Annual Report • Apr 21, 2016
Annual Report
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| Letter from the CEO | 3 |
|---|---|
| Board of Directors and management | 4 |
| Report from the Board of Directors | 6 |
| Financial Statements | 13 |
| Responsibility Statement | 55 |
| Auditor's Report | 56 |
| Corporate Governance | 58 |
Axactor aims at becoming a high-growth debt collection/debt purchase company with a Nordic base and an ambitious pan-European strategy.
Axactor´s focus is on Europe's large non-performing loan (NPL) market, which is estimated at around EUR 1.5 trillion in size. The main growth factors, partly driven by regulatory changes, are sales of non-performing loans and increasing outsourcing of debt collection to specialised companies. We also see a consolidation trend in the debt collection/debt purchase industry.
Our main credit management priorities are amicable collection and legal enforcement, debt surveillance and acquisition of NPLs.
The first step under our pan-European growth strategy was the acquisition of ALD Abogados, one of Spain's leading debt collection agencies. The company's robust customer base, and our amicable collection call center in Valladolid, will constitute the platform for future growth in debt collection and NPL portfolio acquisitions in Spain.
In the first quarter of 2016, Axactor acquired portfolios in the Spanish market with a face value of more than EUR 700 million. In addition to the 200 employees in Axactor Spain, we recently acquired a debt collection company in Norway, IKAS, with 75 employees and solid track record in the Norwegian market.
We are currently also exploring growth markets in several other European countries, including potential carve-outs of collection platforms from financial services institutions.
Axactor has specific strengths that will allow us to pursue these market opportunities successfully:
We have embarked on an exciting journey which I look forward to sharing with our customers, investors, employees and business partners.
Endre Rangnes, CEO
Einar J. Greve Chairman
Mr. Greve works as a strategic advisor in Cipriano AS. Mr. Greve has previously worked as partner at Wikborg Rein & Co for 15 years and as partner of Arctic Securities ASA. Mr. Greve has held and holds various positions in Norwegian listed and unlisted companies. He holds a degree in law (cand.jur) from the University of Oslo. He is a Norwegian citizen and resides in Oslo, Norway.
Mr. Hvammen works as an active investor – taking active part in some companies with investments and time. Mr. Hvammen owns and operates through Lauvheim Holding AS and its wholly owned companies Solan Capital AS and Thabo Energy AS. He has previously been board member, chairman of the board and president for oil service related companies, a senior partner, president and co-founder of rig brokerage company Normarine (today Pareto Offshore), and partner in a financial house in Norway, Fondsfinans ASA.
Mr. Dalemo is partner and chairman of the board at Wistrand Gøteborg. He has a law degree from the University of Gothenburg. He has previously worked for MAQS Law firm and for New Wave Group. Mr. Dalemo advises public and private firms in a wide variety of M&A transactions, including strategic mergers and consolidations, purchases and sales of public and private companies. He frequently advises boards in connection with their evaluation of potential M&A opportunities and other strategic alternatives. Mr. Dalemo joined Wistrand in 2009.
CEO in Lindorff Group AB (2010 – 2014), CEO of EDB Business Partner ASA, now EVRY ASA (2003 – 2010). Prior work experience includes various positions within the IBM Group (including being Country Manager Norway and serving as member of IBM Nordic's executive and top management teams). Other current assignments/positions: Board member of Tieto Ojy.
Ms Siv Farstad has more than 5 years of experience from the industry. Prior to joining Axactor, Ms Farstad held the position as HR executive of Kommunalbanken. She held the position as Senior Vice President HR for Lindorff from January 2011 until May 2015. Earlier she served as HR manager for Microsoft Development Center Norway and EVP HR for NRK.
Geir Johansen joined Axactor as CFO, Head of IR and Risk & Compliance, in January 2016. Before joining Axactor he held the position as CFO at Fred. Olsen Ocean in Oslo. Over the last 20 years, Mr Johansen has lived and worked in the Americas, Europe as well as North and South East Asia having held CFO positions in DOF Subsea ASA, S.D. Standard Drilling Plc and GSP Offshore. Earlier in his career Mr. Johansen worked 13 years in DNGL where he last held position as Finance Director for DNV Maritime globally.
8 years of experience from working with the Lindorff Group. He has his main focus on PMI/cost and productivity improvement. Broad international experience, more than 5 years on projects abroad, primarily in Spain, Germany, the US, the Netherlands, Denmark, Sweden and Finland. Former work experience includes positions as partner at Cardo Partners AS, partner at DHT Corporate Services, Handelsbanken Capital Markets and Arkwright.
COO in Lindorff Group (2010 - 2014). COO of EDB Business Partner (2003 - 2010). Prior work experience includes various positions within IBM Norway, including being Departemental Director with responsibility for monitoring and coordinating IBM Norway overall activities.
| SEK thousand | 2015 | 2014 | 2013 1) |
|---|---|---|---|
| Total revenues | 4,437 | 75 | 8 |
| EBITDA 2) | -30,592 | -9,665 | -21,437 |
| EBIT | -31,429 | -9,665 | -41,481 |
| Net result attributable to shareholders of parent company | -166,606 | -45,986 | -116,994 |
| Investments (MSEK) | 188.4 | 5.9 | 53.1 |
| Cash at end of period | 372,375 | 61,502 | 15,288 |
| Interest bearing debt at end of period | 5,500 | 9,000 | 9,931 |
| Total assets (MSEK) | 604.8 | 175.0 | 158.9 |
| Solidity (%) | 78.9 | 91.9 | 78.5 |
1) Figures from remaining operations as reported in FY 2014 annual report
2) Relates only to remaining operations
Axactor AB ("Axactor", "the company", or "the group") aims at becoming a high-growth debt collection/debt purchase company. The company has been focused on building an efficient, high-quality company from day one, by recruiting an experienced management team, securing a solid investor base and acquiring a leading Spanish debt collection company. Axactor is investing in new technology and standardised systems to facilitate the delivery of top-class debt collection services. Further, the company has relevant expertise and sufficient funding to acquire large nonperforming loan portfolios. Axactor will focus on amicable collection and legal enforcement, including debt surveillance.
The company is registered in Sweden and listed on the Oslo Stock Exchange (ticker "AXA").
Axactor has some 6,600 shareholders, and the management is based in Oslo. There were at year-end 2015 596,614,369 shares outstanding, as well as warrants carrying subscription rights for an additional 55.5 million shares.
On 31 December 2015, Axactor sold its two former nickel subsidiaries to the Swedish mineral company Archelon. The results of the nickel subsidiaries have been incorporated into Axactor's group accounts for 2015. However, the nickel business's assets and liabilities were de-consolidated on the last day of December.
In Spain, Axactor owns 100% of the subsidiary ALD Abogados SL ("ALD"), which is one of the leaders in the Spanish legal debt collection market covering nearly all regions of this country. The company's full-year 2015 revenues totalled approximately EUR 10 million, and resulted in EBITDA of approximately EUR 3.7 million. However, since ALD was only consolidated with the Axactor group in early December, only the December share of 2015 revenues and costs is included in Axactor's external accounts for 2015.
Axactor was formerly Nickel Mountain Group AB ("NMG"), a Swedish mineral exploration and appraisal company. NMG's key asset was the Rönnbäcken nickel sulphide deposit in Västerbotten county in Northern Sweden.
NMG was also previously involved in mineral exploration activities in a number of African countries. In June 2014, NMG disposed of the African assets by dividing out its subsidiary African Diamond AB to the NMG shareholders in order to concentrate the operations.
Axactor had 105 employees as at 31 December 2015, including five in Norway. In December 2014, the group had three employees.
Prior to the acquisition of ALD, the group employed only one person, on a consultancy basis, to supervise both the Rönnbäcken nickel project and group administration matters. On 19 November 2015, the company appointed a new CEO, Endre Rangnes.
The company practices a policy of equal treatment in connection with assignments and promotions, and regards the promotion of a positive working environment as key to the company's future.
No accidents or injuries were recorded in 2015.
A new Board of Directors was elected at an extraordinary general meeting on 23 December 2015, comprising Einar Greve (chairman), Gunnar Hvammen and Per Dalemo.
Axactor's debt collection business is non-polluting. The company is committed to ensuring that its operations are safe and do not harm neither its staff nor the natural environment. The company also strives to provide all employees with a healthy and safe working environment. Quality, health, safety and the environment are integral aspects of the company's business, and systems are in place to monitor and follow up on any and all accident and incidents.
The board and management of Axactor are committed to maintaining high ethical standards and promoting good corporate governance. The company believes that good corporate governance builds confidence among shareholders, customers and other stakeholders, and thereby supports maximal value creation over time. The equal treatment of all shareholders lies at the heart of the company's corporate governance policy. The company has only one class of shares, and all shareholders have equal rights.
The company has got two share series, ordinary shares and A-shares. The latter is a temporary share series which was introduced in autumn 2015 in order to enable the various share issues. The share series differ in that ordinary shares
carry one vote each while as the A-shares have 0.99 votes each. All shareholders otherwise have equal rights.
Axactor's corporate governance report is based on the Norwegian Code of Practice for Corporate Governance dated 30 October 2014. The report is presented in this annual report and on the company's website.
The board and management of Axactor have implemented guidelines on values and ethics. The objective is to create a sound corporate culture and preserve Axactor's integrity by helping employees to follow good business standards. Raising awareness of the guidelines has been the company's main action in this area. The company is not aware of any breach of the guidelines.
The company expects to implement more extensive guidelines and corporate social responsibility measures following the acquisition of ALD.
Axactor's shares are listed on the Oslo Stock Exchange under the ticker "AXA". As per the end of 2015, the company had 596,614,360 outstanding shares, held by 6 605 shareholders. The nominal value of the Axcator share is SEK 0.50.
The company's EGM, held on 23 December 2015, authorised the Board of Directors to approve new issues of shares or convertible debt instruments irrespective of whether such an issue entails variation of shareholders' preferential rights. The maximum dilution permitted under this authorisation is 30%, which translates into 280,000,000 new shares based on the number of issued shares at year-end 2015, including warrants. The authorisation is valid until the AGM in the spring of 2016.
Further, an EGM held on 17 November 2015 authorised the issue of up to 55.5 million incentive options to the new management team. Each option entitles the holder to subscribe for one new ordinary share.
The company estimates that it has sufficient working capital for the 12 months following the balance sheet date. Pursuant to section 3(3a) of the Norwegian Accounting Act, the Board of Directors therefore confirms that the going-concern assumption is met and that the annual accounts have been prepared in accordance with this assumption.
The company has given considerable emphasis to providing shareholders and investors with timely, relevant new information on the company and its activities in compliance with applicable laws and regulations. Axactor is committed to increasing awareness of its shares in Norway and abroad. The list of shareholders includes a substantial number of Nordic institutional and private investors.
The net post-tax full-year result for 2015 is MSEK -166.6. The net result from remaining operations was MSEK -61.3 (MSEK -9.7), while the result for discontinued operations was MSEK -105.3 (MSEK -36.3). The total comprehensive result for the year as a whole was MSEK -166.7 (MSEK -47.1).
Earnings per share (EPS) for the 12-month period ending 31 December 2015 amounted to SEK -0.46, excluding discontinued operations (SEK -0.32). EPS including discontinued operations totalled SEK -1.25 for 2015 and SEK -1.54 for 2014.
Sale revenues for the year amounted to MSEK 4.4 (MSEK 0). The Spanish subsidiary ALD was consolidated into the group in December 2015, and its revenues therefore made a limited contribution to the group P&L. The nickel operations were at the pre-feasibility stage, and generated no revenues in either 2015 or 2014.
The loss of MSEK -166.6 for the year is mainly attributable to the almost full impairment of the nickel operation in 2015 and the resulting impairment costs and realisation loss of MSEK 113.8.
Transaction costs relating to the acquisition of ALD in Spain amounted to MSEK 15.7. Unrealised foreign exchange losses amounted to MSEK 19.9, as the majority of cash was held in NOK.
As the nickel operations are classified as discontinued operations, essentially all of the group's recorded depreciation and impairment charges relate to the discontinued part of the business. Depreciation and impairment pertaining to discontinued operations amounted to MSEK -104.4 (MSEK -33.9) in 2015.
Net financial items relating to remaining operations amounted to MSEK –29.9 (MSEK 0) in 2015. This figure includes a realisation loss of MSEK -9.5 in respect of the divested nickel subsidiaries and an unrealised foreign exchange loss of MSEK -19.9.
Axactor had cash flow of MSEK 310.8 during the 12-month period January–December 2015 (MSEK 46.2). The positive figure for 2015 is the result of sizable share issues in the last quarter of 2015.
At the end of December 2015, Axactor's assets totalled MSEK 604.8, compared to MSEK 175.0 at the end of 2014. The nickel subsidiaries were deconsolidated by year-end 2015. The Spanish subsidiary ALD has been included in the group balance sheet, as have the net issue proceeds received in November and December 2015, after deduction for various issue and legal costs. Further, in early December 2015, the sellers of ALD received cash consideration of EUR 10 million and EUR 5 million in newly issued Axactor shares.
Investments in 2015 amounted to MSEK 188.4, all related exclusively to the ALD acquisition.
At the end of December 2015, cash and cash equivalents amounted to MSEK 372.4 (MSEK 61.5). Most of the liquid assets are held in the Norwegian currency, NOK. At year-end, equity totalled MSEK 477.0 (MSEK 160.8), representing an equity ratio of 79 per cent.
Short-term loans and other short-term liabilities amounted to MSEK 111.0 (MSEK 5.2) at the end of the fourth quarter of 2015. Approximately half of this amount relates to an earnout agreement linked to the ALD acquisition and a post-closing adjustment for ALD's actual working capital on the takeover date. These two components were estimated to have a joint value of MSEK 51 at the end of December 2015, and form part of the Axactor group's total short-term liabilities.
Based on the strategy and ramp-up plan for Axactor, the board has proposed that no dividend be paid for 2015.
The auditor´s report includes a remark related to an accrued cost of SEK 13,5 million which in the opinion of the auditor has not been sufficiently documented. The accrual relates to the company's assessment of the cost that will be invoiced to the company in 2016 for services rendered in 2015. The cost relates to external hired assistance of legal services pertaining to collection activities in ALD. The board acknowledges the remark as it reflects a conservative approach to cost provisions for external services, and recognizes that the newly acquired ALD for 2016 and going forward will be keeping the accounts in accordance with IFRS principles and the Axactor Group's accounting policy.
The parent company's business is management of the group's operations. The post-tax result for the full financial year 2015 amounted to MSEK -204.8 (MSEK -41.1). The loss is primarily due to the abandonment of the nickel operations following adoption of the new business concept. The exit from the nickel segment necessitated a nearly full impairment of the holding values of the shares in the nickel subsidiaries and all receivables owned by these companies.
Cash and cash equivalents held by the parent company amounted to MSEK 142.9 at the end of December 2015 (MSEK 61.4).
Proposed allocation of the company's result (SEK) SEK 2015
| 1,468,788,486 |
|---|
| -1,071,213,151 |
| -204,756,757 |
| 192,817,578 |
The Board of Directors recommends the following allocation: Retained earnings brought forward 192,817,578
In 2015, ALD generated total revenues of approximately EUR 10 million, and achieved EBITDA of EUR 3.7 million. In 2014, ALD's revenues were some EUR 7 million, implying continued local-market growth in the past year. However, only the proportion of ALD's revenues attributable to the postacquisition period (MSEK 4.4 during December 2015) have been incorporated into the Axactor group's P&L account.
The nickel operations were discontinued on the last day of 2015. The nickel subsidiaries were sold to Archelon, with consideration taking the form of newly issued Archelon shares. Axactor received shares corresponding to 4.6 per cent of the capital and votes of the buyer. The financial effect the divestment was MSEK -114 in 2015. The majority of this amount is accounted for as impairment, although a minor realisation loss was also recorded in Axactor's external accounts in connection with deconsolidation of the operations.
Axactor's regular business activities entail exposure to various types of risk. The company manages such risks proactively, and the Board of Directors regularly analyses its operations and potential risk factors and takes steps to reduce risk exposure. Axactor gives strong emphasis to quality assurance, and has quality systems implemented, or under implementation, in line with the requirements applicable to its business operations.
The complete range of risk factors is discussed in detail in Note 2.
Axactor aims at becoming a high-growth debt collection/ debt purchase company with a Nordic base and an ambitious pan-European strategy.
Through ADL, the company has gained a foothold in the Spanish debt collection/debt purchase market. NPL sale volumes are expected to remain high in Spain and other European countries. In February 2016, the company acquired its first unsecured NPL portfolio, originally generated by a Spanish local savings bank.
The acquisition proves that Axactor is a key contender for the many portfolios expected to enter the market going forward. The company has also secured a third-party collection contract with Santander Consumer Finance, demonstrating the company's debt collection know-how and expertise in dealing with global financial brands.
In March 2016, the company acquired IKAS AS and established a debt collection and portfolio acquisition platform in the Norwegian market.
The acquisition of IKAS AS was in line with the strategy of establishing credit management operations in growth markets. Axactor has a solid financial position, an experienced management team and the infrastructure needed to generate future growth and value creation.
The company's priorities for 2016 are as follows:
The company plans to enter new growth markets in the period 2016–2018 through platform and portfolio acquisitions in Germany and Italy. Axactor will also facilitate cost optimisation and synergies by integrating all platforms into a single debt collecting group. In addition, the company will seek out accretive platform investments.
The Board of Directors considers that the outlook for Axactor is positive, both in 2016 and beyond.
Stockholm, 20 April 2016 The Board of Directors
Einar J. Greve Chairman
Gunnar Hvammen Board member
Per Dalemo Board member
| Consolidated Statement of Loss | 14 |
|---|---|
| Consolidated Statement of Comprehensive Loss | 15 |
| Consolidated Statement of Financial Position | 16 |
| Consolidated Statement of Financial Position | 17 |
| Consolidated Statement of Changes in Equity | 18 |
| Consolidated Statement of Cash Flow | 19 |
| Parent Company Income Statement | 20 |
| Parent Company Balance Sheet | 21 |
| Parent Company Statement of Changes in Equity | 22 |
| Parent Company Statement of Cash Flow | 23 |
| Notes to the Financial Report | 25 |
| SEK thousand | Note | 12 m Jan - Dec 2015 |
12 m Jan - Dec 2014 |
|---|---|---|---|
| Continued operations | |||
| Net income | 3, 4 | 4,437 | - |
| Other operating income | - | 75 | |
| Total operating income | 4,437 | 75 | |
| Other external expenses | 7, 8 | -29,940 | -9,927 |
| Personnel expenses | 5, 6 | -5,089 | 187 |
| Operating result before depreciation and impairment losses | -30,592 | -9,665 | |
| Depreciation/amortization and impairment loss on tangible, intangible and financial fixed assets | 11 | -837 | - |
| Operating result after impairment losses | -31,429 | -9,665 | |
| Financial revenue | 12 | 329 | 3,105 |
| Financial expenses | 12 | -30,218 | -3,111 |
| Total financial items | -29,889 | -6 | |
| Result before tax | -61,318 | -9,671 | |
| Income tax | - | - | |
| Result for the period from remaining operations | -61,318 | -9,671 | |
| Loss from discontinued operations | -105,288 | -36,336 | |
| Result for the period | -166,606 | -46,007 | |
| Result for the period attributable to: | |||
| Equity holders of the Parent Company | -166,606 | -45,986 | |
| Non-controlling interest | - | -21 | |
| Result for the period | -166,606 | -46,007 | |
| Result per share before and after dilution, including discontinued operations | 14 | -1.25 | -1.54 |
| Result per share before and after dilution, excluding discontinued operations | 14 | -0.46 | -0.32 |
| Average number of shares (Millions) | 14 | 133.7 | 29.8 |
| SEK thousand | 12 m Jan - Dec 2015 |
12 m Jan - Dec 2014 |
|---|---|---|
| Result for the period | -166,606 | -46,007 |
| Items that could be reclassified to the income statement: | ||
| Foreign currency translation differences - foreign operations | -96 | -1,081 |
| Total other comprehensive loss | -166,702 | -47,088 |
| Total comprehensive loss for the period attributable to: | ||
| Equity holders of the Parent Company | -166,702 | -47,067 |
| Non-controlling interest | - | -21 |
| SEK thousand | Note | 31.12.2015 | 31.12.2014 |
|---|---|---|---|
| ASSETS | |||
| Fixed Assets | |||
| Intangible fixed assets | |||
| Mineral interests | 11 | - | 111,676 |
| Customer relationships | 11 | 37,125 | - |
| Database | 11 | 7,530 | - |
| Other intangible assets | 11 | 448 | - |
| Goodwill | 11 | 124,467 | - |
| Tangible fixed assets | |||
| Plant and machinery | 11 | 549 | 551 |
| Long-term financial fixed assets | |||
| Other long-term investments | 10, 11, 34 | 267 | 359 |
| Total fixed assets | 170,386 | 112,617 | |
| Other receivables | 15 | 58,284 | 696 |
| Prepaid expenses | 16 | 3,760 | 161 |
| Cash and cash equivalents | 17 | 372,375 | 61,502 |
| Total current assets | 434,419 | 62,359 | |
| TOTAL ASSETS | 604,805 | 174,976 |
| SEK thousand | Note | 31.12.2015 | 31.12.2014 |
|---|---|---|---|
| EQUITY AND LIABILITIES | 18, 19 | ||
| Equity attributable to equity holders of the parent company | |||
| Share capital | 298,307 | 45,405 | |
| Other paid-in capital | 1,468,788 | 1,256,648 | |
| Reserves | -96 | - | |
| Retained earnings and profit for the period | -1,290,007 | -1,141,416 | |
| 476,992 | 160,637 | ||
| Non-controlling interest | - | 157 | |
| Total equity | 476,992 | 160,794 | |
| Long-term Liabilities | |||
| Convertible loan | 21 | 5,000 | 5,000 |
| Deferred tax liabilities | 20 | 11,357 | - |
| Other long-term liabilities | 22 | 500 | 4,000 |
| Total long-term liabilities | 16,857 | 9,000 | |
| Current liabilities | |||
| Accounts payable | 23 | 12,420 | 1,560 |
| Tax liabilities | 9,963 | - | |
| Other short-term liabilities | 24 | 64,088 | 1,146 |
| Accrued expenses and prepaid income | 25 | 24,485 | 2,475 |
| Total current liabilities | 110,956 | 5,181 | |
| TOTAL EQUITY AND LIABILITIES | 604,805 | 174,976 | |
| Pledged assets | 26 | 4,000 | 31 |
| Contingent liabilities | - | - |
| Equity related to the shareholders of the Parent Company | |||||||
|---|---|---|---|---|---|---|---|
| SEK thousand | Share capital |
Other paid in capital |
Exchange differences |
Retained earnings and profit for the year |
Total | Non controlling interest |
Total Equity |
| Balance on 1 January 2014 | 45,437 | 1,174,207 | 1,081 | -1,096,021 | 124,704 | 80 | 124,784 |
| Net result for the period | - | - | - | -45,987 | -45,987 | -20 | -46,007 |
| Comprehensive loss for the period | - | - | -1,081 | - | -1,081 | - | -1,081 |
| Total comprehensive result | - | - | -1,081 | -45,987 | -47,068 | -20 | -47,088 |
| Set-off and new share issues | 36,317 | 55,174 | - | - | 91,490 | - | 91,490 |
| Share capital reduction | -36,349 | 36,349 | - | - | - | - | - |
| Cost related to fund raising | - | -7,950 | - | - | -7,950 | - | -7,950 |
| Dividend | - | - | - | -568 | -568 | - | -568 |
| Other transactions | - | -1,132 | - | 1,161 | 29 | 97 | 126 |
| Closing balance on 31 December 2014 | 45,405 | 1,256,648 | - | -1,141,415 | 160,637 | 157 | 160,794 |
| Balance on 1 January 2015 | 45,405 | 1,256,648 | - | -1,141,415 | 160,637 | 157 | 160,794 |
| Net result for the period | - | - | - | -166,606 | -166,606 | - | -166,606 |
| Comprehensive loss for the period | - | - | -96 | - | -96 | - | -96 |
| Total comprehensive result | -96 | -166,606 | -166,702 | -166,702 | |||
| New share issues | 252,902 | 253,503 | - | - | 506,405 | - | 506,405 |
| Costs related to fund-raising | - | -24,280 | - | - | -24,280 | - | -24,280 |
| Reclassification | - | -17,070 | - | 17,070 | - | - | - |
| Sale of subsidiaries | - | - | - | 946 | 946 | -157 | 789 |
| Other transactions | - | -13 | - | - | -13 | - | -13 |
| Closing balance on 31 December 2015 | 298,307 | 1,468,788 | -96 | -1,290,006 | 476,992 | - | 476,992 |
The total number of shares outstanding as of the end of December 2015 is 596,614,360
| SEK thousand | 12 m Jan - Dec 2015 |
12 m Jan - Dec 2014 |
|---|---|---|
| Cash flow from operations | ||
| Result after financial items including discontinued operations 1) | -166,606 | -46,007 |
| Adjustments for non-cash items 2) | 134,586 | 31,468 |
| Total cash flow from operations before change in working capital | -32,020 | -14,539 |
| Change in working capital | ||
| Increase/decrease in receivables | 2,133 | 2,041 |
| Increase/decrease in short term liabilities | 5,852 | -4,665 |
| Total cash flow from operations | -24,036 | -17,163 |
| Cash flow used for investments | ||
| Purchase of intangible fixed assets | - | -5,162 |
| Purchase of tangible fixed assets | - | -691 |
| Purchase of financial fixed asset | -82,691 | - |
| Sale of financial fixed assets | - | 2,000 |
| Total cash flow used for investments | -82,691 | -3,853 |
| Financial activities | ||
| New share issues | 460,386 | 74,081 |
| Cost related to fund-raising | -24,281 | -7,950 |
| Raised credits | - | 1,098 |
| Amortization of debt | -1,099 | - |
| Total cash flow from financial activities | 435,006 | 67,229 |
| Change in cash and bank | 328,279 | 46,213 |
| Exchange difference in liquid funds | -17,406 | - |
| Cash and bank on 1 January | 61,502 | 15,289 |
| Cash and bank at the end of report period | 372,375 | 61,502 |
| 1) Financial items | ||
| Financial income | 329 | 3,105 |
| Financial costs | -30,218 | -3,111 |
| -29,889 | -6 | |
| 2) Adjustments for non-cash items | ||
| Impairment losses on intangible fixed assets | 104,310 | 33,685 |
| Depreciation of tangible fixed assets | 973 | 180 |
| Exchange loss | 19,771 | -1,081 |
| Loss from sold companies | 9,532 | |
| Other | - | -1,316 |
| Total | 134,586 | 31,468 |
| SEK thousand | Note | 12 m Jan - Dec 2015 |
12 m Jan - Dec 2014 |
|---|---|---|---|
| Other operating income | - | 75 | |
| Other external expenses | 7 | -24,740 | -10,316 |
| Personnel expenses | 5, 6 | - | 187 |
| Depreciation / impairment of financial fixed assets | -160,799 | -30,000 | |
| Operating result | -185,539 | -40,054 | |
| Result from financial items | |||
| Financial revenue | 12 | 1,665 | 2,023 |
| Financial expenses | 12 | -20,883 | -3,111 |
| Total financial items | -19,218 | -1,088 | |
| Result before tax | -204,757 | -41,142 | |
| Result for the period | -204,757 | -41,142 |
| SEK thousand | Note | 31.12.2015 | 31.12.2014 |
|---|---|---|---|
| ASSETS Tangible Fixed Assets |
|||
| Long-term financial fixed assets | |||
| Shares in subsidiaries | 27 | 2,185 | 97,247 |
| Receivables from subsidiaries | 28 | 366,360 | 70,468 |
| Total fixed assets | 368,545 | 167,715 | |
| Current Assets | |||
| Other receivables | 15 | 1,704 | 584 |
| Prepaid expenses | 16 | 97 | 65 |
| Cash and cash equivalents | 17 | 142,948 | 61,366 |
| Total current assets | 144,749 | 62,015 | |
| TOTAL ASSETS | 513,294 | 229,730 | |
| SHAREHOLDERS' EQUITY | 18, 19 | ||
| Restricted equity | |||
| Share capital | 298,307 | 45,405 | |
| Statutory reserve | 2,300 | 2,300 | |
| Total restricted equity | 300,607 | 47,705 | |
| Non-restricted equity | |||
| Share premium reserve | 1,468,788 | 1,239,565 | |
| Retained earnings | -1,071,212 | -1,030,070 | |
| Result for the period | -204,757 | -41,142 | |
| Total non-restricted equity | 192,819 | 168,353 | |
| TOTAL SHAREHOLDERS' EQUITY | 493,425 | 216,057 | |
| LIABILITIES | |||
| Long-term liabilities | |||
| Convertible loan | 21 | 5,000 | 5,000 |
| Interest bearing long-term liabilities | 22 | - | 4,000 |
| Total long-term liabilities | 5,000 | 9,000 | |
| Current Liabilities | |||
| Accounts payable | 23 | 5,972 | 1,388 |
| Other liabilities | 24 | 4,049 | 1,099 |
| Accrued expenses | 25 | 4,848 | 2,186 |
| Total current liabilities | 14,869 | 4,673 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 513,294 | 229,730 | |
| Pledget assets | 26 | 4,000 | - |
| Contingent liabilities | - | - |
| Restricted Equity | Non restricted Equity | ||||||
|---|---|---|---|---|---|---|---|
| SEK thousand | Share capital | Statutory reserve |
Share premium reserve |
Retained earnings |
Result for the period |
Total Equity |
|
| Balance on 1 January 2014 | 45,437 | 2,300 | 1,148,042 | -911,164 | -110,388 | 174,228 | |
| Transfer of prior year's net result | - | - | - | -110,388 | 110,388 | - | |
| Costs related to fund-raising | - | - | - | -7,950 | - | -7,950 | |
| Dividend | - | - | - | -568 | - | -568 | |
| Set off- and new share issues | 36,317 | - | 55,174 | - | - | 91,490 | |
| Share capital reduction | -36,349 | - | 36,349 | - | - | - | |
| Result for the period | - | - | - | - | -41,142 | -41,142 | |
| Closing balance on 31 December 2014 | 45,405 | 2,300 | 1,239,565 | -1,030,070 | -41,142 | 216,057 | |
| Balance on 1 January 2015 | 45,405 | 2,300 | 1,239,565 | -1,030,070 | -41,142 | 216,057 | |
| Transfer of prior year's net result | - | - | - | -41,142 | 41,142 | - | |
| Costs related to fund-raising | - | - | -24,280 | - | - | -24,280 | |
| Share issues | 252,902 | - | 253,503 | - | - | 506,405 | |
| Result for the period | - | - | - | - | -204,757 | -204,757 | |
| Closing balance on 31 December 2015 | 298,307 | 2,300 | 1,468,788 | -1,071,212 | -204,757 | 493,425 |
The total number of shares outstanding as of the end of December 2015 is 596,614,360
| SEK thousand | 12 m Jan - Dec 2015 |
12 m Jan - Dec 2014 |
|---|---|---|
| Cash flow from operations | ||
| Result after financial items including discontinued operations 1) | -204,757 | -41,142 |
| Adjustments for non-cash items 2) | 180,937 | 29,431 |
| Total cash flow from operations before change in working capital | -23,820 | -11,711 |
| Change in working capital | ||
| Increase/decrease in receivables | -1,131 | 7,840 |
| Increase/decrease in short term liabilities | 6,197 | -553 |
| Total cash flow from operations | -18,754 | -4,424 |
| Cash flow used for investments | ||
| Loan Financing to subsidiareis | -320,551 | -5,377 |
| Purchase of subsidiaries | -2,185 | - |
| Total cash flow used for investments | -322,736 | -5,377 |
| Financial activities | ||
| New share issues | 460,386 | 74,081 |
| Cost related to fund-raising | -24,281 | -7,950 |
| Total cash flow from financial activities | 436,105 | 66,131 |
| Change in cash and bank | 94,615 | 56,330 |
| Exchange difference in liquid funds | -13,033 | - |
| Cash and bank on 1 January | 61,366 | 5,036 |
| Cash and bank at the end of report period | 142,948 | 61,366 |
| 1) Financial items | ||
| Financial income | 1,665 | 2,023 |
| Financial costs | -20,883 | -3,111 |
| -19,218 | -1,088 | |
| 2) Adjustments for non-cash items | ||
| Dividend | - | -569 |
| Impairment of financial fixed assets | 160,799 | 30,000 |
| Exchange loss | 10,606 | - |
| Loss from sold companies | 9,532 | - |
| Total | 180,937 | 29,431 |
| General Information | 25 | |
|---|---|---|
| Note 1 | Accounting principles | 25 |
| Note 2 | Risks and uncertainties | 29 |
| Note 3 | Segment reporting | 30 |
| Note 4 | Revenue from sales | 31 |
| Note 5 | Employees, salaries and other compensations | 31 |
| Note 6 | Compensations and other benefits: | |
| Board, CEO and management officials | 33 | |
| Note 7 | Other external expenses | 34 |
| Note 8 | Leasing | 35 |
| Note 9 | Transactions with related parties | 35 |
| Note 10 Other long-term investments | 36 | |
| Note 11 Tangible, Intangible and financial fixed assets | 36 | |
| Note 12 Financial items | 39 | |
| Note 13 Income tax | 40 | |
| Note 14 Earnings per share | 40 | |
| Note 15 Other short-term receivables | 41 | |
| Note 16 Prepaid expenses and accrued income | 41 | |
| Note 17 Cash and cash equivalents | 41 | |
| Note 18 Development of the share capital | 42 |
| Note 19 Ownership structure as at February 29, 2016 | 43 |
|---|---|
| Note 20 Deferred tax liabilities | 44 |
| Note 21 Convertible loan | 44 |
| Note 22 Other long-term liabilities | 45 |
| Note 23 Accounts payable | 45 |
| Note 24 Other liabilities | 45 |
| Note 25 Accrued expenses and prepaid income | 46 |
| Note 26 Pledged assets and contingent liabilities | 46 |
| Note 27 Shares and participations in subsidiaries and associated companies |
47 |
| Note 28 Receivables on group companies | 47 |
| Note 29 Discontinued operations | 48 |
| Note 30 Financial risk management | 50 |
| Note 31 Financial instruments | 51 |
| Note 32 Related party disclosure | 51 |
| Note 33 Capital management | 52 |
| Note 34 Fair value estimation | 53 |
| Note 35 Events after the end of the reporting period | 53 |
| Note 36 Preliminary acquisition analysis ALD Abogados SL | 54 |
The Parent Company Axactor AB (publ), until late December 2015 named Nickel Mountain Group AB (publ), Swedish corporate identity number 556227-8043, is a joint stock corporation, domiciled in Stockholm. The registered address is Hovslagargatan 5B, bottom floor, SE-111 48 Stockholm. The company's shares are traded in Norway on the Oslo Stock Exchange. The corporation's activities consist of debt collection ever since the two nickel subsidiaries Nickel Mountain Resources AB and Nickel Mountain Group AB were sold to Swedish mineral company Archelon AB on December 31, 2015. Thereby, the profit- and loss statement of the two nickel subsidiaries form part of the Axactor group profit- and loss account for 2015. The balance sheet of the nickel subsidiaries was, however, deconsolidated at year-end 2015 and is not part of the Axactor group balance sheet. The debt collection business segment arose by acquisition and consolidation of the Spanish debt collection company ALD Abogados SL on December 10, 2015. The Annual Report and Parent Company Report for Axactor AB (publ) were adopted by the Board of Directors on April 20, 2016 and will be submitted for approval to the Annual General Meeting on May 26, 2016.
Statement of conformity with regulations applied The Consolidated Statements have been compiled in accordance with EU-approved International Financial Reporting Standards (IFRS) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC). In addition, the Group applies the Swedish Financial Reporting Board's recommendation RFR 1 "Supplementary accounting regulations for corporate conglomerates" specifying the supplements to IFRS required pursuant to the stipulations of the Swedish Annual Accounts Act.
The Parent Company's functional currency is the Swedish krona (SEK) and this is also the reporting currency for both the Group and the Parent Company. All amounts in the financial reports are stated in thousands of Swedish kronor (TSEK), unless otherwise specified.
Items have been valued at their acquisition value in the consolidated accounts, with the exception of certain financial assets and liabilities, which have been valued at their fair value. The Parent Company's accounting principles follow those of the Group with the exception of the mandatory regulations stipulated in the Swedish Financial Reporting Board's recommendation, RFR 2 "Accounting for legal entities".
The most important accounting principles that have been applied are described below. These principles have been applied consistently for all years presented, unless otherwise specified.
New standards and interpretations that come into force in the 2016 calendar year or thereafter
IFRS 9, Financial instruments: The standard comes into force for financial years beginning in 2018, or thereafter, and replaces IAS 39. It is divided into three sections: classification, hedge accounting, and impairment. The standard requires the classification of financial assets in accordance with three valuation categories, namely amortized cost, fair value through other comprehensive income, or fair value through the Income Statement. The classification is determined when the asset is first accounted for on the basis of the characteristics of the financial asset and the company's business model. No major changes apply with regard to financial liabilities. IFRS 9 also includes augmented regulations regarding disclosures in relation to risk management and the effects of hedge accounting. The standard has been complemented with regulations governing the impairment of financial assets, where the model is based on anticipated losses. An overall assessment of the effects on Axactors's accounting will be made at a later date.
IFRS 15, Revenue from Contracts with Customers: The standard comes into force on 1st January 2018 and replaces existing standards and interpretations on revenues. The standard introduces a new revenue recognition model for contracts with customers and shall be applied to all contracts with customers with the exception of insurance contracts, financial instruments and leasing contracts in that separate standards exist in these areas. The new standard also entails new starting points for when revenue shall be recognized and requires new evaluations by the company management that differ from those currently applied. The principal areas in which existing regulations differ from the new ones are:
At the present time, Axactor cannot estimate the impact of the new accounting standards on the Company´s financial reports.
IFRS 16 Leasing, in January 2016, IASB introduced a new leasing standard that will replace IAS 17, Leasing agreements and the associated interpretations IFRIC 4, SIC-15 and SIC-27. The standard demands that essentially all assets and liabilities related to a leasing agreement get recognized in the balance sheet with a few exceptions. The new standard is based on the view that the lessee has a right to use an asset during a specified time period, and at the same time has an obligation to pay for it. The accounting consequences for the lessor will, in all material respects, be unchanged. The standard is applicable for annual reporting periods beginning on, or after, January 1, 2019. It is voluntary to apply the standard before this date. The EU has not yet endorsed this standard.
The Group has not yet evaluated the effects of IFRS 16.
The standards and interpretations presented are those that may, in the opinion of the Group, have an effect in future. The Group intends to implement these standards when they become applicable.
No other of the standards or interpretations from IASB or pronouncements from IFRIC that have not yet come in to force are expected to have any material impact on the group.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The balance sheets of the subsidiaries located outside Sweden are converted using the current exchange rates of the last day of the reporting period. The currency rate used in the income statements is the average rate for the entire reporting period. All Group transactions and Group unsettled matters, and profit and losses for transactions between group companies that are put into effect, are eliminated at the consolidation.
A subsidiary is included in Group accounts from the date of the acquisition, which is the day when the group obtains control of the company. The company is consolidated until such control ceases to exist. Control is considered to exist when the Group has the right to form the future strategies of a subsidiary, in order to achieve economic advantages.
A non-controlling interest is the part of a subsidiary's result and net assets that is not, directly or indirectly, owned by the Parent Company. The non-controlling interest's part of the result is included in the consolidated result after tax. The non-controlling interest's part of the equity is included in the consolidated equity, but is accounted for separately from the equity that is related to the shareholders of the Parent Company.
The consolidated accounts and the Parent Company accounts are based on historical acquisition values except for financial instruments which are valued fair market value.
Business combinations are accounted for using the acquisition accounting method.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquired entity is re-measured to fair value as at the acquisition date through profit or loss. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquired entity are assigned to those units.
The Group assesses each cash-generating unit annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the actual value, less costs to sell and value in use.
If there is an indication that an asset is impaired, the recoverable amount of the asset is calculated in accordance with IAS 36. For goodwill, other intangible assets with indefinite useful lives and intangible assets not yet ready for use, the recoverable amount is assessed annually.
The fair value of goodwill is determined annually for each cash-generating unit in relation to the unit's performance and anticipated future cash flow. If deemed necessary, goodwill is written down on the basis of this evaluation.
The Group applies IAS 38 Intangible Assets. Expenditures for software development that can be attributed to identifiable assets under the Group's control and with anticipated future economic benefits are capitalized and recognized as
intangible assets. These capitalized expenses include staff expenses for the development team and other direct and indirect expenses.
Customer relationships that are recognized as fixed assets relate to fair value revaluations recognized upon acquisition, in accordance with IFRS 3. They are amortized on a straightline basis over their estimated period of use (5–10 years).
Other intangible fixed assets relate to other acquired rights are amortized on a straight-line basis over their estimated period of use.
Tangible fixed assets are reported at cost in the balance sheet, with a deduction for accumulated depreciation and any impairment. Depreciation is made on a straight-line basis over the asset's estimated useful life, which is assessed on an individual basis, ranging from 3 to 10 years.
For all financial instruments measured at amortized cost, and interest bearing financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate (EIR).
Revenue from dividends is recognized when the Group's right to receive the payment is established.
The cash flow statement shows cash receipts and cash payments, using the indirect method.
Provisions are recognized when the Group has a current obligation (legal or constructive) as a result of a past event, and a reliable estimate can be made of the amount of the obligation.
Management is required to apply judgement in assessing the probability of the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. This judgement is supported by external advice and precedent case law. Further details of contingent assets are disclosed in note 11.
Current assets and current liabilities are comprised of amounts that are expected to be recovered or paid respectively, within twelve months of the reporting date. Other assets and liabilities are reported as non-current assets or long-term liabilities, respectively.
Financial instruments reported as assets in the balance sheet include: long-term receivables, other receivables, prepaid expenses and accrued income, liquid funds, accounts receivable, and short-term investments. All financial assets are classified as loans and receivables, and are reported at amortized cost. The liabilities consist of long-term liabilities, convertible loans, other liabilities, accrued expenses and prepaid income and accounts payable. The liabilities are classified as other financial liabilities and are reported as amortized cost. Financial instruments are initially recorded at acquisition value corresponding to the instrument's fair value. A financial asset or liability is reported in the balance sheet as soon as the Company has a contractual commitment regarding such instrument. Axactor does not have any derivatives and does not, for the time being, engage in hedging. Cost of interest is calculated using the effective interest rate method.
A financial asset is considered for exclusion when the contractual rights to the cash flows from the financial asset expire, or the Group has either transferred the contractual right to receive the cash flows from that asset, or has assumed an obligation to pay those cash flows to one or more recipients, subject to certain criteria.
A financial liability is considered for exclusion when the liability is repaid by Axactor.
Financial instruments are reported using the fair value, accumulated value or acquisition value, depending on the initial categorization under IAS 39. On each reporting occasion, the company performs an impairment test to determine whether objective indications exist of the need to write-down a financial asset or group of financial assets.
There are only defined contribution retirement plans within the Group. Defined contribution retirement plans comprise plans in which the company's liability in terms of retirement payments is limited to the fees that already have been undertaken. The retirement of the individual employee is dependent on the fees paid to the retirement plan or an insurance company by the employer, and the return of capital invested in the retirement insurance. Consequently, it is the employee that holds the risk of return (that the return will be lower than expected) and the risk of the investment (the risk that the invested pension provision will not be sufficient to cover expected retirement compensation in the future). The obligations of the Company related to payments of defined contribution retirement plans are expensed in the income statement as they are earned by the employee for services conducted on behalf of the employer during the period.
All leases are accounted for as operating leases.
The parent company's deficit submitted to the tax authorities for financial year 2014 was some 13.1 MSEK. To this should be added the corresponding result for financial year 2015, which is estimated at 54 MSEK.
In January 2016, the tax authorities reviewed the parent company's taxation for financial year 2013, and increased the deficit for that year by 166.7 MSEK.
No current or deferred tax claims were accounted for at year-end 2015. Deferred tax claims were not accounted for as deductions of loss. Deficit deduction can be used without any time limit. A deferred tax liability related to subsidiaries registered outside Sweden was recorded relating to Spanish subsidiary ALD Abogados SL.
The Group applies IAS 23 Borrowing Costs and IAS 39 Financial Instruments: Recognition and Measurements. Expenses to secure bank financing are amortized across the term of the loan as financial expenses in the consolidated income statement. The amount is recognized in the balance sheet as a deduction to the loan liability. The Group capitalizes borrowing expenses in the cost of qualifying assets, that is, fixed assets for substantial amounts with long periods of completion. No such investments were initiated in 2015.
The Group applies IAS 18 Revenue. Income, consisting of commissions and collection fees, is recognized on collection of the debt. Subscription income is recognized proportionately over the term of the underlying service contracts, which is usually one year.
Within Axactor, segmentation is according to the various countries in which the debt collection business takes place, by year-end 2015 only in Spain. See note 3 for more information.
Current tax and deferred tax are reported in the financial statements. Current tax is the tax that will be paid or refunded based on the current year, using the tax rates that were in effect/decided upon on the closing date applied to taxable income. An adjustment is also made for current tax related to prior periods. Deferred tax is calculated using the balance sheet approach. This involves determining the tax base of assets and liabilities in order to calculate temporary differences. Deferred tax assets are reported for deductible temporary differences of unused loss carry forwards/backs to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. No deferred tax asset is currently recorded for loss carried forward, since it is difficult to determine whether utilization will be possible in the future.
The financial statements are presented in SEK, which is Axactor's functional currency, as well as being the
presentation currency. Transactions in foreign currency are accounted for in the functional currency, at the current rate of exchange of the transaction date. Both monetary and non-monetary assets and liabilities are converted per the balance sheet date, at the day's current exchange rate. Currency differences which arise during conversion are accounted for in profit or loss. Assets and liabilities in foreign subsidiaries are valued at the closing currency rates at the end of the reporting period. Income statements are converted to the average of currency rates for the entire reporting period. Exchange differences that may occur at conversion are reported under other comprehensive income.
According to the Swedish Financial Reporting Board's standard RFR 2, Accounting for Legal Entities, legal entities with securities listed on a Swedish stock exchange or authorized market on the balance sheet date shall, as a general rule, apply those IFRS standards that are applied in the consolidated financial statements. There are, however, certain exceptions from and additions to this rule depending on legal provisions – principally those in the Annual Accounts Act – and the relationship between accounting and taxation.
For Axactor AB (the Parent Company), this means that IFRS measurement and disclosure rules are applied, but the format differs from the Group's financial reports since the Parent Company's financial reports follow the Annual Accounts Act.
In the Parent Company, shares in subsidiaries, associated companies, and joint ventures are reported at cost (full consolidation and the equity method is used in the Group).
The peer-group valuation table (for debt collection companies bought up) gave an Enterprise value/EBITDA multiple range of 6.7 – 7.4. Based on ALD's estimated (at the acquisition moment) full-year 2015 EBITDA of 3 million Euro, the motivated implied enterprise value of ALD got to 20.3 – 22.5 million Euro. Subsequently it turned out that ALD's 2015 EBITDA was 3.7 million Euro.
Axactor defines risk as all factors which could have a negative impact on the ability of the Group to achieve its business objectives. All economic activity is associated with risk. In order to manage risk in a balanced way, it must first be identified and assessed. Axactor conducts risk management at both a Group and company level, where risks are evaluated in a systematic manner. The following summary is by no means comprehensive, but offers examples of risk factors which are considered especially important for Axactor's future development.
The Company's development is dependent upon the continued services and performance of its senior management and other key personnel. The loss of the services of any of the senior management or key personnel may have an adverse impact on the Company.
The credit management sector is affected negatively by a weakened economy. However, Axactor's assessment is that, historically, it has been less affected by economic fluctuations than many other sectors. Risks associated with changes in economic conditions are managed through on-going dialogue with each country management team and through regular checks on developments in each country.
Axactor's financing and financial risks are managed within the Group in accordance with the treasury policy established by the Board of Directors. The treasury policy contains rules for managing financial activities, delegating responsibility, measuring identifying and reporting financial risks and limiting these risks. Internal and external financial operations are concentrated to the Group's central finance function in Oslo, which ensures economies of scale when pricing financial transactions. Because the finance function can take advantage of temporary surpluses and deficits in the Group's various countries of operation, the Group's total interest expense can be reduced. In each country, investments, revenues and most operating expenses are denominated in local currencies, and thus currency fluctuations have a relatively minor effect on operating earnings. Revenues and expenses in national currency are thereby hedged in a natural way, which limits transaction exposure.
When the balance sheets of foreign subsidiaries are recalculated in SEK, a translation exposure arises that affects consolidated shareholders' equity. This translation exposure is limited by raising loans in foreign currencies.
With regard to risks associated with changes in regulations in Europe, Axactor continuously monitors the EU's regulatory efforts to be able to indicate potentially negative effects for European credit management companies and to work for favorable regulatory changes.
The company may issue additional shares in the future. Shareholders of the Company may suffer from dilution in connection with future issuances of shares.
In recent years, the securities markets in Europe have experienced a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations in price, which have not necessarily been related to the operating performance, underlying assets values, or prospects of such companies. There is no assurance that continuous fluctuations in price will not occur. It is likely that the quoted market price for the Axactor shares will be subjected to market trends generally, notwithstanding the financial and operational performance of the Company.
Interest rate risk is related to the risk the group is exposed to from changes in the market's interest rate which can affect the net profit. The Board of Directors and the management have made an assessment that Axactor's interest rate risk exposure is small, since the company currently has a limited loan burden.
Currency risk refers to the risk that the value of a financial instrument may shift as a result of changes in currencies conversion rates. The Company's accounts are held in Swedish krona (SEK). However, the Company conducts the majority of its business operations in other countries. This foreign exchange exposure may affect the Company's results and the amount of liquid assets.
To minimize the risks in this business, caution is exercised in purchase decisions. The focus is on small and medium-sized portfolios with relatively low average amounts, to help spread risks. The acquisitions generally involve unsecured debt, which reduces the capital investment and significantly simplifies administration compared with collateralized receivables. Purchased debt portfolios are usually purchased at prices significantly below the nominal value of the receivables, and Axactor retains the entire amount it collects, including interest and fees. Axactor places high yield requirements on purchased debt portfolios. Before every acquisition, a careful assessment is made based on a projection of future cash flows (collected amount) from the portfolio. In its calculations, Axactor is aided by its management's long experience in collection management and its scoring models. Scoring entails the consumer's payment capacity being assessed with the aid of statistical analysis. Axactor also uses specialized industry consultants for getting a second opinion on each contemplated debt portfolio purchase. Axactor therefore believes that it has the expertise required to evaluate these types of receivables.
For management purposes, the Group was until the last quarter of 2015 organized into business units based on the type of mineral the Group was active with up to that moment in time. As from 2016, the focus of Axactor is debt collection. Therefore, per 31.12.15, the business segments are the various geographic areas where debt collection is conducted. This annual report also includes the profit- and loss statement from the sold nickel subsidiaries, and this business is also reflected as a "business segment", which, however, now is labeled "discontinued operations".
| SEK thousand | Debt Collection |
Other | Total remaining operations |
Discontinued operations |
Total |
|---|---|---|---|---|---|
| Sales revenues | 4,337 | - | 4,337 | - | 4,337 |
| Other operating income | - | - | - | 40 | 40 |
| Operating result before depreciation and impairment losses | -5,848 | -24,744 | -30,592 | -885 | -31,477 |
| Impairment of mineral interests | - | - | - | -104,310 | -104,310 |
| Depreciation according to plan | -64 | -773 | -837 | -137 | -974 |
| Financial items | -1 | -29,888 | -29,889 | 4 | -29,885 |
| Result before tax | -5,913 | -55,405 | -61,318 | -105,288 | -166,606 |
| Fixed assets | 168,330 | 2,056 | 170,386 | - | 170,386 |
| Current assets | 76,230 | 358,189 | 434,419 | - | 434,419 |
| Long-term liabilities | 11,857 | 5,000 | 16,857 | - | 16,857 |
| Short-term liabilities | 96,086 | 14,870 | 110,956 | - | 110,956 |
| Investments | 188,432 | - | 188,432 | - | 188,432 |
| SEK thousand | Debt Collection |
Other | Total remaining operations |
Discontinued operations |
Total |
|---|---|---|---|---|---|
| Other operating income | - | 75 | 75 | 219 | 294 |
| Operating result before depreciation and impairment losses | - | -9,665 | -9,665 | -2,472 | -12,137 |
| Impairment of mineral interests | - | - | - | -33,685 | -33,685 |
| Depreciation according to plan | - | - | - | -180 | -180 |
| Financial intems | - | -6 | -6 | 1 | -5 |
| Result before tax | - | -9,671 | -9,671 | -36,336 | -46,007 |
| Fixed assets | - | - | - | 112,617 | 112,617 |
| Current assets | - | 62,015 | 62,015 | 344 | 62,359 |
| Long-term liabilities | - | 9,000 | 9,000 | - | 9,000 |
| Short-term liabilities | - | 4,673 | 4,673 | 508 | 5,181 |
| Investments | - | - | - | 5,853 | 5,853 |
| SEK thousand | 2015 | 2014 |
|---|---|---|
| Sweden | - | 108 |
| Spain | 4,337 | - |
| Total | 4,337 | 108 |
| SEK thousand | 2015 | 2014 |
|---|---|---|
| Sweden | 32,118 | 112,617 |
| Spain | 138,268 | - |
| Total | 170,386 | 112,617 |
Revenues in 2015 are sales revenues generated by the Spanish subsidiary ALD Abogados SL during the month of December. The revenues in 2014 were other income in the Swedish nickel subsidiaries.
| 2015 | 2014 | ||||
|---|---|---|---|---|---|
| Average number of employees |
Of which men |
Average number of employees |
Of which men |
||
| Parent Company | - | - | - | - | |
| Subsidiaries | 68 | 42% | 4 | 50% | |
| Group Total | 68 | 42% | 4 | 50% | |
| Of which Sweden | - | - | 4 | 50% | |
| Of which Norway | 4 | 75% | - | - | |
| Of which Spain | 64 | 41% | - | - | |
| Part of women on management level | |||||
| Board of Directors | - | - | - | - | |
| Management | - | - | - | - |
Average number of employees in Spain is for the whole year 2015, and in Norway for the period November to December 2015.
| 2015 | 2014 | |||||
|---|---|---|---|---|---|---|
| Salaries and other compensations |
Of which pension costs |
Of which social contribution costs |
Salaries and other compensations |
Of which pension costs |
Of which social contribution costs |
|
| Parent Company | ||||||
| Sweden | - | - | - | -191 | -196 | 6 |
| Subsidiaries | ||||||
| Sweden | - | - | - | 1,569 | 86 | 239 |
| Norway | 1,968 | - | 243 | - | - | - |
| Spain | 2,977 | - | 374 | - | - | - |
| Total Group 1) 2) | 4,945 | - | 617 | 1,378 | -110 | 245 |
1) Part of total remuneration to Board Members has been invoiced and is recognized in the group P&L as "other external costs".
2) Remuneration for the Managing Director appointed during the period January – November 2015 was invoiced from a private company and therefore forms part of "other external costs". As given also by note 6, the invoiced amount in question was 902 TSEK (984 for 12 m 2014).
3) The Managing Director appointed by the end of November had a remuneration up to the end of 2015 including social charges of 804 TSEK.
| 2015 | 2014 | |||
|---|---|---|---|---|
| SEK thousand | Board of Directors and CEO |
Other employees |
Board of Directors and CEO |
Other employees |
| Parent Company | ||||
| Sweden | - | - | - | -191 |
| Subsidiaries | ||||
| Sweden | - | - | 216 | 1,353 |
| Norway | 1,161 | 807 | - | - |
| Spain | - | 2,977 | - | - |
| Total Group | 1,161 | 3,784 | 216 | 1,162 |
| 2015 | 2014 | |||
|---|---|---|---|---|
| SEK thousand | Board of Directors and CEO |
Other employees |
Board of Directors and CEO |
Other employees |
| Parent Company | ||||
| Sweden | - - |
- | - | |
| Subsidiaries | ||||
| Sweden | - - |
52 | 323 | |
| Norway | 143 100 |
- | - | |
| Spain | - 374 |
- | - | |
| Total Group | 143 474 |
52 | 323 |
There were no pension costs or other similar benefits for Board of Directors and President during 2015 or 2014.
| 2015 | 2014 | ||||||
|---|---|---|---|---|---|---|---|
| SEK thousand | Director fee (according to resolution from general meeting) |
Salary including social contribution |
Other Benefits |
Director fee (according to resolution from general meeting) |
Salary | Other Benefits |
|
| Board elected at June 2014 AGM | |||||||
| Rikard Ehnsiö (Resigned in October 2014) | - | - | - | 100 | - | - | |
| Frank Dinhof Petersen (Resigned in October 2014) | - | - | - | 52 | - | - | |
| Svein Breivik (Resigned in October 2014) | - | - | - | 52 | - | - | |
| Björn Rohdin (Resigned in October 2014) | - | - | - | 52 | - | - | |
| Board elected at October 2014 EGM and at June 2015 AGM | |||||||
| Martin Nes (Resigned in December 2015) | 244 | - | - | 56 | - | - | |
| Jan Frode Andersen (Resigned in December 2015) | 146 | - | - | 33 | - | - | |
| Per Dalemo 1) | 146 | - | - | 33 | - | - | |
| Board elected at December 2015 EGM | |||||||
| Einar J Greve | 18 | - | - | - | - | - | |
| Gunnar Hvammen | 9 | - | - | - | - | - | |
| Per Dalemo 1) | 9 | - | - | - | - | - | |
| Management | |||||||
| Torbjörn Ranta 1) | - | 902 | - | - | 984 | - | |
| Endre Rangnes (Appointed CEO in November 2015) | - | 804 | - | - | - | - | |
| Johnny Tsolis | - | 357 | - | - | - | - |
1) Net amount invoiced from private company.
The number of employees in corporate management amounts to 2 (1).
Board members appointed at the June 2015 AGM receive a fee of SEK 250 thousand per year for the Chairman, and SEK 150 thousand per year for each ordinary Board Member, as established by the AGM. This was unchanged remuneration as compared to the preceding year. A new Board of Directors was appointed at the December 23, 2015 EGM. Given the then enlarged business operations, the EGM decided to increase the remuneration for the new Board to 1.8 MSEK on an annual basis divided on 900 TSEK for the Chairman and 450 TSEK for each of the two other Board members.
Termination compensation and severance salary shall in no case exceed twelve months' salary.
Auditing comprises an audit of the Annual Report and an audit of accounts and the management carried out by the Board and the CEO. It also includes other assignments related to the work carried out by the auditor, as well as any need for advisory or other assistance that occurs as a result of the ordinary work carried out by the auditor. Audit-related fees concern different types of services for assurance. Review of tax forms is considered as tax consultancy. Other assignments, for instance legal consultancy in excess of auditing, are related to issues other than taxes. The part of the Audit fees that is directly related to fundraising is accounted for in 'Equity'.
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Rent | -504 | -99 | -105 | - |
| Travel | -123 | -240 | -104 | -115 |
| Legal counselling | -1,731 | -3,039 | -1,729 | -3,039 |
| Admininstrative costs related to listing | -18,431 | -654 | -18,431 | -654 |
| Consultancy fees | -2,286 | -2,417 | -1,163 | -2,417 |
| Insurance | -401 | -233 | -233 | -202 |
| Others | -6,464 | -3,245 | -2,975 | -3,889 |
| Total | -29,940 | -9,927 | -24,740 | -10,316 |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 | |
| Mazars | |||||
| Audit fees | - | 650 | - | 400 | |
| Audit-related fees | - | 19 | - | 19 | |
| Other fees | - | 227 | - | 127 | |
| KPMG | - | - | |||
| Audit fees | - | 254 | - | - | |
| Tax advisory fees | - | 215 | - | 215 | |
| PriceWaterhouseCoopers | |||||
| Audit fees | 747 | 388 | 747 | 338 | |
| Other fees | 663 | 210 | 663 | 210 | |
| Total | 1,410 | 1,963 | 1,410 | 1,309 |
| SEK thousand | Premises |
|---|---|
| Matures 2016 1) | 2,879 |
| Matures 2017-2018 | 6,486 |
| Matures 2018 < | - |
1) The amount relates to the rental contract in respect to the offices in Sweden, Norway and Spain.
| SEK thousand | 2015 | 2014 |
|---|---|---|
| Mr. Ole Weiss, Board Member of NMG AB, in 2013/2014, via his private company, invoiced NMG AB a net amount of 220,000 Danish kronor (DKK) for professional services related primarily to the African assets of the group. The work with African Diamond continued in spring 2014, and for this work NMG was invoiced 72,000 SEK. |
72 | |
| Mr. Erlend Dunér Henriksen, Deputy Board Member of NMG AB in 2013 - 2014, was the main force behind the successful issue of interest free promissory notes to a circle of Norwegian investors during the Autumn of 2013. For these financial advisory services, and for certain other investor relations work, Mr. Henriksen, via his private company Renud Invest AS, invoiced NMG 740 thousand NOK in that year. In the summer and autumn of 2014, he again provided certain additional administrative services which were invoiced to NMG in an amount of 47,000 SEK. |
47 | |
| In the third quarter of 2015, NMG paid in total 100,000 NOK to its major shareholder Strata Marine & Offshore AS, in respect to managerial services extended by the Board Director, Jan Frode Anderson, during the first six months of 2015, over and beyond his normal duties as Board Director of the Company. |
94 | |
| At the EGM on November 17, 2015, the Company approved and ratified a consultancy agreement between the Company and Ferncliff TIH II AS, a company which is a closely related party to the Company's principal shareholder, Strata Marine & Offshore AS, pursuant to which Ferncliff TIH II AS would be entitled to a success fee of 4 million NOK for services rendered in connection with the ALD Acquisition. |
3,757 | |
| At the same time as the above agreement with Ferncliff TIH II AS was executed, the Company also entered in to three other success fee-related advisory agreements in order to ascertain a successful completion of the ALD acquisition. The counterparties were private companies controlled by Mrssr. Endre Rangnes, Johnny Tsolis and Einar Greve. These subsequently, after the ALD acquisition, were appointed CEO, Head of Strategy and Chairman of the Board. The paid out amounts were 1.85 MNOK, 1.65 MNOK and 3 MNOK, respectively. |
6,105 | |
| Certain of Axactor's major shareholders, today's management team of the Company, and Mr. Greve (today's Chairman of the Board) were among the underwriting syndicate guaranteeing successful completion of the private placement and reparatory rights issue of 400 million and 60 million shares, respectively in late autumn 2015. In addition, these underwriters were also allocated shares in the private placement. |
||
| Wistrand Law firm in Gothenburg has been one of Axactor's legal advisors in regard to the acquisition of ALD in Spain and the various share issues, including the prospectus filing. In total, Wistrand has in the fourth quarter of 2015 invoiced Axactor some 2.37 million SEK of legal fees. Per Dalemo, Axactor's Board Director, is employed by Wistrand Law firm, but has not been part of the legal team extending services to Axactor. |
2,366 | 162 |
| Total | 12,323 | 281 |
| Related party balances as per year end 2015 | ||
| Loan from Ulrik Jansson (previous Chairman of the Board) | 5,167 | |
| Accounts payable, invoices from Wistrands Law Firm | 2,366 |
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| Nordic Iron Ore AB | - | 214 | - | - |
| Tasman Metals | - | 145 | - | - |
| Other items | 267 | 31 | - | - |
| 267 | 390 | - | - |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Acquisition value at opening of period | 725,306 | 720,657 | - | - | |
| Acquisition during the report period (year) | - | 5,162 | - | - | |
| Sales and retirements | -725,306 | -513 | - | - | |
| Acquisition value at year-end | - | 725,306 | - | - | |
| Depreciations and impairments | |||||
| Accumulated depreciations at beginning of year | -613,630 | -609,945 | - | - | |
| Depreciation and impairments during the year | -103,743 | -3,685 | - | - | |
| Sales and retirements | 717,373 | - | - | - | |
| Accumulated write downs at year-end | - | -613,630 | - | - | |
| Exchange differences | - | - | - | - | |
| Book-value at year-end | - | 111,676 | - | - |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Acquisition value at opening of period | - | - | - | - | |
| Acquisition during the report period (year) | 37,791 | - | - | - | |
| Acquisition value at year-end | 37,791 | - | - | - | |
| Depreciations and impairments | |||||
| Accumulated depreciations at beginning of year | - | - | - | - | |
| Depreciation and impairments during the year | -666 | - | - | - | |
| Accumulated depreciation and impairment at year-end | -666 | - | - | - | |
| Exchange differences | - | - | - | - | |
| Book-value at year-end | 37,125 | - | - | - |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Acquisition value at opening of period | - | - | - | - | |
| Acquisition during the report period (year) | 7,637 | - | - | - | |
| Acquisition value at year-end | 7,637 | - | - | - | |
| Depreciations and impairments | |||||
| Accumulated depreciations at beginning of year | - | - | - | - | |
| Depreciation and impairments during the year | -107 | - | - | - | |
| Accumulated depreciation and impairment at year-end | -107 | - | - | - | |
| Exchange differences | - | - | - | - | |
| Book-value at year-end | 7,530 | - | - | - |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Acquisition value at opening of period | - | - | - | - | |
| Acquisition during the report period (year) | 448 | - | - | - | |
| Acquisition value at year-end | 448 | - | - | - | |
| Depreciations and impairments | |||||
| Accumulated depreciations at beginning of year | - | - | - | - | |
| Depreciation and impairments during the year | - | - | - | - | |
| Accumulated depreciation and impairment at year-end | - | - | - | - | |
| Exchange differences | - | - | - | - | |
| Book-value at year-end | 448 | - | - | - |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Acquisition value at opening of period | - | - | - | - | |
| Acquisition during the report period (year) | 124,467 | - | - | - | |
| Acquisition value at year-end | 124,467 | - | - | - | |
| Depreciations and impairments | |||||
| Accumulated write downs at beginning of year | - | - | - | - | |
| Impairment write down during the year | - | - | - | - | |
| Accumulated write downs at year-end | - | - | - | - | |
| Exchange differences | - | - | - | - | |
| Book-value at year-end | 124,467 | - | - | - |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Plant and machinery | |||||
| Acquisition value at opening of period | 43,979 | 43,519 | - | - | |
| Acquisition during the report period (year) | - | 687 | - | - | |
| Acquisition of operations | 613 | - | - | - | |
| Sales and retirements | -43,979 | -43,219 | - | - | |
| Acquisition value at year-end of plant and machinery | 613 | 987 | - | - | |
| Depreciations and impairments | |||||
| Accumulated depreciation according to plan at beginning of period | -43,428 | -43,273 | - | - | |
| Sales and retirements | 43,428 | 42,992 | - | - | |
| Depreciation and impairments during the year | -64 | -155 | - | - | |
| Accumulated depreciation at year end according to plan | - | -436 | - | - | |
| Book value at year-end of tangible fixed assets | 549 | 551 | - | - |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Long term receivables and securities | |||||
| Acquisition value at opening of period | 359 | 30,359 | 167,715 | 192,338 | |
| Acquisition during the report period (year) | - | - | 368,545 | 5,377 | |
| Acquisition of operations | 246 | - | - | - | |
| Impairment/Value reduction | - | -30,000 | -10,100 | -30,000 | |
| Sales and retirements | -338 | - | -157,615 | - | |
| Book-value at year-end of financial fixed assets | 267 | 359 | 368,545 | 167,715 |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 | |
| Impairment loss on Alluvia Mining Ltd claim | - | - | - | 30,000 | |
| Depreciation according to plan of plant & machinery and immateriel assets | 837 | - | - | - | |
| 837 | - | - | 30,000 |
Depreciation and impairment of tangible and intangible fixed assets in 2015 are attributable to the Group's nickel mineral interest in Northern Sweden.
| SEK thousand | 2015 |
|---|---|
| Nickel | -104,447 |
| Total | -104,447 |
and the treatment of it as a contingent asset according to IAS 37
The by end of 2014, fully impaired receivable from Alluvia Mining Ltd is related to the proposed purchase of Ghana Gold in the spring of 2013.
Details around this case are fully explained in the annual report for year 2014.
The criminal case against former directors is planned to be reviewed by the Stockholm District Court in autumn 2016. The ruling in the civil case is either expected in parallel or somewhat later. Axactor estimates that the legal process will cost some 1–2 million SEK per year. In the case of an appeal to a higher court, the final ruling may take a couple of more years.
| Financial income | ||||
|---|---|---|---|---|
| Group | Parent | |||
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Exchange gains | 162 | 28 | 85 | - |
| Interests | - | 1,077 | 1,580 | 23 |
| Sale of group company | 167 | 2,000 | - | 2,000 |
| Total financial revenue | 329 | 3,105 | 1,665 | 2,023 |
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Exchange losses | -19,939 | -2,273 | -10,606 | -2,273 |
| Sale of group company | -9,532 | - | -9,532 | - |
| Interests | -747 | -838 | -745 | -838 |
| Total financial expenses | -30,218 | -3,111 | -20,883 | -3,111 |
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 | |
| Actual tax | - | - | - | - | |
| Deferred tax | - | - | - | - | |
| Actual tax reported in the income statement | - | - | - | - | |
| Result before tax for continued operations | -61,318 | -41,218 | -204,757 | -41,142 | |
| Expected tax according to Swedish tax rate (22%) | 13,490 | 9,068 | 45,047 | 9,051 | |
| Other non-taxable/non-deductible items | -2,098 | -6,167 | -37,474 | 435 | |
| Tax losses for which no deferred tax asset was recognized | -11,392 | -2,901 | -7,573 | -9,486 | |
| Tax related to remaining operations | - | - | - | - |
The parent company's deficit submitted to the tax authorities for financial year 2014, was some 13.1 MSEK. To this should be added the corresponding result for financial year 2015, which is estimated at 54 MSEK.
In January 2016, the country tax authorities reviewed the parent company's taxation for financial year 2013, and increased the deficit for that year by 166.7 MSEK.
No current or deferred tax claims were accounted for at year-end 2015. Deferred tax claims were not accounted for as deductions of loss. Deficit deduction can be used without any time limit. A deferred tax liability related to subsidiaries registered outside Sweden was recorded relating to Spanish subsidiary ALD Abogados SL.
| 2015 | 2014 | |
|---|---|---|
| Result related to Parent company's shareholders (TSEK) | -166,606 | -45,986 |
| Average number of shares during the reporting period | 133,687,416 | 29,804,775 |
| Result per share after dilution including discontinued operations (SEK) | -1.25 | -1.54 |
| Result per share after dilution excluding discontinued operations (SEK) | -0.46 | -1.38 |
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Accounts receivables | 51,576 | - | - | - |
| VAT receivables | 890 | 505 | 890 | 399 |
| Deposits | 192 | - | - | - |
| Other interest-free receivables | 5,626 | 191 | 814 | 185 |
| Total | 58,284 | 696 | 1,704 | 584 |
There is no provision for doubtful receivables.
As of December 31, 2015, the analysis of other short-term receivables that were past due, but not impaired, were as follows:
| Total | Neither past due nor impaired |
<30 days | 30-60 days | 60-90 days | 90-120 days | >120 days |
|---|---|---|---|---|---|---|
| - | ||||||
| 58,284 | 38,816 | 11,839 | 1,266 | 3,714 | 129 | 2,520 |
| 696 | - | 696 | - | - | Past due but not impaired - |
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Prepaid insurance fees | 73 | 56 | 73 | 16 |
| Prepaid legal fees | 3,617 | - | - | - |
| Prepaid rentals | 39 | 62 | 23 | 48 |
| Others | 31 | 43 | 1 | 1 |
| Year-end balance | 3,760 | 161 | 97 | 65 |
As of December 31, 2015, cash and cash equivalents of the Group were 372,375 TSEK (61,502 TSEK). These liquid assets all consisted entirely of bank deposits. The Parent Company's cash and cash equivalents as of December 31, 2015 were142,948 TSEK (61,366 TSEK). 95 % of the cash in the Group is in NOK, 4 % i EUR and 1 % in SEK.
| Date | Transaction | Increase of number of ordinary shares |
Change in number of A-shares |
Increase of share capital |
Total number of shares |
Total share capital |
Face value (SEK) |
|---|---|---|---|---|---|---|---|
| 01.01.2014 | Opening balance | - | - | - | 18,174,922 | 9,087,461 | 0.50 |
| 27.01.2014 | Set-off issue | 3,052,799 | - | 1,526,400 | 21,227,721 | 10,613,861 | 0.50 |
| 28.05.2014 | Set-off issue | 1,474,619 | - | 737,310 | 22,702,340 | 11,351,170 | 0.50 |
| 18.11.2014 | Rights issue | 68,107,020 | - | 34,053,510 | 90,809,360 | 45,404,680 | 0.50 |
| 24.11.2015 | Directed issue of A-shares | - | 400,000,000 | 200,000,000 | 490,809,360 | 245,404,680 | 0.50 |
| 02.12.2015 | Conversion A-shares to ordinary shares | 400,000,000 | -400,000,000 | - | 490,809,360 | 245,404,680 | 0.50 |
| 10.12.2015 | Issue in kind | 45,805,000 | - | 22,902,500 | 536,614,360 | 268,307,180 | 0.50 |
| 28.12.2015 | Rights issue | 60,000,000 | - | 30,000,000 | 596,614,360 | 298,307,180 | 0.50 |
There were 18,174, 922 shares outstanding as of January 1, 2014. The value per share was SEK 0.50. The share capital was then SEK 9,087,461. During the first half of 2014, two issues in kind were conducted. Thereby, the number of shares increased by 4,527,418 to a total number of 22,702,340. In November 2014, a rights issue was completed. In that context, 68,107,020 new shares were subscribed and issued. The number of shares was then 90,809,360 at year-end 2014.
During the fourth quarter of 2015, firstly a private placement of 400,000,000 new shares was conducted. Thereafter, an issue in kind of 45,805,000 new shares was carried out to the two sellers of the Spanish subsidiary ALD Abogados SL. Lastly, a rights issue amounting to 60,000,000 new shares took place. The issue price in all three issues in the fourth quarter of 2015, was 1 NOK per share. Both these private placement and the rights issues were fully underwritten. As of year-end 2015, the total number of shares outstanding was, therefore, 596,614,360. The share capital at the same point in time, amounted to SEK 298,307,180.
According to the current Articles of Association, there are two share classes: ordinary shares with one vote per share, and A-shares with 0.99 votes per share. The latter is a technical solution invented in autumn 2015 in connection with the private placement of 400,000,000 new shares. As the time period between subscription of- and payment for the private placement shares, and the subsequent listing of these new shares on the Oslo Stock Exchange was relatively long, it was necessary to technically separate the old shares from the new shares for a while. In Norway, it is not possible to have two different so-called ISINnumbers for one and the same share series. Consequently, the solution was to introduce the mentioned A-shares temporarily. They were subsequently converted to ordinary shares, and today all outstanding shares are, therefore, ordinary shares.
| Name | Holdings | Ownership % |
|---|---|---|
| DNB NOR MARKETS, AKSJEHAND/ANALYSE | 51,840,256 | 8.7% |
| ARCTIC FUNDS PLC | 40,437,195 | 6.8% |
| TVENGE TORSTEIN INGVALD | 30,000,000 | 5.0% |
| STRATA MARINE & OFFSHORE AS | 27,151,999 | 4.6% |
| VERDIPAPIRFONDET ALFRED BERG NORGE | 19,368,370 | 3.2% |
| SWEDBANK GENERATOR | 17,803,435 | 3.0% |
| VERDIPAPIRFONDET HANDELSBANKEN | 16,851,801 | 2.8% |
| VERDIPAPIRFONDET ALFRED BERG GAMBA | 14,670,426 | 2.5% |
| MP PENSJON PK | 14,467,702 | 2.4% |
| STATOIL PENSJON | 11,527,500 | 1.9% |
| SOLAN CAPITAL AS | 11,000,000 | 1.8% |
| STOREBRAND VEKST | 10,602,615 | 1.8% |
| VERDIPAPIRFONDET DNB SMB | 9,521,486 | 1.6% |
| LATINO INVEST AS | 9,500,000 | 1.6% |
| HIGH SEAS AS | 9,000,000 | 1.5% |
| CIPRIANO AS | 8,650,000 | 1.4% |
| PORTIA AS | 8,500,000 | 1.4% |
| DUKAT AS | 7,933,612 | 1.3% |
| VERDIPAPIRFONDET STOREBRAND OPTIMA | 7,913,492 | 1.3% |
| CIPI LAMP UCITS SWEDBANK SMB | 6,227,914 | 1.0% |
| Subtotal 20 biggest owners | 332,967,803 | 55.8% |
| Total number of shares in the Norwegian VPS system | 596,459,746 | 99.97% |
| Total number of shares in the Swedish Euroclear system | 154,614 | 0.03% |
| Grand total | 596,614,360 | 100% |
Source: Oslo Market Solutions.
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Deferred tax at beginning of the year | - | - | - | - |
| Accrual for deferred tax in ALD Abogados SL | 11,357 | - | - | - |
| Total | 11,357 | - | - | - |
The recognition of the carrying amount of an asset will be recovered in the form of economic benefits that flow to the entity in future periods. When the carrying amount of the asset exceeds its tax base, the amount of taxable economic benefits will exceed the amount that will be allowed as a deduction for tax purposes. This difference is a temporary difference and the obligation to pay the resulting income taxes in future periods is a deferred tax liability. As the entity recovers the carrying amount of the asset, the taxable temporary difference will reverse and the entity will have taxable profit. This makes it probable that economic benefits will flow from the entity in the form of tax payments.
The deferred tax liabilities were calculated as the local tax rate of each project times the surplus value related to each acquired project. The deferred tax liability that arose in 2015 relates to the immaterial fixed assets related to ALD in Spain, which were aquired in December 2015.
Norrlandsfonden provided a 5 MSEK convertible loan during 2010 to be used unconditionally as working capital for RNP (Rönnbäcken nickel project).
As a consequence of Axactor AB disposing of the nickel project to Archelon AB on December 31, 2015 Norrlandsfonden and Axactor thereafter agreed on a premature repayment of the loan. This happened in early February 2016.
The table shows the future payments on the convertible loan (including interest payment):
| Group | Parent | ||||
|---|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 | |
| 6 months or less | 100 | 100 | 100 | 100 | |
| 6 - 12 months | 100 | 100 | 100 | 100 | |
| 1 - 5 years | 4,800 | 4,800 | 4,800 | 4,800 | |
| 5,000 | 5,000 | 5,000 | 5,000 |
| SEK thousand | Group | Parent | |||
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | ||
| 6 months or less | - | - | - | - | |
| 6 - 12 months | - | - | - | - | |
| 1 - 5 years | 500 | 4,000 | - | 4,000 | |
| 500 | 4,000 | - | 4,000 |
Other long term-liabilities were in 2014 primarily represented by a long-term loan provided by Mr. Ulrik Jansson (former Chairman of the Board). The loan formally matures in May 2016, so it was in 2015 reclassified to a short-term loan.
The new long-term loan that appeared during 2015 is located in the Spanish subsidiary ALD Abogados SL.
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Accounts payable | 12,420 | 1,560 | 5,972 | 1,388 |
| Total | 12,420 | 1,560 | 5,972 | 1,388 |
Accounts payable are non-interest bearing amounts and typically fall due within 30 days.
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Personnel related liabilities | 5,131 | - | 44 | - |
| Other short-term interest bearing loans | 4,000 | 1,099 | 4,000 | 1,099 |
| Remaining part of purchase consideration for ALD | 51,407 | - | - | - |
| Other short-term liabilities | 3,550 | 46 | 5 | - |
| Total | 64,088 | 1,146 | 4,049 | 1,099 |
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Accrued personnel vacations costs | 194 | 116 | - | - |
| Accrued social security charges | 247 | 10 | - | -26 |
| Special remuneration taxes | - | - | - | - |
| Accrued Board remuneration | 215 | 156 | 215 | 156 |
| Accrued consultant fees | 165 | 304 | 165 | 230 |
| Accured interest rate related to loans | 1,261 | 781 | 1,261 | 781 |
| Accrued legal fees | 20,659 | 377 | 1,463 | 377 |
| Accrued audit fees | 511 | 575 | 511 | 550 |
| Other accrued costs | 1,234 | 156 | 1,233 | 118 |
| Year-end balance | 24,486 | 2,475 | 4,848 | 2,186 |
| Group | Parent | |||
|---|---|---|---|---|
| SEK thousand | 2015 | 2014 | 2015 | 2014 |
| Deposition "Bergsstaten" | - | 31 | - | - |
| Pledged amount related to civil court case | 4,000 | - | 4,000 | - |
| Total | 4,000 | 31 | 4,000 | - |
| Company | Corporate id no | Domicile | No of shares |
Share | Currency | Book value (SEK) |
Equity (SEK) |
Result (SEK) |
|---|---|---|---|---|---|---|---|---|
| Axactor AS | 916249543 | Oslo | 50,000 | 100% | NOK | 2,007 | -734 | -2,635 |
| Axactor Incentive AB | 559031-2608 | Stockholm | 50,000 | 100% | SEK | 50 | 50 | - |
| NMG Portfolio Holding AB | 559031-2954 | Stockholm | 50,000 | 100% | SEK | 50 | -9,290 | -9,340 |
| NMG Platform Holding AB | 559031-2962 | Stockholm | 50,000 | 100% | SEK | 50 | -976 | -1,026 |
| Aguamenti Investments SL | B-87334637 | Madrid | 3,000 | 0.6% | EUR | 28 | 64,188 | -305 |
| Subsidiaries of NMG Platform Holding AB | ||||||||
| Aguamenti Investments SL | B-87334637 | Madrid | 500,000 | 99.4% | EUR | 64,493 | 64,188 | -305 |
| Subsidiaries of Aguamenti Investments SL | ||||||||
| ALD Abogados SL | B-86389558 | Madrid | 3,000 | 100% | EUR | 137,025 | 27,658 | -3,270 |
| Book value of shares in subsidiaries | ||||||||
| SEK thousand | 2015 | 2014 | ||||||
| Acquisition value at opening of period | 102,635 | 102,635 | ||||||
| Accumulated write down of shares in subsidiary | -5,388 | -5,388 | ||||||
| Write down of shares i subsidiary during the year | -87,715 | - | ||||||
| New subsidiaries | 2,185 | - | ||||||
| Sale of subsidiaries | -9,532 | - | ||||||
| Book value of shares in subsidiaries | 2,185 | 97,247 |
| Parent company | ||
|---|---|---|
| SEK thousand | 2015 | 2014 |
| Opening balance receivables related to subsidiaries | 70,468 | 65,091 |
| Impairment of receivables related to subsidiaries | -70,468 | - |
| Lending to subsidiaries | 366,360 | 5,377 |
| Receivables related to Group companies at year-end | 366,360 | 70,468 |
In late December 2015, Axactor AB sold the nickel operations on subsidiary level to Swedish mineral company Archelon. This implies that the revenues and costs attributable to the nickel subsidiaries in 2014 - 2015 are treated as discontinued operations. To this should be added that the minor revenues and costs related to the African operations in former subsidiary African Diamon AB disposed of in June 2014 are also treated as discontinued operations as regards the first 6 months of 2014. The table below presents the revenues and costs related to discontinued operations. These amounts have been excluded from the consolidated statement of loss for the group.
| 12m Jan - Dec |
12m Jan - Dec |
|
|---|---|---|
| SEK thousand | 2015 | 2014 |
| Other operating income | 40 | 219 |
| Other external expenses | -588 | -2,729 |
| Personnel expenses | -297 | 39 |
| Depreciation/impairment of fixed assets | -104,447 | -33,865 |
| Operating result | -105,292 | -36,336 |
| Result from financial items | ||
| Financial revenue | 4 | - |
| Financial expenses | - | - |
| Total financial items | 4 | - |
| Result before tax | -105,288 | -36,336 |
| Income tax | - | - |
| Loss from discontinued operations | -105,288 | -36,336 |
The table below presents the cash flow related to discontinued operations. The amounts have not been excluded from the consolidated statement of cash flow.
| 12m | 12m | |
|---|---|---|
| SEK thousand | Jan - Dec 2015 |
Jan - Dec 2014 |
| Cash flow from operations | ||
| Result after financial items | -105,288 | -34,866 |
| Adjustments for non-cash items* | 101,801 | 32,037 |
| Income tax paid | - | - |
| Total cash flow from operations before change in working capital | -3,487 | -2,829 |
| Total cash flow from change in working capital | -1,293 | -6,815 |
| Total cash flow used for investments | - | -473 |
| Total cash flow from financial activities | 4,772 | - |
| Change in cash and bank | -8 | -10,117 |
| Cash and bank on 1 January | 135 | 10,252 |
| Cash and bank at the end of reporting period | 127 | 135 |
| * Adjustments for non-cash items | ||
| Impairment losses on intangible fixed assets | 101,665 | 32,037 |
| Depreciation of tangible fixed assets | 136 | - |
| Other | ||
| Total | 101,801 | 32,037 |
The group is exposed to a number of financial risks. Changes in exchange rates and interest rates affect the group's profits and cash flows. Axactor is also exposed to refinancing and liquidity risks, as well as credit and counterparty risks. Below are the most material financial risks to which the Group is exposed.
Through its debt collection operations, Axactor is exposed to inter alia exchange rate risk, in that changes in exchange rates affect the Group's profits and projections of future cash flow. The Group's exchange rate exposure covers transaction exposure and translation exposure.
Axactor's transaction exposure comprises both binding undertakings and forecast cash flows.
Forecast exposure arises from the fact that a substantial percentage of the Group's future income – primarily that relating to collection of payments from overdue loans – is affected by fluctuations in exchange rates. Axactor continuously calculates the way changes in the currency markets affect the Group's future financial position. Axactor's policy is not to systematically hedge the Group's future income in a normal commercial environment. However, partial credit financing of loan portfolio acquisitions in the same currency, provides a certain currency exchange rate hedge. Axactor may also use financial derivative instruments in order to limit the risks in certain scenarios.
When net investments in foreign operations are converted into Swedish kronor, a translation difference arises in conjunction with exchange rate fluctuations, and this has an impact on the Group's other comprehensive income.
Fluctuations in market interest rates affect the Group's profits and cash flows. The speed with which a change in interest rates impacts the Group's net financial items, depends on the fixed interest term of the loans and on the cash held in banks. By the end of the year 2015, the Group had a limited interest bearing loan burden, such that the exposure to interest rate risk is considered limited. The interest rate level also has an indirect effect on the Group's result. Namely, everything else equal, the repayment ability of the underlying debtors (the non-performing loan holders) is enhanced by low market interest rates and vice versa.
The term "refinancing and liquidity risk" refers to the risk that Axactor will be unable to extend existing loans or to meet its payment undertakings due to insufficient liquidity. Axactor limits its refinancing risk by aiming for a good spread in terms of financing sources. The refinancing requirement is reviewed regularly by Axactor. The refinancing requirement is dependent, first and foremost, on market trends and investment plans. A deterioration in the global economic climate may entail increased risks, with respect to profit performance and financial position, including the risk of Axactor incurring conflicts with loan terms and conditions.
The term 'credit and counterparty risk' refers to the risk that a counterparty in a transaction may fail to fulfill its obligation, thus causing the Group to incur a loss. In order to limit credit and counterparty risk, only highly creditworthy counterparties are accepted, and wherever possible, the commitment per counterparty is limited.
The objective of the Risk Management function at Axactor is to minimize the total cost of the Group's damage and injury risks. This is achieved both by continuously enhancing the damage and injury prevention policies to control work conducted within the operations, and by introducing and developing Group-wide insurance solutions.
Financial assets within the Group mainly consist of shortterm investments, other receivables, and cash. All financial assets are classified as loans and receivables, and are reported at amortized cost. Financial liabilities are mainly related to long-term liabilities, accounts payable and other payables. Financial liabilities are valued at amortized cost.
By the end of 2015, the Group had two interest bearing long-term loans amounting to 5 MSEK and the equivalent of 0.5 MSEK, respectively. The 5 MSEK loan formally matures on August 31, 2018 and carries an interest rate equal to STIBOR 90 (Stockholm Interbank Offered Rate) plus 4 percent per annum. Since STIBOR is nearly zero for the time being, a change in STIBOR of +/– 10 percent only affects the result
of the Group by +/– SEK 305 on an annual basis. This loan was repaid in full in February 2016, after the end of the report period. The second loan of the equivalent of 0.5 MSEK belongs to the Spanish subsidiary ALD Abogados SL.
Among the short-term loans, Axactor has a loan maturing in May 2016, in a nominal amount of 4 MSEK. It has a fixed interest rate of 12% p.a, and the interest has been accrued since the loan was extended. Accrued interest amounts to some 1.24 MSEK as of year end 2015. Axactor will not repay the loan at maturity but will attempt to set it off against its claim on the creditor. This counterclaim vastly exceeds the loan amount. Axactor is, hence, not concerned with interestrate sensitivity in respect to this particular loan.
| Company | Domicile | Share (%) |
|---|---|---|
| Axactor AS | Oslo | 100% |
| Axactor Incentive AB | Stockholm | 100% |
| NMG Portfolio Holding AB | Stockholm | 100% |
| NMG Platform Holding AB | Stockholm | 100% |
| Elected | Resigned | |
|---|---|---|
| Board members elected prior to AGM 2015 | ||
| Martin Nes | October 2015 | December 2015 |
| Jan Frode Andersen | October 2015 | December 2015 |
| Per Dalemo | October 2015 | Still serving |
| Board members elected at AGM in June, 2015 | ||
| Martin Nes | June 2015 | December 2015 |
| Jan Frode Andersen | June 2015 | December 2015 |
| Per Dalemo | June 2015 | Still serving |
| Board members elected at EGM in December, 2015 | ||
| Einar Greve | December 2015 | Still serving |
Gunnar Hvammen December 2015 Still serving
Torbjörn Ranta (CEO January 2014 - November 2015) Endre Rangnes (CEO as from November 2015) Johnny Tsolis (Head of Group Strategy as from November 2015)
Refer to note 5 for information concerning compensation to management personnel and members of the Board.
Balances of the Parent Company, its subsidiaries and associates are shown in the balance sheet and in notes 27 and 28. The Parent Company has provided administrative services free of charge.
The Group has not granted loans, issued guarantees or provided sureties to any of the members of the Board or senior executives of the Company. For more information about transactions with related parties see note 5, 6 and 9.
The primary objective of the Group's capital management is to ensure maintenance of a strong credit rating and healthy capital ratios in order to support business and maximize shareholder value.
The Group manages its capital structure and makes adjustments based on changes in economic conditions. No changes were made in the objectives, policies or processes during the years ended December 31, 2014 and December 31, 2015. The Group monitors capital using a gearing ratio, which is net debt divided by equity plus net debt.
| SEK thousand | 2015 | 2014 |
|---|---|---|
| Interest-bearing loans and borrowings (note 30, 36) | 11,042 | 10,099 |
| Trade and other payables (note 28, 30) | 105,414 | 5,181 |
| Less: cash and short-term deposits (note 36) | -372,375 | -61,502 |
| Net debt | -255,919 | -46,222 |
| Equity | 476,992 | 160,794 |
| Capital and net debt | 221,073 | 114,572 |
| Gearing ratio | -115.76 % | -40.34% |
The table below analyses financial instruments as of December 2015, carried at fair value, by valuation method. The different levels have been defined as follows:
| Assets | ||||
|---|---|---|---|---|
| SEK thousand | Level 1 | Level 2 | Level 3 | Total |
| Other long-term investments | - | - | 267 (359) | 267 (359) |
| Earn-out component relating to purchase of ALD Abogados (other short-term liabilities) |
- | - | 51,407 (-) | 51,407 (-) |
| - | - | 51,674 (359) | 51,674 (359) |
All other financial assets and debts are a reasonable approximation of fair value and not reported according IFRS 7.29. The terms and conditions regarding the long term debts have not changed and are also a reasonable approximation of fair value.
The book value does in all material aspects correspond to fair value. Input for the assets and liabilities is not based on observable market data, but contains the assumptions and estimates of management (level 3 in fair value hierarchy).
The acquisition agreement regarding ALD stipulated a base price of 15 million Euro supplemented by an adjustment clause for the exact working capital of ALD on the take-over date plus an earn-out component of 3 million Euro conditional on ALD reaching an EBITDA result of at least 3 million Euro for full year 2015. This latter criterion was reached. In total the additional purchase consideration payable to the sellers of ALD reached the equivalent in Euro of 51,407 TSEK.
In December 2015, the acquisition of the company ALD Abogados SL ("ALD"), a Spanish debt collection company, was completed. ALD is one of the leading actors in this industry in Spain. It is represented in most of the Spanish regions and it had some 100 employees by year-end 2015. ALD has existed for some five years and has recorded a continuous growth over the years.
The following table shows a preliminary aquisition analysis of ALD Abogadso SL.
| SEK thousand | |
|---|---|
| Date of acquisition | Dec 10, 2015 |
| Acquired part of the company | 100% |
| Purchase prise | 188,432 |
| - whereof cash consideration | 142,757 |
| - whereof share consideration | 45,675 |
| An earn-out component is included in the purchase price amounting to | 51,407 |
| Acquired assets | |
| Other immaterial fixed assets | 33 |
| Property, plant and equipment | 299 |
| Other long-term assets | 63 |
| Current assets | 63,381 |
| Cash | 10,779 |
| 74,555 | |
| Acquired debts | |
| Interest-bearing loans | 498 |
| Current debts | 44,163 |
| 44,661 | |
| Accounted values in the group consolidation at acquisition | |
| Goodwill | 124,467 |
| Customer relationships | 37,791 |
| Database | 7,637 |
| Deferred tax debt | 11,357 |
| Net sales ALD since acquisition | 4,437 |
| Loss ALD since acquisition | -4,008 |
| Net sales ALD whole year 2015 | 92,876 |
| Profit ALD whole year 2015 | 22,969 |
We confirm, to the best of our knowledge, that the financial statements for the period 1 January to 31 December 2015 have been prepared in accordance with International Financial Reporting Standards, IFRS, as adopted by the EU, and generally accepted accounting principles in Sweden, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the entity and the group taken as a whole. We also confirm that the Administration Report includes a true and fair review of the development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties facing the entity and the group.
Stockholm, 20 April 2016 The Board of Directors
Einar J. Greve Chairman of the Board Gunnar Hvammen Board member
Per Dalemo Board member
Endre Rangnes Chief executive officer
Our modified audit report has been submitted on April 20, 2016
PricewaterhouseCoopers AB
Johan Palmgren Authorized Public Accountant
We have conducted an audit of the financial statements and we have been requested to carry out an audit of the consolidated financial statements for Axactor AB (publ) for the 2015 financial year. The Company's annual accounts and consolidated accounts are included in the printed version of this document on pages 6-55.
Responsibilities of the Board of Directors and the CEO for the annual accounts and consolidated accounts The Board of Directors and the CEO are responsible for the preparation and fair presentation of annual accounts in accordance with the Annual Accounts Act, and for the preparation and fair presentation of consolidated accounts in accordance with International Financial Reporting Standards, IFRS, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the CEO 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.
Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.
However, due to the situation described in the paragraph below indicating the basis for refraining to provide an opinion, we have not been able to obtain sufficient and appropriate audit evidence as the basis for statements in the audit report concerning the consolidated financial statements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement in the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by the Board of Directors and the CEO, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.
We believe that the audit evidence we have obtained is sufficient and appropriate for the parent company to provide a basis for our audit opinion.
In the consolidated balance sheet as of 31 December 2015, an accrued cost of SEK 13,542,583 is recognised which relates to the company's assessment of the cost that will be invoiced to the company in 2016 for services rendered in 2015. The cost relates to external hired assistance for legal services in the operations in the Spanish subsidiary ALD Abogados SL.
We have not been able to obtain sufficient and appropriate audit evidence relating to the carrying value of the accrued legal fees of SEK 13,542,583 due to the lack of documentation of the liability. Consequently, we have not been able to determine if any adjustments are necessary to the consolidated income statement or balance sheet.
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 the Parent Company as of 31 December 2015 and of its financial performance and cash flows for the year then ended in accordance with the Annual Accounts Act. Apart from the possible effects of the relationship as described in the paragraph "Basis for qualified opinion", 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 2015 and of its financial performance and cash flows for the year in accordance with International Financial Reporting Standards 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 recommend that the Annual General Meeting adopt the income statement and balance sheet of the Parent Company. We neither recommend nor reject that the Annual General Meeting adopt the income statement and balance sheet of the Group.
In addition to our audit of the annual accounts and consolidated accounts, and that we have been requested to carry out an audit of the consolidated financial statements, we have examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the CEO of Axactor AB (publ) ) for the 2015 financial year.
The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss, and the Board of Directors and CEO are responsible for the administration of the company under the Swedish Companies Act.
Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.
As a basis for our opinion on the Board of Directors' proposed appropriation of the company's profit or loss, we examined whether the proposal is in accordance with the Swedish Insurance Companies Act.
As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we have examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the CEO is liable to the company. We also examined whether any member of the Board of Directors or the CEO has, in any other way, acted in contravention of the Swedish Companies Act, the Annual Accounts Act or the Articles of Association.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
We recommend to the Annual General Meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the CEO be discharged from liability for the financial year.
PricewaterhouseCoopers AB
Johan Palmgren Authorised Public Accountant
The Board of Directors of Axactor AB (the "Company") has prepared this corporate governance policy document (the "Policy"). As the Company is a Swedish private limited liability listed on the Oslo Stock Exchange, the Norwegian Recommendation for Corporate Governance (the "Recommendation") does not apply directly to the Company. However, with due regard to the fact that the Company is listed in Norway and to a substantial degree approaches the Norwegian investor market, and considering that it wishes to place emphasis on sound corporate governance, the Company has prepared this policy document on the basis of the Recommendation, but made certain necessary adjustments given the Company's Swedish domicile.
This Policy addresses the framework of guidelines and principles regulating the interaction between the Company's shareholders, the Board of Directors (the "Board"), the chief executive officer (the "CEO") and the Company's executive management team (the "Executive Management Team").
The Company's business as set out in the articles of association is: "The Company shall, directly or through subsidiaries or via co-operations with others, conduct debt collection work, extend financial and administrative services, legal and invoicing services, acquire debt, investment operations, as well as therewith associated activities".
Engaging in the activities described in section 2 above, the Company's long term objective is to establish itself as a leading European player within the areas of its operations as defined by the articles of association.
The Company will pursue the following main strategies to reach its overall objective:
The Company will maintain a high ethical standard in its business concept and relations with customers, suppliers, employees and other stakeholders. The following ethical guidelines shall be practiced in the Company, and shall apply to all employees of the Company:
The Board aims to maintain a satisfactory equity ratio in the Company in light of the Company's goals, strategy and risk profile, thereby ensuring that there is an appropriate balance between equity and other sources of financing. The Board shall continuously assess the Company's capital requirements in light of the Company's strategy and risk profile.
The Board's authorities to increase the share capital and to buy own shares shall be granted under Swedish law, and not for periods longer than necessary.
The Company's objective is to generate a return for the shareholders at a level which is at least equal to other investment possibilities with comparable risk. The Company does not distinguish between such a return in the form of dividends and in the form of capital appreciation. The Company is in
a phase of growth, and does not foresee declaring dividends during the initial growth phase of the Company.
During 2015, a total of 505.8 million new Axactor shares were issued at NOK 1 per share via a private placement, an issue in kind and a reparatory rights issue.
On 17 February 2016, the Company raised NOK 106.1 million in gross proceeds through a private placement of 59,600,000 new shares at a price of NOK 1.78 per share
According to the current Articles of Association there are two share series, ordinary shares with one vote per share and A-shares with 0.99 votes per share. The latter is a technical solution from autumn 2015 when the private placement of 400 million new shares took place. As the time period between share subscription and the listing of the subscribed for shares was relatively long, a separation of the newly subscribed shares from the existing shares was required. In Norway, where the shares are listed, it was not possible to have two different so called ISIN-numbers for one and the same series of shares. Therefore, the A-shares had to be introduced. Subsequently, these A-shares were converted to ordinary shares.
Any transactions, agreements or arrangements between the Company and its shareholders, members of the Board, members of the Executive Management Team or close associates of any such parties shall only be entered into as part of the ordinary course of business and on arm's length market terms. With respect to any material related party transactions, the Board shall arrange for a valuation to be obtained from an independent third party unless the transaction, agreement or arrangement in question must be considered to be immaterial or the arrangement is subject to approval by the shareholders' meeting.
No person or company mentioned in the above paragraph shall vote or otherwise participate in any decision by the Company regarding a transaction, agreement or arrangement with such person or company as a counterparty.
Board members and members of the Executive Management Team shall forthwith notify the Board if they have any material direct or indirect interest in any transaction entered into by the Company.
An overview of the transactions with related parties are presented in note 9.
The shares in the Company are not subject to any transfer restrictions.
All registered shareholders have the right to participate in the general meetings of the Company, which exercise the highest authority of the Company. The Company shall summon the shareholders to any general meeting with the notice required by law, and otherwise with such advance notice as is practicable. The person chairing a general meeting should be independent of the Company and the Board.
The notices for such meetings shall include documents providing the shareholders with sufficient detail in order for the shareholders to make an assessment of all the matters to be considered as well as all relevant information regarding attendance and voting procedures. Representatives of the Board and the Company's auditor, as well as the nomination committee, shall be present at annual general meetings.
Notices for general meetings shall provide information on the procedures shareholders must observe in order to participate in and vote at the general meeting. The notice should also set out: (i) the procedure for representation at the meeting through a proxy, including a form to appoint a proxy, and (ii) the right for shareholders to propose resolutions in respect of matters to be dealt with by the general meeting.
Any cut-off for confirmation of attendance shall be set as short as practicable, and the Board shall arrange matters so that shareholders who are unable to attend in person are able to vote by proxy. The form of proxy shall be distributed with the notice.
The Company held extraordinary general meetings on 17 November 2015 and 23 December 2015 related to the new company strategy.
In appointing members to the Board, it is emphasised that the Board shall have the requisite expertise to evaluate independently the matters presented by the Executive Management Team, as well as the Company's operation. It is also considered important that the Board can function well as a body of colleagues. Board members shall be elected for periods not exceeding two years at a time, with the possibility of re-election. Board members shall be encouraged to own shares in the Company.
At the annual general meeting on 3 June 2015, the proposed board was elected, consisting of Martin Nes (chairman), Jan Frode Andersen and Per Dalemo (ordinary board members). At the extraordinary general meeting on 23 December 2015, the following Board was elected: Einar Greve (chairman), Gunnar Hvammen (board member) and Per Dalemo (board member).
The board is considered independent from the company's day-to-day management.
The Company does not currently have a remuneration sub-committee or an audit sub-committee, but shall continuously review the need to establish such sub-committees.
The Board shall prepare an annual plan for its work with special emphasis on goals, strategy and implementation. The Board's primary responsibilities shall be: (i) participating in the development and approval of the Company's strategy, (ii) performing necessary monitoring functions, and (iii) acting as an advisory body for the Executive Management Team. Its duties are not static, and the focus will depend on the Company's ongoing needs. The Board is also responsible for ensuring that the operation of the Company is in compliance with the Company's values and ethical guidelines. The chairman of the Board shall be responsible for ensuring that the Board's work is performed in an effective and correct manner.
The Board shall ensure that the Company has a good management with clear internal distribution of responsibilities and duties. A clear division of work between the Board and the Executive Management Team shall be maintained. The CEO is responsible for the executive management of the Company.
All members of the Board shall regularly receive information about the Company's operational and financial development. The Company's strategies shall regularly be subject to review and evaluation by the Board.
The Board shall prepare an annual evaluation of its work.
In 2015, the Board of Directors conducted 24 board meetings.
The Board shall ensure that the Company has sound internal controls and systems for risk management that are appropriate in relation to the extent and nature of the Company's activities. The objective of the risk management and internal controls shall be to manage exposure to risks in order to ensure successful conduct of the Company's business and to support the quality of its financial reporting.
The Board shall carry out an annual review of the Company's most important areas of exposure to risk and its internal control arrangements.
The Board shall provide an account in the annual report of the main features of the Company's internal control and risk management systems as they relate to the Company's financial reporting.
The general meeting shall determine the Board's remuneration annually. Remuneration of board members shall be reasonable and based on the Board's responsibilities, work, time invested and the complexity of the enterprise. The compensation shall be a fixed annual amount.
The chairman of the Board may receive a higher compensation than the other board members. The Board shall be informed if individual board members perform other tasks for the Company than exercising their role as board members. Work in sub-committees may be compensated in addition to the remuneration received for board membership.
The Company's financial statements shall provide further information about the Board's compensation.
Board members appointed at the June 2015 AGM receive a fee of SEK 250 thousand per year for the Chairman, and SEK 150 thousand per year for each ordinary Board Member, as established by the AGM. This was unchanged remuneration as compared to the preceding year. A new Board of Directors was appointed at the December 23, 2015 EGM. Given the then enlarged business operations the EGM decided to increase the remuneration for the new Board to 1.8 MSEK on an annual basis divided on 900 TSEK for the Chairman and 450 TSEK each for the two other Board members.
The Board shall decide the salary and other compensation paid to the CEO. The CEO's salary and bonus shall be determined on the basis of an evaluation with emphasis on specific factors determined by the Board. The Board shall annually carry out an assessment of the salary and other remuneration to the CEO.
The Company's financial statements shall provide further information about salary and other compensation paid to the CEO and the Executive Management Team.
The CEO shall determine the remuneration of executive employees. The Board shall issue guidelines for the remuneration of the Executive Management Team. The guidelines shall lay down the main principles for the Company's management remuneration policy. The salary level should not be of a size that could harm the Company's reputation, or above the norm in comparable companies. The salary level should, however, ensure that the Company can attract and retain executive employees with the desired expertise and experience.
The compensation to employed management is presented in note 6.
The Board and the Executive Management Team shall assign considerable importance to giving the shareholders quick, relevant and current information about the Company and its activity areas. Emphasis shall be placed on ensuring that the shareholders receive identical and simultaneous information.
Sensitive information shall be handled internally in a manner that minimises the risk of leaks. All material contracts to which the Company becomes a party shall, where appropriate, contain confidentiality clauses.
The Company shall have clear routines for who is allowed to speak on behalf of the Company on different subjects, and who shall be responsible for submitting information to the market and investor community. The CEO and the CFO shall be the main contact persons of the Company in such respects.
The Board shall keep itself updated on matters of special importance to the shareholders. The Board shall therefore ensure that the shareholders are given the opportunity to make known their points of view at and outside the general meeting.
The Company shall have a nomination committee whose members are elected by the general meeting. The general meeting shall elect the leader of the committee and its members, and determine their remuneration based on the nature of the duties performed and the time invested.
The duties and responsibilities of the nomination committee shall be set out in the instructions to the nomination committee. The nomination committee's responsibilities are to propose candidates for election to the Board and to recommend remuneration for board members. Reasonable rationales should be provided for the nomination committee's recommendations, and relevant information should be provided about the candidates and their independence. The recommendations of the nomination committee shall generally be made available to the shareholders at the time of the notice of the annual general meeting. Efforts shall be made to ensure that the composition of the nomination committee is broadly representative of shareholder interests and necessary expertise. Further, no more than one member should be a board member, and no member shall be put forward for election more than once. No member of the Executive Management Team should serve on the nomination committee. An overview of nomination committee members shall be available on the Company's website.
Each year the auditor shall present to the Board a plan for the implementation of the audit work and a written confirmation that the auditor satisfies established requirements as to independence and objectivity.
The auditor shall be present at Board meetings where the annual accounts are on the agenda. Whenever necessary, the Board shall meet with the auditor to review the auditor's view on the Company's accounting principles, risk areas, internal control routines, etc.
The auditor may only be used as a financial advisor to the Company if such use of the auditor cannot influence or call into question the auditor's independence and objectiveness in his capacity as auditor for the Company. Only the Company's CEO and/or CFO shall have the authority to enter into agreements in respect of such advisory assignments.
At the annual general meeting, the Board shall present a review of the compensation paid to the auditor for audit work required by law and remuneration for other concrete assignments.
In connection with the auditor's presentation to the Board of the annual work plan, the Board should specifically consider whether the auditor is performing his control function satisfactorily.
The Board shall arrange for the auditor to attend all general meetings.
Head office – Stockholm, Sweden: Axactor AB Hovslagargatan 5B, bottom floor 111 48 Stockholm Sweden
Telephone: +46 8 402 28 00 Fax: +46 8 402 28 01 [email protected] www.axactor.com
Axactor AS Sjölyst Plass 2 0278 Oslo Norway
Telephone: +46 8 402 28 00 Fax: +46 8 402 28 01 [email protected] www.axactor.com
| Quarterly Report - Q1 | 27.05.2016 |
|---|---|
| Quarterly Report - Q2 | 25.08.2016 |
| Quarterly Report - Q3 | 10.11.2016 |
| Quarterly Report - Q4 | 23.02.2017 |
| Annual General meeting | 26.05.2016 |
| Annual Report | 21.04.2016 |
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