value drivers. This requires Bure to maintain a strong presence in the portfolio companies, mainly through active board participations.

With ownership follows responsibility. In Bure's code of conduct we have formulated our views on responsible ownership, and we strive for our portfolio companies to respect these. The Code of Conduct contains clear commitments regarding inter alia ethics, human rights and labor issues and environmental impact.

Adapted leadership:

Our experience is that companies in varying stages of maturity require different types of leadership to create success over time. We don't believe that any single type of leadership works in every situation. This places demands on us, as principal owner, to be responsive and open to change at all times by continuously evaluating what type of leadership our portfolio companies are in need of.

Financial strength:

A good owner has the financial strength and capacity to always support and assist its portfolio companies in meeting their set objectives.

Bure is a situation-based investor

Bure identifies and monitors interesting industries and companies and evaluates potential investments opportunistically based on the unique situations companies find themselves in at the time of the investment. Among other things, Bure seeks special situations that fall outside the models used by other investors. When evaluating operations and potential

Target scenario for the portfolio

Within the framework of Bure's business model, a target scenario for the portfolio has been defined to balance the portfolio from a risk perspective. The chart to the right provides a schematic illustration of how Bure's portfolio could be composed.

The three different categories are:

  • Target-returning companies – meet Bure's basic investment criteria with a target IRR of 12 per cent.
  • Companies with high potential returns – often have higher operational risk (such as technology or market risk).
  • Cash flow-generating companies – often companies with stable business models and with direct return.

investments, Bure analyses business opportunities based on the company's structure, market, business model, financial position, management and board of directors. In addition, it is vital to clearly identify what role Bure will play in the short and long term.

Overall investment criteria

In both new and existing investments, Bure uses a structured approach that includes clear identification of different value-drivers. Bure's overall investment criteria are:

  • Each investment should have an Internal Rate of Return (IRR) of more than 12 per cent.
  • The holding should be significant and have sufficient potential to contribute to Bure's long-term value growth.
  • Bure should be a sufficiently large owner with a clearly defined role in order to exert an active influence.

Active and long-term ownership with no established exit strategy

Bure has no established exit strategy and is not forced to sell off portfolio companies within a certain period of time. Exits can take place for example when a new owner can contribute to the respective company's development. As an owner, it is critical that Bure has a long-term strategy and an owner agenda, i.e. a clear objective and action plan, for each portfolio company. These are evaluated continuously by Bure with an emphasis on value, potential and risk.

Bure assesses each investment and business opportunity over a period of 3 – 5 years, but the investment horizon can be longer. If interesting new business opportunities arise over time, Bure can continue to own the company. The current portfolio includes several operations where Bure has been involved for many years and has contributed to building successful companies.

Holding at 31 December
2016
Bure's
ownership
Bure as the
largest single
shareholder
Number of
board members
from Bure
Chairman
from Bure
Year of original
investment
Listed portfolio companies
Cavotec 16.6% Yes 1 No 2014
Lauritz.com 11.3% No 1 No 2016
MedCap 22.7% Yes 1 No 2013
Mycronic 29.9% Yes 1 Yes 1986/20091
Vitrolife 21.7% Yes 1 No 1984/20002
Xvivo Perfusion 20.7% Yes 2 Yes 2000/20123
Unlisted portfolio companies
Bure Financial Services 100.0% Yes 3 Yes 2014
Bure Growth 100.0% Yes 3 Yes 2015
Investment AB Bure 100.0% Yes 2 Yes 20124
Mercuri International 99.1% Yes 1 Yes 1998

1) Refers to the original investment in Mydata and the merger with Mycronic.

2) Refers to the original investment in Fermentech Medical and the merger with Vitrolife.

3) Refers to the original investment and Lex Asea distribution from Vitrolife.

4) Refers to locomotive investment.

Portfolio development in 2016

Net asset value, 12 months 2016

Net asset value amounted to SEK 7,054M, an increase of SEK 994M since year-end 2015.

Net asset value per share was SEK 101.74, which is equal to an increase of 16.46 per cent since year-end 2015.

In 2016 Bure also paid a total dividend of SEK 2.00 per share. 0

Development of net asset value

Bure's portfolio consisted of ten companies at the end of 2016. One portfolio company was added during the year– Lauritz.com.

Net asset value rose by SEK 994M, or 16.4 per cent, to SEK 7,054M, compared to SEK 6,060M at 31 December 2015. Total value growth in 2016 amounted to SEK 1,133M, calculated as the increase in net asset value by SEK 994M and the addback of dividends of SEK 139M.

Of the increase in net asset value of SEK 994M, value growth of SEK 1,155M was attributable to the listed portfolio companies, SEK 13M to the unlisted portfolio companies and SEK -174 M to Treasury.

Net asset value per share at 31 December 2016 was SEK 101.74. Adjusted for share dividends, this is equal to an increase of 18.7 per cent during 2016.

Breakdown of net asset value at 31 December 2016

Listed portfolio companies, 12 months 2016

The value of the listed portfolio companies increased during the year by SEK 1,155M to SEK 5,548M. Of this value growth, value changes accounted for SEK 1,018M and investments for SEK 138M.

Value development, listed holdings, 2016

Vitrolife's value growth was SEK 464M. The holding in Vitrolife amounted to SEK 1,823M at 31 December 2016. During the year, Bure received dividends of SEK 11M from Vitrolife. The share price rose by 34.1 per cent during the year.

The value of the holding in Mycronic increased by SEK 462M to SEK 2,873M at 31 December 2016. During the year, Bure received dividends of SEK 117M from Mycronic. The share price rose by 19.1 per cent during the year.

The value of the holding in Xvivo Perfusion increased by SEK 147M to SEK 430M at 31 December 2016. The value change consisted of value growth of SEK 145M and the acquisition of shares for SEK 2M. The share price rose by 50.4 per cent during the year.

The value of the holding in MedCap increased by SEK 21M to SEK 106M. The value change consisted of value growth of SEK 10M and the acquisition of shares for SEK 11M. The share price rose by 10.2 per cent during the year.

The value of the holding in Cavotec increased by SEK 24M to SEK 279M. The value change consisted of a value decrease of SEK 31M and the acquisition of shares for SEK 55M. The share price fell by 13.7 per cent during the year.

The value of the holding in Lauritz.com decreased by SEK 32M to SEK 37M at 31 December 2016. Bure acquired the holding in Lauritz.com through the company's IPO in June 2016. The share price has fallen by 46.3 per cent since the listing in June.

Listed portfolio companies accounted for 78.7 per cent of net asset value, compared to 72.5 per cent at year-end 2015.

Unlisted portfolio companies, 12 months 2016

The value of the unlisted portfolio companies increased by SEK 13M to SEK 625M, compared to SEK 612M at year-end 2015. Of this value growth, value changes accounted for SEK 5M and investments for SEK 8M.

Bure Financial Services' net asset value rose by SEK 14M to SEK 252M, mainly owing to a value increase of SEK 13M for the holding in Catella. During the year, Bure Financial Services invested SEK 1M in Idevall & Partners Holding. Bure received share dividends of SEK 9M from Fondita referring to the second half of 2015 and the first half of 2016.

Bure Growth's net asset value declined by SEK 6M to SEK 37M at 31 December 2016, mainly due to a value decrease of SEK 13M for the holding in Vigmed. During the year, Bure Growth invested SEK 7M in Life Genomics AB.

Investment AB Bure's net asset value was SEK 222M, compared to SEK 216M at year-end 2015.

Mercuri's net asset value of SEK 114M was unchanged compared to the value at the beginning of the year. Unlisted portfolio companies accounted for 8.9 per cent of net asset value, compared to 10.1 per cent at year-end 2015.

Treasury, 12 months 2016

The value of the assets in Treasury fell by SEK 174M to SEK 881M. Assets in Treasury increased by SEK 147M as a result of dividends received primarily from Mycronic and Vitrolife and decreased through the payment of share dividends of SEK 139M to Bure's shareholders, the acquisition of shares in listed and unlisted portfolio companies for SEK 145M and administrative expenses of SEK 47M. Assets in Treasury accounted for 12.5 per cent of net asset value, compared to 17.4 per cent at year-end 2015.

Bure's share

The number of shares outstanding in Bure amounts to 69,332,710. The 2016 Annual General Meeting authorised Bure's Board of Directors to decide on the buyback of up to 10 per cent of the total number of shares outstanding. At 31 December 2016 no buybacks had been made.

Bure's share price on 31 December 2016 was SEK 103.50, which is equal to a total return of 54.7 per cent since the beginning of the year.

Portfolio companies 2016 and 20151

Listed portfolio
SEK M
2016 2015
Net sales 2,003 2,173
EBIT 116 71
EBIT margin 5.8% 3.3%
Holding 16.6% 13.1%
Net sales 279 282
EBIT 41 37
EBIT margin 14.6% 13.2%
Holding 11.3%
Net sales 896 813
EBIT 17 25
EBIT margin 1.9% 3.1%
Holding 22.7% 20.0%
Net sales 2,319 1,815
EBIT 691 540
EBIT margin 29.8% 29.8%
Holding 29.9% 29.9%
Net sales 856 722
EBIT 249 226
EBIT margin 29.1% 31.3%
Holding 21.7% 21.7%
Net sales 138 120
EBIT 3 7
EBIT margin 2.0% 6.0%
Holding 20.7% 22.5%
Onoterade
Mkr
2016 2015
Net sales 27 105
EBIT 27 105
EBIT margin 100.0 % 100.0%
Holding 100.0% 100.0%
Net sales -15 -15
EBIT -15 -15
EBIT margin n/m n/m
Holding 100.0% 100.0%
Net sales 31 34
EBIT 7 21
EBIT margin 23.4% 62.7%
Holding 100.0% 100.0%
Net sales 424 452
EBIT 37 28
EBIT margin 8.7% 6.2%
Holding 99.1% 99.1%

1) MedCap refers to the period from November to October of each year.

Adapted leadership

As companies evolve, their conditions change. Bure places great importance on continuously appointing leadership that gives each portfolio company the capacity to realise its full potential.

Net asset value per share at 31 December 2016 was SEK 101,74 (87,40), which is equal to an increase of 16.4 per cent. In addition, the shareholders received an ordinary dividend of SEK 1.00 per share and an extraordinary dividend of SEK 1.00 per share.

Net asset value grew by SEK 994M, or 16.4 per cent, to SEK 7,054M in 2016. Furthermore, Bure paid total share dividends of SEK 139M.

31 December 2016
Bure's net asset value at
31 December 2016
% of
capital
Net asset
value
31 Dec 2015,
SEK M
Value
change,
(+/-), SEK M
Investment (+)/
Disposal (-),
SEK M
Net asset
value,
SEK M
% of net
asset
value
Net asset
value per
share,
SEK
Cavotec 16.6% 255 -31 55 279 4.0% 4.0
Lauritz.com 11.3% 0 -32 69 37 0.5% 0.5
L MedCap 22.7% 85 10 11 106 1.5% 1.5
I
S
Mycronic 29.9% 2,411 462 0 2,873 40.7% 41.4
T
E
D
Vitrolife 21.7% 1,359 464 0 1,823 25.8% 26.3
Xvivo Perfusion 20.7% 283 145 2 430 6.1% 6.2
Total listed portfolio companies1 4,393 1,018 138 5,548 78.7% 80.0
Bure Financial Services2 100.0% 239 13 1 252 3.6% 3.6
U
N
Bure Growth3 100.0% 43 -13 7 37 0.5% 0.5
L
I
Investment AB Bure4 100.0% 216 5 0 222 3.1% 3.2
S
T
E
D
Mercuri International
Group5
99.1% 114 0 0 114 1.6% 1.6
Total unlisted portfolio companies 612 5 8 625 8.9% 9.0
T
R
E
Cash and cash equivalents and
short-term/financial investments6
1,040 -167 873 12.4% 12.6
A
S
U
Other assets7 15 -6 8 0.1% 0.1
R
Y
Total treasury 1,055 -174 881 12.5% 12.7
Total net asset value 6,060 994 7,054 100.0% 101.7

1) The number of shares in listed portfolio companies at 31 December 2016: Cavotec 12,998,970, Lauritz.com 4,595,333, MedCap 3,041,017, Mycronic 29,317,163,

Vitrolife 4,709,790 and Xvivo Perfusion 4,891,483.

2) Of which, Catella SEK 201.4M, Fondbolaget Fondita SEK 49.0M and Idevall & Partner Holding SEK 2.1M.

3) Of which, Vigmed Holding SEK 7.5M, BioLamina SEK 22,4M and Life Genomics SEK 7.0M.

4) Refers to net assets.

5) Refers to the book value of equity and interest-bearing receivables.

6) Cash and cash equivalents, participations in funds and investments in market-listed assets

7) Refers to other unlisted companies, interest-bearing receivables and other net assets.

Listed holdings 16 20

www.cavotec.com

Vitrolife

Cavotec is a global engineering group that delivers power transmission, distribution and control technologies that form the link between fixed and mobile equipment in the Ports & Maritime, Airports, Mining, Tunnelling, Automation and General Industrial sectors. jul aug sep okt nov dec

500
EUR M
2016
2016
2015
SIX General Index
Net sales
400
212
232
Operating expenses
-199
-225
300
EBIT
12.3
7.6
200
EBIT margin
5.8%
3.3%
Net financial items
-1.0
5.2
100
Profit/loss before tax
11.3
12.8
0
Income tax expense
-4.8
-6.7
2012
2013
2014
2015
2016
Profit/loss for the period
6.5
6.1
Net loan debt (-)/receivable (+)
-23
-25
Total no. of shares traded, thousands
per month
Total assets
244
260
100
Equity
145
140
Xvivo Perfustion
Micronic Mydata
80
Cash flow from operating activities
10
0
2016
SIX General Index
Average no. of employees
942
1,063
60
Facts at 31 December 2016
Largest shareholders
40
Book value: SEK 279M
Bure Equity
20
Fjärde AP-fonden
Acquisition date: 2014
Fabio Cannavale
0
Others
2012
2013
2014
2015
2016
Board member from Bure:
Vitrolife
Key figures
MedCap
2,500
2014
2,000
233
-220
1,500
12.6
1,000
5.4%
3.7
500
16.2
0
-6.0
10.2
-20
242
3,000
138
2,500
-1
1,019
2,000
1,500
1,000
16.6%
9.7%
500
9.3%
Patrik Tigerschiöld, board member 0
64.4%

Cavotec share price performance, 5 years

The year in brief

  • Net sales for 2016 declined by 9 per cent to EUR 212M. Vitrolife
  • Operating profit was EUR 12,3M (7,6), equal to an operating margin of 5.8 per cent (3.3). 2016
  • Cavotec announced its strategic plan for the next five years, including a goal to achieve revenue of EUR 500M with an EBIT margin of over 12 per cent. According to the plan, Cavotec has been organised in two business areas – Ports & Maritime and Airports & Industry.
  • The share price fell by 13.7 per cent in 2016.

www.lauritz.com

Lauritz.com is Scandinavia's largest online auction house for antiques, art and designer furniture.

Key figures per month Total no. of shares traded, thousands
DKK M
45
2016 2015 2014
1 400
MedCap
Net sales
40
219 225 153
1 200
SIX General Index
Operating expenses
-187 -195 -137
1 000
35
EBIT
32.0 29.7 16.6
30
EBIT margin
14.6% 13.2% 800
10.8%
25
Net financial items
-16.2 -40.4 600
-2.4
20
Profit/loss before tax
15.7 -10.8 14.3
400
Income tax expense
15
-5.1 2.3 -3.8
200
Profit/loss for the period
10
10.7 -8.5 10.5
2012
2013
2014
2015 2016 0
Net loan debt (-)/receivable (+) -163 -306 -256
Total assets 497 502 510
Equity 62 13
Total no. of shares traded, thousands
15
Cash flow from operating activities
120
per month
3
-13 15
24,000
Mycronic
Average no. of employees
203 204 136
20,000
100
SIX General Index
80
Facts at 31 December 2016
Largest shareholders 16,000
Book value: SEK 37M
60
Bengt Sundström 55.6%
12,000
Bure Equity 11.3%
40
Acquisition date: 2016
Robur 8,000
8.4%
20 Others 24.7%
4,000
Board member from Bure:
0
Henrik Blomquist, board member
2012
2013
2014
2015 2016 0

Lauritz.com share price performance, since June 2016

  • Net sales at the auctions in 2016 amounted to DKK 1,073M, which is a decrease of 1 per cent. Total no. of shares traded, thousands 600
  • Revenue was down by 3 per cent to DKK 219M (225). 500 Vitrolife
  • Operating profit increased by 8 per cent to DKK 32.0M (29.7), equal to an operating margin of 14.6 per cent (13.2). 2,000 400 SIX General Index
  • In 2016 Lauritz.com acquired one auction house and entered into three parnership agreements. 300
  • The share price fell by 46,3 per cent since the IPO in June 2016. 100 200

Share of Bure's net asset value 1.5%

Others 52.4%

www.medcap.se

MedCap owns and develops companies in the Life Science sector.

Key figures
SEK M
Nov 15
– Oct 16
Nov 14
– Oct 15
Nov 13
– Oct 14
Net sales 896 813 912
Operating expenses -879 -788 -894
EBIT 17.0 24.9 17.8
EBIT margin 1.9% 3.1% 1.9%
Net financial items -5.9 -1.0 -0.7
Profit/loss before tax 11.1 23.9 17.0
Income tax expense -1.5 -4.3 0.2
Profit/loss for the period 9.6 19.6 17.2
Net loan debt (-)/receivable (+) -117 -62 -67
Total assets 628 529 551
Equity
MedCap
309 287 270
Cash flow from operating activities
2016
-10 83 38
Average no. of employees 321 261 281
Facts at 31 December 2016 Largest shareholders
Book value: SEK 106M Bure Equity
22.7%
Bengt Julander
20.9%
Acquisition date: 2012 Karl Tobieson
4.0%

Board member from Bure: Henrik Blomquist, board member

MedCap share price performance, 5 years

The year in brief

  • Partnertech • Net sales for 2016 increased by 9.8 per cent to SEK 896M (813). Total no. of shares traded, thousands per month 120
  • Operating profit was down by SEK 7.9M to SEK 17.0M (24.9). 20,000 100 Mycronic
  • In February 2016, MedCap commenced trading on Nasdaq Stockholm Mid Cap. 16,000 80 SIX General Index
  • The share price rose by 10.2 per cent in 2016. 60

www.mycronic.com

Mycronic develops and manufactures laser-based pattern generators for production of photomasks and advanced surface mount equipment for flexible electronics production.

Key figures
SEK M 2016 2015 2014
Net sales 2,319 1,815 1,475
Operating expenses -1,628 -1,275 -1,199
EBIT 691.0 540.3 276.5
EBIT margin 29.8% 29.8% 18.7%
Net financial items -1.6 0.2 1.6
Profit/loss before tax 689.4 540.5 278.1
Income tax expense -163.1 -98.0 -11.8
Profit/loss for the period 526.3 442.5 266.2
Net loan debt (-)/receivable (+) 198 898 661
Total assets 2,755 1,742 1,600
Equity 1,412 1,268
Total no. of shares traded, thousands
1,207
Cash flow from operating activities
45
per month
462
661 418
1 400
Average no. of employees
MedCap
40
577 495 508
1 200
SIX General Index 1 000
35
Facts at 31 December 2016
Largest shareholders
30
Book value: SEK 2,873M
Bure Equity 800
29.9%
25
Acquisition date: 2010 via
Fjärde AP-fonden 6.4%
600
20
Skanditek
Robur Fonder 4.8%
400
Board member from Bure:
15
Others 58.9%
200
Patrik Tigerschiöld, chairman
10
0

Mycronic share price performance, 5 years

2012 2013 2014 2015 2016

  • Order intake for 2016 was SEK 2,455M, corresponding to an increase of 13 per cent compared to 2015. The total order backlog at the end of the year was SEK 1,342M (1,066). Total no. of shares traded, thousands per month 1,000 20
  • Net sales for 2016 amounted to SEK 2,319M (1,815), representing an increase of 28 per cent. 12 16
  • Operating profit was SEK 691.0M (540.3), equal to an operating margin of 29.8 per cent (29.8). 8 Laurtiz.com SIX General Index
  • Mycronic carried out three acquisitions in China, Germany and the USA during 2016. 4
  • The share price rose by 19.1 per cent in 2016.

SIX General Index

www.vitrolife.com 15

Vitrolife is an internationally active medtech group that develops, produces and markets fertility treatment products. 2012 2013 2014 2015 2016 10

www.xvivoperfusion.com 20 40 60

SIX General Index

Xvivo Perfusion AB is an internationally active medical technology company focused on developing optimised solutions for organ, tissue and cell preservation in connection with transplantation. 0 2012 2013 2014 2015 2016 0

Key figures
Partnertech
Total no. of shares traded, thousands
SEK M
120
per month
2009-12-31 − 2014-12-31
2016
2015 2014
24,000
Mycronic
Net sales
856 722 511
100
SIX General Index
Operating expenses
-607 -496 20,000
-367
80
EBIT
248.8 226.1 16,000
143.3
EBIT margin
60
29.1% 31.3% 28.1%
12,000
Net financial items 0.1 0.7 3.6
40
Profit/loss before tax
248.9 226.8 8,000
146.9
Income tax expense
20
-57.7 -43.5 -37.5
4,000
Profit/loss for the period
0
191.2 183.4 109.5
2012
2013
2014
2015 2016 0
Net loan debt (-)/receivable (+) 151 152 28
Total assets 1 250 1 059 972
Equity
Vitrolife
1 020
Total no. of shares traded, thousands
845 703
2016
Cash flow from operating activities
20
per month
181
194 146
1,000
Average no. of employees 328 320 242
16
Facts at 31 December 2016
Largest shareholders 800
12
Book value: SEK 1,823M
Bure Equity 600
21.7%
Laurtiz.com
8
SIX General Index
William Demant 400
Acquisition date: 2010 via
Skanditek
Invest A/S 19.4%
4 SSB Client Omnibus 200
Board member from Bure:
Fredrik Mattsson, board member
AC OM07 6.6%
0
jul
aug
sep
Others
okt
nov
dec 0
52.3%

Vitrolife share price performance, 5 years

The year in brief

  • Net sales for 2016 were up by 19 per cent to SEK 856M (722). In local currency, net sales were up by 18 per cent. Total no. of shares traded, thousands per month 100 Cavotec
  • Operating profit was SEK 248.8M (226.1), equal to an operating margin of 29.1 per cent (31.3). 80 SIX General Index Xvivo Perfustion 2016
  • In 2016 Vitrolife acquired OCTAX and MTG, which are world-leading in laser technology for IVF. 60
  • Vitrolife introduced EmbryoScope+ and expanded its product portfolio in the time lapse area. 40
  • The share price rose by 34.1 per cent in 2016. 20
Key figures Total no. of shares traded, thousands
per month
SEK M
20
2016 2015 2014
1,000
Net sales 138 120 85
16
Operating expenses
-135 -113 800
-78
EBIT
12
2.7 7.2 7.5
EBIT margin
Laurtiz.com
2.0% 6.0% 600
8.8%
Net financial items
8
SIX General Index
0.3 0.2 0.0
400
Profit/loss before tax 3.0 7.4 7.5
4
Income tax expense
-1.5 -2.3 200
-2.3
Profit/loss for the period
0
1.5 5.1 5.2
jul
aug
sep
okt
nov
dec 0
Net loan debt (-)/receivable (+) 25 41 48
Total assets 349 204 202
Equity 316
Total no. of shares traded, thousands
185 178
Cash flow from operating activities
600
per month
13
9 -4
Average no. of employees
Vitrolife
500
28 21 16
2,500
SIX General Index
Facts at 31 December 2016
400
Largest shareholders
2,000
Cash flow from operating activities
600
13 9 -4
3,000
Average no. of employees
Vitrolife
28 21 16
500
SIX General Index
Facts at 31 December 2016
400
Largest shareholders 2,500
2,000
Book value: SEK 430M
300
Bure Equity 20.7%
1,500
Acquisition date: Lex Asea Eccenovo 6.1%
200
distribution from Vitrolife in 2012
Thomas Olausson 1,000
5.5%
Board member from Bure:
100
Fredrik Mattsson, chairman
0
Gösta Johannesson, board member
2012
2013
2014
Others
2015
2016 67.6%
500
0

Xvivo Perfusion share price performance, since October 2012

  • Net sales for 2016 amounted to SEK 138M (120), an increase of 15 percent.
  • Operating profit was SEK 2.7M (7.2), equal to an operating margin of 2.0 per cent (6,0). Operating profit adjusted for amortization/depreciation and items affecting comparability was SEK 26.4M (20.8), equal to a margin of 19 per cent. Items affecting comparability related to the application to Nasdaq's main list and the acquisition of Vivoline Medical amounted to SEK 10.4M. Total no. of shares traded, thousands per month 2,500 3,000 25 30 35 40 SIX General Index Cavotec
  • In November 2016, Xvivo Perfusion commenced trading on Nasdaq Stockholm Midcap. 1,000 15 20
  • The share price rose by 50.4 per cent in 2016.

Unlisted portfolio companies

Bure Financial Services is a wholly owned subsidiary that invests in financial operations and assets. The company owns 10.7 per cent of the shares and 11.1 per cent of the votes in Catella, 20.1 per cent of Fondbolaget Fondita and 33.0 per cent of Idevall & Partners Holding.

Key figures – Bure Financial Services Group

SEK M 2016 2015 2014
Revenue/value adjustments 26.9 105.3 49.5
Operating expenses 0.0 0.0 0.0
EBIT 26.9 105.3 49.5
EBIT margin 100.0% 100.0% 100.0%
Net financial items 0.0 0.0 0.0
Profit/loss before tax 26.9 105.3 49.5
Income tax expense 0.0 0.0 0.0
Profit/loss for the period 26.9 105.3 49.5
Net loan debt (-)/receivable (+)1 -75 -88 -101
Total assets 250 234 143
Equity 175 146 43
Cash flow from operating activities 14 17 0
Average no. of employees 0 0 0
1) Of which, a liability of SEK 75.9M to the Parent Company at 31 December 2016.
Facts at 31 December 2016
Largest shareholders
Book value: SEK 252M Bure Equity 100.0%
Acquisition date: Established 2014
Board member from Bure:
Patrik Tigerschiöld, chairman
Henrik Blomquist, board member

Max Jonson, board member

The year in brief

  • Revenues/fair value adjustments of SEK 26.9M refer to an increase in the market value of the holding in Catella by SEK 12.7M, shares in profit from Fondita and Idevall & Partners Holding of SEK 8.9M and dividends from Catella of SEK 5.3M.
  • The share price for Catella B rose by 6.5 per cent in 2016.

www.bure.se www.bure.se

Bure Growth is a wholly owned subsidiary that invests in development companies. The company owns 10.0 per cent of Vigmed Holding, 20.3 per cent of BioLamina and 28.1 per cent of Life Genomics.

Key figures – Bure Growth Group

SEK M 2016 2015 2014
Revenue/value adjustments -15.4 -15.0
Operating expenses 0.0 0.0
EBIT -15.4 -15.0
EBIT margin n/m n/m
Net financial items 0.0 0.0
Profit/loss before tax -15.4 -15.0
Income tax expense 0.0 0.0
Profit/loss for the period -15.4 -15.0
Net loan debt (-)/receivable (+)1 -35 -38
Total assets 33 43
Equity -2 5
Cash flow from operating activities 0 0
Average no. of employees 0 0
1) Of which, a liability of SEK 34.9M to the Parent Company at 31 December 2016.

1) Of which, a liability of SEK 34.9M to the Parent Company at 31 December 2016.

Facts at 31 December 2016 Largest shareholders
Book value: SEK 37M Bure Equity 100.0%
Acquisition date: Established 2015
Board member from Bure:
Henrik Blomquist, chairman
Fredrik Mattsson, board member
Max Jonson, board member
  • Revenues/fair value adjustments of SEK -15.4M refer to a decrease in the market value of the holding in Vigmed Holding by SEK 13,2M and shares in profit from BioLamina and Life Genomics of SEK -2.2M.
  • Bure Growth invested SEK 7.0M in Life Genomics, which corresponds to a holding of 28.1 per cent.
  • The share price in Vigmed Holding fell by 63.7 per cent in 2016.

www.bure.se

Investment AB Bure is a wholly owned subsidiary that owns and is responsible for the leasing of locomotives. Operations started in 2012.

Key figures

SEK M 2016 2015 2014
Net sales 31.0 33.9 33.4
Operating expenses -23.8 -12.6 -7.4
EBIT 7.2 21.2 26.0
EBIT margin 23.4% 62.7% 77.8%
Net financial items -3.5 -4.0 -7.0
Group contributions 27.9
Appropriations 64.1 -17.3 -46.8
Profit/loss before tax 67.8 0.0 0.0
Income tax expense 0.0 0.0 0.0
Profit/loss for the period 67.8 0.0 0.0
Net loan debt (-)/receivable (+)1 -90 -109 -136
Total assets 231 226 207
Equity 81 64 14
Cash flow from operating activities 23 25 25
Average no. of employees 0 0 0

1) Of which, a liability of SEK 138.6M to the Parent Company at 31 December 2016.

Facts at 31 December 2016 Largest shareholders
Book value: SEK 222M1 Bure Equity 100.0%
Acquisition date: Established 2012
Board member from Bure:
Henrik Blomquist, chairman
Philip Nyblaeus, board member
1) Refers to net assets in Investment AB Bure.

The year in brief

  • Net sales for 2016 amounted to SEK 31.0M (33.9).
  • Operating profit was SEK 7.2M (21.2), of which SEK 9.3M referred to a provision for bad debts and SEK 2.3M to an impairment loss on intangible assets.
  • During the year, Investment AB Bure dissolved accelerated depreciation of SEK 64.1M through the utilisation of available loss carryforwards.
  • Investment AB Bure's customer RushRail declared bankruptcy on 12 December 2016. Since the bankruptcy, Investment AB Bure has repossessed the seven locomotives and plans to either sell these or lease them out.
  • The net loan liability is an internal debt to the Parent Company and has decreased according to plan during the year.

www.mercuri.se

Mercuri International is a leading sales and management training consultancy with a global coverage.

Key figures

SEK M 2016 2015 20141
Net sales 424 452 490
Operating expenses -387 -424 -482
EBIT 36.7 27.8 8.6
EBIT margin 8.7% 6.2% 1.8%
Net financial items 1.5 -7.7 -4.8
Profit/loss before tax 38.2 20.1 3.8
Income tax expense -8.3 -11.6 -4.0
Profit/loss for the period 29.9 8.5 -0.2
Net loan debt (-)/receivable (+)2 -41 -73 -89
Total assets 335 326 359
Equity 127 94 90
Cash flow from operating activities 38 18 4
Average no. of employees 256 274 312

1) The key ratio excludes divested operations in Norway, Estonia, Croatia, Slovakia, Slovenia and the Czech Republic.

2) Of which, a liability of SEK 58.8M to the Parent Company at 31 December 2016.

Facts at 31 December 2016 Largest shareholders
Book value: SEK 114M1 Bure Equity 99.1%
Acquisition date: 1998
Others
0.9%
Board member from Bure:
Henrik Blomquist, chairman

1) Refers to the book value of equity and interest-bearing receivables.

  • Net sales for 2016 decreased by 6.2 per cent to SEK 424M (452), which is mainly due to a lower number of employees.
  • Operating profit improved by 32 per cent to SEK 36.7M (27,8) with an operating margin of 8.7 per cent (6,2).
  • Cash flow for 2016 improved to SEK 38M (18) and the net loan liability continued to decrease, amounting to SEK 41M (73) at year-end 2016.

Commitment and responsibility

As an owner, Bure maintains a strong presence and supports the companies we invest in. Bure is always active on the boards of our portfolio companies and also devotes a great deal of time outside of board meetings.

The Bure share–historical overview 1993–2016

One of Bure's foremost goals is to generate a high and sustainable total return for Bure's shareholders. Total return is a measure of how the stock market values Bure's share and net asset value, as well as distributions of assets to Bure's shareholders. These distributions can take the form of cash dividends and shares in companies or the redemption and buyback of shares.

10-year total return performance

Total return including distribution of companies

Bure de nes total return including distribution of companies as a combination of Bure's share price performance, cash dividends and the market value of the companies that have been distributed. The method is based on the reinvestment of cash dividends in Bure shares. In the case of companies that are distributed, the shareholders are assumed to retain the received shares until the date on which the share is possible de-listed, after which the proceeds are reinvested in Bure shares. Since Bure was listed on Nasdaq Stockholm in 1993, the shareholders have received a total return of 5,264 per cent, corresponding to an annualized return of 18.7 per cent.

Growth in net asset value

Net asset value is the sum of Bure's net assets and can be said to be the result of long-term company building. Net asset value includes listed assets that are measured at fair market value, while unlisted assets are normally measured at cost. For unlisted assets, this means that the value is not realised until the assets are sold or generate dividends for Bure.

Shareholder-friendly measures

Bure uses a number of shareholder-friendly measures that enable the shareholders to benefit from the value of Bure's assets above and beyond the stock market's valuation of the Bure share.

Cash dividends entail the distribution of cash, while company distributions involve the distribution of shares in a specific company to the shareholders. Since 1993, Bure has distributed SEK 3.2Bn in cash as well as shares in the companies

Capio, Observer (later Cision) and AcadeMedia for a value of SEK 5.2Bn on the distribution date – a total of SEK 8.4Bn.

Other types of distributions include share redemptions and share buybacks. In simple terms, this increases the value of the remaining shares. Over the years, Bure has carried out redemption procedures and buybacks of shares and warrants for SEK 3.6Bn.

Since the start, Bure has thus distributed a total of more than SEK 12.0Bn to its shareholders – which is equal to 1.7 times the market capitalisation at year-end 2016.

Total distribution to Bure's shareholders 1993–2016: SEK 12.0Bn

The Bure share is quoted on Nasdaq Stockholm in the Mid Cap segment.

Share capital

Bure's share capital at 31 December 2016 amounted to SEK 535.5M, divided between 69,332,710 ordinary shares. Each share has a quota value of SEK 7.72. All shares grant equal voting rights and rights to the company's assets and profits.

Shareholders

At 31 December 2016 Bure had 21,190 shareholders (19,041) according to Euroclear Sweden. Of Bure's shareholders, 73.3 per cent (70.1) held fewer than 500 shares each. Foreign investors 33.1 per cent (30.6). At year-end, the ten largest shareholders together held 54.6 per cent (55.4) of the share capital and votes in Bure.

Ownership structure

Share price performance

In 2016 the share price increased by 50.5 per cent. Bure's share price at year-end 2016 was SEK 103.50 (68.75). The highest price paid for the Bure share was SEK 109.25 and the lowest was SEK 55.50. In 2016 the Bure share produced a total return of 54.7 per cent. Total return is a measure of the total share price performance including reinvested dividends.

The total return on Bure's share can be compared to the total return index SIX Return Index, which showed a return of 9.6per cent. At year-end 2016 Bure had a market capitalisation of SEK 7,176M.

Bure's largest shareholders at 31 December 2016

No. of
Shareholder shares Holding
Patrik Tigerschiöld 7,933,405 11.4%
Nordea Investment Funds 7,790,560 11.2%
Björkman family incl. foundations 6,226,012 9.0%
Ted Tigerschiöld 3,746,052 5.4%
Stephanie Tigerschiöld 3,712,073 5.4%
Fjärde AP-Fonden 2,505,854 3.6%
SIX SIS AG, W8IMY 2,373,391 3.4%
CBNY-DFA-INT SML CAP V 1,241,574 1.8%
AMF 1,201,426 1.7%
CBNY-Norges Bank 1,111,602 1.6%
Total 10 largest shareholders 37,841,949 54.6%
Others 31,490,761 45.4%
Total 69,332,710 100%

Trading volume

In 2016 a total of 21,013,912 shares (23,901,821) were traded on Nasdaq Stockholm for a combined value of SEK 1,748M (1 196), which is equal to a turnover of 30 per cent (34) of Bure's shares. The average trading volume per trading day was 82,732 shares (95,226). A total of 101,783 trades (60,860) of the Bure share were cleared during the year.

Dividends for 2016 and 2017

In 2016 Bure paid an ordinary dividend of SEK 1.00 per share and an extraordinary dividend of SEK 1.00 per share for the 2015 financial year. The Board of Directors proposes that the 2017 AGM approve an ordinary dividend of SEK 1.50 per share and an extraordinary dividend of SEK 0.50 per share for the 2016 financial year.

Share buybacks

The 2016 AGM authorised the Board, during the period until the next AGM, to acquire treasury shares corresponding to a maximum of 10 per cent of all shares outstanding in the company. In 2016 Bure has not utilised the authorisation to repurchase shares.

Employee share ownership

Bure encourages an alignment of interests between the employees and the company's shareholders. Within the framework of the long-term incentive plan, all employees are given the opportunity to invest an amount equal to approximately 6 per cent of basic salary (before tax) in Bure shares. All employees took part in the plan during 2016 with an aggregate invested amount of SEK 0.5M that was matched by Bure. The personal investment means that the plan has an up- and downside potential that equates the interests of the employees with those of other shareholders. At 31 December 2016 the employees had a combined holding of 115,020 shares. For more information about employee shareholdings, see section "Employees".

Distribution of shareholdings at 31 December 2016

Size of holding No. of
shareholders
No. of
shares
Holding
1 –
500
15,533 1,910,935 73.3%
501 –
1,000
2,581 2,065,215 12.2%
1,001 –
5,000
2,396 5,270,538 11.3%
5,001 – 10,000 334 2,500,142 1.6%
10,001 – 15,000 111 1,416,302 0.5%
15,001 – 20,000 42 764,604 0.2%
20,001 – 193 55,404,974 0.9%
Total 21,190 69,332,710 100%

Financial strength

Bure is a prominent investment company in Sweden, with the financial strength and capacity to give its portfolio companies the long-term financial support they need.

Financial endurance is critical in enabling a company to stick to its strategy and meet its set goals.

Corporate governance

Corporate governance report 2016

Corporate governance in Bure Equity AB is regulated by Swedish law, primarily the Swedish Companies Act and Nasdaq Stockholm's Rules for Issuers. Bure also applies the revised rules in the Swedish Code of Corporate Governance ("the Code") as of 1 December 2016. These rules are being applied successively to the extent prescribed in the Code and in pace with the issuance of statements and recommendations by advisory organisations (such as the Swedish Corporate Governance Board) on specific issues related to the Code. Bure Equity complies with the Code and reports no deviations from the Code for the financial year 2016 aside from that regarding the company's special audit function (see section on deviations from the Code below). For more information about corporate governance issues that are not covered in this corporate governance report, see www.bure.se.

Share capital

Bure has been listed on Nasdaq Stockholm since 1993. At 31 December 2016 the share capital amounted to SEK 535.5M, and was divided between 69,332,710 ordinary shares. The company's ordinary shares grant the right to one vote per share. All shares grant entitlement to an equal share in the company's assets and equal dividends.

At year-end 2016 Bure had 21,190 shareholders according to statistics from Euroclear Sweden. The ten largest shareholders accounted for 54.6 per cent of the shares. Patrik Tigerschiöld was Bure's single largest shareholder, with 11.4 per cent of the shares. The percentage of shares held by physical persons or legal entities outside Sweden was 33.1 per cent. The 2016 Annual General Meeting (AGM) authorised the Board, during the period until the next AGM, to acquire up to 10 per cent of the outstanding shares in the

company. In 2016 Bure has not utilised the authorisation to repurchase shares.

General meeting of shareholders

The general meeting of shareholders is Bure's highest decision-making body and shall be held in Stockholm or Gothenburg once a year before the end of the month of June. According to the Articles of Association currently in force, notice of annual general meetings shall be published no more than six weeks and no fewer than four weeks prior to the meeting and no more than six weeks and no fewer than three weeks prior to an extraordinary general meeting. Notice must always be given through an announcement in the official gazette, Post- och Inrikes Tidningar, and in Svenska Dagbladet.

In order to have a matter dealt with at an AGM, the shareholder must submit a written request to the Board in good time so that the matter can be included in the notice to attend the meeting. Bure's Articles of Association contain no restrictions regarding the number of votes each shareholder may exercise at the meeting. All shareholders who are entered in Euroclear Sweden's shareholder register and who have notified the company of their intention to attend by the specified date have the right to participate in the meeting and exercise the votes for their total shareholdings. Shareholders may be accompanied by assistants at the meeting if they notify the company in advance.

2016 Annual General Meeting

The 2016 AGM was held on 9 May in Stockholm. The meeting was attended by 125 shareholders, proxies and assistants, together representing 49.8 per cent of the votes and share capital. Bure's Board of Directors, management and auditor were present. The CEO's address was published in full on the website the day after the meeting.

Nominating committee

On 1 November 2016 Bure announced the composition of the nominating committee. The nominating committee has been appointed in accordance with the instructions for the nominating committee that were adopted by Bure's 2016 AGM. These state that the Board Chairman, not later than at the end of the third quarter of each year, shall ensure that the company's three largest shareholders are given the opportunity to each appoint one member to the nominating committee. Should any of these three shareholders waive its right to appoint a member, the shareholder next in order of voting power will be contacted to appoint a member to the committee. The mandate period is one year. Furthermore, the Board Chairman shall be a member of the nominating committee. No compensation is paid for work on the nominating committee.

The nominating committee consists of:

  • Bengt Belfrage, representing Nordea Investment Funds.
  • Patrik Tigerschiöld, representing the Tigerschiöld family.
  • Per Björkman, representing the Björkman family. The Nomination Committee appointed Per Björkman as chairman of the Committee.

The tasks of the nominating committee are to prepare and submit proposals to the AGM regarding:

  • Election of a chairman of the meeting.
  • Election of and fees for the Board Chairman and the other members of the company's Board.
  • Election of and fees for the auditor and deputy auditor (where applicable).
  • Principles for appointment of the next nominating committee.

The auditor was elected by the 2016 AGM to serve for a period of one year. Ahead of the 2017 AGM, the nominating committee has held two minuted meetings. The nominating committee's proposals, report on the work of the nominating committee ahead of the AGM and other information about the proposed Board members will be posted on the company's website in connection with the notice to attend the AGM.

Board of Directors

All members of the Board are appointed by the shareholders at the Annual General Meeting to serve for a period of one year from the AGM until the end of the next AGM. According to the Articles of Association, Bure's Board of Directors shall consist of no fewer than five and no more than nine members.

The Board is responsible for the company's organisation and management of the company's affairs, but not for its operating activities. The tasks of the Board are to assess the company's financial situation, to continuously monitor activities, to adopt a procedural plan, to appoint a CEO and to define the separation of duties.

The AGM on 9 May 2016 elected Patrik Tigerschiöld (reelection) as Chairman and elected Hans Biörck (re-election), Carl Björkman (re-election), Bengt Engström (re-election), Charlotta Falvin (re-election), Sarah McPhee (newly elected) and Mathias Uhlén (re-election) as regular Board members.

Information about the Board members and the CEO is presented at the end of the corporate governance report. CFO Max Jonson has served as Secretary of the Board. The CEO is not a member of the Board. Of the company's seven Board members, five are independent in relation to the company, its management and the company's major shareholders, one is independent in relation to the company and its management and dependent in relation to the company's major shareholders and one is dependent in relation to the company, its management and the company's major shareholders. A description of the Board members' and the CEO's shareholdings and other assignments is provided on pages in the section "Board of Directors and Employees".

Duties of the Board

The duties of the Board include development of the company's strategy and business plan in such a way that the longterm interests of the shareholders are optimally served. The work of the Board of Directors is governed by a procedural plan that was most recently adopted at the statutory meeting of the Board on 9 May 2016. The work of the Board follows a yearly plan containing fixed decision points that is adopted yearly in connection with the statutory meeting. According to the procedural plan, the Board is responsible for the company's organisation and management of the company's a airs. Among other things, the Board's procedural plan includes information about the separation of duties between the Board, the Chairman, the CEO and the Board's committees.

The Board continuously monitors the financial situation of the company and the Group so that the Board is able to meet the monitoring obligations required by law, Nasdaq Stockholm's Rules for Issuers and good board practice. The procedural plan states that it is the responsibility of the Board to decide on matters that are not part of operating activities or that are of major importance, such as material financial commitments and agreements and significant changes in the organisation.

Every year, Bure's Board of Directors establishes and documents the company's goals and strategies and discusses marketing, strategic and budgetary issues. The Board establishes the company's finance policy, authorization rights, order of delegation and decision-making procedures. The Board has formulated specific instructions regarding the responsibilities and powers of Bure's CEO. The management continuously provides the Board with reports and updates about operations. Information materials and decision data ahead of Board meetings are usually distributed around one week prior to each Board meeting.

The company's auditors attend at least one board meeting every year to report on the year's audit and their evaluation of the company's internal control systems. The auditors present their observations from the annual audit directly to the Board. Once a year, the auditors meet with the Board without the presence of any member of the management.

Work of the Board in 2016

According to the Articles of Association, the Board shall hold at least six meetings per year and shall meet more frequently when required. In the past financial year the Board held 12 meetings, consisting of 10 scheduled meetings and 2 extra meetings. See Board attendance in the table on page 26.

Key issues that were dealt with during the financial year included the following:

  • Financial monitoring of operations
  • Discussions and decisions regarding the portfolio
  • Preparation of the dividend proposal
  • Development of the company's strategic focus
  • Authorisation for the repurchase of treasury shares
  • Auditing, investment and compensation committee issues, as described under "Board committees" below.

The company's auditor has taken part in two board meetings, of which one without the presence of any member of the management.

Total Board fees in Bure Equity AB as approved by the 2016 AGM amount to SEK 2,450,000, of which SEK 800,000 is paid to the Chairman.

Board evaluation

Once a year, the Board carries out a systematic evaluation in which the Board members have the opportunity to state their views on the working procedures, Board materials, their own performance and that of the other Board members in order to develop the work of the Board and provide the nominating committee with a relevant basis for decision ahead of the AGM.

Board committees

The Board's procedural plan contains instructions regarding the audit committee, compensation committee and investment committee. The work of the audit committee and the compensation committee is performed by the Board as a whole.

Audit committee

The audit committee is responsible for issues concerning auditing, internal control and review of the financial accounts and interim reports. The committee is also responsible for evaluating the auditors' performance and preparing for election of new auditors when appropriate. The audit committee met with the company's auditors on two occasions during the year.

Compensation committee

The compensation committee deal with matters relating to compensation in the form of salary, pensions and bonuses or other terms of employment for the CEO and staff reporting directly to the CEO. The proposed principles for

compensation to the CEO and management were put before the AGM on 9 May 2016.

Investment committee

In order to actively manage Bure's cash and cash equivalents and short-term investments, the Board has appointed an investment committee whose main task is to continuously evaluate management of the investments with regard to risk and return. The investment committee consists of Patrik Tigerschiöld, Hans Biörck and the CEO Henrik Blomquist. The investment committee abides by the rules set out in the company's finance policy. In the past financial year, the investment committee held one meeting at which all members were in attendance.

Principles for compensation to senior executives

The AGM adopts principles for compensation to senior executives. Proposals are prepared by the compensation committee. The main principle is to offer market-based compensation and terms of employment. The total compensation package consists of fixed basic salary, variable salary, pension benefits and other benefits. The principles that were applied in 2016 are described in the administration report. Information about compensation to the CEO and other senior executives during 2016 is provided in Note 35.

Financial reporting

Bure's financial reporting is based on the applicable laws, regulations, rules, agreements and recommendations for companies listed on Nasdaq Stockholm. A more detailed description of the accounting policies is provided in Note 1 of the annual report. The audit report for the financial year 2016 is also included in the annual report. The Board and the auditors communicate on an ongoing basis. The Board continuously ensures that the company's finance and accounting organisation is properly dimensioned and has adequate resources.

Every year, the Parent Company issues instructions regarding the financial information to be reported by the subsidiaries and other portfolio companies. Among other things, this information includes income statements, balance sheets, cash flow statements and key figures. A more extensive reporting package is required of the subsidiaries in connection with the annual closing of the books. This reporting takes place in a group-wide accounting system.

Attendance at Board meetings

in 2016 Board meetings Compensation, SEK th Shareholding
Patrik Tigerschiöld, Chairman 12/12 800 7,933,405
Hans Biörck 12/12 275 25,000
Carl Björkman 12/12 275 2,945,412
Bengt Engström 12/12 275 7,000
Charlotta Falvin 11/12 275 0
Sarah McPhee 9/9 275 4,500
Mathias Uhlén 9/12 275 36,500

According to the requirements in the listing agreement with Nasdaq Stockholm, Bure provides financial information in the form of interim reports, a year-end report, an annual report and press releases in connection with significant events.

Deviations from the Code of Corporate Governance

According to section 7.3 of the Code, the Board of Directors is required to evaluate the need for a special audit function (internal audit) on a yearly basis. The Board's assessment is that Bure has no need for this function under the present circumstances. The Board has instructions and continuously ensures that the responsible individuals in the organisation have the requisite expertise and resources to fulfil their duties in the preparation of financial reports. Bure holds seats on the boards of the portfolio companies via a representative for the holding. Depending on the holding, it is also possible to appoint more than one member to represent Bure.

Bure's current holdings are spread across different industries and geographical areas. As a result, it is deemed more appropriate to make this decision for each individual holding than to set up an internal audit function at the group level. The need for an internal audit function in the Parent Company must therefore be regarded as minor.

Information about the auditors

As its independent auditor, Bure has appointed the auditing firm of Öhrlings PricewaterhouseCoopers AB ("PwC"). PwC has appointed Michael Bengtsson, 57 years, as Auditor in Charge. Aside from Bure Equity AB, Michael is auditor of Indutrade AB, Sweco AB and Carnegie Investment Bank AB, among others. For information about compensation to PwC, see Note 9.

The Board's description of internal control over financial reporting for the financial year 2016

As stated in the Swedish Companies Act and the Swedish Code of Corporate Governance, the Board of Directors is responsible for the company's internal control. This description has been prepared in accordance with the Swedish Code of Corporate Governance, section 7.4, and is thereby limited to internal control over financial reporting. This description is not part of the formal annual report.

Control environment

The procedural plan for the Board and instructions for the CEO ensure a clearly defined separation of roles and responsibilities that promotes e effective management of the company's risks. Furthermore, the Board has established a number of normative documents for internal control, and among other things emphasises the importance of having clear and documented instructions and policies in both the Parent Company and the subsidiaries. The management regularly reports to the Board according to established routines and is responsible for the system of internal controls that is necessary for management of significant risks in day-to-day operations. This includes guidelines that promote an understanding,

and awareness among the various executives of the importance of their respective roles in maintaining good internal control.

Risk assessment and control activities

In assessing the risk for irregularities in the company's financial reporting, Bure has developed a model in which a number of areas with a heightened risk for errors have been identified. Special attention has been given to the creation of controls to prevent and detect deficiencies in these areas. Areas where material deficiencies are noted are dealt with immediately.

Information and communication

Significant guidelines, manuals, etc., of relevance for financial reporting are continuously updated and communicated to the appropriate employees. There are both formal and informal communication paths to the management and Board for significant information from the employees. For external communication, there are guidelines to ensure that the company lives up to high demands regarding complete and accurate information to the market.

Monitoring

The Board continuously monitors and evaluates the information provided by the management. This includes ensuring that action is taken with respect to any deficiencies or recommendations identified in internal and external audits.

Stockholm, 15 March 2017

The Board of Directors of Bure Equity AB (publ)

Board of Directors

Patrik Tigerschiöld, Stockholm, born in 1964, M.Sc. Business and Economics

Board Chairman since 2013 (also during 2004–2009) CEO during 2010–April2013* Chairman of MycronicAB, the Association for Generally Accepted Principles in the Securities Market, the Swedish Association of Listed Companies and Bure Financial Services AB.

Board member of Stockholm University, Cavotec SA, Fondbolaget Fondita Ab and Idevall & Partners Fonder AB.

Shareholding in Bure, own and held by related parties: 7,933,405.

Dependent in relation to the company and its management. Dependent in relation to the company's major shareholders.

Hans Biörck, Stockholm, born in 1951, M.Sc. Business and Economics

Board member since 2012 Chairman of Skanska AB. Board member of Trelleborg AB, Dunkerska Stiftelserna and Crescit Asset Management AB. Shareholding in Bure, own and held by related parties: 25,000. Independent in relation to the company and its management.

Independent in relation to the company's major shareholders.

Carl Björkman, Stockholm, born in 1970, M.Sc. Engineering Board member since 2010

Chairman of Cality Invest AB.

Board member of Bällsta Mekaniska AB, Stäketsholms Förvaltnings AB, Johan Björkman's Public Benefit Foundation for Economic Research and FPG Media AB.

Shareholding in Bure, own and held by related parties: 2,945,412.

Independent in relation to the company and its management. Dependent in relation to the company's major shareholders.

* Employed by Skanditek 1999 – 2010

Bengt Engström, Stockholm, born in 1953, M.Sc. Engineering Board member since 2014

Chairman of Scandinavian Executive AB, Chamber AB and Real Holding AB. Board member of ScandiNova AB, Scanfil Oy, Prevas AB, Advania AB and Avaj International Holding AB.

Shareholding in Bure, own and held by related parties: 7,000. Independent in relation to the company and its management. Independent in relation to the company's major shareholders.

Charlotta Falvin, Genarp, born in 1966, M.Sc. Business and Economic Board member since 2015

Chairman of Ideon Open AB, School of Engineering at Lund University and SHB södra regionbank.

Board member of CLX Communications AB, Invisio Communications AB, NetInsight AB, the Chamber of Commerce and Industry of Southern Sweden and member of the Advisory Board of the Sten K. Johnson Centre for Entrepreneurship at Lund University.

Shareholding in Bure, own and held by related parties: 0.

Independent in relation to the company and its management. Independent in relation to the company's major shareholders.

Sarah McPhee, Stockholm, born in 1954, BA, MA and M.Sc. Economics from the Stockholm School of Economics Board member since 2016 Chairman of SNS and Fjärde AP-fonden. Board member of Klarna AB and Axel Johnson Inc. Shareholding in Bure, own and held by related parties: 4,500. Independent in relation to the company and its management. Independent in relation to the company's major shareholders.

Mathias Uhlén, Stockholm, born in 1954, Ph.D. Engineering and Professor of Microbiology, KTH Royal Institute of Technology Board member since 2010

Chairman of Atlas Antibodies AB and Antibodypedia AB.

Board member of Affibody Holding AB, SweTree Technologies AB, Alligator AB, Novozymes A/S and Stockholm City Science Foundation.

Member of the Royal Swedish Academy of Sciences (KVA), the Royal Swedish Academy of Engineering Sciences (IVA) and the National Academy of Engineering (NAE) in the USA.

Shareholding in Bure, own and held by related parties: 36,500.

Independent in relation to the company and its management. Independent in relation to the company's major shareholders.

Employees

From left: Gösta Johannesson, Oskar Hörnell, Trolle Sahlström, Samir Kamal, Philip Nyblaeus, Max Jonson, Fredrik Mattsson, Elisabet Hellman and Henrik Blomquist.

Henrik Blomquist

Stockholm, born in 1971, Economic studies

President and Chief Executive Officer Employed since 1999*

Experience of investment operations and corporate development.

Chairman of Mercuri International Group AB, Investment AB Bure, Bure Growth AB and Cavena Image Products AB.

Board member of Lauritz.com Group A/S, MedCap AB, Bure Financial Services AB and others.

Shareholding in Bure, own and held by related parties: 44,766.

Philip Nyblaeus

Stockholm, born in 1982

Investment manager Employed since 2011

Board member of Vigmed Holding AB and Investment AB Bure.

Shareholding in Bure, own and held by related parties: 3,325.

Trolle Sahlström

Stockholm, born in 1988

Analyst Employed since 2017 Shareholding in Bure, own and held by related parties: 0.

Oskar Hörnell

Stockholm, born in 1987

Analyst Employed since 2015 Shareholding in Bure, own and held by related parties: 2,750.

Max Jonson

Stockholm, born in 1968

Chief Financial Officer Employed since 2013

Board member of Bure Financial Services AB, Bure Growth AB, BioLamina AB and Celemi International AB.

Shareholding in Bure, own and held by related parties: 15,234.

Gösta Johannesson

Stockholm, born in 1959

Senior Advisor Consultant since April 2013 Chairman of Idevall & Partners Fonder AB.

Board member of Xvivo Perfusion AB, Axiell Group AB and Interflora AB and others.

Shareholding in Bure, own and held by related parties: 5,000.

Fredrik Mattsson

Stockholm, born in 1972 Investment Director Employed since 2009*

Chairman of Xvivo Perfusion AB, BioLamina AB and Celemi International AB.

Board member of Vitrolife AB, Bure Growth AB and others.

Shareholding in Bure, own and held by related parties: 47,965.

Elisabet Hellman

Stockholm, born in 1957

Executive Assistant Employed since January 2016 Shareholding in Bure, own and held by related parties: 980.

Samir Kamal

Stockholm, born in 1965

Senior Advisor Consultant since September 2013

Board member of Bonava AB, Scandi Standard AB and Save by Solar AB.

Shareholding in Bure, own and held by related parties: 0 st.

30 ANNUAL REPORT 2016

Five-year overview

Data per share1 2016 2015 2014 2013 2012
Net asset value, SEK2 101.7 87.4 46.1 33.5 27.1
Share price, SEK 103.5 68.8 35.9 26.0 22.0
Share price as a percentage of net asset value 102% 79% 78% 78% 81%
Parent Company basic equity per share, SEK 98.4 82.9 42.3 30.6 25.8
Parent Company equity per share excl. buybacks, SEK 98.4 84.7 45.0 32.6 25.9
Consolidated basic equity per share, SEK 102.4 85.6 43.4 31.6 26.0
Consolidated equity per share excl. buybacks, SEK 102.4 87.5 46.2 33.7 26.2
Parent Company basic earnings per share, SEK3 15.7 40.4 12.7 6.4 1.6
Consolidated diluted earnings per share, SEK3 16.9 42.0 12.8 6.6 -1.7
Number of shares, thousands 69,333 70,834 76,082 81,102 81,357
Number of outstanding options/warrants, thousands 1,359 1,619
Total number of shares incl. outstanding options/warrants, thousands 69,333 70,834 76,082 82,461 82,976
Number of shares excluding share buybacks, thousands 69,333 69,333 71,397 76,052 81,102
Average basic number of shares, thousands 69,333 70,042 74,947 78,649 81,224
Key figures
Dividend, SEK per share 2.0 1.0 1.0 0.5 0.3
of which, extraordinary dividend, SEK per share 1.0 0.5
Direct return 1.9% 1.5% 2.8% 1.9% 1.4%
Total return 54.7% 95.4% 43.0% 21.0% 39.8%
Market capitalisation, SEK M 7,176 4,870 2,731 2,109 1,784
Net asset value, SEK M 7,054 6,060 3,291 2,545 2,195
Return on equity 17.1% 62.2% 33.5% 21.8% 8.4%
Administrative expenses/Net asset value 0.66% 0.68% 1.23% 1.21% 1.89%
Parent Company profit and financial position
Exit gains/losses, SEK M 0 417 132 2 275
Profit/loss after tax, SEK M 1,086 2,829 953 503 128
Total assets, SEK M 6,835 5,895 3,233 2,659 2,170
Equity, SEK M 6,822 5,874 3,216 2,479 2,134
Equity/assets ratio 100% 100% 99% 93% 98%
Cash and cash equivalents and short-term investments, SEK M 873 1,040 473 683 829
Consolidated profit and financial position
Net sales, SEK M 455 486 537 549 549
Profit/loss after tax, SEK M 1,173 2,940 961 507 -142
Total assets, SEK M 7,271 6,281 3,545 2,814 2,438
Equity, SEK M 7,101 6,065 3,302 2,560 2,113
Equity/assets ratio 98% 97% 93% 91% 87%
Net loan debt (-)/receivable (+), SEK M 669 986 626 552 907
Average number of employees 262 280 336 612 659

1) All historical data per share have been adjusted for shares in issue with a time-weighting factor as prescribed by IAS 33.

2) Net asset value consists of the market value of Bure's listed holdings and the Parent Company's book value of unlisted holdings, net assets and cash and cash equivalents.

Administration report

The Board of Directors and the CEO of Bure Equity AB (publ), corporate identity number 556454-8781, domiciled in Stockholm, hereby submit the annual report and consolidated annual report for the 2016 financial year.

Operations and focus Bure is a long-term principal owner of operating companies. Bure was established in 1992 and
was listed on Nasdaq Stockholm in 1993. By actively developing a diversified portfolio of
professionally managed companies and operations, Bure's objective is to create value and
returns for its shareholders.

Key events of 2016

Acquisitions Bure Growth acquired shares in Life Genomics AB , which offers genetic tests to the healthcare sector and the public. The investment amounted to SEK 7M and the holding is 28.1 per cent. Bure acquired 2.75 million shares in Cavotec for SEK 55.1M and increased its holding from 13.1 per cent to 16.6 per cent.

Bure acquired 4.6 million shares in Lauritz.com for SEK 68.9M, which corresponds to a holding of 11.3 per cent.

Bure acquired 0.07 million shares in MedCap for SEK 11.2M and increased its holding from 20.0 per cent to 22.7 per cent.

Consolidated profit and financial position

Consolidated operating income was SEK 1,626M (3,448).
Results for the full year
The subsidiaries' net sales amounted to SEK 455M (486).
Dividends amounted to SEK 139M (163), of which Mycronic accounted for SEK 117M and Vitrolife
for SEK 11M.
Exit gains/losses totalled SEK 2M (416).
Capital gains/losses on short-term investments amounted to SEK 2M (-16).
Fair value changes amounted to SEK 1,016M (2,374), of which listed portfolio companies
accounted for SEK 1,018M. Of this amount, Cavotec accounted for SEK -31M, Lauritz.com for
SEK -32M, MedCap for SEK 10M, Mycronic for SEK 462M, Vitrolife for SEK 464M, Xvivo Perfusion
for SEK 145M and the decrease in value from other long-term securities holdings and short
term investments for SEK 1M.
Shares in profit/loss of associated companies amounted to SEK 8M (11).
Consolidated operating profit for the period was SEK 1,162M (2,960).
Net financial items totalled SEK 5M (-4).
Consolidated profit/loss after financial items was SEK 1,167M (2,956).
Profit/loss after tax was SEK 1,173M (2,940).
Other comprehensive income included translation differences of SEK 2M (-8).
Financial position Consolidated equity at the end of the year amounted to SEK 7,101M (6,065) and the equity/
assets ratio was 98 per cent (97). At 31 December 2016 the Group had a reported net loan
receivable of SEK 669M (1,017), which consisted of interest-bearing assets of SEK 698M (1,070)
and interest-bearing liabilities of SEK 30M (53). Consolidated equity per share at the end of the
year was SEK 102.42, compared to SEK 85.62 per share at 31 December 2015.

Parent Company profit and financial position

Results for the full year Profit/loss after tax was SEK 1,086M (2,829).
Dividends amounted to SEK 133M (161), of which Mycronic accounted for SEK 117M and
Vitrolife for SEK 11M.
Exit gains/losses amounted to SEK 0M (417).
Capital gains/losses on short-term investments totalled SEK 2M (-16).
Fair value changes amounted to SEK 989M (2,295), of which listed portfolio companies
accounted for SEK 1,018M. Of this amount, Cavotec accounted for SEK -31M, Lauritz.com for
SEK -32M, MedCap for SEK 10M, Mycronic for SEK 462M, Vitrolife for SEK 464M, Xvivo Perfusion
for SEK 145M, the impairment loss on shares in Bure Growth for SEK 28M and the value decrease
from short-term investments for SEK 1M.
Administrative expenses amounted to SEK 46M (41). Net financial items totalled SEK 7M (8).
Financial position Equity in the Parent Company at the end of the year was SEK 6,822M (5,874) and the equity/
assets ratio was 100 per cent (100). At the end of the period, the Parent Company had a
reported net loan receivable of SEK 798M (1,198), which consisted of interest-bearing assets of
SEK 798M (1,198) and interest-bearing liabilities of SEK 0M (0). External interest-bearing
receivables amounted to SEK 8M (16). Receivables from subsidiaries totalled SEK 309M (324).
Bure's loss
carryforwards
At the end of 2016 the Bure Group had loss carryforwards of SEK 709M, of which SEK 559M
referred to the Parent Company. All losses are attributable to Sweden and are perpetual. The
deferred tax asset based on loss carryforwards in the Group has been valued at SEK 8M (10).
Employees and salaries Information about the average number of employees and the salaries and benefits of senior
executives is provided in Notes 34–35.
Significant risks and
uncertainties
In view of rapid changes in the financial markets, a special emphasis is placed on monitoring
the effects of these on Bure's investments and their valuations.
Liquidity risk is the risk that the Group will be unable to finance loan payments or other
financial obligations as they fall due either with its own funds or with new financing. No
significant changes in the Parent Company's or the Group's risks and uncertainties took place
during the year. At 31 December 2016 the Group had a net loan receivable of SEK 669M (1,017).
Financial
risk management
The Group is exposed to a number of different financial risks, including share price risk,
currency risk, interest rate risk and liquidity risk. Bure has a number of basic principles for
management of risks. Bure's finance policy states that the Parent Company shall be essentially
debt-free. Furthermore, each portfolio company shall be financially independent from the
Parent Company, which means that the Parent Company is not financially liable for obligations
in the portfolio companies and that the companies are responsible for their own financing
arrangements. Financing of the respective portfolio companies shall be well adapted to each
company's individual situation. For a more detailed description of the Group's financial risk
management, see Note 21, Financial instruments
To actively manage Bure's cash and cash equivalents and short-term investments, the Board of
Directors has established an Investment Committee. The Investment Committee's main
responsibility is to evaluate the management of short-term investments with regard to risk and
return. The Investment Committee is comprised of Patrik Tigerschiöld, Hans Biörck and CEO
Henrik Blomquist. he mandate of the Investment Committee is regulated by the company's
finance policy.
The underlying costs are normally generated in the same currency as revenues, which means
that transaction exposure is limited. Since the Group has investments outside Sweden via its
subsidiaries, the consolidated statement of financial position and statement of comprehensive
income are exposed to exchange differences arising on the translation of the foreign subsidiar
ies' financial statements.

Sensitivity analysis for the Group

Ownership structure and the Bure share

Share capital and number of shares

Authorisation for the repurchase of treasury

shares

The Group's results are affected by a number of factors. Those described here should be seen only as indications, and do not to any extent include compensatory measures that can be taken in response to specific events. Bure's sensitivity to financial factors can be broken down into share price risk, interest rate sensitivity and currency sensitivity. Price risk shares refers to the risk that the value of shares listed on an exchange is subject to change. Based on the market value of listed holdings of SEK 5,757M at 31 December 2016, an average decrease in the price of listed portfolio companies by 1 per cent would affect consolidated profit before tax by SEK 58M. In the short term, a 1 per cent change in the interest rate for the Group would have an estimated effect on consolidated profit of SEK 7M. Sensitivity to different currencies is deemed to be relatively limited. The most important currency, apart from the Swedish krona, is the euro. The share of the Group's subsidiaries net sales in EUR is 60 per cent. A 5 per cent change in the euro exchange rate would have an estimated effect on profit of SEK 1M. The estimated effect on profit of a change in Bure's sales varies depending on the company to which the change relates. In some of the companies, the short-term margin effect of a change in sales is fairly substantial. This depends on the reason for the change in sales. For example, there is a large difference between a volume effect and a price effect. Listed portfolio companies with significant international sales have currency exposure mainly against the EUR and the USD.

Financial targets and strategy Bure's business model is to acquire, develop and divest operating companies in a way that gives Bure's shareholders a good return on invested capital and enables the portfolio companies to continuously develop their respective businesses in a successful manner. The goal is for the potential value growth of each individual investment to clearly contribute to long-term growth in Bure's market capitalisation. Each individual investment shall have an annual internal rate of return (IRR) of more than 12 per cent. The Parent Company shall be essentially debt-free and the portfolio companies shall have a level of debt over time that is adequate in relation to their assessed operational risk.

Bure is listed on Nasdaq Stockholm. At 31 December 2016, Bure's largest shareholders were Patrik Tigerschiöld with a holding of 11.4 per cent, Nordea Investment Funds with 11.2 per cent and the Björkman family including foundations with 9.0 per cent. At 31 December 2016 Bure had 21,190 shareholders according to Euroclear Sweden.

Bure's share capital at 31 December amounted to SEK 535.5M, divided between 69,332,710 shares, which is equal to a quota value of SEK 7.72 each. The Articles of Association contain no restrictions on the right to transfer shares nor, to the Board of Directors' knowledge, is the company party to any significant agreements that will have any impact, be altered or cease to apply if control over the company changes as a result of a public tender offer.

Treasury shares Bure's 2016 AGM resolved to authorise Bure's Board of Directors to acquire up to 10 per cent of the total number of shares in Bure Equity AB. At 31 December 2016, no buyback of shares had been carried out.

The Board of Directors will propose that the AGM give the Board renewed authorisation, until the date of the 2018 AGM, to repurchase treasury shares in a number equal a maximum of 10 per cent of the total number of shares outstanding in the company.

Principles for
compensation and other
The principles for compensation were adopted by the AGM of Bure on 9 May 2016 and are as
follows:
terms of employment for
senior executives
Compensation to the CEO and other senior executives shall consist of basic salary, variable
salary and pension. Other senior executives refer to the CFO and one investment manager.
The relationship between basic and variable salary (bonus) shall be proportionate to the
executive's responsibilities and powers.
The maximum amount of variable salary for the CEO is equal to 100 per cent of basic annual
salary. For other senior executives, the maximum amount of variable salary is equal to between
60 and 100 per cent of basic annual salary.
Variable salary for the CEO and other senior executives is based on the outcome of four
quantitative parameters in relation to predetermined targets.
The quantitative parameters are linked to predetermined targets for a selection of the portfolio
companies, Bure's share price performance and net asset value development per share.
Other senior executives also have a discretionary parameter where the outcome is evaluated
against individually set goals.
Bure also offers a long-term share savings program for all employees. All employees are given
the opportunity, within the framework of the long-term incentive plan, to invest an amount
equal to approximately 6 per cent of fixed basic salary (before tax) in Bure shares. All employees
took part in the plan for 2016 with an aggregate invested amount of SEK 0.5M, which was
matched by Bure. The personal investment means that the plan has an up- and downside
potential that equates the interests of the employees with those of other shareholders.
All pension benefits are of the defined contribution type. For additional information see Note
35, Compensation to senior executives.
Related party
transactions
In 2016 the Board Chairman provided consulting services to Bure under a contract.
Subsequent events No significant subsequent event has taken place after the end of the year.
Framtidsutsikter Due to the nature of its business, Bure makes no forecasts about future earnings.
Proposed appropriation
of profits
The company's annual report will be submitted for adoption by the Annual General Meeting on
3 May 2017. The following funds are at the disposal of the AGM according to the Parent Company
balance sheet:
Retained earnings
Profit for the year
SEK 5,200,219,878
SEK 1,086,086,511
SEK 6,286,306,389
The Board proposes that the profits be appropriated as follows:
To be paid to the shareholders as an ordinary dividend of SEK 1.50 per
share and an extraordinary dividend of SEK 0.50 per share, for a total of
SEK 138,665,420
To be carried forward to new account SEK 6,147,640 969

It is the Board's assessment that the proposed dividend is justifiable in view of the demands imposed by the operations' nature, scope and risks on the amount of equity in the Parent Company and the Group, as well as the consolidation requirements, liquidity and financial position in general.

The undersigned hereby certify that the consolidated financial statements and the annual report have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the European Union and with the application of generally accepted accounting principles, and give a true and fair view of the financial position and results of the Group and the Parent Company, and that the administration report gives a true and fair view of the development of operations, financial position and results of the Group and the Parent Company and describes the significant risks and uncertainties to which the Group companies are exposed.

Stockholm, 15 March 2017

Patrik Tigerschiöld Chairman

Hans Biörck Carl Björkman Bengt Engström

Charlotta Falvin Sarah McPhee Mathias Uhlén

Henrik Blomquist CEO

Our auditor's report was submitted on 15 March 2016 Öhrlings PricewaterhouseCoopers AB

Michael Bengtsson Authorised Public Accountant

Statement of comprehensive income GROUP

Group
Note SEK M 2016 2015
Operating income
2 Net sales 455.1 485.6
Other operating income 3.1 14.4
32 Dividends 138.7 162.5
3, 14 Exit gains 2.4 415.9
Capital gains on short-term investments 2.2 -15.6
5 Fair value 1,016.3 2,374.1
4 Shares of profit/loss of associates 8.5 11.1
Total operating income 1,626.3 3,447.8
Operating expenses
8, 9 Other external expenses -178.5 -189.4
34, 35 Personnel costs -268.9 -277.9
10, 12, 13 Depreciation and impairment of property, plant and equipment -16.0 -15.8
Other operating expenses -0.4 -5.2
Total operating expenses -463.9 -488.3
Operating profit/loss 1,162.4 2,959.5
6 Interest income and similar profit/loss items 8.4 3.1
6 Interest expenses and similar profit/loss items -3.5 -6.9
Profit/loss after financial items 1,167.3 2,955.8
7 Income tax expense 5.8 -15.4
Profit/loss after tax 1,173.1 2,940.4
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Translation differences 2.4 -7.9
Other comprehensive income for the year, net after tax 2.4 -7.9
Comprehensive income for the year 1,175.5 2,932.5
Profit/loss attributable to non-controlling interests 0.3 0.1
Profit/loss attributable to owners of the Parent Company 1,172.8 2,940.3
Comprehensive income attributable to non-controlling interests 0.3 0.1
Comprehensive income attributable to owners of the Parent Company 1,175.2 2,932.5
Average basic number of shares outstanding, thousands1 69,333 70,042
Attributable to owners of the Parent Company, SEK 16.92 41.98
23 Basic earnings per share, SEK1
1) No dilutive effect at 31 December 2016 or 2015.
16.92 41.98

Balance sheets GROUP

Group
Note SEK M 31 Dec 2016 31 Dec 2015
NON-CURRENT ASSETS
Intangible assets
10 Patents, licenses, etc. 3.6 5.8
11 Goodwill 101.2 97.3
Total intangible assets 104.8 103.2
Property, plant and equipment
12 Buildings, land and land improvements 1.1 1.9
13 Equipment, tools, fixtures and fittings 192.6 200.1
Total property, plant and equipment 193.8 202.1
Financial assets
21, 22, 29 Financial assets at fair value through profit or loss 5,548.2 4,393.0
21, 22, 30 Investments accounted for using the equity method 88.2 80.9
21, 22 Other non-current securities 208.9 209.3
15, 21, 22, 25 Other non-current receivables 21.6 36.9
7 Deferred tax assets 7.6 10.0
Total financial assets 5,874.5 4,730.1
Total non-current assets 6,173.0 5,035.3
CURRENT ASSETS
Inventories, etc. 3.4 3.5
21, 22 Trade receivables 83.7 96.3
15, 22, 25 Other current receivables 12.8 12.4
Current tax assets 8.8 7.0
16 Prepaid expenses and accrued income 19.4 19.3
21, 22 Short-term investments 284.5 70.7
22, 25 Cash and cash equivalents 685.3 1,036.4
Total current assets 1,097.9 1,245.5
TOTAL ASSETS 7,270.9 6,280.8
of which, interest-bearing 698.1 1,069.9
Group
Note SEK M 31 Dec 2016 31 Dec 2015
EQUITY
24 Share capital 535.5 535.5
Other contributed capital 714.6 714.6
Retained earnings including profit for the year 5,850.2 4,813.6
Total equity attributable to owners of the Parent Company 7,100.3 6,063.7
Equity attributable to non-controlling interests 1.1 0.8
Total equity 7,101.3 6,064.5
LIABILITIES
Non-current liabilities
7 Deferred tax liability 0.0 14.1
17 Provisions 31.0 30.1
21, 22, 25 Liabilities to credit institutions 0.8 1.0
21, 22 Other non-current liabilities 0.9 8.6
Total non-current liabilities 32.8 53.8
of which, interest-bearing 25.4 22.0
Current liabilities
21, 22, 25 Liabilities to credit institutions 4.3 31.3
22 Prepayments from customers 11.7 14.0
22 Trade payables 14.6 16.3
7 Current tax liabilities 4.0 5.2
Other current liabilities 23.8 23.3
18, 22 Accrued expenses and deferred income 78.4 72.4
Total current liabilities 136.8 162.5
of which, interest-bearing 4.3 31.3
TOTAL LIABILITIES 169.6 216.3
TOTAL EQUITY AND LIABILITIES 7,270.9 6,280.8

PARENT COMPANY

Income statements

Parent Company
Note SEK M 2016 2015
OPERATING INCOME
Investing activities
32 Dividends:
Portfolio companies 132.0 159.7
Other companies 0.7 1.5
Short-term investments 0.7 0.1
3 Exit gains/losses 0.0 416.6
Capital gains/losses on short-term investments 2.2 -15.6
5 Fair value:
Portfolio companies 1,017.6 2,315.8
Other companies -27.8 0.0
Short-term investments -0.8 -21.3
Other operating income 1.2 5.4
Total operating income 1,125.8 2,862.2
Operating expenses
34, 35 Personnel costs -21.6 -20.8
8, 9 Other external expenses -24.1 -20.0
13 Depreciation of property, plant and equipment -0.8 -0.7
Total expenses -46.6 -41.5
Operating profit/loss before financial items 1,079.2 2,820.7
Financial income and expenses
6 Interest income and similar profit/loss items 7.4 8.4
6 Interest expenses and similar profit/loss items -0.6 -0.6
Total financial income and expenses 6.9 7.8
Profit/loss before tax 1,086.1 2,825.5
Income tax expense 0.0 0.0
Profit/loss for the year1 1,086.1 2,828.5
23 Average basic number of shares outstanding, thousands2 69,333 70,042
Basic earnings per share, SEK2 15.66 40.38
Average number of employees 6 6

1) Corresponds to comprehensive income. 2) No dilutive effect at 31 December 2016 or 2015.

PARENT COMPANY

Balance sheets

Parent Company
Note SEK M 31 Dec 2016 31 Dec 2015
NON-CURRENT ASSETS
Property, plant and equipment
13 Equipment, tools, fixtures and fittings 4.2 4.8
Total property, plant and equipment 4.2 4.8
Financial assets
14, 22, 27, 28 Investments in group companies 85.3 103.0
14, 22, 29 Financial assets at fair value through profit or loss 5,548.2 4,393.0
14, 30 Investments accounted for using the equity method 0.0 0.0
15, 22, 25 Other non-current receivables 5.5 19.9
Total financial assets 5,639.0 4,516.0
Total non-current assets 5,643.3 4,520.8
CURRENT ASSETS
Current receivables
22, 25 Receivables from group companies 308.7 324.2
15, 22, 25 Other current receivables 3.9 6.3
Current tax assets 1.2 1.2
16 Deferred expenses and accrued income
Total current receivables
4.8
318.6
2.5
334.2
21, 22, 25 Short-term investments 284.5 70.7
22, 25 Cash and cash equivalents 588.0 969.5
Total current assets 1,191.1 1,374.5
TOTAL ASSETS 6,834.4 5,895.3
of which, interest-bearing assets 797.6 1,197.7
EQUITY
Restricted equity
24 Share capital 535.5 535.5
Total restricted equity 535.5 535.5
Non-restricted equity
Retained earnings 5,200.2 2,510.4
Profit/loss for the year 1,086.1 2,828.5
Total non-restricted equity 6,286.3 5,338.9
Total equity 6,821.8 5,874.4
LIABILITIES
Non-current liabilities
22 Other non-current liabilities 0.9 8.6
Total non-current liabilities 0.9 8.6
Current liabilities
22 Trade payables 1.6 2.8
22 Other current liabilities 0.3 0.3
18, 22 Accrued expenses and deferred income 9.7 9.1
Total current liabilities 11.7 12.2
of which, interest-bearing liabilities
Total liabilities 12.6 20.9
TOTAL EQUITY AND LIABILITIES 6,834.4 5,895.3

GROUP

Statement of changes in equity

Other
contributed
Retained
earnings incl.
Non
controlling
Total
SEK M Share capital capital profit for the year interests equity
Equity at 1 January 2015 535.5 714.6 2,050.9 0.7 3,301.7
Profit/loss for the year 2,940.3 0.1 2,932.5
Other comprehensive income -7.9 -7.9
Cancellation of shares -36.9 -36.9
Bonus issue 36.9 36.9
Cash dividend -70.8 -70.8
Share buyback -98.9 -98.9
Equity at 31 December 2015 535.5 714.6 4,813.6 0.8 6,064.5
Equity at 1 January 2016 535.5 714.6 4,813.6 0.8 6,064.5
Profit/loss for the year 1,172.8 0.3 1,175.5
Other comprehensive income 2.4 2.4
Cancellation of shares -11.3 -11.3
Bonus issue 11.3 11.3
Cash dividend -138.7 -138.7
Equity at 31 December 2016 535.5 714.6 5,850.2 1.1 7,101.3

PARENT COMPANY

Statement of changes in equity

SEK M Share
capital
Non-restricted
equity
Total
equity
Equity at 1 January 2015 535.5 2,680.1 3,215.7
Profit/loss for the year 2,828.5 2,828.5
Cancellation of shares -36.9 -36.9
Bonus issue 36.9 36.9
Cash dividend -70.8 -70.8
Share buyback -98.9 -98.9
Equity at 31 December 2015 535.5 5,338.9 5,874.4
Equity at 1 January 2016 535.5 5,338.9 5,874.4
Profit/loss for the year 1,086.1 1,086.1
Cancellation of shares -11.3 -11.3
Bonus issue 11.3 11.3
Cash dividend -138.7 -138.7
Equity at 31 December 2016 535.5 6,286.3 6,821.8

Cash flow statement

Group Parent Company
Note SEK M 2016 2015 2016 2015
Operating activities
Profit/loss after financial items 1,167.3 2,955.8 1,086.1 2,828.5
10, 11, 12, 13 Amortisation and depreciation of property, 16.0 15.8 0.8 0.7
plant and equipment and intangible assets
Fair value of short and long-term investments 1.3 -63.2 0.8 16.4
Fair value of portfolio companies -1,017.6 -2,315.8 -989.8 -2,315.8
4 Shares of profit/loss of associates -8.5 -11.1
Other non-cash items, net 9.0 9.1 0.0 0.1
Paid tax -9.0 -1.9 0.0 0.0
Cash flow from operating activities before
changes in working capital
158.5 588.9 97.9 529.9
Cash flow from changes in working capital
Change in inventories 0.1 0.1
Change in current receivables 11.5 17.2 -0.6 3.0
Change in provisions -2.6 -2.6
Change in current liabilities 2.6 -22.9 -0.6 -3.9
Cash flow from changes in working capital 11.6 -8.1 -1.2 -0.9
Cash flow from operating activities 170.0 580.7 96.6 529.0
Investing activities
12, 13 Acquisition of other non-current assets -10.1 -7.3 -0.2 -2.4
Disposal of other non-current assets 0.8 7.6 0.0 0.0
14 Investments in portfolio companies -145.5 -68.9 -148.0 -76.0
Disposal of portfolio companies 0.0 262.7 0.4 262.7
Loans granted -0.1 -2.8 -7.9 -42.3
Amortisation of receivables 16.1 3.4 30.9 39.4
Investments in short-term investments, net -214.6 221.7 -214.6 251.6
Cash flow from investing activities -353.5 416.3 -339.5 433.0
Financing activities
Borrowings 3.6 7.2 -7.7 7.6
Amortisation of liabilities -35.0 -15.1 7.7 -7.6
Share buyback -98.9 -98.9
Dividends to shareholders -138.7 -70.8 -138.7 -70.8
Cash flow from financing activities -170.1 -177.6 -138.7 -169.7
Cash flow for the year -353.5 819.4 -381.5 792.3
Cash and cash equivalents at beginning of year 1,036.4 215.9 969.5 177.2
Cash flow for the year -353.5 819.4 -381.5 792.3
Translation differences 2.4 1.1
Cash and cash equivalents at end of year 685.3 1,036.4 588.0 969.5
Interest paid 2.8 3.1 0.1 0.0
Interest received 2.9 6.9 6.1 8.0

Notes

Note 1 – Accounting policies

General information Bure Equity AB (publ), corporate identity number 556454-8781, domiciled in Stockholm. The address
of the head office is Nybrogatan 6, Stockholm, Sweden. The Parent Company is quoted on Nasdaq
Stockholm. These consolidated financial statements were approved by the Board on 15 March 2017.
Basis of presentation The consolidated financial statements are presented in compliance with International Financial Reporting
Standards (IFRS) as endorsed for application in the EU. In addition to IFRS, the Swedish Financial Reporting
Board's recommendations RFR 1, Supplementary Accounting Rules for Groups, and RFR 2,
Accounting for Legal Entities, are applied.
The consolidated financial statements have been prepared according to the acquisition method of
accounting, aside from financial assets measured at fair value through profit for the year. The preparation of
financial statements according to IFRS requires the management to make estimates and assumptions. Areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates affect
reported statement of comprehensive income or statement of financial position are described in Note 11.
Basis of consolidation The consolidated financial statements are presented according to IAS 27, Consolidated and Separate
Financial Statements, with the application of the acquisition method as stated in IFRS 3, Business
Combinations.
The consolidated financial statements include the Parent Company and all companies in which the Parent
Company has a controlling influence, normally comprising companies in which Bure directly or indirectly
holds more than 50 per cent of the voting rights. Companies acquired during the year are consolidated from
the date of acquisition. Companies sold during the year are consolidated until the date of sale. Associated
companies are consolidated according to IAS 28, Investments in Associates, with the help of the equity
method or are measured at fair value through profit for the year in the case of listed companies. Associated
companies normally consist of companies in which Bure has a significant influence, i.e. where the share of
votes is between 20 and 50 per cent. For the holding in Valot Group the equity method is not used since
Bure has a marginal share of the value change in equity. Under the equity method, the Group's historical
cost for the shares, plus the Group's share of profit/loss of the associated company less dividends received, is
recognised in the consolidated statement of financial position within "Investments accounted for using the
equity method". In the consolidated statement of comprehensive income, "Shares of profit/loss of associates"
comprises Bure's share in the net profit/loss of associated companies according to the equity method. Listed
holdings are accounted for as financial instruments under the heading "Financial assets at fair value through
profit or loss" in the statement of financial position and are measured at fair value through comprehensive
income in accordance with IAS 39 and IAS 28, item 1.
Share of and transactions with
non-controlling interests
Non-controlling interests (NCIs) refer to the portion of profit/loss and net assets in partially owned
subsidiaries that is attributable to other owners. The NCI's share in profit or loss is recognised in the
consolidated statement of comprehensive income and the NCI's share in net assets is recognised in equity
in the consolidated statement of financial position. Information is provided regarding the amount of each
item that is attributable to owners of the Parent Company and to NCIs. On the sale of NCIs where the
consideration received differs from the carrying amount of the sold share in net assets, the resulting gain
or loss is recognised in equity.
Foreign currency translation Items included in the financial statements of the Group's subsidiaries are measured using the currency of the
primary economic environment in which the subsidiary operates (the functional currency). The consolidated
financial statements are presented in Swedish kronor (SEK), which is the functional and presentation currency
of the Parent Company. Transactions in foreign currencies are translated to the functional currency at the rate
of exchange ruling on the transaction date. Foreign exchange gains/losses arising on translation of monetary
assets and liabilities denominated in foreign currency are translated at the closing day rate of exchange
and recognised in profit or loss. Goodwill and other intangible assets arising on the acquisition of a foreign
operation are treated as assets of such operations and are translated at the closing day rate of exchange.
The assets and liabilities of foreign subsidiaries are translated at the closing day rate of exchange and all
income and expenses are translated at the average rate during the year. Estimated translation differences
are recognised in other comprehensive income. Goodwill and negative goodwill arising from business
combinations with respect to assets in foreign currency are translated at the current rate of exchange.
Exchange gains or losses on financial assets and liabilities are recognised in financial income or expense.
Exchange gains or losses on operating assets and liabilities are recognised in operating profit or loss.
Business combinations Business combinations are reported according to the acquisition method of accounting, whereby all acquired
assets and liabilities are measured at their fair values on the acquisition date. These fair values also include the
share in assets and liabilities attributable to non-controlling interests. Identifiable net assets also consist of
assets, liabilities, and provisions that are not recognised in the balance sheet of the acquired business.
No provisions may be made for planned restructuring measures in connection with the acquisition,
so-called restructuring reserves. The difference between the fair value of consideration given and the fair
value of net assets acquired is recorded as goodwill to the extent that no other identifiable and separable
intangible assets have been identified. Any goodwill arising from the business combination ultimately
consists of the synergies that the acquire is expected to give rise to in the existing operation.
Business combinations,
cont'd.
All intangible assets identified in connection with business combinations, excluding goodwill, are
amortised on a straight-line basis. Each individual intangible asset (except for goodwill) is amortised over
its estimated useful life, which is reviewed regularly. If an intangible asset is deemed to have an indefinite
life, it is not amortised. An intangible asset is assessed to have an indefinite life when all relevant
circumstances have been taken into account and there is no foreseeable limit to the period over which
the asset is expected to generate net cash flows. The useful life of goodwill is generally assumed to be
indefinite. There are no other assets with indefinite lives in the Group.
Goodwill Goodwill arising from business combinations is recognised as a non-current asset and is tested for
impairment at least annually. Since it is not possible to test goodwill for impairment separately from
other assets, goodwill must be allocated to cash-generating units in which a separable cash flow can be
identified. Other assets and liabilities in the Group may also be allocated to these cash-generating units.
The cash-generating units to which goodwill has been allocated correspond to the lowest level of the
Group at which goodwill is monitored. The lowest organisational level in accordance with the standard
may not be higher than a segment as described in IFRS 8, Operating Segments. An impairment loss is
recognised in the consolidated statement of comprehensive income when the recoverable amount of a
cash-generating unit falls below its carrying amount. When the recoverable amount of a cash-generating
unit is lower than its carrying amount, an impairment loss is first recognised through a reduction in
goodwill. If this value is in turn lower than the difference between the recoverable amount and carrying
amount, impairment losses should be recognised on other assets on a pro rata basis.
Intangible assets
(excl. goodwill)
The intangible assets recognised in the statement of financial position are those that have either been
acquired as part of a business combination (see above), separately purchased or internally generated.
Intangible assets are capitalised in the statement of financial position when it is probable that the
economic benefits attributable to the asset will flow to Bure and the cost of the asset can be measured
reliably. The Group currently conducts no research and development activities, for which reason no
internally generated intangible assets are recorded in the statement of financial position.
Property, plant and
equipment
Items of property, plant and equipment are recognised at cost less accumulated depreciation and
impairment losses. Depreciation is calculated on the depreciable amount, normally comprising historical
cost less any estimated residual value at the end of the useful life. Depreciation is carried out on a straight
line basis over the estimated useful life of the asset.
Other intangible assets 20–33 per cent.
Other machinery and equipment 20–33 per cent.
Computers 33 per cent.
Locomotives 3.3 per cent.
Leasing Leases are classified as either finance or operating leases. A lease is classified as a finance lease if it
transfers substantially all the risks and rewards incident to ownership of the asset to the lessee. All
other leases are classified as operating leases. A finance lease is recorded as a non-current asset and a
financial liability in the statement of financial position. The finance lease payments consist of interest and
straight-line depreciation. A leased asset is depreciated according to the same principles as separately
acquired assets. For operating leases, the lease payments are charged to the consolidated statement of
comprehensive income on a straight-line basis over the term of the lease.
Certain smaller finance leases for company cars and office equipment are recorded as operating leases.
Financial instruments Classification of financial assets and liabilities.
The fair values of all financial assets and liabilities have been measured in accordance with IFRS 13.
Fair value is assessed to be equal to the carrying amounts of trade and other receivables, other current
receivables, cash and cash equivalents, trade and other payables and borrowings. Carrying amount
less impairment approximates fair value for trade receivables and trade payables. For non-current non
interest-bearing liabilities, fair value has been estimated through discounting of future cash flows using
current market interest rates over the term of the liabilities.
The Group's financial assets and liabilities are measured according to the following hierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted market prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
At each balance sheet date, management conducts a review to look for objective evidence that a financial
Impairment of
financial assets
asset may be impaired. For available-for-sale financial assets, an impairment loss is recognised if the
identified decrease in fair value is significant and permanent.
Financial risk management The Group is exposed to a number of different financial risks such as share price risk, currency risk, interest
rate risk and general liquidity risk. Bure's overall risk objective is regulated in the Parent Company's finance
policy. Because the subsidiaries are mutually autonomous, each has adopted its own separate finance policy.
A more detailed description of financial risk management is provided in Note 21, Financial instruments.
Inventories Inventories are stated at the lower of cost and net realisable value.
Provisions A provision is recognised when the Group has a present obligation (legal or constructive) that has
risen as a result of a past event, it is probable that an outflow of resources will be required to settle the
obligation and the amount can be estimated reliably. In cases where the company expects a provision
to be reimbursed by another party, for example within the framework of an insurance agreement, the
reimbursement is recognised as a separate asset only when it is virtually certain that the reimbursement
will be received. If the cash out flow to settle an obligation is expected to occur after more than
12 months, the future payment should be measured at discounted present value using a discount rate the
reflects short-term market expectations with consideration to transaction-specific risks. The cost of the
provision is capitalised in comprehensive income. A provision to a restructuring reserve is recognised in
the period when the Group has a legal or constructive obligation to carry out the plan and those affected
have a valid expectation. A provision is recognised only for direct expenditures that are caused by the
restructuring and are an effect of remaining contractual obligations without lasting economic benefits or
that consist of a fine resulting from termination of the obligation.
Revenue recognition Revenue arising from the sale of goods is recognised when the significant risks and rewards of ownership
have been transferred to the buyer. Income from the sale of services is recognised when it can be
measured reliably, when it is probable that the economic benefits associated with the transaction will
flow to the company and when the expenses expected to arise as a result of the transaction can be
measured reliably.
Revenue from service contracts is recognised when the total income and expenses in a completed
project can be measured reliably and it is probable that the economic benefits associated with the
specific transaction will flow to the company. The stage of completion of a contract is determined by
comparing the proportion of contract costs incurred to date with the estimated total contract costs.
In accordance with the rules in the percentage of completion method, estimated revenue for work in
progress less progress billings is recognised under the heading "Receivables". In cases where the progress
billings exceed costs incurred, these are recognised under the heading "Liabilities" as prepayments from
customers.
Borrowing costs Borrowing costs are expensed in the period in which they are incurred. In cases where borrowing costs
arise in connection with the acquisition, construction or production of a qualifying asset, these costs are
capitalised as part of the cost of the asset.
Pensions Contributions payable under defined contribution pension plans are recognised as an expense in the
period in which they arise.
Non-current assets held
for sale and discontinued
operations (IFRS 5)
A non-current asset/liability or disposal group for which the carrying amount will be recovered primarily
through a sale and not through use is reported in a separate category in the statement of financial
position as "Non-current assets held for sale" or "Discontinued operations". A discontinued operation
is a component of an entity that either has been disposed of or is classified as held for sale according to
a coordinated plan and represents a separate line of business or a major business within a geographical
area of operations. The application of IFRS 5 has had no other effect on the prior period financial reports
than a change in the presentation of the statement of comprehensive income, statement of financial
position and cash flow statement. For discontinued operations, this means that profit/loss after tax from
discontinued operations is stated on a separate line in the statement of comprehensive income.
Operating segments Bure's operations are monitored and supervised by the group management based on the individual
company holdings, which are therefore regarded as operating segments. Buying and selling between the
operating segments is limited.
Income taxes Deferred tax assets and liabilities are recognised when there are temporary differences between the
carrying amounts and tax bases of assets and liabilities. Deferred tax assets relating to loss carryforwards
are recognised to the extent that it is deemed probable that there will be sufficient taxable profits against
which to utilize these loss carryforwards. The year's reported tax expense consists of tax payable on
the year's taxable profit (current tax) and deferred tax. Bure's share in the income taxes of associates is
included in "Shares of profit/loss of associates".
Cash flow statement Cash and cash equivalents refer to bank deposits.
Critical accounting estimates
and judgments
In preparing the financial statements, the Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, rarely correspond to the actual results.
The estimates and assumptions that are associated with a significant risk for material adjustments in
the carrying amounts of assets and liabilities in the next financial year are described below.
Impairment of property,
plant and equipment and
intangible assets
Property, plant and equipment and intangible assets, aside from those with indefinite useful lives, are
depreciated/amortised over the period when they are expected to generate economic benefits, i.e their
useful lives. If there is an indication of impairment, the asset's recoverable amount is calculated, and
consists of the higher of the asset's fair value less costs to sell and its value in use. An impairment loss is
recognised when the recoverable amount of an asset is lower than its carrying amount. The recoverable
amount is determined on the basis of the management's estimates, for example of future cash flows.
Impairment of property,
plant and equipment and
intangible assets, cont'd.
Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually
or more frequently when is an indication of a decline in value. In order to test these assets, they must be
allocated to cash-generating units and their respective useful lives must be calculated. The necessary
calculations require the management to estimate the expected future cash flow attributable to the
defined cash-generating units and to choose a suitable discount rate for use in discounting this cash flow.
The Group has evaluated the estimates where changes could have a significant impact on the fair value of
the assets and would therefore require the recognition of an impairment loss. Among other things, these
estimates are related to the expected rate of inflation and the choice of discount rate. The assumptions
applied in impairment tests, including a sensitivity analysis, are described in more detail in Note 11.
Deferred tax assets Deferred tax is calculated on the basis of temporary differences between the tax base and carrying
amount of an asset or liability and on unutilised loss carryforwards. Deferred tax assets are recognised
only when it is probable that these can be utilised against future profits. The probability that loss
carryforwards can be utilised against future profits is assessed through calculation of expected future
cash flows. This assessment is made in connection with impairment testing of shares in subsidiaries.
In cases where the actual outcome differs from the estimates or when management adjusts these
estimates, this can lead to changes in the value of deferred tax assets.
Provisions for doubtful debts Trade receivables are initially measured at fair value and subsequently at the amount in which they are
expected to be settled. Provisions for doubtful debts are made after individual and systematic assessment
of each customer/counterparty's ability to pay and when there is objective evidence that the Group will
not be able to collect the amount due. Losses tied to doubtful debts are recognised in comprehensive
income within other operating expenses. In cases where the previously reserved amount is recovered,
the provision is reversed.
Valuation of associates Unlisted associated companies are valued according to the historical cost method. For holdings in
unlisted companies, cash flow and market valuations are performed regularly to calculate the recoverable
amount. Value changes are determined through impairment testing after the application of the valuation
rules established by the Board.
Parent Company
accounting policies
Unless otherwise stated, the Parent Company applies the same accounting policies as the Group, with
the addition of the Swedish Financial Reporting Board's recommendation RFR 2, Accounting for Legal
Entities. Any deviations between the policies applied by the Parent Company and the Group are a result
of limitations in the scope for IFRS conformity in the Parent Company due to its application of the Swedish
Annual Accounts Act.
Financial assets Shares in subsidiaries and unlisted associated companies are measured in accordance with the acquisition
method of accounting. For holdings in subsidiaries and unlisted associated companies, recoverable value
is determined through ongoing cash flow and market value analyses. Fair value changes are determined
through impairment testing after application of the valuation rules established by the Board. Listed associated
companies are accounted for as financial instruments under the heading "Financial assets at fair value through
profit or loss" in the Parent Company's balance sheet and are measured at fair value through the income
statement in accordance with IAS 39 and IAS 28, item 1.
Income taxes The equity share of untaxed reserves is included in retained earnings. The tax share of untaxed reserves
has been recognised as deferred tax liabilities within non-current liabilities.

Note 2 – Segment information

Reporting by operating segment

Since Bure already previously reported its segments in a similar manner, no changes have been made in the grounds for segmentation or in calculation of profit/loss by segment compared to the previous year's annual report. Consolidation adjustments relating to positive and negative goodwill have been attributed to the respective companies. Transactions between the various segments are insignificant in scope and account for less than 0.1 per cent of total sales. Dormant companies or companies not classified as portfolio companies are reported under the heading "Other companies". No customer accounted for more than 10 per cent of net sales during the periods.

Bure
Investment Financial Bure Other Elimina Parent
Mercuri AB Bure Services Growth companies tions etc. Company Total
SEK M 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
Net sales
Total net sales 424 452 31 34 0 0 0 0 0 0 455 486
Profit/loss
Shares of profit/loss 2 2 9 9 -2 0 8 11
Profit/loss by segment 32 26 7 21 1 5 41 53
Administrative expenses -47 -41 -47 -41
Fair value/impairment losses 13 94 -13 -15 28 989 2,295 1,016 2,374
Dividends 5 2 -1 133 161 139 163
Exit gains/losses/capital
gains/losses on short-term
investments
3 -1 0 2 401 5 400
Operating profit/loss 37 28 7 21 27 105 -15 -15 0 0 28 -1 1,079 2,821 1,162 2,960
Net financial items 5 -4
Income tax expense 6 -15
Profit/loss after tax 1,173 2,940
Other disclosures Bure
Mercuri Investment
AB Bure
Financial
Services
Bure
Growth
Other
companies
Elimina
tions etc.
Parent
Company
Total
SEK M 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
Assets 250 243 203 198 202 189 6 21 0 0 -312
Equity holdings in associates 14 13 48 46 25 22 0 -346 6,835 5,895 7,183 6,200
88
Total asset 264 256 203 198 250 234 31 43 0 0 -312 -346 6,835 5,895 7,271 6,281 81
Liabilities
Unallocated liabilities 209 232 149 162 76 88 35 38 0 0 -312 -326 13 21 170 216
Total liabilities 209 232 149 162 76 88 35 38 0 0 -312 -326 13 21 170 216
Investments 6 5 0 0 0 0 0 0 0 0 0 0 0 2 6 7
Amortisation/depreciation 4 6 11 9 0 0 0 0 0 0 0 0 1 1 16 16
Sweden Rest of Europe North America Asia Other markets Total
SEK M 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
Sales by market 73 79 293 318 28 24 49 51 13 13 455 486
Assets by market 6,994 6,013 205 219 20 13 48 37 3 0 7,271 6,281
Investments by market 2 6 3 1 0 0 1 0 0 0 5 7
Breakdown of net sales by type Net sales
SEK M 2016 2015
Operating income
Sale of goods 39 38
Service contracts 396 421
Other sales 21 27
Total net sales 455 486
Other operating income 3 27
Total net sales 455 486
Total operating income 458 512
Note 3 – Exit gains/ Group Parent Company
losses SEK M 2016 2015 2016 2015
Mycronic 393.9 393.9
PartnerTech 22.7 22.7
Other holdings 2.4 -0.8
Total 2.4 415.9 416.6
Note 4 – Share of profit/loss Group
of associates SEK M 2016 2015
BioLamina -1.0 -0.1
Fondbolaget Fondita 9.1 9.4
Idevall & Partners Holding -0.2 -0.3
Life Genomics -1.3
Others 1.8 2.1
Total 8.5 11.1
Note 5 – Fair value Group Parent Company
adjustments/changes Mkr 2016 2015 2016 2015
Cavotec -30.8 -15.7 -30.8 -15.7
Lauritz.com -31.9 -31.9
MedCap 9.7 21.8 9.7 21.8
Mycronic 461.7 1 586.0 461.7 1,586.0
PartnerTech 29.7 29.7
Vitrolife 463.9 576.9 463.9 576.9
Xvivo Perfusion 144.9 117.1 144.9 117.1
Catella 12.7 94.4
Vigmed Holding -13.2 -14.9
Bure Growth -28.0
Short-term investments -0.8 -21.3 -0.8 -21.3
Skanditek 0.2
Total 1,016.3 2,374.1 989.0 2,294.5
Note 6 – Interest and Group
Parent Company
similar profit/loss items SEK M 2016 2015 2016 2015
Income from financial assets measured at fair value through comprehensive income in the Group and
through profit or loss in the Parent Company
Net exchange differences in financial receivables/
liabilities
4.3 -0.2 -0.5 -0.6
Operating profit includes no Interest income 2.5 3.3 7.4 8.4
foreign exchange differences Interest expense -2.0 -6.9 -0.1 0.0
relating to current assets. Total interest and similar profit/loss items 4.9 -3.8 6.9 7.8
Note 7 – Income taxes Group
SEK M 2016 2015
Current tax -5.2 -4.7
Deferred tax 11.0 -10.7
Total 5.8 -15.4
At the beginning of 2016 Items included in deferred tax
the Bure Group had loss Deferred tax assets:
carryforwards amounting to Taxed deficit 6.9 9.0
SEK 709M, of which SEK 559M Temporary differences 0.7 1.0
refers to the Parent Company.
All losses are attributable to
Total 7.6 10.0
Sweden and are perpetual. Deferred tax liabilities:
The deferred tax asset based Temporary differences 0.7
on loss carryforwards in the
Group has been valued at
Total 0.0 0.7
SEK 8M (10), which is almost Deferred tax, net 7.6 10.7
exclusively attributable to
loss carryforwards in the
Composition of tax expense
subsidiaries that are expected Reported profit before tax 1,169.6 2,958.2
to be offset against future Effect of associated companies, net -2.3 -2.4
profits. All loss carryforwards Reported profit before tax 1,167.3 2,955.8
are fully available. The entry Tax according to the applicable tax rate, 22.0% (22.0%) -256.8 -650.3
tax-deductible items consist Other non-deductible expenses -1.1 -0.9
mostly of non-taxable Non-taxable income 0.4 1.3
unrealized gains on listed Tax-deductible items 247.6 642.5
financial assets. Effect of changed tax rates 14.9
Utilisation of previously uncapitalised loss carryforwards 1.5 0.2
Effect of uncapitalised loss carryforwards -2.0 -1.4
Effect of different tax rate in foreign country 0.7 -0.5
Reversal of previously capitalised loss carryforwards 0.0 -4.1
Adjustment of taxes for prior years 0.0 0.7
Other 0.6 -2.9
Total 5.8 -15.4
Group
SEK M 2016 2015
Gross change in deferred tax
At beginning of year 10.0 16.6
Changed tax rate 0.0 0.0
Translation differences -2.4 -6.6
At end of year 7.6 10.0

Contracted lease payments

Note 8 – Leases Group Parent Company
SEK M 2016 2015 2016 2015
The period's lease payments (operating)
Cars 3.2 3.8 0.1 0.1
Premises 13.8 17.8 2.0 1.9
Other equipment 2.4 2.6 0.1 0.1
Total 19.5 24.3 2.1 2.0
Group Parent Company
2017 2018–2023 >2023 2017 2018–2023 >2023
Operating leases
Cars 2.4 4.5 0.1 0.1
Premises 13.1 12.7 1.9 1.9
Other equipment 1.8 4.3 0.0 0.0
Total 17.2 21.5 2.1 2.0
Finance leases
Cars 0.5 0.4
Total 0.5 0.4
Note 9 – Fees to auditors Group Parent Company
SEK M 2016 2015 2016 2015
Fees to PwC
Auditing fees 1.9 1.9 0.4 0.4
Auditing Services aside from the audit 0.1 0.4 0.1
Consulting services 0.2 0.0
Fees for tax advice 0.1 0.2 0.1 0.2
Total fees to PwC 2.2 2.5 0.5 0.7
Fees to other auditors
Auditing fees 0.2 0.2
Consulting services 0.3 0.1
Total fees to other auditors 0.6 0.4

Note 10 – Patents, licenses, etc.

SEK M 2016 2015
Opening balance 18.6 21.3
The year's acquisitions 2.4 1.9
Disposals/reclassifications 0.0 -4.4
Translation differences 0.3 -0.2
Closing balance 21.3 18.6
Opening amortisation -12.8 -13.2
Disposals/reclassifications 3.9
The year's amortisation -2.4 -3.7
The year's impairment losses -2.3
Translation differences -0.2 0.2
Closing accumulated amortisation -17.8 -12.8
Carrying amount 3.6 5.8

Group

Note 11 – Goodwill Group
SEK M 2016 2015
Opening balance 568.7 597.4
The year's acquisitions
Disposals/reclassifications -15.5
Translation differences 14.0 -13.2
Closing balance 582.6 568.7
Opening amortisation -93.7 -97.1
The year's acquisitions
Disposals/reclassifications 2.4
Translation differences -1.0 1.0
Closing accumulated amortisation -94.7 -93.7
Opening impairment losses -377.6 -397.4
Disposals/reclassifications 11.1
The year's impairment losses
Translation differences -9.1 8.7
Closing accumulated impairment losses -386.7 -377.6
Carrying amount 101.2 97.3

The recoverable amount of the Group's goodwill items in 2016 has been determined based on calculations of value in use. These calculations are based on estimated future cash flows with consideration to financial budgets approved by management.

SEK M Goodwill Growth
forecast period
Terminal
growth rate
EBIT
forecast period
Discount
rate1
Mercuri International
Group AB
101.2 4.9% 2.0% 9.4% 8.8%

The valuations that have provided the basis for the value testing do not represent fair market value, but are instead estimated in accordance with IAS 36 to determine the recoverable amount of cashgenerating units. Based on the above, the goodwill values in the table can be considered well founded. The forecast period is five years. The recoverable amount exceeds the carrying amount. If, for example, the growth or EBIT assumption should change by one percentage point, Bure's goodwill values could be lower than their reported carrying amounts. A sensitivity analysis of significant variables for goodwill has the following effects on the estimated value:

Mercuri International Group AB
Variable
Change,
%-points
Effect on
value
Growth, terminal period -1% -46 Mkr
Discount rate 1% -66 Mkr

The recoverable amount exceeds the carrying amount even with consideration to the above changes. The growth assumption is based on an assessment of general economic development in combination with industry-specific assumptions.

Note 12 – Buildings, land
and land improvements

There are no future commitments for property investments. There are no finance leases connected to properties in the Group.

SEK M Group
2016 2015
Opening balance 6.9 7.1
Sales/reclassifications -5.3
Translation differences 0.1 -0.3
Closing balance 1.6 6.9
Opening depreciation -4.9 -5.0
Sales/reclassifications 4.5
The year's depreciation -0.1 -0.2
Translation differences 0.0 0.2
Closing accumulated depreciation -0.5 -4.9
Carrying amount 1.1 1.9

1) Refers to the discount rate before tax. The discount rate for the comparison year was 8.8 per cent.

Note 13 – Equipment,
tools, fixtures and
fittings
Note 13 – Equipment, Group Parent Company
tools, fixtures and SEK M 2016 2015 2016 2015
fittings Opening balance 279.1 342.6 10.1 7.7
The year's acquisitions 4.2 5.4 0.2 2.4
Disposals/Reclassifications -6.5 -67.7 0.0
Translation differences 1.6 -1.3 0.0
Closing balance 278.3 279.1 10.2 10.1
The reported values do not Opening depreciation -78.9 -134.5 -5.3 -4.5
include any equipment financed Disposals/Reclassifications 4.8 66.3 0.0
through lease contracts. There The year's depreciation -10.2 -12.0 -0.8 -0.7
are no contracts outstanding Translation differences -1.4 1.2
concerning acquisition of Closing accumulated depreciation -85.7 -78.9 -6.0 -5.3
equipment. Carrying amount 192.6 200.1 4.2 4.8
Note 14 – Acquisitions
and divestitures
Acquisitions in 2016 Bure Growth acquired shares in Life Genomics AB , which offers genetic tests to the healthcare sector and
the public. The investment amounted to SEK 7M and the holding is 28.1 per cent.
Bure acquired 2.75 million shares in Cavotec for SEK 55.1M and increased its holding from
13.1 per cent to 16.6 per cent.
Bure acquired 4.6 million shares in Lauritz.com for SEK 68.9M, which corresponds to a holding of 11.3 per
cent.
Bure acquired 0.07 million shares in MedCap for SEK 11.2M and increased its holding from
20.0 per cent to 22.7 per cent.
Acquisitions in 2015 In January Bure Financial Services acquired on additional 0.3 million shares in Catella for a value of
SEK 3.1M. Bure's total holding in Catella amounts to 8.8 million shares, which is equal to 10.7 per cent of
the number of shares and 11.1 per cent of the number of votes in the company. Catella is classified as
non-current securities.
In March and December Bure acquired on additional 2.0 million shares in Cavotec for a value of
SEK 56.4M. Bure's total holding in Cavotec amounts to 10.2 million shares, which is equal to 13.1 per cent
of the total number of shares in the company.
In November Bure Growth acquired additional shares in BioLamina and thereby increased the holding
from 17.0 per cent to 20.3 per cent. BioLamina is classified as an investment accounted for using the
equity method.
Since the 2015 Annual General Meeting, Bure has repurchased 1,501,000 shares for a total of SEK 76.6M,
which is equal to 2.1 per cent of the total number of shares outstanding. The shares have been
repurchased at an average price of SEK 51.06 each.
Divestitures in 2015 In June Bure sold 5,404,140 shares in PartnerTech for a total of SEK 189.1M to Scanfil Oyj, which submitted
a public tender offer for the company. The purchase consideration exceeded the value of the shares in
PartnerTech by SEK 52.4M at 31 December 2014. The exit gain amounted to SEK 22.7M.
In the first quarter of 2015, Bure sold 44,446 shares in Mycronic for SEK 0.7M in connection with the
exercise of warrants. In November an additional 7,800,000 shares were sold for SEK 499M, which resulted
in an exit gain of SEK 394M.
Note 15 – Other Group Parent Company
non-current and SEK M 2016 2015 2016 2015
current receivables Other non-current receivables
Non-current receivables, interest-bearing 5.4 14.1 4.6 11.3
Non-current receivables, interest-bearing 5.4 14.1 4.6 11.3
Non-current receivables, non interest-bearing 16.2 22.8 0.9 8.6
Total other non-current receivables 21.6 36.9 5.5 19.9
Other current receivables
Current receivables, interest-bearing 3.7 4.3 3.7 4.3
Current receivables, non interest-bearing 9.1 8.1 0.2 2.0
Total other current receivables 12.8 12.4 3.9 6.3
Note 16 – Prepaid expenses Group Parent Company
and accrued income SEK M 2016 2015 2016 2015
Accrued interest income 0.5 0.5 0.5 0.5
Accrued income 9.3 8.3 3.2
Other accrued income 0.0 0.4 1.3
Prepaid expenses 9.5 10.0 0.5 0.6
Other items 0.2 0.2 0.6
Total 19.4 19.3 4.8 2.5
Note 17 – Provisions Group
SEK M 2016 2015
Opening provisions 30.1 33.1
Provisions during the year
Mercuri International Group 4.6 3.0
Total 4.6 3.0
Utilised/dissolved during the year
Mercuri International Group -5.2 -4.9
Total -5.2 -4.9
Translation differences 1.6 -1.1
Closing provisions 31.0 30.1
2017 2018 >2018
Estimated reversal of Pension provisions 0.8 23.7
provisions in the Group Restructuring reserve 0.0 1.2
Other provisions 2.7 2.6
Total 3.5 27.5
Note 18 – Accrued Group Parent Company
SEK M 2016 2015 2016 2015
expenses and Accrued vacation pay 8.4 6.9 0.7 0.7
deferred income Accrued social security expenses 13.0 11.9 2.1 1.7
Deferred income 2.4 4.9
Other accrued expenses 54.7 48.8 7.0 6.8
Total 78.4 72.4 9.7 9.1
Group Parent Company
Note 19 – Pledged assets SEK M 2016 2015 2016 2015
Shares in subsidiaries and associates 73.0 114.1
Blocked bank accounts 0.4 0.3
Total pledged assets 73.4 114.4
Note 20 – Contingent
liabilities
Contingent liabilities in the Group amounted to SEK 0.4M (1.4) and pertained to surety and guarantee
commitments furnished by the subsidiaries.
There is no contingent consideration in the Group that has not already been capitalised. Bure has no
remaining commitments to acquire additional shares in subsidiaries.

Note 21 – Financial instruments

Financial risks – objectives and policies

Provisions to the reserve for doubtful debts are made after individual assessment of each customer's ability to pay.

The Group is exposed to a number of different financial risks through its operations. Bure is an investment company with an important overall objective that is regulated in the Parent Company's finance policy. The Parent Company shall be essentially free from debt, and the subsidiaries shall have independent financing to ensure their financial autonomy from the Parent Company and other group companies. Consequently, the subsidiaries shall also be able to independently manage their own liquidity risk. A separate finance policy has been established for each individual subsidiary. The policy document provides guidelines for management of cash, surplus liquidity, debt financing and handling of currency and interest rate risk. Price risk Price risk on shares refers to the risk for possible changes in the value of shares listed on an exchange. Based on the market value of listed holdings of SEK 5 757 on 31 December 2016, a change of 1 per cent in the price of listed portfolio companies would affect the Group's profit before tax by SEK 58M. Currency risk Currency risk refers to the risk that the Group's commercial flows (transaction risk) will be affected by exchange rate fluctuations. Transaction risk in the Group is limited, since nearly all income is matched by expenses in the same currency. Because the Bure Group has investments outside Sweden via its subsidiaries, the Group's statements of financial position and comprehensive income are exposed to translation risk arising on the translation of the financial statements of foreign subsidiaries. This risk is normally not hedged. The most significant currency aside from the SEK is the EUR. A change of +/-5 per cent in the EUR rate would have an impact on the subsidiaries' profit before tax of SEK +/-1 Mkr. Interest rate risk The Group is exposed to interest rate risk through changes in the interest rate on assets and liabilities with variable interest due to movements in market interest rates. Fixed interest liabilities are also exposed to interest rate risk, but to a significantly lesser degree since the interest rate changes when the loans mature and are extended on new terms. A change of 1 per cent in the interest rate for the Group would have an estimated short-term impact on consolidated profit before tax of SEK 7M. Interest rate risk in borrowings can be maintained at a desired level through the use of derivatives such as swaps, forwards and options. At present, there are no hedges of interest rate risk.

Credit risk Credit risk is the risk that Bure's counterparties will be unable to meet their payment obligations and that any collateral furnished will not cover the amount due, thereby causing Bure to incur a financial loss. Bure's policy is to carry out a credit assessment of all customers with which it does business. The maximum credit exposure on the balance sheet date was SEK 6M. There are no significant concentrations of credit risk in the Group.

2016 2015
Age structure of
trade receivables
SEK M
Trade
receiv
ables
Reser
ves
Net
receiva
ble
Secured
by col
lateral
Trade
receiva
bles
Reser
ves
Net
receiv
able
Secured
by col
lateral
Not yet due 63.3 63.3 65.3 65.3
Past due 1– 30 days 12.0 12.0 17.0 17.0
Past due 31– 60 days 3.9 3.9 7.1 7.1
Past due 61– 90 days 3.2 3.2 2.2 2.2
Past due 91–180 days 2.0 2.0 5.9 5.9
Past due >180 days 1.8 -2.6 -0.7 2.9 -4.0 -1.1
Total 86.2 -2.6 83.7 100.3 -4.0 96.3
Specification of reserve for doubtful debts
SEK M 2016 2015
Opening balance 4.0 2.9
The year's provisions 0.7 1.9
Written-off amount -2.0 -0.5
Reversal of unutilised reserves -0.2 -0.3
Foreign exchange effects 0.1 0.0
Total 2.6 4.0

Liquidity risk is the risk that the Group will be unable to finance loan payments and other liquidity flows as they fall due either with its own funds or with new financing. In order to maintain sufficient liquidity, Bure maintains a liquidity reserve that is at least adequate to cover one year's forecasted liquidity requirement and other liquidity needs in the existing company structure. The liquidity reserve consists of available cash and cash equivalents and short-term investments. That portion of the liquidity reserve that exceeds the liquidity requirement as defined above may according to Bure's policy be invested over a longer investment horizon, distributed to the shareholders or used in buyback programmes.

Group maturity structure for external liabilities at 31 December 2016

Interest-bearing <1 <3 3–12 1–5 > 5
liabilities months months months year year Total
Bank overdraft facilities 4.3 4.3
Other borrowings 1.1 25.4 26.5
Total 1.1 29.6 30.8
Non interest-bearing 0,0
<1
0,0
<3
1,2
3–12
89,9
1–5
0,0
> 5
91,2
liabilities months months months year year Total
Trade payables 0.5 14.2 14.6
Other external liabilities 22.1 1.4 0.3 23.8
Total 0.5 36.3 1.4 0.3 38.5

Fair value and carrying amount of financial assets and liabilities

The fair value of all financial assets and liabilities has been calculated in accordance with IFRS 13. Fair value is assessed to be equal to carrying amount for trade receivables and other receivables, other current receivables, cash and cash equivalents, trade payables and other liabilities, and borrowing. Carrying amount less impairment losses comprises an approximate fair value for trade receivables and payables. For non-current interest-free liabilities, fair value has been calculated by discounting future cash flows by the applicable market interest rates with regard to the maturity of the liability.

The Group's financial assets and liabilities are measured in accordance with the following hierarchy:

Level 1: According to quoted prices in active markets for identical assets and liabilities.

Level 2: According to directly or indirectly observable market inputs for the asset or liability that are not included in Level 1.

Level 3: According to inputs for the asset or liability that are not observable in the market.

Fair value hierarchy 2016 2015
SEK M Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets
Financial assets at fair value
through profit or loss
5,548.3 5,548.3 4,393.0 4,393.0
Investments accounted for
using the equity method
88.2 88.2 80.9 80.9
Other non-current securities 208.9 208.9 209.3 209.3
Other non-current receivables 0.9 20.7 21.6 8.6 28.3 36.9
Short-term investments 284.5 284.5 70.7 70.7
Total financial assets 6,042.5 108.8 6,151.4 4,681.6 109.2 4,790.8
Financial liabilities
Liabilities to credit institutions 5.1 5.1 32.3 32.3
Other non-current liabilities 0.9 0.9 8.6 8.6
Accrued expenses and
deferred income
78.4 78.4 72.4 72.4
Prepayments from customers 11.7 11.7 14.0 14.0
Total financial liabilities 0.9 95.1 96.0 8.6 118.7 127.3

Note 22 - Classification of financial assets and liabilities

At fair value Loans Financial Other
Group, through and assets held financial
SEK M profit or loss receivables for sale liabilities
Financial assets
Financial assets at fair value through
profit or loss
5,548.3
Investments reported according to the
equity method
88.2
Other non-current securities 208.9
Other non-current receivables 21.6
Trade receivables 83.7
Other current receivables 12.8
Short-term investments 284.5
Cash and bank 685.3
Total financial assets 284.5 803.3 5,845.3
Financial liabilities
Liabilities to credit institutions 5.1
Other non-current liabilities 0.9
Accrued expenses and deferred income 78.4
Prepayments from customers 11.7
Trade payables 14.6
Total financial liabilities 110.7
Parent Company,
SEK M
At fair value
through
profit or loss
Loans
and
receivables
Financial
assets held
for sale
Other
financial
liabilities
Financial assets
Shares in group companies 85.3
Financial assets at fair value through
profit or loss
5,548.3
Other non-current receivables 5.5
Receivables from group companies 308.7
Other current receivables 3.9
Short-term investments 284.5
Cash and bank 588.0
Total financial assets 284.5 906.1 5,633.6
Financial liabilities
Other non-current liabilities 0.9
Accrued expenses and deferred income 9.7
Trade payables 1.6
Total financial liabilities 12.2

Note 23 – Earnings per share

Bure reports earnings per share in accordance with IAS 33, Earnings Per Share. Earnings per share are reported both before and after dilution.

Earnings per share are calculated by dividing net profit/loss by the weighted average number of shares outstanding during the year. In the Group, profit attributable to owners of the Parent Company is used for calculation of earnings per share.

In the event of a negative result, the net loss is divided only by the weighted average number of shares outstanding.

Specification of applied parameters 2016 2015
Profit for the year in the Parent Company, SEK M 1,086.1 2,828.5
Consolidated profit for the year, SEK M 1,173.1 2,940.4
Average number of shares outstanding1 69,332,710 70,041,657
Basic earnings per share in the Parent Company, SEK2 15.66 40.38
Basic earnings per share in the Group, SEK2 16.92 41.98

shares for 2015.

1) Excluding 1,501,000 repurchased

2) No dilutive effect at 31 December 2016 or 31 December 2015.

Note 24 – Equity According to the Articles of Association, the share capital shall amount to no less than SEK 300,000,000 and no more than SEK 1,200,000,000.

Information about changes in equity is provided below.

2016 2015
No. of
shares
Quota
value
Share
capital
No. of
shares
Quota
value
Share
capital
Number of registered shares
Registered number at 1 January 70,833,710 7.56 535,518,034 76,081,510 7.04 535,518,034
Cancellation of treasury shares -1,501,000 -11,347,882 -5,247,800 7.04 -36,937,904
Bonus issue 11,347,882 36,937,904
Registered number at
31 December
69,332,710 7.72 535,518,034 70,833,710 7.56 535,518,034

Description and reporting of repurchase of treasury shares

Restricted and non-restricted equity Bure's 2016 AGM authorised the Board of Directors to acquire treasury shares in a maximum number of up to 10 per cent of the total number of shares outstanding.

At 31 December 2016 the repurchase mandate had not been utilised.

Share dividend The 2015 AGM approved an ordinary dividend to the shareholders of SEK 1.00 per share and an extraordinary dividend of SEK 1.00 per share. The total amount distributed was SEK 138.7M. According to Swedish law, shareholders' equity must be divided into non-restricted and restricted equity, of which restricted equity is not available for distribution to the shareholders. Restricted equity in the Parent Company consists of the share capital, statutory reserve and revaluation reserve. In Bure's case, the statutory reserve consists of capital contributed in connection with the company's formation. The statutory reserve also includes former share premium reserve, which must be transferred to the statutory reserve in accordance with the new Swedish Companies Act.

Non-restricted equity includes retained earnings and net profit for the year, which are available for distribution to the shareholders.

Consolidated equity consists of the share capital, other contributed capital, other reserves and retained earnings including profit for the year.

Other contributed capital in the Group refers to capital contributed by the shareholders. Other reserves include translation reserve, which consists of foreign exchange differences arising on translation of the financial statements of foreign operations. Retained earnings including profit for the year include profits earned in the Parent Company and its subsidiaries.

Reserves Other reserves at 31 December 2016 amounted to SEK -78.5M (-80.8). Translation differences affected the reserve in an amount of SEK 2.4M (-7.9) during the year.

Note 25 – Financial position

Group Parent Company
SEK M 2016 2015 2016 2015
Cash and cash equivalents 685.3 1,036.4 588.0 969.5
+ Interest-bearing investments 3.8 15.0 3.8 15.0
+ Current interest-bearing receivables 3.7 4.3 201.1 201.9
+ Non-current interest-bearing receivables 5.4 14.1 4.6 11.3
Interest-bearing assets 698.1 1,069.9 797.6 1,197.7
- Current interest-bearing liabilities 4.3 31.3
- Non-current interest-bearing liabilities 25.4 22.0
Interest-bearing liabilities 29.6 53.3
Net loan receivable at end of year 668.5 1,016.6 797.6 1,197.7

Note 26 – Events after the end of the reporting period

The Board of Directors proposes that the 2017 AGM approve an ordinary dividend of SEK 1.50 per share and an extraordinary dividend of SEK 0.50 per share, which is equal to a total distribution of SEK 138.7M.

Note 27 – Participations in group companies, the year's change

The divestiture in 2016 is the result of a fusion of dormant subsidiaries. Impairment losses in 2016 refer to the holding Bure Growth.

Note 28 – Shares in group

Parent Company
SEK M 2016 2015
Opening balance 1,384.2 1,364.6
Acquisitions/additions 10.4 19.6
Write-up 0.2
Divestiture -205.5
Closing balance 1,189.3 1,384.2
Opening impairment losses -1,281.2 -1,281.2
Divestiture 205.1
Impairment losses -28.0
Closing accumulated impairment losses -1,104.1 -1,281.2
Carrying amount 85.3 103.0
Note 28 – Shares in group % of Carrying
amount in
companies Portfolio company
SEK M
No. of
shares
capital/
votes
Parent Com
pany
Corporate ID
number
Domicile
Bure Financial Services AB 50,000 100.0 0.1 556943-6420 Stockholm
Bure Growth AB 50,000 100.0 2.0 556935-7550 Stockholm
Mercuri International Group AB 998,500 99.1 54.9 556518-9700 Stockholm
Investment AB Bure 1,000 100.0 28.0 556561-0390 Stockholm
Total portfolio companies 84.9
Other companies
Skanditek Aktiebolag 8,000 100.0 0.4 556541-9065 Stockholm
Total Other companies 0.4
Total 85.3

Note 29 – Financial assets at fair value through

profit or loss

SEK M No. of
shares
% of
capital/votes
Carrying
amount in
Parent Company
Carrying
amount
in Group
Corporate ID
number
Domicile
Cavotec SA 12,998,970 16.6 279.5 279.5 CH-501.3.015.724-3 Lugano, Schweiz
Lauritz.com Group A/S 4,595,333 11.3 37.0 37.0 DK 37 62 75 42 Söborg, Danmark
MedCap AB 3,041,017 22.7 105.5 105.5 556617-1459 Stockholm
Mycronic AB 29,317,163 29.9 2,873.1 2,873.1 556351-2374 Stockholm
Vitrolife AB 4,709,790 21.7 1,822.7 1,822.7 556354-3452 Göteborg
Xvivo Perfusion AB 4,891,483 20.7 430.5 430.5 556561-0424 Göteborg
Carrying amount 5,548.2 5,548.2

Other financial information

Liabilities
SEK M Assets excl. equity Revenue EBIT
Cavotec SA 2,334 947 2,003 116
Lauritz.com Group A/S 639 559 279 41
MedCap AB 628 319 896 17
Mycronic AB 2,755 1,343 2,319 691
Vitrolife AB 1,250 230 856 249
Xvivo Perfusion AB 349 33 138 3

Note 30 – Investments accounting for

using the equity method

SEK M No. of
shares
% of
capital/votes
Carrying
amount in
Parent Company
Carrying
amount
in Group
Corporate ID
number
Domicile
Dipylon Medical AB1 20,138 36.1 0.0 0.0 556241-3749 Stockholm
RushRail AB 449 30.3 0.0 0.0 556674-1228 Stockholm
Valot Group AB 35,000 35.0 0.0 0.0 556784-4005 Stockholm
Fondbolaget Fondita Ab2 654 20.1 46.9 0899688-5 Helsingfors
Idevall & Partners
Holding AB2
660,000 33.0 1.6 559018-1193 Stockholm
Life Genomics AB3 106,924 28.1 5.7 556993-1891 Göteborg
BioLamina AB3 447,419 20.3 19.6 556764-1872 Stockholm
Others 14.4
Carrying amount 0.0 88.2

1) The number of shares includes shares held by the subsidiary Skanditek Aktiebolag. Skanditek Aktiebolag holds 2,269 shares in Dipylon Medical.

2) The shares are owned by the subsidiary Bure Financial Services AB. 3) The shares are held by the subsidiary Bure Growth AB.

Bure's related parties are the members of the Board and companies closely related to them, Bure's subsidiaries, associated companies and the management in the Parent Company.

In 2016 the Board Chairman has provided consulting services to Bure under a contract.

For salaries and compensation to senior executives, see Note 35. Aside from fees from the Parent Company, non-executive Board members in the Parent Company have not received fees from subsidiaries in the Group.

Purchases and sales between the Parent Company and group companies are insignificant in scope. Profit in the Parent Company includes intra-group interest income SEK 5.0M (5.6) and interest expenses of SEK 0.0M (0.0).

Note 31 – Related party

transactions

Note 32 – Dividends received

Group Parent Company
SEK M 2016 2015 2016 2015
Catella 5.3 1.8
Cavotec 3.4 4.1 3.4 4.1
Mycronic 117.3 148.5 117.3 148.5
Vitrolife 11.3 7.1 11.3 7.1
Cindra 0.5
Valot 0.7 1.0 0.7 1.0
Dividends from short-term investments 0.7 0.1 0.7 0.1
Total 138.7 162.5 133.4 161.3

2016 2015

Note 33 – Average number of employees

No. of of whom, No. of of whom,
employees women employees women
Parent Company 6 1 6 1
Subsidiaries 256 129 274 126
Total Group 262 130 280 127
Parent Company
Sweden 6 1 6 1
Subsidiaries
Sweden 49 29 49 27
Denmark 4 2
United Kingdom 14 4 18 7
Finland 36 11 44 19
Germany 28 8 27 8
France 46 20 48 20
USA 11 7 12 6
China 30 17 30 17
Other countries 42 19 42 20
Total Group 262 116 280 127
Note 34 – Salary, other 2016 2015
compensation and social
security expenses
SEK M Salary
and other
comp.
Social
security
expenses
Pension
costs
Salary
and other
comp.
Social
security
expenses
Pension
costs
Pension costs are stated Parent Company 13.8 5.6 1.5 15.8 4.8 2.2
including payroll tax. Subsidiaries 182.5 39.1 12.9 198.4 40.8 17.1
Total Group 196.3 44.7 14.4 214.2 45.6 19.3
Note 35 – Compensation
to senior executives
Basic annual
Board fees
salary/ comp./bonus Variable Other
benefits1
Pension
costs
Total
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
1) Other benefits refer to Board Chairman 0.8 0.8 0.8 0.8
company car benefits. Other Board members 1.7 1.5 1.7 1.5
CEO 2.8 2.5 2.2 2.2 0.1 0.1 0.6 0.8 5.8 5.6
Other senior executives 3.0 2.9 1.9 1.9 0.6 0.6 5.5 5.4
8.3 7.7 4.1 4.1 0.1 0.1 1.2 1.4 13.7 13.3

Board of Directors The 2016 AGM resolved that Board fees would be paid in a total amount of SEK 2,450,000 (2,300,000), of which SEK 800,000 (800,000) to be paid to Patrik Tigerschiöld, the Board Chairman, and SEK 275,000 (250,000) to each of the other Board members, including Hans Biörck, Carl Björkman, Bengt Engström, Charlotta Falvin, Sarah McPhee and Mathias Uhlén. The Board consisted of a total of seven members during 2016 (7). No special fees have been paid for work on the Board's committees. The Board chairman received consultancy fees of SEK 2.5M during 2016.

Chief Executive Officer The CEO Henrik Blomquist had a contractual annual salary of SEK 2,8M. Bonuses have been paid in an
amount of SEK 2,2M (excluding social security expenses) for 2016. Pension premiums are of the defined
contribution type and correspond to 30 per cent of pension-qualifying salary, which consists of basic
salary. The retirement age for the CEO is 65 years. Bonuses may be paid in a maximum amount of 100
per cent of annual salary. Bonus payments are not pension-qualifying. The CEO has the right to a term
of notice of 12 months in the event of termination by the company and 12 months in the event of his
resignation. The CEO is entitled to termination benefits equal to 12 monthly salaries in the event of
termination by the company. Termination benefits are not payable in the event of retirement. Decisions
regarding the salary and benefits of the CEO are made by the Board of Directors.
Other senior executives Other senior executives refer to the CFO and one investment manager. The pension premiums are
ofthe defined contribution type and correspond to a maximum of 22.9 per cent of annual salary.
The pension cost refers to the cost excluding payroll tax that has been charged to the year's profit.
The retirement age for other senior executives is 65 years. Bonuses for other senior executives may
be paid in a maximum amount of 60 – 100 per cent of annual salary. Other senior executives have
a term of notice of 3 – 6 months in the event of termination by the company and 3 – 6 months in
the event of their own resignation. Termination benefits are not payable in the event of retirement.
Decisions regarding the salary of other senior executives are made by the CEO after consultation
with the Board of Directors.
Variable compensation
(bonus)
In 2016 Bure had a variable compensation system for all employees in which the maximum variable
salary component was 40 – 100 per cent of basic salary. 80 per cent of the bonus was based on
quantitative targets related to Bure's net asset value and share price performance, and the year's
focus regarding the portfolio companies. The remaining 20 per cent was based on discretionary
assessment.
For information about the preparatory and decision-making process applied by the company, see
the administration report.
Information about the senior executives' holdings of shares:
Henrik Blomquist, CEO, 44,766 shares.
Max Jonson, CFO, 15,234 shares.
Fredrik Mattsson, Investment Manager, 47,965 shares.
Note 36 – Gender Parent Company 2016 2015
distribution among Total no. of women on Board of Directors 2 2
senior executives Total no. of women in management
In the subsidiaries, 20 per cent Total no. of men on Board of Directors 5 5
(13) of the board members,
presidents and senior
Total no. of men in management 5 5
executives are women. Total no. of people on Board of Directors 7 7
Total no. of people in management 6 6

Note 37 – Proposed appropriation of profit The company's annual report will be submitted for adoption by the Annual General Meeting on 3 May 2017.

The following funds are at the disposal of the AGM according to the Parent Company balance sheet:

SEK 1,086,086,511
SEK 6,286,306,389

The Board proposes that the profits be appropriated as follows: To be paid to the shareholders as an ordinary dividend of SEK 1.50 per share and an extraordinary dividend of SEK 0.50 per share, for a total of SEK 138,665,420 To be carried forward to new account SEK 6,147,640,969

It is the Board's assessment that the proposed dividend is justifiable in view of the demands imposed by the operations' nature, scope and risks on the amount of equity in the Parent Company and the Group, as well as the consolidation requirements, liquidity and financial position in general.

Auditor's report

To the general meeting of the shareholders of Bure Equity AB (publ), corporate identity number 556454-8781

Report on the annual accounts and consolidated accounts

Opinions

We have audited the annual accounts and consolidated accounts of Bure Equity AB (publ) for the year 2016. The annual accounts and consolidated accounts of the company are included on pages 32-71 in this document.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of parent company as of 31 December 2016 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2016 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Our audit approach

Audit scope

We designed our audit by determining materiality and assessing the risks of material misstatement in the consolidated financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the group operates.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole. These, together with qualitative considerations, helped

us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Key audit matters

Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the Key audit matter
Valuation of financial instruments
Bure's assets consist mainly of listed shares. For
most financial instruments as Bure is a part of an
active market with marketprices exists.
We have tested and evaluated the design and effectiveness of
Bures controls regarding pricing and monitoring of the
pricing of financial instruments.
To a lesser extent there are holdings where the
valuation is based on other market data than market
prices in the same instrument.
For those instruments that are listed, we evaluated Bures
controls for the collection of prices from external sources and
we have conducted testing of prices by reconciliation against
external sources.
In a portfolio of financial instruments as Bures there
are normally several valuation issues that needs to
be established to ensure an proper valuation of
listed and unlisted financial instruments in
accordance with IFRS
For those instruments that are not listed, we evaluated the
models and the market data Bure used for the valuation.
We have also conducted testing of the valuation of unlisted
instruments against independent data sources.

Other Information than the annual accounts and consolidated accounts

This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-31. The Board of Directors and the Managing Director are responsible for this other information.

Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.

In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

[The Audit Committee shall, without prejudice to the Board of Director's responsibilities and tasks in general, among other things oversee the company's financial reporting process.]

Auditor's responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.

A further description of our responsibility for the audit of the annual accounts and consolidated accounts is available on Revisorsnämnden's website: www.revisorsinspektionen.se/rn/showdocument/documents/ rev_dok/revisors_ansvar.pdf. This description is part of the auditor´s report.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Bure Equity AB (publ), for the year 2016 and the proposed appropriations of the company's profit or loss.

We recommend to the general meeting of shareholders that the profit be appropriated (dealt with) in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for Opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfil the company's accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

  • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or
  • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.

A further description of our responsibility for the audit of the administration is available on Revisorsnämnden's website: www.revisorsinspektionen.se/rn/showdocument/documents/rev_dok/revisors_ansvar.pdf. This description is part of the auditor´s report.

Stockholm the 15 March 2017 Öhrlings PricewaterhouseCoopers AB

Michael Bengtsson Authorized Public Accountant

Definitions

Basic earnings
per share
Profit/loss after tax divided by the average number of shares outstanding during the year.
For the Group, net profit less the non-controlling interests' share in profit for the year.
Diluted earnings
per share
Profit after tax divided by the average number of shares outstanding during the year after dilution.
For the Group, net profit less non-controlling interests' share in profit for the year. The average
number of shares after full dilution is calculated according to the rules in IFRS, IAS 33 Earnings
per Share.
Direct return Dividend proposed to the AGM and extra dividends paid during the year divided by the share price
at 31 December.
EBIT Operating profit before goodwill impairment and amortisation of excess values arising on
consolidation plus amortisation/depreciation of non-current assets.
Equity/asset ratio Equity in relation to total assets. As of the transition to IFRS on 1 January 2005, non-controlling
interests are included in total equity.
Equity per share Equity divided by the number of shares outstanding. As of the transition to IFRS on 1 January 2005,
non-controlling interests are included in total equity.
Growth Increase in net sales in relation to net sales for the previous year. The key figure thus includes
both organic and acquisition-driven growth.
IRR Internal Rate of Return.
Market capitalisation Share price multiplied by the total number of shares outstanding.
Net asset value The market value of Bure's listed holdings (valued at fair values) plus the book value of unlisted
holdings and cash
and cash equivalents.
Net loan liability Same definition as net loan receivable, but is used when interest-bearing liabilities exceed
interest-bearing assets.
Net loan receivable Financial interest-bearing assets minus interest-bearing liabilities.
Return on equity Profit/loss after tax divided by average equity.
Share buyback For several years, Swedish companies have been permitted to repurchase up to 10 per cent of their
own outstanding shares, provided that this is approved by the Annual General Meeting within the
framework of non-restricted equity.
Total return The total of the year's share price growth and reinvested dividends divided by the share price at
the beginning of the year.

Shareholder information

Financial calendar 2017

Interim report January – March 27 April
Annual General Meeting 3 May
Interim report January – June 17 August
Interim report January – September 9 November

Distributionspolicy

Bure's annual report is sent by mail to all persons who so request. Interim reports are distributed only in digital form. To subscribe, visit http://www.bure.se/investors/

Investor relations /Shareholder contact

Max Jonson, +46 (0)8-614 00 20 [email protected]

Contact Bure Equity AB

Address: Nybrogatan 6, 114 34 Stockholm
Phone: +46 (0)8 614 00 20
Fax: +46 (0)8 614 00 38
E-mail: [email protected]
Website: www.bure.se

Annual General Meeting of Bure Equity AB (publ)

The Annual General Meeting will be held on 3 May 2017, at 4:00 p.m. at IVA's Conference Centre, Wallenbergsalen, Grev Turegatan 16, in Stockholm. The doors will open at 3:00 p.m. Coffee will be served prior to the meeting.

Participation

Shareholders who wish to participate in the AGM must be entered in the register of shareholders maintained by Euroclear Sweden AB no later than 26 April 2017.

In order to participate in the AGM, shareholders whose shares are registered in the name of a nominee must temporarily re-register the shares in their own names with Euroclear Sweden AB.

Shareholders must notify their nominees well in advance to ensure that an entry is made in the register of shareholders by 26 April 2017.

Notification

Notice of participation must be received by Bure no later than 12:00 p.m. on 26 April 2017 via

Mail: Bure Equity AB, Nybrogatan 6, SE-114 34 Stockholm
E-mail: [email protected]
Phone: +46 (0)8 614 00 20
Fax: +46 (0) 8 614 00 38

The notification should include the shareholder's name, personal/corporate identity number, address, telephone number and special mention if the shareholder wishes to be accompanied by an assistant (no more than two). Shareholders who wish to be represented by a proxy must submit a dated form of proxy. The original proxy document must be sent to the company at the above address well in advance of the AGM. Persons representing a legal entity must enclose a copy of the registration certificate or other appropriate document.

An entrance card will be sent by mail after 26 April 2017.

Text and production: Bure in collaboration with Bullhoundmedia AB Photographer: Pär Olsson Share: SIX Financial Information Nordic Print: Åtta.45 Tryckeri AB, Stockholm

BURE EQUITY AB 71

Bure Equity AB (publ) Nybrogatan 6, SE-114 34 Stockholm, Sweden Phone: +46 8-614 00 20 Corporate ID number: 556454-8781 [email protected] www.bure.se

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