Annual Report • Apr 4, 2012
Annual Report
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BIOHIT IN BRIEF 1 2011 IN BRIEF 2 LETTER FROM THE PRESIDENT AND CEO 4 STRATEGY, MISSION, VISION AND TARGETS 6 BUSINESS ENVIRONMENT 8 LIQUID HANDLING BUSINESS 10 DIAGNOSTICS BUSINESS 11 RESEARCH AND DEVELOPMENT 15 QUALITY AND THE ENVIRONMENT 16 EXCERPTS FROM BIOHIT'S HISTORY 17 BOARD OF DIRECTORS 19 MANAGEMENT SHAREHOLDINGS 20 MANAGEMENT TEAM 21 INFORMATION FOR SHAREHOLDERS 22 BIOHIT'S CORPORATE GOVERNANCE STATEMENT 24 FINANCIAL STATEMENTS 29
Biohit Oyj is a globally operating Finnish biotechnology company established in 1988. At the end of 2011, the company made a major strategic choice: Biohit divested its liquid handling business to focus on its Healthcare business, a socially responsible segment that holds considerable growth potential.
Biohit's range comprises products and analysis systems for the prevention and early diagnosis of gastrointestinal diseases. These include the blood sample-based GastroPanel examinations for the diagnosis of stomach diseases and associated risks, including gastric cancer; quick tests for the diagnosis of lactose intolerance and H. pylori infection in connection with gastroscopy; and the Colon-View examination for the early detection of intestinal bleeding that indicates a risk of colorectal cancer (www.biohithealthcare.com/ diagnostics). Biohit's Acetium capsule is the only way to reduce carcinogenic acetaldehyde in an anacidic stomach. An anacidic stomach may be a consequence of a) atrophic gastritis
(a functional disorder of the stomach involving damage to the gastric mucosa) resulting from Helicobacter pylori infection or an autoimmune disease, or b) medication taken to reduce stomach acidity (www.acetium.com/acetaldehyde-exposure-test).
Acetaldehyde is classed as a Group I carcinogen, a group that also includes asbestos, tobacco and benzene. All available means should be used to reduce exposure to these carcinogens in food and the organs.
Biohit is headquartered in Helsinki and the company has a subsidiary in the UK. Since 1999, Biohit's Series B share has been quoted on NASDAQ OMX Helsinki in the Small cap/Healthcare group. It is traded under the code BIOBV (www.biohithealthcare.com/investors).
Terveystalo has introduced Biohit's GastroPanel examination into its service range. GastroPanel is now available at all of Terveystalo's 150-plus locations across Finland. Diacor has also introduced GastroPanel at all of its locations in the Greater Helsinki Area. Certain major events in 2011 hindered Biohit's ability to tap the great potential of the diagnostics business. There were changes in the company's management, and we had to allocate resources to prepare for the divestment of the liquid handling business and its continued operation under a new owner. Favourable trends were seen in the net sales of the diagnostics business, especially in Finland.
The goodwill write-off on Biohit's continuing operations covered certain products in the GastroPanel test package. Acetium products do not belong to this product group. The diagnostics business grew less than was expected during the 2011 financial year. Cash flow from products during the early years of the forecast period is predicted to be in the red, due to front-loaded investments and delayed developments in net sales. As a consequence, Biohit Oyj's Board of Directors decided on a goodwill write-off of EUR 2.6 million in the 2011 Financial Statements. This write-off is based on a goodwill impairment test carried out at the end of 2011, as required by our compliance with IFRS standards. Over the coming years, we'll focus on developing both our GastroPanel and Acetium operations.
Based on a resolution of the AGM held on 13 April 2011, the Board of Directors is authorised to decide on the issue of shares and to issue the special rights referred to in Chapter 10, Section 1 of the Limited Liability Companies Act so that the maximum number of new Series B shares to be issued pursuant to the special rights is 2,000,000. This amount corresponds to approximately 20% of the company's Series B shares. After the directed share issue to Sartorius in August, the Board is still authorised to decide on the issue of a further 1,322,034 Series B shares. The issue of shares and the issue of special rights entitling to the receipt of shares can occur in deviation from the subscription right of shareholders (directed issue).
Such an authorisation remains valid for three years from the resolution of the AGM. On the basis of the authorisation granted by the Annual General Meeting on 13 April 2011, the Board of Directors decided to arrange a directed share issue to Sartorius Lab Holding GmbH. Sartorius subscribed for a total of 677,966 new Series B shares. These shares represent about 4.98% of all Biohit Oyj's shares and 0.97% of all votes conferred after registration. The subscription price was EUR 2.95 per share. Biohit Oyj's financial position saw another significant improvement after the company divested its liquid handling business to Sartorius Lab Holding Gmbh for EUR 68 million on 14 December 2011.
R&D in the diagnostics business has focused on improvements and further developments to existing innovations and products. Biohit also employs external experts and subcontractors in its R&D operations. Gross investments in continuing operations during the reporting period totalled EUR 0.1 million (EUR 0.1 million).
Biohit Oyj has signed an agreement with Thermidas Oy on the global marketing of Thermidas' thermal camera. This innovation is currently used in the analysis of, for example, blood circulation in sports injuries and the lower limbs of diabetes patients. It may also be adaptable for use in treatment monitoring and the safe, early diagnosis of certain cancer risks, such as skin, prostate and breast cancer.
During 2011, the average number of personnel employed by the Group was 422 (412 in 2010) of whom 188 (192) were employed by the parent company and 234 (220) by its subsidiaries. At the end of the financial year, Biohit employed 34 people. 27 were employed by the parent company and, during the second transitional phase, 5 people will also be working for subsidiaries divested to Sartorius.
At the turn of 2010/2011, Biohit combined sales and marketing management for the liquid handling and diagnostics businesses. They were, however, separated again after the divestment of the liquid handling business. We also made changes to our sales organisation.
| Jan–Dec 2011 | Jan–Dec 2010 | |
|---|---|---|
| Net sales, MEUR, | ||
| continuing operations | 2.1 | 2.2 |
| Net sales, MEUR, | ||
| discontinued operations | 37.9 | 37.8 |
| Operating profit/loss, MEUR, | ||
| continuing operations | -4.9 | -2.9 |
| Operating profit/loss, | ||
| discontinued operations | 49.1 | 3.4 |
| Profit/loss before taxes | 43.8 | 0.4 |
| Profit/loss for the period | 37.7 | 0.1 |
| Average number of personnel | 422 | 412 |
| Personnel at period end, continuing | ||
| operations | 34 | 35 |
| Equity ratio, % | 74% | 44.5% |
| Earnings per share, EUR | 2.9 | 0.00 |
| Shareholder´s equity per share, EUR | 3.9 | 1.01 |
| Average number of shares during | ||
| the period | 13,163,616 | 12,937,627 |
| Number of shares at end of period | 13,615,593 | 12,937,627 |
74%
BIOHIT'S EQUITY RATIO
NET SALES 2011,
422
AVERAGE NUMBER OF PERSONNEL 2011
AVERAGE NUMBER OF PERSONNEL IN CONTINUING OPERATIONS 2011
2011 was a decisive year for Biohit. In December, Biohit divested its liquid handling business to German company Sartorius Lab Holding Gmbh. The liquid handling business has developed in small markets. Our strategic choice is to focus our resources on developing Biohit HealthCare and tapping into this business' enormous and rapidly growing global market potential. The company's innovations, existing products and strong balance sheet now pave the way for the development of successful business operations.
The diagnostics business grew more slowly than expected in 2011. Biohit had to allocate resources to prepare for the divestment of the liquid handling business and its continued operation under a new owner, and this hindered our ability to tap the great potential of the diagnostics business.
Biohit aims to set its diagnostics business on the growth track. We'll be focusing on sales and marketing, establishing distribution channels, and enhancing cooperation with distributors. We'll also be strengthening our own organisation. Our spearhead products are Acetium, GastroPanel, and our quick tests. Our main market areas will be Europe and Asia. Profitability will be sought through net sales growth. Our initial goal is to improve profitability, so that our income covers costs. The divestment of the liquid handling business to Sartorius Lab Holding Gmbh had a significant impact on the Group's result for the financial year. Biohit's equity ratio stood at 79.2 per cent (44.5 per cent) at the end of 2011.
In the current situation, Biohit's lighter Group structure and precise focus are definite strengths. As a small biotechnology company, we are able to react rapidly to changes in both our operating environment and our partners' needs.
We offer products for the early diagnosis and prevention of gastrointestinal diseases and the risks of gastric and colorectal cancer. We also offer products to bind carcinogenic acetaldehyde in the stomach. All these products are protected by patents or patent applications. Our products and services can save on healthcare costs, extend people's working lives, increase wellbeing, and ensure a healthier life – and not only that, but more safely than ever before.
Our main focal points for operational development are further investments in marketing and our sales organisation. We'll also be focusing on building up an international distribution network by increasing the number of distributors and improving cooperation with distributors.
We'll be making determined efforts to enhance cooperation with our distributors, customers, subcontractors and other partners. Biohit will also be seeking growth through cooperation with a variety of automation manufacturers. We're currently negotiating the integration of GastroPanel tests into laboratory automation systems. We expect this to increase net sales, only moderately at first, but significantly at a later stage.
We have long been laying the foundations for sales growth by, for example, registering products in a range of countries and negotiating their eligibility for reimbursement in state social insurance systems.
Close cooperation with the scientific community has been vital to Biohit over the years. In order to ensure awareness and use of our diagnostic systems, we need to engage in long-term communication with physicians and the general public.
Biohit will continue its considerable investments in R&D. We're focusing our resources on improving existing products and developing new products and services based on our innovations.
We'll be increasing consumer awareness of the preventative health-benefits of using Acetium, our innovation for reducing the risk of gastric and oesophageal cancer. Acetium capsules, which bind the acetaldehyde that can cause cancer in an anacidic stomach, were launched in Germany in 2011. We'll be launching this product in other European countries by investing in marketing campaigns and media visibility, and we're also currently in negotiation with several distributors.
I would like to thank all Biohit personnel and other stakeholders for their valuable work in 2011. We have every reason to be proud of our personnel's professional skills. With the aid of everyone's unique expertise, I believe that together we'll be able to set Biohit on the growth track.
Semi Korpela President & CEO
I'm very enthusiastic, as Biohit has unique growth potential. We're setting out at full throttle to build up the business – and we've got what it takes to work miracles!
The divestment was very well received by our customers. We'll now be able to offer them greater expertise and support for diagnostics products in particular. Our precise focus will generate added value for our customers and, as a small business, we'll be able to react quickly. The market is showing great interest in Biohit. We have, for example, received offers from potential partners.
Biohit will be a dynamic and profitably growing public listed company. We'll be conducting global operations with a customer-oriented approach. Brisk organic growth will boost our net sales to a completely new level.
After the divestment of the liquid handling business on 14 December 2011, Biohit has been focusing on its products and services for the diagnosis of gastrointestinal diseases and the prevention of cancer. These socially responsibly products are based on the company's numerous innovations. New kinds of opportunities have now opened up for brisk business growth.
We'll be focusing our resources on developing Biohit HealthCare and tapping this business' enormous and rapidly growing global market potential. Resources will be allocated to the global marketing of diagnostics products and services in cooperation with independent importers and strategic partners.
BIOHIT'S MISSION is "Innovating for Health", and gastrointestinal health in particular. There is a great and rapidly growing need for innovation in this area, as populations age and public awareness of carcinogenic acetaldehyde increases. (www.acetium.com/ acetaldehyde-exposure-test).
Biohit shoulders its social responsibility by creating innovative new technologies and services that help physicians and research institutions to promote diagnostics and research. They can also prevent diseases of the gastrointestinal tract, exposure to acetaldehyde, human suffering and financial loss, thereby generating wellbeing.
BIOHIT'S GOAL is to work with our scientific advisors and partners to enable as many people as possible to gain access to Biohit HealthCare's safe, cost-effective and highly innovative products and procedures, thereby promoting the safe and cost-effective diagnosis and prevention of diseases. Biohit's range includes diagnostics products and systems, and products to bind carcinogenic acetaldehyde.
BIOHIT'S VISION for 2015 is to become one of the world's leading biotechnology companies in selected market areas, and to achieve faster-than-average growth. This will be achieved through the company's global product and service brand – Biohit HealthCare.
We seek profitable sales growth, which is a prerequisite for the company's continued development and ability to pay dividends.
Biohit's liquid handling business was transferred to Sartorius Lab Holding Gmbh on 14 December 2011. According to Dominique Baly, who has taken over running of the liquid handling business, the day the agreement was signed was the most important day of the year for both Biohit and Sartorius.
Biohit and Sartorius agreed that, in conjunction with the transaction on 14 December 2011, Sartorius would sell Biohit all of the liquid handling products that Biohit requires to supplement its diagnostics and GastroPanel laboratories, including Roboline and the Roboline analyser.
The photo shows Professor Osmo Suovaniemi, MD, PhD, Chairman of Biohit Oyj's Board of Directors and the founder of the company, and Sartorius AG's CEO, Dr Joachim Kreuzburg, signing the agreement.
Biohit HealthCare products promote the early diagnosis and prevention of cancer risks and diseases of the gastrointestinal tract. These products are used in hospitals, healthcare centres, clinics and service laboratories.
As the population ages, serious gastrointestinal diseases, such as gastric, oesophageal and colorectal cancer, are becoming increasingly common. Cancers of the gastrointestinal tract often present only minor symptoms, which hinders their detection. There is, therefore, a growing need for top-quality, reliable diagnostics. Some current treatment practices are insufficient and outdated, and can therefore lead to fatal malpractice.
In January 2012, a panel of international medical experts recommended the use of biomarkers as a primary examination procedure when screening for and diagnosing atrophic gastritis (a functional disorder of the stomach involving damage to the gastric mucosa), which causes a risk of gastric and oesophageal cancer. GastroPanel is based on measuring the biomarkers found in a blood sample. Gastroscopic examinations can then be performed only on those who are truly at risk of cancer. This will generate considerable savings and reduce needless deaths.
Several studies have shown that half of all gastroscopic examinations are carried out on people with healthy stomachs. Gastro-Panel provides a quicker and more cost-effective way to examine stomach condition, and is also more pleasant for patients. Early diagnosis improves the prognosis, and reduces human suffering and needless deaths.
20–40 per cent of the population in Western countries suffers from upper-abdominal complaints, and over half of the world's population from Helicobacter pylori infection. Many patients presenting abdominal complaints either do not receive safe, effective treatment or are unsatisfied with their treatment. Many of those who remain undiagnosed resort to risky self-medication, such as yoghurts and prescription-free medication for reducing stomach acidity.
Similar efficiency-boosting measures are required in healthcare throughout the West. The current debt crisis in public finance is placing its own immediate challenges on healthcare funding.
Exporting diagnostics products to new markets therefore requires precise calculations of the potential cost savings. Customers also desire simpler and easier tests for patient screening. These are exactly the kinds of trends that will increase demand for Biohit's diagnostic tests.
Another trend worth mentioning is the technicalisation and automation of laboratories. Laboratories have a growing need to switch from manual labour to automation, and to centre their research on ever-larger automation systems. This trend can clearly be seen in the growing need for point-of-care (POC) analyses, such as blood sample-based tests that can be conducted at clinics. These trends pose challenges for Biohit – but also offer new opportunities.
Biohit engages in international cooperation with the industry's top experts. Leading gastroenterologists from all across the globe have launched the Healthy Stomach Initiative, a programme that promotes research, training and awareness in the field of stomach health. Biohit is one of the programme's partners. The GastroPanel and ColonView examinations have been suggested as a way to screen the population for cancer risks.
Europe and Asia are Biohit's main market areas.
Our primary goal is to build up a strong, motivated and professional distribution network. Potential distributors are carefully screened. New distribution agreements are currently underway with distributors specialising in gastroenterology. Once products have been registered, Biohit helps distributors with, for example, commercialisation and user training in accordance with each country's practices.
In Finland, Terveystalo and Diacor's capital-region locations have introduced the GastroPanel examination.
In early 2012, Japanese company Fujirebion CanAg Diagnostics (Beijing) launched sales and marketing of GastroPanel examinations in China, where the company has about 200 distributors.
This decade will be the decade of acetaldehyde. In October 2009, the IARC (a WHO expert organisation) classed acetaldehyde as a
Group I carcinogen – a group that also includes asbestos, tobacco and benzene. All available means should be employed to prevent exposure to these carcinogens in the organs and food.
Biohit's patented Acetium innovation reduces the amount of acetaldehyde in an anacidic stomach. An acid-free stomach is the primary risk factor in gastric cancer and, according to recent research, it also poses a significant risk of oesophageal cancer. Acetium is recommended for those who have an anacidic stomach or chronic Helicobacter pylori infection, or take PPI medication. There are over half a million such people in Finland.
Acetium is prescription-free and available at all Finnish pharmacies supplied by Tamro Oyj. Acetium's target markets are Europe and Asia. Acetaldehyde awareness is increasing in Finland, which is promoting product sales. However, we will be increasing awareness of Acetium and the presence of carcinogenic acetaldehyde in the organs and foodstuffs through effective communications to physicians and the general public. (www.acetium.com/acetaldehyde-exposure-test).
A transaction completed on 14 December 2011 transferred ownership of Biohit's liquid handling business to Sartorius Lab Holding Gmbh. Biohit is obligated to report on its discontinued liquid handling business, which developed, manufactured and marketed mechanical and electronic pipettes and disposable tips for use in research institutions, universities and hospitals. The range also included customised OEM (Original Equipment Manufacturer) products, and maintenance, calibration and training services provided through Biohit's distribution network.
Favourable trends were seen in sales of mechanical pipettes during 2011. Demand for electronic pipettes was hardest hit by the economic downturn. The net sales of the liquid handling business as a whole rose to EUR 37.9 million, representing comparable growth of five per cent on 2010.
The greatest growth was seen in Russia and China, although demand fell in the rest of Asia. North America posed the greatest challenges, as the market situation weakened considerably after the first quarter and a fall in the value of the dollar lowered net sales.
The liquid handling business had an operating result of EUR 2.8 million, which was five per cent less than in 2010.
In June, Biohit expanded its product range with the eLINE 0.1–5 µl electronic pipette, which was well received on the market. This new pipette is ideal for microbiology labs and dispensing small volumes of liquid.
Biohit launched the Roboline pipette in early 2011. This pipette is suitable for the safe, precise and automatic dispensing and transfer of samples and reagents in a broad variety of diagnostics and research.
Roboline marketing and distribution channels were also established during 2011. The new product was demonstrated to customers in France, the UK, Germany, the USA, Russia, China, and Japan. It has raised widespread interest at research laboratories at universities and in the pharmaceutical and diagnostics industries. A good opening for the product was made in the OEM market, when Biohit signed an agreement to make 81 automation deliveries in North America during 2011 and 2012. On the basis of customer feedback, we designed Roboline to be even more user friendly.
An analyser based on Roboline is currently in the development stage. Like the hundreds of thousands of other microplate readers and automated analysing systems on the global market today, this fully automated analyser for GastroPanel and other microplate immunoassays is based on the vertical measurement principle. (www.google.com: "Osmo Suovaniemi vertical measurement" and "Suovaniemi equation").
During 2011, the manufacture of mechanical pipettes was transferred to Asia, where demand is experiencing the strongest growth. In July, Biohit's pipette calibration laboratory in Suzhou, China, was the first company in China to be granted CNAS (China National Accreditation Service) accreditation.
PREPARING FOR LARGE MARKETS AND NEW INNOVA-TIONS IN THE DIAGNOSTICS BUSINESS
Net sales of diagnostics products and products for binding carcinogenic acetaldehyde remained quite modest in 2011. Biohit had to allocate resources to prepare for the divestment of the liquid handling business and its continued operation under a new owner, and this hindered our ability to tap the great potential of these products.
The diagnostics product range includes the GastroPanel examination and ColonView quick tests for primary healthcare; lactose intolerance and Helicobacter pylori quick tests for specialised healthcare; and instruments and analysis systems for laboratories. The company is also preparing to market GastroPanel laboratories of varying capacities. In addition to GastroPanel test kits, these laboratory packages also include liquid handling products, instruments, and software, as well as installation, training, and maintenance services. Biohit will purchase any liquid handling products required for its diagnostics products and laboratories from Sartorius, the company that bought Biohit's liquid handling business. The Gastro-Panel laboratory concept will promote the effective introduction of the GastroPanel examination, which has been suggested by the international Healthy Stomach Initiative.
The Healthy Stomach Initiative's work group, which comprises sixteen gastroentological experts from twelve different countries, published the following article in January 2012: Rationale in diagnosis and screening of atrophic gastritis with stomach-specific plasma biomarkers, Scandinavian Journal of Gastroenterology. 2012; 47: 136–147 (www.biohithealthcare.com/GastroPanel biomarkers: "Rationale in diagnosis and screening of atrophic gastritis with stomach-specific plasma biomarkers").
The Healthy Stomach Initiative's international work group recommends the use of the GastroPanel examination's biomarkers for the diagnosis and screening of those suffering from abdominal complaints and asymptomatic Helicobacter pylori infection, and for atrophic gastritis resulting from Helicobacter pylori infection or an autoimmune disease, when it is not safe to use, for example, the 13C urea breath test. 20–40% of the population in Western countries suffer from abdominal complaints. Diseases of the gastrointestinal tract are a major source of healthcare costs all across the globe. Certain examination and treatment practices are also insufficient and outdated.
GastroPanel represents the latest in safety, cost-effectiveness and technological advancement in the field, and doesn't exhibit any of the serious medical problems as the following tests, which can lead to malpractice and even deaths from gastric cancer. (www.biohithealthcare.com: "State of the art GastroPanel and Acetium innovations for the unmet need"):
"The 13C urea breath test (UBT), stool antigen test, and simple antibody tests do not detect atrophic gastritis that is caused by Helicobacter pylori infection or an autoimmune disease. The diagnosis of, in most cases, asymptomatic atrophic gastritis is important due to its associated risks, such as gastric and oesophageal cancer, and malabsorption of vitamin B12, iron, magnesium, calcium and certain drugs. Calcium deficiency causes osteoporosis, and vitamin B12 deficiency can cause Alzheimer's disease, dementia, depression and polyneuropathy, as well as a high homocysteine content in the body, which in turn is thought to be an independent risk factor for atherosclerosis, heart attacks and strokes. The absorption of dipyridamole, certain iron preparations and antifungals (fluconazole, itraconazole), thyroxine, and atazanavir is considerably
The vertical measurement principle, which uses the formula A=km, has enabled the use of effective analysers and non-radioactive biomarkers, and the mass development of safe immunoassays for research and the diagnosis of, for example, infectious diseases and cancers. (www.biohithealthcare.com/About us/History/Aggressive innovation and patenting strategy: "the Suovaniemi equation". A = km, where A is absorbance, k is a constant, and m is a mass to be measured.)
The GastroPanel test is an excellent tool for treating patients suffering from upper abdominal complaints, as it provides fast and reliable information on the condition of the stomach. If the blood-sample based GastroPanel test indicates a healthy stomach, no endoscopic examination is required," says Francesco Di Mario, Professor of Gastroenterology.
A study conducted in Italy found that, among a thousand patients suffering from abdominal discomfort, only 30 per cent required an endoscopic examination after an initial examination with GastroPanel. The test used a blood sample to measure biomarker concentrations and Helicobacter pylori antibodies, indicating the condition of the gastric mucosa.
Cooperation between Professor Di Mario and Biohit began in 2000. "Biohit's Italian distributor proposed that our department test GastroPanel. Since my earlier research focused on the biomarkers examined with these tests, this innovation immediately aroused my interest."
Professor Di Mario also highlights the benefits of GastroPanel in the early diagnosis of diseases of the gastrointestinal tract. When diagnosed at a sufficiently early stage, the progress of gastric cancer can be halted.
According to Di Mario, up to 70 per cent of gastric and colorectal cancers are diagnosed too late in Western European countries, and little can be done to save patients at this stage. However, Japanese studies found that 80 per cent of those
diagnosed with cancer could be treated when screening was used to catch the disease at an early stage.
Di Mario explains that GastroPanel is gradually gaining ground as an examination method in Italy. It's currently being used by around 40 public hospitals and a
number of private research institutions in Italy. According to confirmed guidelines for basic healthcare in Italy, Gastro-Panel is the primary method for examining upper abdominal complaints in cases where the patient exhibits no alarming symptoms.
"It takes a while for physicians to accept new examination methods. The crisis in public finance is also making reform more difficult. On the other hand, the indisputable cost benefits of using GastroPanel would have a favourable impact in the current economic situation."
Di Mario is one of the two gastroenterologists who launched the Healthy Stomach Initiative. This concept aims to create a foundation for international cooperation in the field, and also to draw up guidelines. When it comes to prevention, promoting a healthy diet and influencing the general public's behaviour are also important objectives.
impaired in an anacidic stomach resulting from atrophic gastritis. The risk of pneumonias and, in senior citizens, even the risk of fatal intestinal infections (such as giardiasis, malaria, Clostridium difficile and E. coli EHEC) has been shown to increase significantly in an anacidic stomach. Furthermore, none of the aforementioned three Helicobacter pylori tests provides any information on excessive gastric acid secretion, which in patients with gastro-oesophageal reflux disease may cause complications. Such complications are often asymptomatic and include ulcerative oesophagitis and Barrett's oesophagus, which may lead to oesophageal cancer if left untreated. Helicobacter pylori gastritis may also develop into antral atrophic gastritis, which increases the risk of peptic ulcer disease and gastric cancer. The 13C urea breath test and stool antigen test may even give up to 50% false negative results if the patient has atrophic gastritis, MALT lymphoma or bleeding peptic ulcer disease; or if the patient is currently taking antibiotics or PPIs."
Pasechnikov VD, Chukov SZ, Kotelevets SM et al. reached the following conclusion in their article: "The analysis of the literature data and results of our own research allow us to conclude that the serious medical and ethical problems of the 'test and treat' strategy can be corrected simply and economically by replacing its 13C urea breath or stool antigen test by the GastroPanel examination. Talley et al. (2004) indicate that in many countries, such as Sweden and the US, the 'test and treat' strategy alone is not considered sufficient. The H. pylori tests of the 'test and treat' strategy do not find atrophic gastritis and related risks, such as gastric cancer and precancerous lesions. Any observations would need to be confirmed by gastroscopy and biopsy specimen examination, after which the diseases could be successfully treated. GastroPanel used in conjunction with gastroscopy and biopsy specimen examinations will reveal patients with precancerous lesions and early-stage gastric cancers, and will therefore prevent unnecessary deaths from gastric cancer." (Invasive and non-invasive diagnosis of Helicobacter pylori-associated atrophic gastritis: A comparative study, Scandinavian Journal of Gastroenterology 2005; 40: 297–301).
On the basis of the results of the Finnish Setti study (Sipponen P, Härkönen M, et al.) it was estimated that 250 to 300 gastric cancer deaths among the over-50s could be prevented in Finland each year. This could be achieved by using GastroPanel to screen all elderly people, and all suspected H. pylori positive patients in particular, for atrophic gastritis. Gastroscopy can be conducted on at-risk patients to diagnose early-stage gastric cancers and precancerous lesions whilst the diseases are still at an asymptomatic and curable stage. In addition to the risk assessment of gastric cancer, GastroPanel screening, diagnostics and check-ups also produce a lot of reliable and valuable additional information (see www.biohithealthcare.com/Investors/Strategy and Objectives: "State of the art GastroPanel and Acetium innovations for the unmet need".
GastroPanel examinations are available at, for example, private clinics such as Terveystalo and Diacor. A list of these locations is available in Finnish at: www.biohithealthcare.com/fi/laboratoriopalvelut/ kuluttaja. When the GastroPanel 's biomarker tests (Pepsinogen I and II and Gastrin-17 concentrations, and Helicobacter pylori antibodies) are performed on the basis of a doctor's referral, the Social Insurance Institution of Finland (Kela) will provide compensation. GastroPanel examinations are performed without referral at the Docrates Hospital (www.docrates.fi/ Terveys- ja Hyvinvointipalvelut/Vatsaongelmien testit) and Biohit's own service laboratory, tel. +358 9 773 861.
In addition to its range of examinations, which include GastroPanel and ColonView, Biohit's service laboratory also offers an acetaldehyde measurement service that determines the acetaldehyde concentration of, for example, nutrients and alcoholic beverages. (www.biohithealthcare.com/Diagnostics). Biohit has filed patent applications for its BioFood method in several countries. The BioFood method binds and inactivates the free, carcinogenic acetaldehyde found in, for example, beer, yoghurt and many baby and toddler foods.
In addition to the aforementioned conclusion, the authors of the Healthy Stomach Initiative article also stated that the acetaldehyde formed in an anacidic stomach resulting from atrophic gastritis significantly increases the risk of gastric and oesophageal cancer. Acetium capsules can reduce the carcinogenic acetaldehyde formed in the stomach, and are thereby likely to reduce the risk of cancer.
Acetium – an innovative way of removing carcinogenic acetaldehyde – is based on Finnish research. The animoacid L-cysteine effectively binds and inactivates the acetaldehyde found in stomach fluids. Acetium capsules release L-cysteine into the stomach, where acetaldehyde is formed, at a regulated rate. Acetium is available from pharmacies without a prescription. On the basis of its mechanism of action, the Finnish Medicines Agency has classed Acetium as a medical device.
Biohit's unique Acetium capsules bind and inactivate acetaldehyde, which is classed as a Group I carcinogen. Acetium should be taken with every meal, and always with the consumption of alcohol. It is suitable for:
An anacidic or low-acid stomach resulting from atrophic gastritis (caused by Helicobacter pylori infection or an autoimmune disease), which can be diagnosed using the blood sample-based GastroPanel examination: about 500 million people worldwide.
Untreated, chronic Helicobacter pylori infection (diagnosis using GastroPanel): over 500 million people worldwide.
Long-term users of medication that reduces stomach acidity (Proton Pump Inhibitors and H2 blockers): about 5–10% of people in Western countries use these medicines, and over 500,000 people in Finland.
People who have undergone stomach surgery: over a million people worldwide.
A genetic defect that prevents the body from breaking down acetaldehyde: up to about half of all Asians have an ALDH2 deficiency and an estimated 2–12% of them have an anacidic stomach.
In October 2009, the IARC (International Agency for Research on Cancer), which operates under the WHO, recategorised acetaldehyde as a Group I carcinogen. This group also includes asbestos, tobacco and benzene. All Group I carcinogens are subject to the same ethical and legislative principles, regardless of their source. All available means should be used to reduce exposure to these carcinogens in food and the organs (www.acetium.com/test-youracetaldehyde-exposure).
Biohit will launch prototype production of BioFilter and the Acetium lozenge by the end of spring 2012. At the end of the year, a study will be conducted to discover whether these products can help people quit smoking.
Smoking is the greatest single cause of cancer worldwide. Every year, a total of about one million cases of mouth, throat, oesophageal and gastric cancer are diagnosed worldwide (25% of all cancers). Five years after diagnosis, under five per cent of these people are still alive. Smoking is one of the most important factors in deaths that could have been prevented. Every year, smoking causes about five million fatalities worldwide, mainly as a consequence of lung and other cancers, COPD (chronic obstructive pulmonary disease), and cardiovascular diseases.
In addition to preventing cancers, Acetium tablets (which contain L-cysteine and xylitol) and BioFilter (which contains L-cysteine) may also help people quit smoking. Our latest innovation is the new BioFilter method and device, which enables the removal of the majority of the acetaldehyde contained in smoke from the most common cigarettes. The BioFilter is a closed plastic tube that contains cellulose fibres saturated with L-cysteine. The plastic tube can be attached to a variety of cigarette holders, and can remove up to 95 per cent of the carcinogenic and addictive acetaldehyde that is formed during smoking.
There is a considerable market for these types of products, even if only a small fraction of smokers are motivated to quit smoking using the Acetium lozenge or BioFilter to bind addictive and carcinogenic acetaldehyde.
In March 2012, Biohit launched a clinical trial to study the capacity of the company's new BioAcetium product to treat Helicobacter pylori infection (www.biohithealthcare.com/Investors/Stock Exchange Releases 02.03.2012).
Biohit Oyj has developed BioAcetium, which slowly releases L-cysteine or N-acetylcysteine into the stomach. Both substances have been shown to be able to destroy the biofilm produced by H. pylori, which protects the bacteria from gastric acid and antibiotics. The BioAcetium innovation could provide a completely new H. pylori eradication treatment that is significantly safer and more cost-effective than previous treatment models. Its risk of developing antibiotic-resistant strains of bacteria is also either non-existent or minimal.
Over half of the world's population continues to suffer from H. pylori infection. Those who suffer from H. pylori infection have a 10–20% chance of developing a gastric or duodenal ulcer, and a 1–2% risk of developing gastric cancer over the course of their lives. Gastric cancer is still the second most-common cause of cancer-related death worldwide. According to current treatment recommendations, measures should be taken to eliminate the bacteria in at least all those suffering from gastric ailments. However, Helicobacter's ability to develop antibiotic-resistant strains is a rapidly growing problem worldwide.
Biohit's business, which seeks to improve health and quality of life, is based on continual R&D. Biohit's patent-protected innovations are the result of longterm basic and applied research. R&D and quality go hand in hand.
Biohit has applied a determined and systematic innovation and patent strategy. Over the years, the company has also engaged in close cooperation with experts, universities and research organisations in many countries. R&D is carried out in accordance with industry standards, and is steered by Biohit's scientific advisory board. Product and patient safety are paramount.
Biohit will continue to make considerable investments in R&D, for both new and existing products, such as the GastroPanel examination, quick tests for Helicobacter pylori infection and lactose intolerance, and Acetium. Over a quarter of our personnel are working on these tasks.
The GastroPanel examination is suitable for the early diagnosis of dyspepsia, Helicobacter pylori infection, and atrophic gastritis (a functional disorder of the stomach involving damage to the gastric mucosa). Over ten years of continual research went into its development. GastroPanel's strength lies in its almost one-hundred-percent success rate in revealing healthy stomachs. Patients do not then need endoscopic examinations, and other symptoms can be investigated. Treatment can progress quickly and cost-effectively.
Biohit has been involved in, for example, studies of volunteers suffering from atrophic gastritis and Helicobacter pylori infection. Atrophic gastritis was diagnosed in 3.5 per cent of those studied, and its prevalence was greater among older age groups (Prevalence of undiagnosed advanced atrophic corpus gastritis in Finland; an observational study among 4,256 volunteers without specific complaints; Telaranta-Keerie AL, 2010).
Biohit has been granted patents for GastroPanel in Finland and several other countries. We're currently studying the suitability of new quick tests for possible inclusion in the GastroPanel examination. We're also continuing R&D on ColonView, which has been designed for the early detection of intestinal bleeding, which indicates a risk of colorectal cancer.
Exposure to acetaldehyde has been connected to around four million new cases of cancer every year, worldwide – that is, almost 40% of all cancers. It's possible to significantly reduce this exposure by informing the food and drink industry and the general public of the dangers of acetaldehyde. (www.acetium.com/test-youracetaldehyde-exposure).
Biohit is involved in Tekes' (the National Technology Agency of Finland) ongoing Acetaldehyde Inactivation project.
We'll be continuing development of our new products for acetaldehyde removal – BioFilter and the Acetium lozenge – alongside our Acetium products; and we're also investigating their suitability as an aid for quitting smoking. Biohit has defined new research sub-areas, such as BioAcetium capsules' potential use in Helicobacter pylori eradication.
Biohit's innovative BioFood method enables the carcinogenic acetaldehyde in foodstuffs and alcoholic beverages to be bound and inactivated. It would be advisable for packaging to state the amount of acetaldehyde contained in these products. The colouring used is cola drinks may cause cancer. That's why an American court decided that a cancer warning label should be placed on all bottles and cans of cola. Biohit's service laboratory offers an acetaldehyde measurement service to determine the acetaldehyde concentration in foodstuffs and alcoholic beverages. (www.biohithealthcare.com/Diagnostics).
Quality is vital in our industry, as it has a direct impact on the reliability of our laboratory customers' operations. Biohit's quality handbook will be further developed during 2012 with a close eye on the needs of the diagnostics business. Our short-term quality targets include establishing standardised operating procedures.
We pay particular attention to measuring quality and aim to find benchmarks that provide genuinely useful information. Measurements are taken in accordance with the healthcare quality directive.
Customers will be able to use their Biohit products for many years – and still find them safe and reliable. We quickly undertake any necessary maintenance and training. Customer feedback is an important measure of quality, and we aim to respond as quickly as possible. Feedback is also valuable, as we can utilise it in our R&D.
We also use customer satisfaction surveys to analyse our customers' perceptions of quality on a regular basis. The survey is sent to both end-users and distributors.
The development, production and marketing of diagnostics products are governed by strict quality standards and other regulations. Our test kit production adheres to the guidelines issued by the Clinical Laboratory Standard Institute and other international organisations.
In September 2011, Biohit's Kajaani plant was placed third in a national working environment competition organised by the Federation of Finnish Technology Industries, the Centre for Occupational Safety, and Regional State Administrative Agencies. The competition evaluated the safety of working conditions and practices. Ownership of the Kajaani plant was transferred to Sartorius Lab Holding Gmbh as part of the divestment of the liquid handling business in late 2011.
All of Biohit's products are CE/IVD (In Vitro Diagnostics) registered and approved. Both products and processes comply with ISO 9001 and ISO 14001 quality and environmental standards, and also with ISO 13485 quality standards, which cover the manufacture of medical equipment.
Biohit seeks to develop and manufacture products that will cause as little environmental loading as possible throughout their entire life cycles. We are aware of the environmental impacts of our products, and develop our operating procedures with an eye on the principles of sustainable development.
Biohit's quality and environmental system is certified by Det Norske Veritas (DNV). Our environmental policies undergo continual development, and will, for example, be brought in line with new waste legislation at the beginning of May. Biohit is already working in compliance with this legislation in our product design and improvements. The materials we use are not hazardous to health and cause as little environmental loading as possible, and we use them sparingly.
We also intend to replace our test kit packaging material with a more environmentally friendly alternative. Any waste generated is sorted as carefully as possible, and we try to minimise the volume of mixed waste. We will be clarifying and monitoring our environmental targets more closely in 2012. Our operations comply with the WEEE directive. Biohit is a member of The Environmental Register of Packaging PYR Ltd and Der Grüne Punkt, a packaging recycling and reuse programme.
Biohit's GastroPanel and Acetium innovations form a unique pairing in the prevention of gastric and oesophageal cancer. GastroPanel detects atrophic gastritis and its associated risks, such as gastric and oesophageal cancer, at a stage when successful treatment is still possible. Atrophic gastritis of the corpus, which rarely heals, leads to a permanently low-acid or anacidic stomach. Mouth microbes are able to live in an anacidic stomach and produce acetaldehyde from alcohol and the sugars contained in food.
In October 2009, the WHO classified acetaldehyde as a Group I carcinogen – a dangerous group which also includes asbestos, tobacco and benzene. All Group I carcinogens are subject to the same ethical and legislative principles, regardless of their source. All available means should be used to reduce exposure to these carcinogens in food and the organs. Acetium capsules, which are protected by granted and pending patents, are the only way of inactivating carcinogenic acetaldehyde in the stomach, which in turn enables the prevention of gastric and oesophageal cancer.
Before the GastroPanel innovation, it was difficult to diagnose asymptomatic patients or those presenting only minor symptoms of atrophic gastritis caused by Helicobacter pylori infection or autoimmune disease and its associated risks (such as gastric cancer, oesophageal cancer, and vitamin B12, iron and calcium deficiency) before they present alarming symptoms with a poor prognosis. Patients were often only diagnosed at random during the histological examination of biopsy samples taken through gastroscopy. The symptoms of dyspepsia include occasional or chronic upper abdominal complaints, such as discomfort, nausea, bloating, belching, indigestion or pain. If these ailments lead to alarming symptoms, such as significant and inexplicable weight loss, recurrent vomiting, difficulty swallowing, melena or hematemesis (vomiting blood), then gastric or oesophageal cancer has
usually progressed to an incurable stage. Atrophic gastritis and the resulting gastric or oesophageal cancer is rarely suspected before the onset of alarming symptoms. That's why abdominal complaints are usually treated with medication to reduce stomach acidity, and even yoghurts.
About one third of the population suffers from abdominal complaints and the atrophic gastritis that can lead to, for example, the risk of cancer, is usually asymptomatic. The GastroPanel examination aids in identifying patients who are at risk of gastric or oesophageal cancer (due to atrophic gastritis resulting from Helicobacter pylori infection or an autoimmune disease), so they can be referred for gastroscopy and timely treatment. Gastroscopy is also recommended when the complications of gastroesophageal reflux disease are suspected on the basis of symptomatic Helicobacter pylori infection or excessive acid secretion. These complications include esophagitis and oesophageal cancer.
The innovation and development of the GastroPanel examination stems from cooperation between the Finnish biotechnology industry and the scientific community. Contributors have included Biohit Oyj's R&D personnel and the following members of Biohit's scientific advisory board: Professors Pentti Sipponen, Matti Härkönen, Seppo Sarna, Mikko Salaspuro, Martti Marvola, Mårten Wikström and Osmo Suovaniemi. GastroPanel R&D has benefited from:
Decades of basic research on gastritis carried out by teams led by Finnish professors Max Siurala and Pentti Sipponen.
Barry J. Marshall and J. Robin Warren's Nobel prizewinning discovery of Helicobacter pylori and its effect on gastritis, which was based on the aforementioned basic research (http://nobelprize. org/medicine/laureates/2005/press.html).
An excellent example of Biohit's long-term innovation and patenting strategy is the 2010 Konsta Lifetime Achievement Award, which was awarded to Professor Osmo Suovaniemi for his contribution as an inventor and innovator. The Support Association for Finnish Inventors and Headline Oy established the Konsta Awards to recognise and highlight the significance of Finnish innovation.
"Professor Osmo Suovaniemi, 66, inventor and CEO, is a natural-born and multi-talented inventor and entrepreneur. The extent of his patent portfolio is unique in Finland, and also significant globally. Osmo Suovaniemi is the perfect example of what a Finnish inventor can achieve through networking, creativity, determination, and the power of positive thinking." (www.biohithealthcare.com/About us/ History: Aggressive innovating and patenting strategy)
The worldwide spread of analysis and liquid handling equipment based on Osmo Suovaniemi's vertical measurement principle and other innovations has enabled the mass development of safe immunoassays using non-radioactive biomarkers for research and the diagnosis of, for example, infectious diseases and cancers. These
'revolutionised laboratory routines worldwide in the 1970s and 1980s' (TEKES, The National Technology Agency of Finland, 2001: Paving the Way for Evidence-Based Medicine: Diagnostics 2000) have enabled the development and use of the ELISA tests used in the GastroPanel examination (www.biohithealthcare.com/About Us/History/Aggressive innovation and patenting strategy).
The development of our Acetium capsules is a good example of basic scientific research successfully crossing academic borders, and also successful cooperation with Finnish biotechnology companies. R&D has been carried out by Professor Mikko Salaspuro and his research team, with Professor Martti Marvola. Professor Salaspuro is a world-renowned and highly esteemed alcohol and acetaldehyde researcher.
Agréus L, Kuipers EJ, Kupcinskas L, Malfertheiner P, Di Mario F, Leja M, et al. Rationale in diagnosis and screening of atrophic gastritis with stomach-specific plasma biomarkers. Scand J Gastroenterol. 2012;47:136-147.
Varis K, Sipponen P, Laxén F, Samloff IM, Huttunen JK, Taylor PR, Heinonen OP, Albanes D, Sande N, Virtamo J, Härkönen M. Implications of serum pepsinogen I in early endoscopic diagnosis of gastric cancer and dysplasia. Helsinki Gastritis Study Group. Scand J Gastroenterol. 2000;35:950-6
Villako K, Kekki M, Maaroos HI, Sipponen P, Uibo R, Tammur R, Tamm A. Chronic gastritis: progression of inflammation and atrophy in a six-year endoscopic follow-up of a random sample of 142 Estonian urban subjects. Scand J Gastroenterol Suppl. 1991;186:135-41
Sipponen P, Varis K, Fräki O, Korri UM, Seppälä K, Siurala M. Cumulative 10-year risk of symptomatic duodenal and gastric ulcer in patients with or without chronic gastritis. A clinical follow-up study of 454 outpatients. Scand J Gastroenterol. 1990;25:966-73 5. Kekki M, Siurala M, Varis K, Sipponen P, Sistonen P, Nevanlinna HR. Classification principles and genetics of chronic gastritis. Scand J Gastroenterol Suppl. 1987;141:1-28 6. Ihamäki T, Kekki M, Sipponen P, Siurala M. The sequelae and course of chronic gastritis during a 30- to 34-year bioptic follow-up study. Scand J Gastroenterol. 1985;20:485-91.
Sipponen P, Kekki M, Siurala M. Atrophic chronic gastritis and intestinal metaplasia in gastric carcinoma. Comparison with a representative population sample. Cancer. 1983;52:1062-8.
Väkeväinen et al. Scand. J. Gastroenterol 2002; 37:648–655
Secretan B, Straif K, Baan R, Grosse Y, ElGhissasi F, Bouvard V et al. A review of human carcinogens - Part E: tobacco, areca nut, alcohol, coal smoke, and salted fish. www. thelancet.com/oncology. Vol10, November 2009.
Salaspuro M. Acetaldehyde as a common denominator and cumulative carcinogen in digestive tract cancers. Scand J Gastroenterol 2009; 44:912–25.
Salaspuro V, Hietala J, Kaihovaara P, Pihlajarinne H, Marvola M, Salaspuro M. Removal of acetaldehyde from saliva by a slow-release buccal tablet of L-cysteine. Int J Cancer 2002; 97:361–4.
Salaspuro VJ, Hietala JM, Marvola ML, Salaspuro MP. Eliminating carcinogenic acetaldehyde by cysteine from saliva during smoking. Cancer Epid Biomark Prev 2006; 15:146–9.
| Name | Position | Series A shares |
Change* | Series B shares |
Change* |
|---|---|---|---|---|---|
| Osmo Suovaniemi | Chairman of the Board | 2,265,340 | 3,129,704 | ||
| Kalle Kettunen | Member of the Board | 46,900 | 9,350 | ||
| Mikko Salaspuro | Member of the Board | 10,000 | |||
| Semi Korpela | President & CEO | 2,000 | 2,000 |
Only those members of the company's management who own Biohit Oyj shares are listed. Shareholdings also include any shares held by underage children or companies controlled by the shareholder, but not shares held by spouses that are required to report their holdings.
Detailed information on the personal shareholdings of all members of the Board of Directors and the Management Team is presented on the company's website: www.biohithealthcare.com/investors.
Business units abroad
Biohit Healthcare Ltd, Great Britain Graham Johnson, BSc Biohit Healthcare, Shanghai Branch, China Wilson (Wei Xiang) Feng, BSc Biohit Healthcare, Russia Yulia Kubacheva, MD
Biohit's Annual General Meeting will be held on Wednesday 11 April 2012 at 3 p.m. at the Royal Crowne Plaza, conference room 2, Mannerheimintie 50, 00260 Helsinki.
Registration begins on 19 March 2012 at 12:00 noon and ends on 4 April 2012 at 4:00 p.m. Registration may be submitted:
The Board of Directors proposes that on the basis of the financial statements to be adopted for the financial period ended on 31 December 2011, a dividend of EUR 0.1973 per each A share and EUR 0.2007 for each B share be paid.
The Board of Directors will propose to the AGM that, on the basis of the financial statements to be adopted for the financial period ended on 31 December 2011, funds from the invested nonrestricted equity fund be distributed to shareholders as a capital repayment, with the capital repaid amounting to EUR 0.80 for each A and B share.
Total number of shares: 13,615,593
Biohit Oyj Series B shares are listed on NASDAQ OMX Helsinki in the Small cap group. The shares are traded under the code BIOBV. More detailed information on the Biohit Oyj share is presented in the Notes to the Financial Statements, and is also available on the company's website www.biohithealthcare.com/Investors.
Published financial reports and other stock exchange releases can be read on Biohit's website: www.biohithealthcare.com/Investors. The website also contains an online form for ordering electronic copies of the company's releases, which will be e-mailed to you.
Thursday 26 April 2012 Interim report January–March 2012
Thursday 16 August 2012 Interim report January–June 2012
Thursday 25 October 2012 Interim report January–September 2012
Biohit observes a silent period for three weeks prior to the publication of financial results. During this period, management and other personnel will not comment on the company's financial position or markets, nor will they meet with capital market or financial media representatives.
However, if an event that requires immediate publication does occur during the silent period, Biohit will publish the information without delay in accordance with disclosure regulations, and can also comment on the matter in question.
22 Jun 2011 Changes in the Management Team of Biohit Oyj
18 Aug 2011 Interim report of the Biohit Group 1 January to 30 June 2011
Biohit Oyj has prepared this Corporate Governance Statement on the basis of Section 51 of the Corporate Governance Code for listed companies released by the Securities Market Association.
The Corporate Governance Statement has been issued separately from the Report of Biohit Oyj's Board of Directors. The Board of Directors reviewed the Statement in its meeting on 16 March 2012.
The Report of the Board of Directors, the Auditor's Report and the full Corporate Governance Statement are available on Biohit's website at www.biohithealthcare.com/investors.
Biohit Oyj is a Finnish public limited company whose Series B share is quoted on NASDAQ OMX Helsinki in the Small cap/Healthcare group. The Biohit Group (hereinafter referred to as 'Biohit') comprises the parent company Biohit Oyj and its foreign subsidiaries, which primarily focus on sales and marketing for Biohit Oyj's products. Biohit is headquartered in Helsinki.
Biohit's administration complies with current legislation, standards and recommendations concerning public listed companies, the regulations of NASDAQ OMX Helsinki Oy, and Biohit Oyj's Articles of Association. Biohit Oyj also follows the Finnish Corporate Governance Code ("corporate governance code") for listed companies that was approved by the Securities Market Association in October 2008 and came into force on 1 January 2009. The Corporate Governance Code is available at www.cgfinland.fi.
The highest decision-making power at Biohit is exercised by its shareholders at the Annual General Meeting. The company's Board of Directors supervises the administration and organisation of the company and the Group's earnings trend. The President & CEO is responsible for operative management, and is assisted by a Management Team.
In 2011, Biohit's Annual General Meeting was held on 13 April in Helsinki. 2,965,490 Series A shares and 5,087,211 Series B shares were represented at the meeting, corresponding to 62.24% of all the company's shares and 92.7% of the votes. Over half of the members of the Board, all new candidates proposed for Board membership, and the chief auditor were in attendance.
An extraordinary general meeting was held in Helsinki on 23 November 2011. 2,875,800 Series A shares and 5,439,585 Series B shares were represented at the meeting, corresponding to 61.07% of all the company's shares and 89.74% of the votes. At the extraordinary general meeting, shareholders approved the divestment of Biohit's liquid handling business and authorised the Board of Directors to handle the transaction.
The Board of Directors, which comprises 5-7 members elected by the Annual General Meeting, is responsible for the administration and appropriate organisation of Biohit's business operations. The Board of Directors elects a chairman from amongst its members.
Board members' terms of office run from the date of their election by the AGM until the end of the next AGM.
The Board of Directors is responsible for Biohit's administration and the appropriate organisation of its business operations. The Board's areas of responsibility are laid down in the written rules of procedure approved by the Board. They are as follows:
The Board's decision-making is based on reports drawn up by operative management on the operational development of the Group and its business areas.
The Chairman is responsible for calling Board meetings and arranging Board activities. In general, the Board convenes once a month, that is, 10–12 times per year. The meeting schedule for the entire
term is confirmed in advance. When necessary, Board meetings are held more frequently or by teleconference.
The Board of Directors of Biohit Oyj convened 13 times in 2011. (13 times in 2010.) The average participation rate was 87% (87%).
The following were elected by the 2011 Annual General Meeting to serve as members of Biohit's Board of Directors in 2011:
Osmo Suovaniemi was Chairman of Biohit's Board of Directors during the 2011 financial year.
The scope of Biohit's business operations does not require the appointment of an Audit Committee, and no other committees have been appointed to assist the Board.
The President & CEO is responsible for the day-to-day management of the company in accordance with the instructions and regulations given by the Board of Directors. The President & CEO of the parent company is elected by the Board and also acts as Group President. The President also ensures the appropriate organisation and legality of the company's accounting and financial management. The terms of the President's employment are laid down in a written contract that is approved by the Board of Directors. The President cannot be elected Chairman of the Board.
Jussi Heiniö, LLM, was President & CEO until 14 December 2011, when Semi Korpela, MSc (Econ.) took over the position:
Until 14 December 2011, Biohit had two Management Teams. One focused on Group-level administration and the liquid handling business and its development, while the other focused on the diagnostics business and its development.
The Liquid Handling Management Team's composition and areas of responsibility were as follows: Jussi Heiniö (President & CEO), Erkki Vesanen (Product Portfolio Management), Kalle Härkönen (Operations), Jukka-Pekka Haapalahti (Sales and Marketing), Seppo Riikonen (Quality and Risk Management). Tiina Hankonen (Finance, ICT and HR) and Josefin Hoviniemi (Communications) until June 2011, and Nina Hasu (Finance) as of August 2011. All the aforementioned Management Team members transferred to Sartorius on 14 December 2011 as part of the divestment of Biohit's liquid handling business.
The Diagnostics Management Team's composition and areas of responsibility were as follows: Jussi Heiniö (President & CEO), Lea Paloheimo (Product Portfolio Management), Kalle Härkönen (Operations), Jukka-Pekka Haapalahti (Sales and Marketing), Terhi Lampén (Marketing), Seppo Riikonen (Quality and Risk Management). Tiina Hankonen (Finance, ICT and HR) and Josefin Hoviniemi (Communications) were Management Team members until June 2011, and Nina Hasu as of August 2011.
After the divestment of Biohit's liquid handling business (as of 15 December 2011), the members of Biohit's Management Team are as follows: Semi Korpela (President & CEO), Tapani Tiusanen (Operations and ICT), Ulla Savelainen (Finance, Communications and HR), Terhi Lampén (Sales and Marketing) and Lea Paloheimo (Product Development and Quality).
The new Management Team met once during 2011.
The Managing Directors of subsidiaries are responsible for the management of subsidiary operations and report to the President & CEO of the parent company.
Subsidiaries are responsible for the sales and marketing of Biohit's products in their market areas. The Managing Directors of subsidiaries operate under the management and supervision of Biohit's President & CEO.
In 2011, the Managing Directors of Biohit's subsidiaries were: Venkat Rao (India), Ian Hemmings (UK), Hideaki Mizoguchi (Japan), Eirik Pettersen (China), Régis Carnis (France), Matthias Beuse (Germany), Victor Peppi (Russia) and Robert P. Gearty (USA).
At the end of the year, Graham Johnson was appointed Managing Director of the UK subsidiary. Wilson (Wei Xiang) Feng (China) and Yulia Kubacheva (Russia) will remain at Sartorius during the transition phase, until subsidiaries have been established.
The personal details and shareholdings of Biohit's Board of Directors and operative management are available on the Internet at: www.biohithealthcare.com/investors.
The Annual General Meeting approves the fees of Biohit Oyj's Board of Directors. A decision was made at the Annual General Meeting on 13 April 2011 to pay a monthly fee of EUR 1,600 to the Chairman of the Board and a monthly fee of EUR 1,500 to other Board members.
Other remuneration for Board members (in addition to the Board membership fee) is charged by time, and the Board has approved these invoicing principles.
An employment contract was signed on 10 June 2010 with Professor Osmo Suovaniemi, a member of the Board, under which Suovaniemi is paid a monthly fee approved by the Board of Directors for his services as scientific advisor to the Board. In 2011, this fee was EUR 14,000 a month plus car and phone benefit.
The Board approves the President & CEO's remuneration and terms of employment. The salary paid to the company's President & CEO, Jussi Heiniö, in 2011 was EUR 16,000 a month plus car and phone benefit. Jussi Heiniö transferred to Sartorius on 14 December 2011 as part of the divestment of Biohit's liquid handling business.
Semi Korpela took over as Biohit's President & CEO on 14 December 2011. Semi Korpela's salary is EUR 10,000 a month plus phone benefit.
The President approves the remuneration and terms of employment of Management Team members. Biohit's Board of Directors approves the principles of the incentive schemes for Management Team members and the President & CEO. Bonuses are determined on the basis of the net sales and earnings trends in each person's area of responsibility. The maximum bonus that can be received depends on each person's monthly salary and can total no more than three month's salary.
No bonus was approved for the President & CEO and Management Team members in 2011.
The President & CEO approves the salaries of subsidiaries' Managing Directors in accordance with the instructions provided by Biohit's Board of Directors. Profit-based incentives are dependent on sales and profitability trends for each unit's product segments.
Biohit does not employ any incentive schemes that pay management in the company's own shares.
No other notable pension arrangements, beyond those mandated by law, have been made with the Managing Directors of Group companies.
During the financial year ending 31 December 2011, remuneration paid to members of the parent company's Board totalled EUR 123,000 (EUR 104,000 in 2010).
President & CEO Jussi Heinö was paid EUR 220,891. Osmo Suovaniemi was paid EUR 187,800 as a member of the scientific advisory board.
The salaries and fees of the Group's Managing Directors totalled EUR 638,000 (EUR 801,000 in 2010 and EUR 839,000 in 2009).
Salaries paid to other Management Team members totalled EUR 606,000 (EUR 1,002,000 in 2010 and EUR 854,000 in 2009).
Biohit's internal control is responsible for ensuring that the Group carries out its business operations within the framework of current regulations and legislation, and in accordance with the Board of Directors' instructions. Internal control seeks to ensure that the Group operates with maximum efficiency and that the objectives set in the strategy ratified by the Board of Directors are achieved at different levels of the organisation. Risk management is geared towards supporting the achievement of these objectives by anticipating and managing business-related risks.
Biohit's business operations and administration aim to realise the company's values, of which the most important is to promote health and wellbeing through innovation. Biohit will now focus on its diagnostics business, in which the company conducts global operations in both manufacturing and sales and marketing.
Biohit's control environment is defined by the Board of Directors, which, as the highest administrative body, is responsible for organising internal control. The President & CEO is responsible for maintaining the efficiency of the control environment and the functionality of internal control. Biohit's financial department is responsible for the functionality of financial reporting as well as the interpretation and application of financial statement standards in line with the separately ratified instructions.
In the assessment of risks related to financial reporting, Biohit's objective is to identify the major risks associated with the Group's business operations and environment. The cost-effective management and monitoring of these risks will then ensure that the company's strategic and operational targets can be reached as intended.
The Board of Directors carries the main responsibility for risk assessment and monitoring the implementation of risk management. The President & CEO works with the parent company's operative management and subsidiaries' managements to ensure that the Group's risk management is duly arranged. The parent company's operative management is responsible for identifying and managing the risks involved within each business area, while subsidiaries' managements are responsible for those in their own market areas.
Risk management is one of the areas covered by Biohit's internal control processes, which regularly monitor the risks associated with the company's business operations, identify any changes and, if necessary, take appropriate action to hedge against them. Risk management focuses on ensuring the continuity of business operations and preventing financial misconduct.
Internal control measures are integrated into the Group's general business management and reporting process. Subsidiaries report on business and earnings trends and the most significant deviations to Group Management on a monthly and quarterly basis. The Group's Management Team reports to the BOD on the overall development of business; these two bodies, together with the President and CEO, decide on overall corporate strategies and procedures guiding the operations of the Group.
Subsidiaries' Boards follow business developments and ensure that the parent company's approved instructions and guidelines are followed. As a rule, each subsidiary's Board of Directors convenes after the end of each quarter. Subsidiary Boards work with financial reports and the written quarterly reports drawn up by subsidiary management.
Biohit's steering and control is carried out in accordance with the management system described above. The company provides the reporting systems necessary for business and financial management.
The financial department of the parent company provides instructions for drawing up annual and interim financial statements and prepares the consolidated financial statements. The parent company's financial department retains central control of funding and administrative matters within the framework of the instructions provided by the Board of Directors and the President & CEO, and is also responsible for the management of interest and exchange rate risks. The Managing Directors of subsidiaries ensure that subsidiaries' reporting is carried out in accordance with the instructions given by the Group's Management Team. The parent company's administration department controls and provides instructions on Group-level personnel policies and any agreements made within the Group.
Biohit aims to provide all of its stakeholders with information about the company's operations in a proactive, consistent and timely manner. The company seeks to take the special requirements and interests of all its stakeholders into account in its communications, in order to increase confidence in the company and thereby promote its business operations. Biohit's Board of Directors has ratified an information release policy with a view to ensuring the accuracy and reliability of any information released. The policy also specifies who is responsible for communications in different situations.
Biohit's financial department regularly provides information on processes related to financial administration reporting. This ensures the real-time availability of data, which is a prerequisite for efficient internal control. Financial administration guidelines and the company's information release policy aim to ensure the promptness and comprehensiveness of communications and the release of information required for internal control purposes.
The efficiency of internal controls on financial reporting is overseen by the Board of Directors, the President & CEO, Management Team members, and the Managing Directors of subsidiaries. Control focuses on following weekly and monthly financial reports and forecasts, and analysing any deviations from business plans. Monitoring is performed at all Board and Management Team meetings where reports are reviewed. It is supported by regular contact between Group Management and the company's auditor, and the analyses of any deviations, which occurs at least once a quarter. The audit frameworks for the Group's subsidiaries and key audit areas are jointly defined by the Group's financial management and the chief auditor.
Financial reporting processes and resources have been reorganised to meet Biohit's new requirements after the divestment of its liquid handling business.
Biohit has not appointed a separately organised function for internal auditing purposes. The Group's financial management holds primary responsibility for the practical implementation of the internal audit.
The Group has all the internal control reporting systems required for financial management and monitoring business development. The reporting systems produce monthly financial data, so that financial management can ensure that the parent company's approved instructions on, for example, authorisations are being adhered to. The Group's auditor and the auditors of each subsidiary evaluate the effectiveness of the internal control system both in connection with the external audit and through spot checks throughout the financial year.
The auditor elected by the AGM is responsible for Biohit's statutory audit. According to the Articles of Association, the company needs to have one auditing body approved by the Central Chamber of Commerce.
Biohit's auditor in 2011 was authorised public accountants Ernst & Young Oy, with Erkka Talvinko, Authorised Public Accountant, as chief auditor.
The Group's invoiced auditors' fees for the financial year 2011 totalled EUR 149,000 (EUR 138,000 in 2010). Authorised public accountants Ernst & Young Oy were also paid a total of EUR 50,000 (EUR 29,000 in 2010) for other services.
Biohit applies the Guidelines for Insiders approved by NASDAQ OMX Helsinki Oy, as well as any relevant amendments.
Biohit's Communications Director is responsible for the company's insider control. The Director ensures that insiders are aware of insider regulations and adhere to trading restrictions. Insiders are not allowed to trade Biohit Oyj securities for 21 days before the publication of the company's financial statement bulletin and interim reports. Insiders participating in projects are not allowed to sell or purchase shares in Biohit before an announcement has been made of the continuation or discontinuation of a project.
Information on the shareholdings of Biohit's insiders and their trading activity is available on Biohit's website at www.biohithealthcare.com/investors.
Report of the Board of Directors 30 Consolidated statement of comprehensive income 35 Consolidated balance sheet 36 Consolidated statement of changes in shareholder's equity 37 Consolidated Cash Flow Statement 38 Notes to the consolidated financial statements 39 Key ratios 60 Shares and sharesholders 62 Formulas for the key ratios 64 Parent Company Income Statement 65 Parent Company Balance Sheet 66 Parent Company Cash Flow Statement 67 Notes to the Parent Company's Financial Statements 68 The proposal of the Board of Directors concerning the profit for the financial year 77 Auditor's report 78
• Earnings per share EUR 2.86 (EUR 0.00)
Biohit Oyj sold its discontinued business to Sartorius Lab Holding GmbH on 14 December 2011. A trimmee group now focuses in the diagnostics business. A trimmer group structure and focus on core business represent major strengths for Biohit in the current situation.
Biohit aims to bring its diagnostics business to the growth track. In the future, we will make determined efforts to enhance our sales and marketing, to build distribution channels and to develop co-operation with distributors. We will also strengthen our own organisation. Our leading products are Acetium, GastroPanel and quick tests. Besides Europe. Asia is another main market for us.
Growth in the diagnostics business in 2011 was slower than expected. Management resourses were significantly tied up in the preparations of the sale of the liquid handling business and the continuation of the business by the new owner, postponing the benefits from the great potential of the diagnostics business.
The sale of the liquid handling business to Sartorius Lab Holding GmbH had a significant effect on the period's financial performance. Biohit reported a healthy equity ratio at the end of 2011: 74% (44.5%). A strong balance sheet provides a good base for building our business.
| MEUR | Jan–Dec 2011 | Jan–Dec 2010 |
|---|---|---|
| Net sales, EUR million, continuing operations | 2.1 | 2.2 |
| Net sales, EUR million, discontinued operations | 37.9 | 37.8 |
| Operating profit/loss, EUR million, continuing operations | -4.9* | -2.9 |
| Operating profit/loss, EUR million, discontinued operations | 49.1** | 3.4 |
| Profit/loss before taxes | 43.8* | 0.4 |
| Profit/loss for the period * ** | 37.7 | 0.1 |
| Average number of personnel | 422 | 412 |
| Personnel at period end, continuing operations | 34 | 41 |
| Equity ratio, % | 74.0% | 44.5% |
| Earnings per share, EUR | 2.86 | 0.00 |
| Shareholders' equity per share, EUR | 3.9 | 1.01 |
| Average number of shares during the period | 13,163,616 | 12,937,627 |
| Number of shares at end of period | 13,615,593 | 12,937,627 |
*) Operating profit for 2011 includes a goodwill write-down of EUR 2.6 million
**) Figures include a capital gain of EUR 46.1 million from the sale of the liquid handling business
Following the sale of the liquid handling business at the end of 2011, the diagnostics business is now reported as continuing operations and the liquid handling business as discontinued operations.
General administrative expenses for the reporting and comparison periods have been allocated to continuing and discontinued operations on the basis of the number of personnel. In the 2012 reporting, general administrative expenses for the comparison period 2011 will be re-allocated fully to continuing operations.
Net sales from the continuing business fell by 6.7%.
Efforts made to fully tap into the potential offered by the diagnostics business had to be suspended as company resources were required for the preparation of the liquid handling business divestment and continuation by the new owner.
Operating loss from the continuing operations came to EUR 4.9 million (EUR -2.9 million). The goodwill write-down of EUR 2.6 million had a negative effect on the diagnostics business results.
Operating profit from discontinued operations was EUR 49.1 million (EUR 3.4 million) including a capital gain of EUR 46.1 million rom the sale of the liquid handling business.
| MEUR | Jan–Dec 2011 | Jan–Dec 2010 |
|---|---|---|
| Discontinued operations | 37.9 | 37.8 |
| Continuing operations | 2.1 | 2.2 |
| Total | 39.9 | 40.0 |
| MEUR | Jan–Dec 2011 | Jan–Dec 2010 |
|---|---|---|
| Discontinued operations | 49.1 | 3.4 |
| Continuing operations | -4.9 | -2.9 |
| Total | 44.3 | 0.5 |
Exchange rate gains amounted in 2011 to EUR 0.2 million. In the comparison period in 2010, net exchange rate gains amounted to EUR 0.6 million.
Calculated in comparable currencies, the trend in Biohit's net sales in 2011 does not deviate substantially from the reported figures.
On 31 December 2011, the balance sheet total was EUR 71.5 million (EUR 29.4 million) and the equity ratio was 74.0% (44.5%).
The write-down applies to certain products in the GastroPanel test package in continuing operations. The Acetium products are not included in this product group. Growth in the diagnostics business was lower than expected during the period. The expected cash flow from products is negative in the first years of the forecast period due to significant expenses in the development stage and the delay in net sales build-up. Consequently, Biohit Oyj's Board of Directors decided to record a EUR 2.6 million goodwill write-down in the financial statements for 2011. The write-down is based on the goodwill impairment testing conducted at the end of 2011 as required by the IFRS standards. In the future, Biohit will invest in the development of both the GastroPanel and the Acetium business.
Pursuant to the authorization granted by the AGM on 13 April 2011, the Board of Directors decided on a share issue directed at Sartorius Lab Holding GmbH, who subscribed for a total of 677,966 of Biohit's new Series B shares. This accounts for approximately 4.98% of Biohit shares and 0.97% of all voting rights conferred by the shares following their registration. The subscription price was EUR 2.95 per share.
Biohit Oyj has been able to materially strengthen its financial position since the sale of its liquid handling business to Sartorius Lab Holding Gmbh on 14 December 2011.
In the diagnostics business, research and development focused on the development and improvement of existing products. The company uses third-party experts and subcontractors in its R&D activities. Development expenditure associated with the diagnostics business has not been capitalised.
In continuing operations, gross investments during the reporting period totalled EUR 0.1 million (EUR 0.3 million). The value of the fixed assets transferred to the buyer in connection with the sale of the liquid handling business in December 2011 was EUR 12.8 million.
During the reporting period, the average number of personnel employed by the Group was 422 (412 in the corresponding period in 2010 and 370 in the corresponding period in 2009), of whom 188 (192) were employed by the parent company and 234 (220) by subsidiaries. At the end of the period, the number of personnel was 34, of whom 27 were employed by the parent company and 2 by subsidiaries. During the transition period, former subsidiaries continue to employ 5 persons. The wages and salaries has been
paid to personnel totally in 2011 EUR 14,333 thousand (EUR 14,227 thousand in 2010 and EUR 12,324 thousand in 2009).
Biohit's key risks have to do with the investments required to grow its diagnostics business. Risks are involved in the selection and development of distribution channels, in recruitment, and in product margin structures. Significant short-term risks are associated with the selection of new market areas, the timing of expansion into the selected markets, and product success in these markets.
Business development and new product launches require investments that represent a challenge in terms of Biohit's financial position. However, due to the directed share issue arranged during the period and the sale of the liquid handling business, the company was able to improve its cash position and liquidity considerably.
When investing liquid assets, the objective is to gain a return on investment with a minimum risk of losing any capital. The investment portfolio consists of deposits, money market investments and corporate loans. A fundamental aspect in portfolio management is sufficient diversification across different asset classes, investment instruments and counterparties. Biohit conducts its investment activities with at least two partners.
The diagnostics business has a wide customer base, which means Biohit does not materially depend on any individual customers or individual project deliveries. Most of the company's business is conducted in euro, and the indirect effects of currency exchange rate fluctuations are considered minor.
Determined sales and marketing efforts will be required to fully tap into the potential offered by the diagnostics products.
Net sales from continuing operations in 2012 is expected to improve from 2011.
Biohit's diagnostics business involves the development, manufacture and marketing of test and analysis systems for the diagnosis and prevention of diseases of the gastrointestinal tract. These tests and systems are based on innovations and research data. The product range includes GastroPanel examinations and Colon-View quick tests for primary healthcare; lactose intolerance and Helicobacter pylori quick tests for specialised healthcare; and instruments and analysis systems for laboratories. The company also markets GastroPanel laboratory analysis packages. In addition to GastroPanel test kits, this package includes liquid handling products, instruments, and software, as well as installation, Training, and maintenance services. The GastroPanel laboratory concept Biohit's service laboratory provides analyses of tests developed by Biohit, and the determination of carcinogenic acetaldehyde in foodstuffs and alcoholic beverages. On a global scale, exposure to acetaldehyde is linked to approximately 4 million new cancer cases annually, or nearly 40 per cent of all cancers. Biohit has developed products and a method for reducing exposure to acetaldehyde in the gastrointestinal tract.
The Acetium capsule developed by the company binds carcinogenic acetaldehyde in the stomach. Acetium products were co-developed in cooperation with researchers at the University of Helsinki and Biohit's scientific advisors.
Prescription-free Acetium capsules are recommended for use after the consumption of food or alcohol, to prevent the possible risk of gastric and oesophageal cancer by those who:
Biohit's GastroPanel and Acetium are unique innovations in the prevention of gastric and oesophageal cancer. GastroPanel detects the atrophic gastritis caused by a Helicobacter pylori infection or an autoimmune disease, revealing the risk of gastric and oesophageal cancer in time when treatment to cure the condition is still available. Atrophic gastritis of the corpus, which rarely heals, leads to a permanently low-acid or anacidic stomach. Mouth microbes are able to live in an anacidic stomach and produce acetaldehyde from alcohol and the sugars contained in food. In October 2009, the WHO classified acetaldehyde as a Group I carcinogen – a group which also includes asbestos, tobacco and benzene.
Every effort must be made to reduce all Group I carcinogens in the human body and food, regardless of their source. Protected by granted and pending patents, Acetium capsules are, so far, the only way of binding and inactivating carcinogenic acetaldehyde in the stomach, which in turn enables the prevention of gastric and oesophageal cancer. Biohit has applied for patents in several countries for the BioFood method, which can be used to bind and inactivate acetaldehyde in alcoholic beverages and foodstuffs before it enters the mouth. The Acetium lozenge binds acetaldehyde already dissolved into saliva from cigarette smoke. Protected by pending patents, the Acetium lozenge may also help users to give up smoking. This will be further examined in a study on the topic. In animal tests, acetaldehyde has been found to be addictive.
| Diagnostics | Jan–Dec 2011 | Jan–Dec 2010 |
|---|---|---|
| Net sales, EUR million | 2.1 | 2.2 |
| Change, % | -6.7% | 23.7% |
| Operating result, EUR million* | -4.9 | -2.9 |
| Change, % | -66% | -40.1% |
| Operating result, % of net sales | -234.5% | -127.3% |
*) Operating result of the diagnostics segment includes a goodwill write-down of EUR 2.6 million
At Group level, sales of the diagnostics business did not develop as expected during the reporting period. Net sales developments have mainly been favourable in Biohit's domestic market in Finland.
At the turn of 2010/2011, Biohit combined the sales and marketing management in the liquid handling and diagnostics businesses but after the sale of the liquid handling business they were separated. In addition, the company has made changes to its sales organisation.
In Finland, Terveystalo, a private healthcare company operating nationwide, included the GastroPanel examination, developed by Biohit, in its service offering this spring. The GastroPanel examination is now available from all of the one hundred-plus Terveystalo sites across Finland. Health care company Diacor has also included the GastroPanel examination in its offering. Diacor's doctors have been trained to carry out the examination, and it is available from all Diacor sites in the metropolitan Helsinki region.
At the end of 2011, Biohit sold its discontinued business to Sartorius Lab Holding GmbH.
| Liquid Handling | Jan–Dec 2011 | Jan–Dec 2010 | |
|---|---|---|---|
| Net sales, EUR million | 37.9 | 37.8 | |
| Change, % | 0.1% | 12.7% | |
| Operating result, EUR million | 49.1* | 3.4 | |
| Change, % | 1363.4% | 4.2% | |
| Operating result, % of net sales | 129.9% | 8.9% |
*) Operating result for 2011 includes a capital gain of EUR 46.1 million from the sale of the liquid handling business
Biohit paid back to the principal shareholders a capital loan of EUR 0.6 million and the accumulated interest 5% of EUR 0.6 million in February 2012. Also in February, the holders of Biohit Oyj's convertible bond sold the loan back to the company. The value of the loan was EUR 4.1 million and interest 6.5%.
A group of 16 gastroenterology experts from twelve countries wrote an article, which was published in the prestigious Scandinavian Journal of Gastroenterology (SJG). The objective of this group of experts is to promote international co-operation aimed at developing safer and more cost-efficient diagnostic tools for stomach diseases as well as their prevention and care (GastroPanel biomarkers: "Rationale in diagnosis and screening of atrophic gastritis with stomach-specific plasma biomarkers". Scandinavian Journal of Gastroenterology. 2012; 47: 136–147).
The annual general shareholders' meeting held after the end of the reporting period on 13 April 2011 decided that the company will not pay a dividend for the past financial year and that the parent company's loss for the financial year, EUR 534,475.32, is to be moved to the profit/loss account of previous financial years.
The shareholders' meeting decided that the number of members in the Board is seven (7) and elected the following people to the Board until the end of the next annual shareholder's meeting: Kalle Kettunen (CEO, MSc (Eng.), MBA), Professor Osmo Suovaniemi (MD, PhD), Professor Mikko Salaspuro (MD, PhD) and Eero Lehti (MP, MSc (Soc. Sc.)) were elected as old members. Petteri Kilpinen (CEO, BSc (Eng.)), Seppo Luode (MSc (Eng.), MBA) and Saila Miettinen-Lähde (CFO, MSc (Eng.), BSc) were elected as new members.
Authorised Public Accountants, Ernst & Young Oy, with Erkka Talvinko, APA, as the auditor in charge were elected as the auditors of the company.
In addition, the meeting decided to authorise the Board to decide on the issue of shares and to issue the special rights referred to in Chapter 10, section 1 of the Limited Liability Companies Act entitling the receipt of shares with the following terms and conditions: The maximum number of new Series B shares to be issued pursuant to the special rights is 2,000,000, which corresponds to approximately 20% of the company's Series B shares.
According to the resolution, the Board of Directors is entitled to decide on all terms and conditions regarding the issue of shares and the issue of special rights. The issue of shares and the issue of special rights entitling to the receipt of shares can occur in deviation from the subscription right of shareholders (special issue). Such an authorisation remains valid for three years from the resolution of the AGM.
Semi Korpela, M.Sc. (Econ.), born 1970, was appointed President and CEO of Biohit Group as of 14 December 2011. Previously, Korpela worked as the Financial Director of Biohit Group from 2003 to 2006. After this, Korpela held positions as Financial Director at CPS Color Group, Medisize Group and LDR Group Oy.
Tapani Tiusanen, PhD. (Physics), DipEMC (Marketing), born 1956, was appointed the new Head of Operations and IT of Biohit Group as of 16 December 2011. Previously, Tiusanen worked in several positions at Labsystems Oyj, Vaisala Oyj and Kibron Inc. and for the last three years as Development Manager at Biohit Group.
Ulla Savelainen, B.Sc. Econ. & Bus. Adm., born 1949, was appointed Head of Financials, HR and Communications of Biohit Group as of 16 December 2011. Previously, Savelainen worked as a Financial Administration Consultant in several listed companies. From 2000 to 2005, Savelainen worked as the Financial Manager of Sentera Oyj.
Terhi Lampén, M.Sc. (Econ.), born 1973, was appointed Head of Sales and Marketing of Biohit Group as of 16 December 2011. Previously, Lampén worked as the Nordic Sales Manager of the Diagnostics business and from the beginning of 2011 onwards as the Marketing Manager. Before her career at Biohit, Lampén worked as a Product Specialist at Johnson & Johnson and as a Regional Manager at Boehringer Ingelheim.
Lea Paloheimo, PhD (Clinical Biochemistry) born 1951, was appointed Head of Product Development and Quality of Biohit Group as of 16 December 2011. Paloheimo has worked at Biohit Group since 2001.
Biohit Oyj's shares are divided into series A and series B shares. There are 2,975,500 series A shares and 10,640,093 series B shares, totalling 13,615,593 shares. Series A shares confer 20 votes per share and Series B shares 1 vote per share. The dividend paid for Series B shares is, however, two (2) per cent of the nominal value higher than that paid for Series A shares. The total market capitalisation value (supposing that the market capitalisation value for series A and B shares is equal) at the end of the period was EUR 39.9 million (EUR 27.2 million on 31 December 2010).
Biohit Oyj's Series B shares are quoted on NASDAQ OMX Helsinki in the Small cap/Healthcare group under the code BIOBV.
| BIOBV/NASDAQ OMX Helsinki | Jan–Dec 2011 | Jan–Dec 2010 | |
|---|---|---|---|
| High, EUR | 3.96 | 4.91 | |
| Low, EUR | 1.74 | 1.50 | |
| Average, EUR | 2.30 | 3.42 | |
| Latest, EUR | 2.93 | 2.10 | |
| Turnover, EUR | 8,228,319 | 32,166,841 | |
| Turnover, volume | 3,001,175 | 9,415,015 |
As a result of the directed share issue arranged during the reporting period, the number of the company's shares grew by 677,966 shares.
At the end of the reporting period on 31 December 2011, the company had 4,238 shareholders (4,602 on 31 December 2010). Private households held 69.23% (72.82%), companies 22.66% (23.62%), and public sector organisations 2.54% (2.65%) of the shares. Foreign ownership or nominee registrations accounted for 5.49% (0.86%) of shares.
Further information on the shares, major shareholders, and management's shareholdings is available on the company's website at www.biohithealthcare.com/investors.
All the figures have been rounded up or down, due to which the sums of figures may deviate from the sum total presented.
Helsinki 16 March 2012
Biohit Oyj Board of Directors
| 1 Jan–31 Dec 2011 Continuing |
Discontinued | 1 Jan–31 Dec 2010 Continuing |
Discontinued | ||||
|---|---|---|---|---|---|---|---|
| 1,000 € | Note | operations | operations | Total | operations | operations | Total |
| Net sales | 2.3 | 2,069 | 37,853 | 39,922 | 2,218 | 37,827 | 40,045 |
| Other operating income | 2.4 | 32 | 46,110 | 46,142 | 153 | 64 | 217 |
| Change in inventories of finished goods | |||||||
| and work in progress | -214 | 433 | 219 | 39 | -469 | -430 | |
| Materials and services | 2.5 | -759 | -9,044 | -9,803 | -862 | -6,911 | -7,773 |
| Employee benefit expenses | 2.6, 2.9 | -2,386 | -14,959 | -17,345 | -2,041 | -15,079 -17,120 | |
| Depreciation and amortisation | 2.7 | -2,802 | -1,725 | -4,527 | -61 | -1,610 | -1,671 |
| Other operating expenses | 2.8, 2.9 | -790 | -9,557 | -10,347 | -2,369 | -10,391 -12,760 | |
| Operating profit | -4,850 | 49,112 | 44,262 | -2,922 | 3,430 | 507 | |
| Financial income | 2.10 | 235 | 663 | ||||
| Financial expenses | 2.10 | -708 | -782 | ||||
| Profit before taxes | 43,789 | 388 | |||||
| Income taxes | 2.11 | -6,080 | -327 | ||||
| Profit for the period | 37,710 | 61 | |||||
| Other comprehensive income | |||||||
| Translation differences | 134 | 190 | |||||
| Total comprehensive income | 37,844 | 251 | |||||
| Distribution of comprehensive income | |||||||
| To equity holders of the parent company | 37,710 | 61 | |||||
| Total | 37,710 | 61 | |||||
| Earnings per share are calculated from the earnings attributable to equity holders of the parent company. |
|||||||
| Earnings per share, diluted and undiluted, EUR | 37,844 | 251 | |||||
| Total | 37,844 | 251 | |||||
| Earnings per share are calculated from the earnings attributable to equity holders of the parent company. |
|||||||
| Earnings per share, diluted and undiluted, EUR |
2.12 | 2.86 | 0.00 |
| 1,000 € | Note | 31 Dec 2011 | 31 Dec 2010 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | § | ||
| Goodwill | 2.13 | - | 2,638 |
| Intangible assets | 2.13 | 311 | 3,177 |
| Tangible assets | 2.14 | 116 | 6,531 |
| Financial assets | 2.15, 2.18 | 6,830* | 12 |
| Deferred tax assets | 2.16 | - | 1,849 |
| Total non-current assets | 7,257 | 14,206 | |
| Current assets | |||
| Inventories | 2.17 | 319 | 5,238 |
| Trade and other receivables | 2.15, 2.18 | 5,982 | 7,779 |
| Financial assets recognised at fair value through profit or loss | 2.15, 2.19 | 10,000 | 500 |
| Cash and cash equivalents | 2.15, 2.19 | 47,915 | 1,659 |
| Total current assets | 64,216 | 15,177 | |
| Total assets | 71,472 | 29,383 |
Includes EUR 6.8 million in receivables from a business transaction; the funds are placed in a blocked account. Funds will released from the blocked account 31 March 2014, provided no claims concerning the transaction are made.
| Shareholders' equity | |||
|---|---|---|---|
| Share capital | 2.20 | 2,315 | 2,199 |
| Translation differences | 2.20 | 0 | -134 |
| Fund for investments of non-restricted equity | 2.20 | 14,292 | 12,407 |
| Retained earnings | 36,240 | -1,469 | |
| Shareholders' equity attributable to parent company shareholders | 52,846 | 13,003 | |
| Total shareholders' equity | 52,846 | 13,003 | |
| Non-current liabilities | |||
| Pension obligations | 2.21 | 155 | |
| Non-current interest-bearing liabilities | |||
| Capital loans | 2.15, 2.23 | 696 | |
| Other interest-bearing liabilities | 2.15, 2.23 | 7,849 | |
| Total interest-bearing liabilities | 2.15, 2.23 | 8,544 | |
| Other liabilities | 2.23 | 90 | 701 |
| Total non-current liabilities | 90 | 9,400 | |
| Current liabilities | |||
| Trade payables | 2.15, 2.24 | 3,045 | 1,854 |
| Current interest-bearing liabilities | 2.15, 2.23 | 4,906 | 920 |
| Provisions | 2.22 | 50 | |
| Tax liabilities | 4,528 | ||
| Other liabilities | 2.15, 2.24 | 6,056 | 4,156 |
| Total current liabilities | 18,536 | 6,980 | |
| Total shareholders' equity and liabilities | 71,472 | 29,383 |
| 1,000 € | 14 Dec 2011 | |
|---|---|---|
| Intangible assets | 3,341 | |
| Tangible assets | 7,746 | |
| Inventories | 5,313 | |
| Non-current receivables | 553 | |
| Current receivables | 3,475 | |
| Cash and cash equivalents | 1,445 | |
| Total assets | 21,874 | |
| Translation differences | -64 | |
| Non-current liabilities | 2,466 | |
| Current liabilities | 1,616 | |
| Total liabilities | 4,082 | |
| Sold net assets | 17,728 |
| 1,000 € | Shareholders' equity attributable to parent company shareholders | |||||
|---|---|---|---|---|---|---|
| Note | Share capital | Translation differences |
Invested unrestricted equity fund |
Retained earnings |
Total shareholders' equity |
|
| Balance at 1 Jan 2010 | 2,199 | -324 | 12,404 | -1,530 | 12,749 | |
| Change in the equity component | ||||||
| of convertible bonds | 4 | 4 | ||||
| Total comprehensive income for the period | 2.20 | - | 190 | - | 61 | 251 |
| Balance at 31 Dec 2010 | 2,199 | -134 | 12,407 | -1,469 | 13,003 |
| 1,000 € | Shareholders' equity attributable to parent company shareholders | |||||
|---|---|---|---|---|---|---|
| Note | Share capital | Translation differences |
Invested unrestricted equity fund |
Retained earnings |
Total shareholders' equity |
|
| Balance at 1 Jan 2011 | 2,199 | -134 | 12,407 | -1,469 | 13,003 | |
| Share issue | 116 | 1,885 | 2,000 | |||
| Total comprehensive income for the period | 2.20 | - | 134 | - | 37,710 | 37,844 |
| Balance at 31 Dec 2011 | 2,315 | - | 14,292 | 36,240 | 52,846 |
| 1,000 € Note |
2011 | 2010 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit for the period | 37,710 | 61 |
| Adjustments to profit for the period | ||
| Depreciation and amortisation 2.7 |
4,527 | 1,671 |
| Unrealised exchange rate gains and losses | 164 | -113 |
| Sales gain from business divestment | -46,110 | |
| Financial income and expenses | 308 | 232 |
| Income taxes | 6,080 | 327 |
| Total adjustments to profit for the period | -35,031 | 2,117 |
| Change in working capital | ||
| Increase (-) or decrease (+) in current non-interest-bearing receivables | -1,624 | -1,030 |
| Increase (-) or decrease (+) in inventories | 4,919 | -100 |
| Increase (+) or decrease (-) in current non-interest-bearing liabilities | -454 | 1,235 |
| Total change in working capital | 2,841 | 105 |
| Interest paid | -757 | -515 |
| Interest received | - | 3 |
| Realised exchange rate gains and losses | 355 | 397 |
| Income taxes paid | -160 | -207 |
| Net cash flow from operating activities | 4,957 | 1,961 |
| Cash flow from investments | ||
| Investments in tangible and intangible assets | -4,069 | -1,778 |
| Proceeds from sales of tangible and intangible assets | 428 | - |
| Capital gain from the sale of liquid handling business | 56,535 | |
| Investments in funds and deposits | -9,501 | -100 |
| Net cash flow from investments | 43,393 | -1,878 |
| Cash flow from financing activities | ||
| Share issue | 2,000 | |
| Payments of finance lease liabilities | -288 | -262 |
| Proceeds from loans | 500 | 5,650 |
| Repayments of loans | -4,351 | -5,498 |
| Net cash flow from financing activities | -2,139 | -109 |
| Change in cash and cash equivalents | 46,211 | -26 |
| Cash and cash equivalents at the beginning of the period | 1,659 | 1,580 |
| Effect of exchange rates on cash and cash equivalents | 45 | 105 |
| Cash and cash equivalents at the end of the period 2.19 |
47,915 | 1,659 |
Biohit Oyj is a Finnish public company that manufactures diagnostics products and diagnostics analysis systems for use in research institutions, healthcare and industrial laboratories. The parent company is domiciled in Helsinki.
Copies of the consolidated financial statements are available on the Internet at www.biohithealthcare.com or from the parent company's headquarters, address Laippatie 1, Helsinki, Finland.
At its meeting on 16 March 2012, Biohit Oyj's Board of Directors approved the financial statements for publication. According to the Finnish Limited Liability Companies Act, shareholders have the opportunity to approve or reject the financial statements at the Annual General Meeting held after their publication. The Annual General Meeting can also decide to revise the financial statements.
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). They have been drawn up in compliance with the IAS and IFRS standards and the SIC and IFRIC interpretations in effect as at 31 December 2011. The term "IFRS standards" in the Finnish Accounting Act and the provisions laid down pursuant to the Act refers to the standards approved by the EU in accordance with the procedures laid down in IAS Regulation (EC) 1606/2002 of the European Parliament, and the interpretations of these standards. The notes to the consolidated financial statements also conform to Finnish accounting and corporate legislation.
The consolidated financial statements have been drawn up on the basis of original acquisition costs, with the exception of availablefor-sale investments and financial assets and liabilities measured at fair value through profit or loss. The figures in the financial statements are presented in thousands of euros.
When financial statements are prepared in accordance with IFRS, the Group's management must make estimates and exercise judgement in the application of accounting policies. The note "Accounting principles requiring judgements by management and key sources of estimation uncertainty" provides information on the judgements that have been made by management in the application of the accounting principles employed by the Group and which have the greatest impact on the figures presented in the financial statements.
The consolidated financial statements include the parent company Biohit Oyj and all of its subsidiaries. Subsidiaries are those companies in which the Group has a controlling interest, that is, in which the Group holds over half of the voting rights or otherwise has a controlling interest. "Controlling interest" means the right to dictate a company's financial and business principles in order to benefit from its operations.
The acquisition cost method has been used in eliminating crossownership of shares within the Group. The acquisition cost is taken to include surrendered assets at fair value, liabilities that have arisen or for which responsibility has been adopted, equity instruments issued, and all the direct expenses of the acquisition. Acquired subsidiaries are included in the consolidated financial statements as from the moment when the Group has assumed a controlling interest, and divested subsidiaries are included until the moment when the Group ceases to have a controlling interest. All intra-Group transactions, receivables, liabilities, unrealised profits and internal distribution of profits are eliminated when drawing up the consolidated financial statements. Unrealised losses are not eliminated if they are due to impairment. The distribution of profit for the period to the equity holders of the parent company and minority interests is presented in the income statement. Minority interest in equity is presented in the balance sheet as a separate item under shareholders' equity. The minority interest share of accumulated losses is recognised in the consolidated financial statements up to the amount of the investment at most. The Group does not have any associated companies, joint ventures or minority shareholders.
Figures relating to the result and financial position of each of the Group's business units are measured in the currency of the main operating environment for that unit. The consolidated financial statements are presented in euros, the functional and presentation currency of the parent company.
Foreign currency transactions are recorded in the functional currency using the exchange rates on the date of the transaction in question. Monetary receivables and liabilities are converted using the rates on the closing date. Non-monetary items denominated in foreign currency are translated to the functional currency at the rate on the transaction date. Exchange rate differences on translation have been entered in the income statement. Exchange rate differences arising from the translation of intra-Group trade receivables and payables are recorded under financial items, and the corresponding external items are accounted for as sales or purchases adjustment items. The income statements of foreign
subsidiaries have been translated into euros using the average exchange rates for the financial period. Their balance sheets have been translated using the rates on the closing date. The exchange rate difference resulting from the use of the average exchange rate in the translation of income statement items and the closing date rate in the balance sheets has been entered as a separate item under translation differences in consolidated shareholders' equity. Exchange rate differences in monetary items that are classed as net investments in foreign subsidiaries are entered under translation differences. In accordance with the exception permitted by IFRS 1, cumulative translation differences prior to the IFRS transition date are recorded under retained earnings at the time of the transition to IFRS, and will also not be entered into the income statement later on the divestment of a subsidiary.
Following the recent business transaction, only one segment is reported. Segment reporting constitutes the company's internal reporting to senior operative management.
The sale of goods and services is recognised as income when the significant risks and rewards related to ownership are transferred to the buyer, and the payment of goods and services, costs or the possible return of the goods does not involve significant uncertainty. The income recognised is the fair value of the consideration received from the goods or services sold less value-added tax and both bulk and other discounts as well as exchange rate gains or losses on the sale. Interest income is recognised using the effective interest method. Dividend income is booked when the rights to the dividends have materialised.
Property, plant and equipment have been valued at the original acquisition cost less accumulated depreciation and impairment. The acquisition cost includes the direct costs of acquisition. Later expenditure is included in the carrying amount of the asset or recognised as a separate asset only if it is probable that the Group will benefit from the future economic benefits of the asset and the acquisition cost of the asset can be reliably measured. Other repair and maintenance expenditure is recognised through profit or loss in the period incurred.
Assets are amortised on a straight-line basis over their estimated useful life. There is no depreciation on land areas. The estimated useful lives of assets are as follows:
| Buildings | 20–30 years |
|---|---|
| Machinery and equipment | 3–10 years |
The residual values and useful lives of assets are reviewed in each financial statement. If necessary, they are adjusted to reflect the changes in the expected economic benefits. Capital gains and losses on the discontinuation or disposal of property, plant and equipment are included in other operating income or expenses.
Costs of debt are expensed in the financial period in which they were incurred, with the exception of costs of debt associated with the acquisition cost of a capitalised investment, in which case financing costs based on the Group's average financing costs are capitalised in the acquisition cost. Transaction costs arising directly from the raising of loans – and which are clearly connected with a certain loan – are included in the original periodised acquisition cost of the loan and are periodised as interest expenses using the effective interest rate method.
Public grants received for the acquisition of intangible assets and property, plant or equipment are recognised as decreases in the carrying amounts of property, plant and equipment. Grants are recognised as revenue through smaller depreciation over the useful life of the asset. Grants not related to the acquisition of noncurrent assets are booked in other operating income.
In the case of companies acquired after 1 January 2004, goodwill corresponds to the share of the acquisition cost in excess of the Group's share of the fair value of the acquiree's net assets at the time of acquisition. The goodwill on the consolidation of business functions prior to this date corresponds to the carrying amount (as per the previously employed accounting standards), which has been used as the deemed cost. Neither the classification nor accounting treatment of these acquisitions has been adjusted when drafting the opening consolidated IFRS balance sheet.
No regular depreciation is recorded on goodwill. Instead, it is subjected to an annual impairment test. To this end, goodwill is allocated to cash generating units. Goodwill is measured at the original acquisition cost less impairment.
Research expenditure is expensed in the income statement. Development expenditure on the design of new or more advanced products is capitalised as intangible assets in the balance sheet as from the date when the product is technically feasible, can be utilised commercially, and is expected to yield future economic benefits. Expensed development expenditure is not capitalised later. Amortisation begins when the asset is ready to be used. The useful life of capitalised development expenditure is 5 years, over which time capitalised assets are expensed on a straight-line basis.
An intangible asset is recorded in the balance sheet only if the asset's acquisition cost can be reliably determined and it is probable that the company will benefit from the expected economic benefits of the asset. Other intangible assets with a finite useful life are entered in the balance sheet at the original acquisition cost and expensed in the income statement on a straight-line basis over their known or estimated useful lives. The Group has no intangible assets with unlimited useful lives.
The depreciation periods are as follows::
| 10 years |
|---|
| 5 years |
| 3 years |
| 5–7 years |
At each closing date, the Group evaluates whether there are indications of impairment on any asset item. If impairment is indicated, the recoverable amount of the asset is estimated. The recoverable amount for goodwill is also assessed annually regardless of whether impairment is indicated. Impairment is examined at the level of cash generating units, that is, at the lowest unit level that is primarily independent of other units and whose cash flows can be separated out from other cash flows. The discount interest used is determined before taxes and describes the market outlook for the time value of money and the risks associated with the asset items to be tested.
The recoverable amount is the fair value of the asset item less the costs of disposal or the value in use, whichever is higher. Value in use is the estimated net cash flow, discounted to its present value, from the asset item or cash-generating unit in question. An impairment loss is recognised if the carrying amount of the asset item is higher than its recoverable amount. The impairment loss is entered immediately in the income statement. If the impairment loss is allocated to a cash generating unit, it is first allocated as a reduction to the goodwill of the cash generating unit and subsequently as a reduction to the other asset items of the unit on a pro rata basis. An impairment loss is reversed if the situation changes and the recoverable amount of an asset item has changed since the date when the impairment loss was recorded. However, impairment losses are not reversed beyond the carrying amount of the asset exclusive of impairment losses. Impairment losses on goodwill are never reversed under any circumstances.
Inventories are measured either at the acquisition cost or at the net realisable value, whichever is lower. The acquisition cost is determined using the FIFO principle. The acquisition cost of finished and incomplete products comprises raw materials, direct labour costs, other direct costs, and the appropriate portion of the variable general costs of manufacture and fixed overhead at a normal level of operations. The net realisable value is the estimated selling price in ordinary business operations less the estimated expenditure on product completion and sale.
Lease agreements concerning property, plant and equipment in which the Group holds a material share of the risks and rewards of ownership are classified as finance lease agreements. Assets acquired under finance lease agreements are recognised in the balance sheet at the fair value of the asset when the lease period begins or at the present value of the minimum rents, whichever is lower. Assets acquired under finance lease agreements are amortised over their useful life unless it is probable that the asset will not be redeemed after the end of the lease period. In such cases, amortisation is performed during the contract period. Lease payments are split between the finance cost and a reduction in the liability over the lease period such that the interest rate on the liability outstanding for each financial period remains the same. The lease commitments are included in interest-bearing liabilities.
Lease agreements in which the risks and rewards incident to ownership are retained by the lessor are treated as other lease agreements. Rents payable under other lease agreements are expensed in the income statement on a straight-line basis over the lease period.
The Group does not act as a lessor.
Group companies have organised their pension security in accordance with the pension legislation and practices of the country in question. The majority of the Group's pension schemes are defined contribution schemes for which payments are expensed in the period in which they occur. Defined benefit pension schemes are entered into the income statement such that expenses are periodised over the years in employment of the employee on the basis of annual actuarial calculations. Actuarial gains and losses are recognised in the income statement over the average remaining time in service of the persons in the scheme insofar as they exceed either 10% of the pension commitment or 10% of the fair value of assets, whichever is higher.
Provisions are recorded when the Group has a legal or constructive obligation on the basis of a prior event, the materialisation of the payment obligation is probable, and the size of the obligation can be reliably estimated. The amount recognised as a provision represents the best estimate of the expenditure required to fulfil the existing obligation on the closing date. If the time value of money is material, the provision recorded is the present value of expected expenditure.
Tax expenses in the income statement comprise taxes on the taxable income for the period and deferred tax liabilities. Taxes on the taxable income for the period are calculated on the taxable income on the basis of the tax base in force in the country in question. If applicable, taxes are adjusted for the taxes of previous periods.
Deferred taxes are calculated on all temporary differences between the carrying amount and taxable value. The largest temporary differences arise from the depreciation of property, plant and equipment, unused tax losses, and the internal margin included in inventories.
No deferred taxes are calculated on goodwill impairment that is not deductible in taxation and no deferred taxes are recognised on the undistributed profits of subsidiaries to the extent that the difference is unlikely to be discharged in the foreseeable future.
Deferred taxes have been calculated using the tax bases set by the closing date. Deferred tax assets have been recognised to the extent that it is probable that taxable income against which the temporary difference can be applied will materialise in the future.
The Group's financial assets are categorised as: financial assets at fair value through profit or loss, loans and other receivables, and available-for-sale financial assets. Financial assets are classified in accordance with the purpose underlying their acquisition, and are categorised on initial recognition. All acquisitions and sales of financial assets are booked on the date of the transaction. Financial assets are derecognised in the balance sheet when the Group has lost its contractual rights to their cash flows, or when the Group has substantially transferred the risks and rewards out of the Group.
Financial assets at fair value through profit or loss include financial asset items that have been acquired to be held for trading or which have been measured at fair value through profit or loss on initial recognition (use of the fair value alternative). Held-for-trading assets are investments in fixed-term deposits and are included in current assets. The items in this group are measured at fair value. The fair value of all investments in this group is measured on the basis of released price quotations on well-functioning markets, that is, buy quotations on the closing date. Both realised and unrealised gains and losses due to changes in fair value are recorded in financial items in the income statement on the period in which they were incurred.
Loans and other receivables are assets that exclude derivative assets and whose related payments are fixed or definable. They are not quoted on well-functioning markets and are not held for trading. Assets are measured at the periodised acquisition cost using the effective interest rate method. They are included in the balance sheet as either current or non-current financial assets – noncurrent if they do not mature within the next 12 months. This category mainly consists of trade receivables.
Available-for-sale assets comprise investments in unquoted shares. They are measured at acquisition cost, as they are non-liquid assets whose fair value cannot be reliably determined. Available-for-sale assets are included in non-current assets, as the Group is unlikely to surrender them within 12 months of the closing date.
Cash and cash equivalents comprise cash at bank and in hand and other liquid investments with a maturity of less than 3 months.
Financial liabilities are originally booked at their fair value on the basis of the consideration received. Transaction costs have been included in the original carrying amount of financial liabilities. All financial liabilities are later valued at the periodised acquisition cost using the effective interest rate method. Financial liabilities are included in current and non-current liabilities and may be interest-bearing or non-interest-bearing. Interest-bearing liabilities comprise financial liabilities requiring the company to make contractual interest or other payments during the term of the loan. Non-interest-bearing liabilities comprise liabilities for which the company does not have to make contractual interest or other payments.
The fair value of the convertible bond liability has been determined using the market interest rate for a comparable liability on the date of issue. The bond liability will be presented as a periodised acquisition cost until it is amortised through repayment or conversion into shares. The remainder – the equity component of the bond – is presented, less taxes, in the share premium fund.
The principles used for determining the fair values of financial assets and liabilities are presented in note 2.15 to the financial statements.
At every closing date, the Group evaluates whether there is objective evidence indicating impairment in the value of either a single item or a group of financial assets. If there is evidence of impairment, impairment is recognised through profit or loss. If the impairment loss decreases in a subsequent financial year, the recognised loss is reversed through profit or loss, except in the case of available-for-sale investments classed as equity instruments. Impairment of the latter is not reversed in the income statement.
The Group recognises an impairment loss on trade receivables when there is reliable evidence to indicate that the receivable cannot be collected according to the original terms. The impairment loss to be recognised in the income statement is defined as the difference between the carrying amount of the receivable and the estimated present value of future cash flows adjusted using the effective discount interest rate. If the impairment loss decreases in
a subsequent financial year and the reduction can be considered as relating to an event after the recognition of impairment, the recognised loss is then reversed through profit or loss.
The IAS 1 standard – Presentation of Financial Statements – does not include a definition of operating profit. The Group has defined it as follows: operating profit or loss is the net sum remaining after other operating income is added to net sales, less purchasing costs (adjusted for the change in inventories of finished goods and work in progress and the costs incurred from production for own use) and less expenses, depreciation and potential impairment losses caused by employee benefits and other operating expenses. All other income statement items except the above-mentioned are presented below operating profit/loss. Translation differences and changes in the fair value of derivatives are included in operating profit/loss if they are incurred from items related to operational activities; otherwise they are entered under financial items. Exchange rate differences on intra-Group receivables and liabilities are booked under financial items.
When preparing financial statements, estimates and assumptions about the future must be made, which is why the actual results may differ from these estimates and assumptions. Management must also exercise judgement in the application of accounting policies. Although estimates are based on the most up-to-date information available, actual results may differ from these estimates. The major areas in which estimation and judgement have been used are described below.
The Group tests goodwill and incomplete intangible assets for impairment on at least an annual basis, and evaluates whether there are indications of impairment as presented in the accounting policies above. The recoverable amount from cash generating units has been defined on the basis of value in use calculations. Estimates must be used when performing these calculations.
In the case of unused tax losses and the deferred tax assets recognised on temporary differences, the Group evaluates annually whether it is probable that the company in question will generate sufficient taxable income before the unused tax losses lapse.
The following standards, amendments or interpretations that came into force on 1 January 2011 did not affect the consolidated accounting principles because the Group did not record any transactions covered by the standards in question:
IAS 24 (Revised) –Related party disclosures in the financial statements – Effective date: Financial periods beginning on 1 January 2011 or thereafter. The revision is expected to affect the Group's accounting policies.
IASB has issued the following new or revised standards and interpretations, which the Group will apply as of 1 January 2012:
• IFRS 7 Financial instruments: Presentation – amendment (Transfers of Financial Assets)
• IAS 12 Income Taxes – amendment (Recovery of Underlying Asset) The Group estimates that these amendments will not have a material effect on the consolidated financial statements.
IASB has issued the following new or revised standards and interpretations, which the Group will apply in accordance with the effective dates approved by the EU:
These new and revised standards have not yet been approved for application in the EU. The Group is assessing their effect on the consolidated financial statements.
Biohit Oyj sold its liquid handling business to Sartorius Lab Holding GmbH on 14 December 2011 and now focuses on its diagnostics business. The diagnostics business is reported as continuing operations and the liquid handling business as discontinued operations.
Until 14 December 2011, Biohit had organised its business into two primary business areas: Liquid Handling and Diagnostics. The format of the Group's segment reporting has been based on these business segments.
| Continuing operations 2011 |
2010 | Discontinued operations 2011 |
2010 | |
|---|---|---|---|---|
| Capital gains on the sale of property, plant, and equipment | 4 | - | 46,110* | - |
| Grants | 28 | 64 | - | 116 |
| Other | - | - | - | 37 |
| Total | 32 | 64 | 46,110 | 153 |
*) EUR 3.5 million of the capital gain from the sale was not recognised as income.
| Continuing operations 2011 |
2010 | Discontinued operations 2011 |
2010 | |
|---|---|---|---|---|
| Raw materials, consumables, and goods | 703 | 806 | 8,590 | 6,264 |
| External manufacturing services | 56 | 56 | 454 | 647 |
| Total materials and services | 759 | 862 | 9,044 | 6,911 |
| Continuing operations 2011 |
2010 | Discontinued operations 2011 |
2010 | |
|---|---|---|---|---|
| Wages and salaries | 2,005 | 1,636 | 12,328 | 12,591 |
| Pensions, defined benefit plans | - | - | - | 89 |
| Pensions, defined contribution plans | 273 | 123 | 1,486 | 1,470 |
| Other personnel expenses | 108 | 282 | 1,651 | 1,451 |
| Wages and salaries capitalised in non-current assets | - | - | -507 | -522 |
| Total | 2,386 | 2,041 | 14,959 | 15,079 |
Details of the management's employee benefits are presented in Note 2.26, 'Related party transactions'.
| Number of personnel | Continuing operations 2011 |
2010 | Discontinued operations 2011 |
2010 |
|---|---|---|---|---|
| Average number of salaried personnel | 36 | 38 | 207 | 183 |
| Average number of non-salaried personnel | - | - | 179 | 191 |
| Overall average number of personnel | 36 | 38 | 386 | 374 |
| Number of personnel at the end of the financial period | 34 | 41 | - | 390 |
| Continuing operations 2011 |
2010 | Discontinued operations 2011 |
2010 | |
|---|---|---|---|---|
| Intangible assets | 2,670* | 42 | 710 | 212 |
| Buildings | - | - | 118 | 208 |
| Machinery and equipment | 132 | 19 | 897 | 1,190 |
| Total | 2,802 | 61 | 1,725 | 1,610 |
*) Includes a good-will write-down of EUR 2,638 thousand.
| Continuing | Discontinued | |||
|---|---|---|---|---|
| operations 2011 |
2010 | operations 2011 |
2010 | |
| Travel and other employee-related expenses | 212 | 483 | 2,139 | 2,125 |
| Rent and maintenance expenses | -45 | 94 | 2,603 | 2,747 |
| Marketing and sales expenses | 333 | 781 | 944 | 2,459 |
| Other external services | 342 | 625 | 2,587 | 2,084 |
| Other operating expenses | -52 | 386 | 1,284 | 977 |
| Total | 790 | 2,369 | 9,557 | 10,391 |
| Invoiced auditors' fees of the continuing and discontinued | ||||
| operations | - | - | 149 | 138 |
| Other fees of the continuing and discontinued operations | - | - | 50 | 29 |
| Total auditors' fees | - | - | 199 | 167 |
The research and development expenditure of the discontinued operations totalled EUR 2,213 thousand (EUR 2,542 thousand), representing 5.5% (6.3%) of net sales.
| 2011 | 2010 | |
|---|---|---|
| Exchange rate gains from financial assets and liabilities | 221 | 658 |
| Gains from financial assets recognised at fair value | - | 3 |
| Other financial income | 14 | 1 |
| Total financial income | 235 | 663 |
| Interest expenses on financial liabilities | -654 | -533 |
| Exchange rate losses on financial assets and liabilities | -30 | -148 |
| Fees | -25 | -101 |
| Total financial expenses | -708 | -782 |
| Total financial income and expenses | -473 | -120 |
| Direct taxes | 2011 | 2010 |
|---|---|---|
| Taxes on taxable income for the period | -4,731 | -204 |
| Deferred taxes | -1,349 | -123 |
| Total direct taxes | -6,080 | -327 |
| Reconciliation of the tax rate | 2011 | 2010 |
| Profit before taxes | 43,789 | 388 |
| Taxes at the rate for the parent company, 26% | -11,385 | -101 |
| Effect of different tax rates of foreign subsidiaries | -29 | -23 |
| Tax-exempt income | 6,177 | - |
| Non-deductible expenses | -1,733 | -60 |
| Change in unrecognised tax assets from tax losses / use of previously unrecognised tax losses | 890 | -123 |
| Other | - | -20 |
| Taxes in the income statement | -6,080 | -327 |
It is not possible to objectively impose income taxes on discontinued and continued operations or on the sale of business operations. In taxation, discontinued operations by the parent company have been able to benefit from the losses of continued operations. The sale of business operations has had direct tax effects in different countries. In addition, discharge of depreciation differences, the full utilisation of confirmed losses by the parent company and the loss of deferred tax receivables with the sold subsidiaries cause indirect taxes. When preparing the financial statements, the company did not have the final details of the business sale's tax effects in different countries which has been taken into consideration when estimating the amount of recognised income from the return on sales.
Undiluted earnings per share are calculated by dividing the profit for the period attributable to equity-holders of the parent company by the weighted average number of shares outstanding during the period.
| 2011 | 2010 | |
|---|---|---|
| Earnings for the period attributable to equity-holders of the parent company, EUR 1000 | 37,710 | 61 |
| Interest on the convertible bonds | 263 | 263 |
| Result for the period for the calculation of earnings per share adjusted | ||
| for the dilution effect | 37,973 | 324 |
| Average number of shares, undiluted | 13,615,593 | 12,937,627 |
| Conversion of convertible bonds into shares | 900,000 | 900,000 |
| Average number of shares, diluted | 14,515,593 | 13,837,627 |
| Earnings per share (EPS), undiluted, EUR | 2.86 | 0.00 |
In the calculation of earnings per share adjusted for the dilution effect, the weighted average number of shares accounts for the dilution effect of the conversion of convertible bonds into shares. The convertible bonds did not have a dilutive effect in the 2011 and 2010 financial years.
| Development | Intangible | Other intangible | |||
|---|---|---|---|---|---|
| 2011 | expenditure | rights | Goodwill | assets | Total |
| Acquisition cost, 1 Jan 2011 | 2,376 | 2,092 | 2,638 | 1,732 | 8,838 |
| Increases | 986 | 73 | - | 17 | 1,076 |
| Decreases | -15 | - | - | - | -15 |
| Sale of the liquid handling operations | -3,347 | -1,625 | - | -1,001 | -5,973 |
| Acquisition cost, 31 Dec 2011 | - | 540 | 2,638 | 748 | 3,926 |
| Accumulated amortisation and impairment, 1 Jan 2011 | -468 | -1,426 | - | -1,129 | -3,024 |
| Acc. depreciation of the discontinued operations | 773 | 1,130 | - | 481 | 2,079 |
| Depreciation of the discontinued operations | -305 | -95 | - | -3 | -403 |
| Impairment and depreciation of the continuing | |||||
| operations | - | -25 | -2,638 | -8 | -2,671 |
| Accumulated amortisation and impairment, 31 Dec 2011 | - | -321 | -2,638 | -656 | -3,616 |
| Carrying amount, 1 Jan 2011 | 1,908 | 666 | 2,638 | 603 | 5,815 |
| Carrying amount, 31 Dec 2011 | - | 219 | - | 92 | 311 |
| Development | Intangible | Other intangible | |||
|---|---|---|---|---|---|
| 2010 | expenditure | rights | Goodwill | assets | Total |
| Acquisition cost, 1 Jan 2010 | 1,815 | 1,832 | 2,638 | 1,472 | 7,757 |
| Increases | 565 | 260 | - | 531 | 1,356 |
| Decreases | -3 | - | - | - | -3 |
| Transfers between items | - | - | - | -276 | -276 |
| Foreign exchange differences | - | - | - | 5 | 5 |
| Acquisition cost, 31 Dec 2010 | 2,376 | 2,092 | 2,638 | 1,732 | 8,838 |
| Accumulated amortisation and impairment, 1 Jan 2010 | -356 | -1,312 | - | -1,101 | -2,770 |
| Depreciation and amortisation | -112 | -114 | - | -28 | -254 |
| Impairment | - | - | - | ||
| Foreign exchange differences | - | - | - | - | - |
| Accumulated amortisation and impairment, 31 Dec 2010 | -468 | -1,426 | - | -1,129 | -3,024 |
| Carrying amount, 1 Jan 2010 | 1,458 | 520 | 2,638 | 371 | 4,987 |
| Carrying amount, 31 Dec 2010 | 1,908 | 666 | 2,638 | 603 | 5,815 |
Contractual commitments concerning the acquisition of intangible assets totalled EUR 0 thousand (EUR 54 thousand).
Intangible rights consist of patents. Assets acquired under finance lease agreements have been capitalised in other intangible assets. The acquisition cost at the end of the year was EUR 82 thousand (EUR 474 thousand), accumulated amortisation EUR 8 thousand (EUR 473 thousand), and the carrying amount EUR 74 thousand (EUR 1 thousand).
The goodwill is allocated in full to certain products in the diagnostics segment belonging to the GastroPanel test kit. The annual impairment test required by the IFRS was performed at the end of 2011. Testing was based on the budget approved by the Board of Directors for 2012 and business plans for each market area. The impairment test was limited to the estimated cash flow of GastroPanel products. The test was performed according to the principles of the previous year. The estimate for the previous year was relatively accurate in 2010, but in 2011 the actual development lagged significantly behind the estimate.
Challenging in the testing of the goodwill of the GastroPanel series is that the business is in its early stages of commercialisation and estimates for future cash flow can not be based on any actual figures. The reported growth figures for the five-year forecasting period are relatively large, but due to the conservatism principle and lack of historical data they are lower than the company's growth targets.
The targeted significant growth requires notable investments. Increase in costs before any sales and the predicted delay in the increase in net sales caused by the re-focusing are likely to result in negative cash flows in the first few years. According to the IFRS, this will require reporting an impairment.
The discount interest applied in the impairment calculations is determined to reflect the effects of risks on the required return on equity. The costs of debt have been determined according to the existing credit portfolio. The discount interest before taxes applied in the impairment calculations was 15%. The higher risk associated with the commercialisation of a novel medicinal product has been taken into consideration in determining the interest.
On the basis of the impairment test based on the above assumptions, a goodwill impairment of EUR 2,638,000 was entered into the 2011 financial statement.
| 2011 | Land | Buildings | Machinery and equipment |
Total |
|---|---|---|---|---|
| Acquisition cost, 1 Jan 2011 | 72 | 4,070 | 16,939 | 21,082 |
| Increases | 383 | 1,708 | 2,462 | 4,553 |
| Decreases | -72 | -356 | -277 | -705 |
| Sale of liquid handling operations | -383 | -5,288 | -18,524 | -24,195 |
| Acquisition cost, 31 Dec 2011 | - | 134 | 600 | 734 |
| Accumulated depreciation and impairment, 1 Jan 2011 | - | -2,170 | -12,380 | -14,551 |
| Acc. Depreciations of the discontinued operations | 2,285 | 13,233 | 15,518 | |
| Depreciaiton of the discontinued operations | -115 | -1,205 | -1,320 | |
| Depreciation of the continuing operations | - | - | -132 | -132 |
| Depreciation of the continuing operations | - | - | - | - |
| Accumulated depreciation and impairment, 31 Dec 2011 | - | - | -484 | -484 |
| Carrying amount, 1 Jan 2011 | 72 | 1,900 | 4,559 | 6,531 |
| Carrying amount, 31 Dec 2011 | - | - | 116 | 116 |
| 2010 | Land | Buildings | Machinery and equipment |
Total |
|---|---|---|---|---|
| Acquisition cost, 1 Jan 2010 | 72 | 4,008 | 15,903 | 19,984 |
| Increases | - | 46 | 1,167 | 1,213 |
| Decreases | - | - | -401 | -401 |
| Transfers between items | - | - | 276 | 276 |
| Foreign exchange differences | - | 16 | -6 | 10 |
| Acquisition cost, 31 Dec 2010 | 72 | 4,070 | 16,939 | 21,082 |
| Accumulated depreciation and impairment, 1 Jan 2010 | - | -1,962 | -11,562 | -13,524 |
| Depreciation | - | -208 | -1,209 | -1,417 |
| Accumulated depreciation of decreases and transfers | - | - | 432 | 432 |
| Foreign exchange differences | - | - | -41 | -41 |
| Accumulated depreciation and impairment, 31 Dec 2010 | - | -2,170 | -12,380 | -14,551 |
| Carrying amount, 1 Jan 2010 | 72 | 2,046 | 4,342 | 6,460 |
| Carrying amount, 31 Dec 2010 | 72 | 1,900 | 4,559 | 6,531 |
Assets acquired under finance lease agreements have been capitalised in machinery and equipment. The acquisition cost at the end of the year was EUR 54 thousand (EUR 1 407 thousand), accumulated depreciation EUR 27 thousand (EUR 462 thousand), and the carrying amount EUR 36 thousand (EUR 945 thousand).
| Balance sheet values of financial assets by category, 31 Dec 2011 |
Loans and receivables |
Available for-sale financial assets |
Financial assets recognised at fair value through profit or loss |
Total carrying amount |
Fair value |
|---|---|---|---|---|---|
| Non-current financial assets | |||||
| Financial assets | 6,823 | 7* | - | 6,830 | 6,755 |
| Total | 6,823 | 7 | - | 6,830 | 6,755 |
| Current financial assets | |||||
| Trade and other receivables | 5,982 | - | - | 5,982 | 5,982 |
| Investments held for trading | - | - | 10,000 | 10,000 | 10,000 |
| Cash and cash equivalents | 47,915 | - | - | 47,915 | 47,915 |
| Total | 53,897 | - | 10,000 | 63,897 | 63,897 |
| Total financial assets | 60,719 | 7 | 10,000 | 70,727 | 70,652 |
| Balance sheet values of financial assets by category, 31 Dec 2010 |
Loans and receivables |
Available for-sale financial assets |
Financial assets recognised at fair value through profit or loss |
Total carrying amount |
Fair value |
|---|---|---|---|---|---|
| Non-current financial assets | |||||
| Financial assets | 4 | 8* | - | 12 | 12 |
| Total | 4 | 8 | - | 12 | 12 |
| Current financial assets | |||||
| Trade and other receivables | 7,779 | - | - | 7,779 | 7,779 |
| Investments held for trading | - | - | 500 | 500 | 500 |
| Cash and cash equivalents | 1,659 | - | - | 1,659 | 1,659 |
| Total | 9,438 | - | 500 | 9,938 | 9,938 |
| Total financial assets | 9,442 | 8 | 500 | 9,942 | 9,950 |
*) Available-for-sale investments totalling EUR 7 thousand (EUR 8 thousand) include unquoted investments, which have been presented at cost because their fair value is not reliably available.
The carrying value of other receivables is equivalent to their fair value, because the discount effect is minimal when the maturity of liabilities is taken into account.
| Financial liabilities by category | Carrying amount 2011 |
Fair value 2011 |
Carrying amount 2010 |
Fair value 2010 |
|---|---|---|---|---|
| Non-current financial liabilities measured at amortised cost | ||||
| Convertible bonds | - | - | 3,841 | 3,477 |
| Capital loans | - | - | 696 | 696 |
| Other interest-bearing liabilities | - | - | 4,008 | 4,008 |
| Other liabilities | 90 | 90 | 856 | 856 |
| Total | 90 | 90 | 9,400 | 9,036 |
| Current financial liabilities measured at amortised cost | ||||
| Convertible bonds | 3,848 | 4,050 | - | - |
| Capital loans | 636 | 636 | - | - |
| Other interest-bearing liabilities | 384 | 384 | 920 | 920 |
| Trade and other payables | 13,669 | 13,669 | 6,010 | 6,010 |
| Total | 18,536 | 18,536 | 6,930 | 6,930 |
| Total financial liabilities | 18,626 | 18,828 | 16,330 | 15,966 |
The original carrying amount of trade payables and other non-interest-bearing liabilities is equivalent to their fair value, because the discount effect is minimal when one takes into account the maturity of liabilities.
The fair value of convertible bonds has been determined with a discount interest rate of 9.00% in 2010. Biohit Oyj paid the loan EUR 4 050 thousand back to the holders of the convertible bond 1 February 2012. The total capital loan and its accumulated interest has been paid to the company´s pricipal sharerholders in February 2012. Other interest bearing liabilities will be paid during year 2012.Their balance sheet values do not substantially differ from their fair values.
| Deferred tax assets | 2011 | 2010 |
|---|---|---|
| Internal margin on inventories | - | 287 |
| Pension obligations | - | 34 |
| Unused tax losses | - | 1,089 |
| Accumulated depreciation difference | - | 439 |
| Total | - | 1,849 |
| Deferred tax liabilities | ||
| Accumulated depreciation differences | - | 38 |
| Total | - | 38 |
Changes in deferred taxes have been entered into the income statement. As the company has been able to use all of its confirmed losses, deferred income taxes have been recognised as expenses.
| 2011 | 2010 | |
|---|---|---|
| Raw materials and consumables | 198 | 2,660 |
| Products in progress | 26 | 360 |
| Completed products and goods | 95 | 2,218 |
| Total inventories | 319 | 5,238 |
The inventories of liquid handling business was sold to Sartorius 14th December. The value of the inventories include GastroPanel and Acetium raw materials and completed products and goods. The item includes the carrying amount of EUR 124 thousand (EUR 120 thousand) of obsolete and slowly moving inventories recognised as expenses.
| Non-current receivables | 2011 | 2010 |
|---|---|---|
| Non-current non-interest-bearing receivables | 23 | 4 |
| Trade receivables | 4,347 | 6,592 |
| Pre-payments and accrued income | 333 | 649 |
| Other receivables | 1,302 | 538 |
| Total | 5,982 | 7,779 |
A breakdown of trade receivables by age is presented in Note 2.25.
| 2011 | 2010 | |
|---|---|---|
| Cash at bank and in hand | 47,915 | 1,659 |
| Financial assets recognised at fair value through profit or loss | 10,000 | 500 |
| Total | 57,915 | 2,159 |
| Cash and cash equivalents in the cash flow statement | 47,915 | 1,659 |
Biohit Oyj's share capital is EUR 2,314,651 and the number of shares 13,615,593, of which 2,975,500 (2,975,500) are Series A shares and 10,640,093 (9,962,127) Series B shares. The Series B shares are quoted on the stock exchange.
Both series have a nominal share value of EUR 0.17. Series A and Series B shares differ to the extent that each Series A share confers on its subscriber the right to 20 (twenty) votes at General Meetings and each Series B share confers the right to one (1) vote. However, in the payment of dividends, a dividend two (2) per cent higher than the nominal value is paid for Series B shares than is paid for Series A shares.
According to the Articles of Association, the company's minimum share capital is EUR 1,063,101.29 and the maximum share capital EUR 4,252,405.16. Within these limits, the share capital can be increased or decreased without amendment to the Articles of Association. As a result of the directed share issue arranged during year 2011, the number of the company´s shares grew by 677,966 shares. There was no change in share capital in 2010. The share capital is fully paid-in.
Translation differences: The fund includes translations differences resulting from the conversion of foreign subsidiaries' financial statements into euros.
Invested unrestricted equity fund: This fund includes other equity investments and payments for share subscriptions insofar as it is decided not to enter said amounts in the share capital.
The majority of the Group's pension schemes are defined contribution plans. There is a defined benefit plan in France and in Japan. After sale of business handling business in 2011 Group does not have any pension liabilities for the defined benefit plans.
| Pension liabilities for defined benefit plans in the balance sheet | 2011 | 2010 | |
|---|---|---|---|
| Present value of non-funded liabilities | - | 155 | |
| Present value of funded liabilities | - | 197 | |
| Unrecognised actuarial gains/losses | - | -3 | |
| Fair value of assets | - | -195 | |
| Pension liabilities at end of year | - | 155 | |
| Changes in the present value of obligations during the period | 2011 | 2010 | |
| Present value of obligations at beginning of period | 350 | 204 | |
| Costs based on work carried out during the period | - | 89 | |
| Interest expenses | - | 0 | |
| Benefits paid | - | 57 | |
| Sale of liquid handling business | -350 | - | |
| Pension liabilities at end of year | - | 350 | |
| Changes in the fair value of assets during the period | 2011 | 2010 | |
| Fair value of assets at beginning of period | 195 | 119 | |
| Employer contributions | - | 73 | |
| Benefits paid | - | 3 | |
| Sale of liquid handling business | -195 | - | |
| Pension liabilities at end of year | - | 195 | |
| Pension expenses from defined benefit schemes recognised in the income statement | 2011 | 2010 | |
| Costs based on work carried out during the period | - | 89 | |
| Total | - | 89 | |
| Mathematical assumptions for defined benefit pension schemes | 2011 | 2010 | |
| Discount interest rate, % | - | 3.0 | |
| Projected increase in wages and salaries, % | - | 2.0 | |
| Projected inflation, % | - | 4.5 | |
| Amounts for the financial period and the previous two periods | 2011 | 2010 | 2009 |
| Discount interest rate, % | - | 350 | 204 |
| Projected increase in wages and salaries, % | - | -195 | -119 |
| Projected inflation, % | - | 155 | 85 |
The 2010 reserve for guarantees amounting to EUR 50,000 were transferred to Sartorius with the sale of Biohit's liquid handling business.
| Interest-bearing liabilities, balance sheet values | 2011 | 2010 |
|---|---|---|
| Non-current interest-bearing liabilities | ||
| Loans from financial institutions | - | 3,493 |
| Convertible bonds | - | 3,841 |
| Capital loans | - | 696 |
| Finance lease liabilities | 90 | 515 |
| Total | 90 | 8,544 |
| Current interest-bearing liabilities | ||
| Loans from financial institutions, current portion | 384 | 631 |
| Convertible bonds | 3,848 | - |
| Capital loans | 636 | |
| Finance lease liabilities, current portion | 38 | 288 |
| Total | 4,906 | 920 |
| Total interest-bearing liabilities | 4,996 | 9,464 |
Fair values for financial liabilities are presented in Note 2.15.
At the end of 2011, after the sale of the liquid handling business, loans repaid amounted to EUR 4,361,000. The remaining loan sums, excluding leasings, will be paid back in full by the end of 2012. Current and non-current interest-bearing liabilities are in euro value. The average interest rate weighted with the amount of outstanding liabilities in 2012 is 4.8% p.a. (4.8% in 2010). The fair values of interest-bearing liabilities do not differ significantly from their carrying values.
On 28 October 2010, Biohit Oyj floated an issue of convertible bonds targeted at professional investors in Finland. The subscription value of the convertible bonds on the date of issue was EUR 4,050,000. These convertible bonds replace the convertible bonds which matured on 28 October 2010. Annual fixed interest of 6.5% is paid on the capital of a convertible bond, which has a five-year maturity. Each EUR 4,500 note unit can be converted into 1,000 Series B shares with a nominal value of EUR 0.17. The conversion rate is EUR 4.50. A bond can be converted into a maximum of 900,000 Biohit Oyj Series B shares. The company's share capital may be increased by a maximum of EUR 153,000 and the number of Series B shares by a maximum of 900,000 new shares as a result of conversions. At maximum, 6.5% of the company's shares can be converted on the basis of the convertible bonds, and 1.0% of the votes conferred by the shares after any increase in share capital. Starting on 2 January 2011, the company is entitled to premature repayment of the bond at a 100% rate with interest accumulated up to the repayment date added, provided that the average rate weighted against turnover of the company's stock quoted in the Helsinki Stock Exchange has over a period of 30 subsequent trading days preceding the repayment decision date exceeded the calculated conversion rate as defined in the terms of the bond or converted according to the terms, on 20 trading days by a minimum of 70%.
Biohit made an offer to redeem to its debtors, which was approved. The Biohit Group repaid the convertible bond on 1 February 2012.
In the balance sheet, the convertible bonds are divided into shareholders' equity and liabilities. The liability component has been initially recognised at fair value, which was defined by using the market interest on an equivalent liability at the moment when the bond was issued. The equity component has been calculated as the difference between the cash received from the bond issue and the fair value of the liability. The equity component of the convertible bond, EUR 177 thousand, is recognised in the invested unrestricted equity fund.
Loans from financial institutions include EUR 0 thousand (EUR 1,919 thousand) in long-term loans with the special condition that the loan will mature immediately when the creditor so demands.
Biohit's principal shareholders have granted the company a capital loan of EUR 636 thousand (EUR 696 thousand) for product and other business-related development. The accumulated interest on the capital loan as of 31 December 2011 totals EUR 595 thousand (EUR 657 thousand). The loan meets the terms of capital loan laid down in Chapter 12 of the Finnish Limited Liability Companies Act. The main terms are as follows:
Capital loans and their outstanding interest have been paid to the company´s principal shareholders in February 2012.
| Total minimum rents | 2011 | 2010 |
|---|---|---|
| Due for payment before one year | 30 | 318 |
| Due for payment after 1 year but not later than 5 years | 65 | 532 |
| Total | 95 | 850 |
| Future financial expenses | -5 | -47 |
| Present value of finance lease liabilities | 90 | 803 |
| Present value of minimum rents | 2011 | 2010 |
|---|---|---|
| Due for payment before one year | 28 | 288 |
| Due for payment after 1 year but not later than 5 years | 62 | 515 |
| Present value of finance lease liabilities | 90 | 803 |
| Non-interest-bearing liabilities, balance sheet values | 2011 | 2010 |
|---|---|---|
| Non-current non-interest-bearing liabilities | ||
| Deferred tax liabilities | - | 37 |
| Pension liabilities | - | 155 |
| Interest on capital loans | - | 657 |
| Other non-current liabilities | - | 7 |
| Total | - | 856 |
| Current non-interest-bearing liabilities | ||
| Trade payables | 3,045 | 1,854 |
| Other liabilities | 1,166 | 1,121 |
| Provisions | - | 50 |
| Advances received | 39 | 171 |
| Tax liabilities | 4,528 | 18 |
| Accrued liabilities and pre-paid income | 4,851 | 2,846 |
| Total | 13,630 | 6,060 |
| Total non-interest-bearing liabilities | 13,630 | 6,916 |
Accrued liabilities and pre-paid income include amortised employee benefits and leasing expenses.
Biohit's risk management has focused on analysing and minimising the following major risks:
International operations involve exchange rate risks. When calculated using comparable exchange rates, Biohit's net sales is in the same level when using the reporting date exchange rates. The overall effect of exchange rate fluctuations on the Group's profitability was not material. While the strengthening of the euro against other currencies weakens the Group's profitability, the weakening of the euro will have the opposite effect. The company seeks to protect itself from exchange rate risks by making procurements in currencies other than the euro. The exchange rate risk is also reduced by the realisation of fixed costs in currencies with a strong net position. During the reporting period, the company used no exchange rate hedges.
The trade receivables and payables include on the closing date liquid handling receivables and payables. In the future the currency distribution and risk will be different in the continuing operations. On the closing date, 4.3% (40%) of the Group's external trade receivables and 4.3% (14%) of its trade payables were in foreign currencies.
| 2011 1,000 € | USD | JPY | CNY | GBP |
|---|---|---|---|---|
| Non-current liabilities | - | - | - | - |
| Open position | - | - | - | - |
| Current assets | ||||
| Other financial assets | 169 | |||
| Trade and other receivables | 187 | 94 | ||
| Current liabilities | ||||
| Non-interest-bearing liabilities | 89 | |||
| Open position | 187 | 174 | ||
| Net position | 187 | 174 | ||
| 2010 1,000 € | USD | JPY | CNY | GBP |
| Non-current liabilities | 7 | 54 | - | 8 |
| Open position | 7 | 54 | - | 8 |
| Current assets | ||||
| Other financial assets | 290 | 269 | 189 | 303 |
| Trade and other receivables | 2,486 | 2,528 | 345 | 868 |
| Current liabilities | ||||
| Interest-bearing liabilities | - | - | - | 0 |
| Non-interest-bearing liabilities | 1,820 | 1,874 | 129 | 670 |
| Open position | 956 | 923 | 405 | 501 |
| Net position | 949 | 869 | 405 | 493 |
The net position includes cash and cash equivalents in foreign currencies, as well as receivables and payables to both Group and non-Group companies, converted into euros at the exchange rate for the closing date.
Changes in interest rates have only a slight effect on Biohit's earnings, for which reason the Group has not implemented separate hedging measures during the financial period.
The contractual repricing periods for floating-rate liabilities are as follows:
| In 2011 | Under 6 months | 6–12 months | 12–36 months | Total |
|---|---|---|---|---|
| Loans from financial institutions | - | - | - | - |
| In 2010 | Under 6 months | 6–12 months | 12–36 months | Total |
| Loans from financial institutions | 353 | 1,895 | - | 2,248 |
Biohit Oyj sold its liquid handling business to Sartorius Lab Holding GmbH 14 Dec 2011, and with this sale ithe financial standing of the company has become significantly stronger.
The company has paid the loans in 2012.
The objective of liquidity risk management is to secure the Group's financing in all situations. At closing date, the Group's liquid assets totalled EUR 57.9 million (EUR 2.2 million.) The company's financial position has improved significantly due to the sale of the liquid handling business.
The objective of investing the company's liquid assets is to acquire profit with little risk of equity losses. The company's investment portfolio includes deposits, investments in the money markets and business loans. Investments are spread among property classes, investment instruments and the opposite side. The company always has at least two partners in its investment schemes.
The equity ratio was 74 % in 2011 (44.5 % in 2010).
| The continuing operations | <1 year | 1–5 years | >5 years | Total |
|---|---|---|---|---|
| Trade payables and other non-interest-bearing liabilities | 5,997 | 3,726 | - | 9,723 |
| Repayments on loans from financial institutions | 384 | - | - | 384 |
| Financing costs for loans from financial institutions | 50 | - | - | 50 |
| Repayments on the convertible bonds | 4,050 | - | - | 4,050 |
| Financing costs for the convertible bonds | 69 | - | - | 69 |
| Repayments on capital loans | 636 | - | - | 636 |
| Financing costs for capital loans | 599 | - | - | 599 |
| Repayments on finance lease liabilities | 39 | 90 | - | 129 |
| Financing costs for finance lease liabilities | 2 | 5 | - | 7 |
| Total | 11,826 | 3,821 | - | 15,647 |
| The discontinued operations | <1 year | 1–5 years | >5 years | Total |
| Trade payables and other non-interest-bearing liabilities | 4,337 | - | - | 4,337 |
The company has not hedged against commodity risks with derivatives, as they are not appropriate in view of the nature of the company's business.
Business units are responsible for any credit loss risks associated with their trade receivables, and have conducted separate evaluations of the credit risk associated with each customer. Biohit's customer base consists mainly of financially sound companies, and consequently Biohit does not consider credit loss risks significant. The Group has not taken out any credit insurance. Biohit mainly enters into long-term, active relationships with its customers, so that any changes in customers' credit ratings will quickly come to the company's attention.
At 31 December 2011, trade receivables totalled EUR 4.5 million (EUR 6.6 million). Trade receivables include EUR 0.4 million (EUR 0.3 million) in receivables from a single, financially stable customer. The maximum credit risk amount is equal to the carrying amount of trade receivables.
| Impairment | Impairment | |||||
|---|---|---|---|---|---|---|
| Breakdown of trade receivables by age | 2011 | loss | Net 2011 | 2010 | loss | Net 2010 |
| Not yet falling due | 3,885 | - | 3,885 | 4,932 | - | 4,932 |
| Under 60 days due | 400 | - | 400 | 1,423 | - | 1,423 |
| 61–120 days due | 65 | -7 | 58 | 176 | -15 | 161 |
| 121–360 days due | 27 | -22 | 5 | 104 | -28 | 76 |
| Over 360 days due | 83 | -83 | - | 33 | -33 | - |
| Total | 4,460 | -112 | 4,348 | 6,668 | -76 | 6,592 |
On 31 December 2011, trade receivables for continuing operations totalled EUR 373,000. In 2011, credit losses from trade receivables totalled EUR 63,000 (EUR 56,000).
Biohit's equity structure management aims to safeguard the Group's ability to operate in all situations. The target equity structure is defined by the largest shareholders, and attainment of this level is periodically monitored by the Board of Directors. The equity ratio is used to monitor equity structure, and it should remain above 40%.
The equity structure indicator – the equity ratio – is calculated by dividing the Group's shareholders' equity by the balance sheet total minus advances received and then multiplying the result by 100.
| Equity ratio | 2011 | 2010 |
|---|---|---|
| Total shareholders' equity | 52,846 | 13,003 |
| Balance sheet total | 71,472 | 29,389 |
| Advances received | -39 | -171 |
| Equity ratio | 74.0% | 44.5% |
Parties are considered to be related parties if one party is able to exercise control over the other or has substantial influence in decisionmaking related to the other's finances and business operations. The Group's related parties include the parent company and subsidiaries. Others include members of the Board of Directors, the Group Management Team, and the president & CEO.
| Salaries and other current employee benefits | 2011 | 2010 |
|---|---|---|
| Parent company | ||
| Management Teams | 606 | 1,002 |
| President & CEO | 221 | 209 |
| Members of the Board of Scientific Advisors | 188 | 113 |
Osmo Suovaniemi has been employed by the company as a member of the Board od Scientific Advisors from 10 June 2010, this fee was EUR 188 thousand in 2011 (EUR 113 thousand in 2010)
| Subsidiaries | 2011 | 2010 |
|---|---|---|
| Managing directors | 638 | 801 |
| Fees of Board members | 2011 | 2010 |
| Parent company | ||
| Osmo Suovaniemi | 18 | 15 |
| Reijo Luostarinen | 5 | 19 |
| Mikko Salaspuro | 17 | 15 |
| Kalle Kettunen | 17 | 15 |
| Jukka Ant-Wuorinen | 4 | 15 |
| Ainomaija Haarla | 4 | 10 |
| Eero Lehti | 17 | 15 |
| Petteri Kilpinen | 14 | - |
| Seppo Luode | 14 | - |
| Saila Miettinen-Lähde | 14 | - |
| Parent company, total | 123 | 104 |
| Subsidiaries | 2011 | 2010 |
| Members of the Boards | - | 77 |
| Other operating expenses | 2011 | 2010 |
| Consulting fees | ||
| Companies controlled by Board members | 134 | 69 |
| Total consulting fees | 134 | 69 |
| Capital loans from related parties | 2011 | 2010 |
| Loan amounts | 636 | 696 |
| Interest for the period | 38 | 39 |
| Total interest payment liabilities | 595 | 657 |
| Average loan interest per annum | 5.5% | 5.5% |
The main terms for the capital loans are presented in Note 2.22.
| Group's parent company and subsidiaries | ||||
|---|---|---|---|---|
| Parent company Biohit Oyj, Finland | Group´s holding | |||
| Biohit Healthcare Ltd, UK | 100% | |||
| Oy Finio Ab, Finland | 100% | |||
| Vantaan Hienomekano Oy, Finland | 100% |
Subsidiaries Biohit Ltd, UK, Biohit SAS, France, Biohit Deutschland GmbH, Biohit Japan CO, Ltd, Biohit Inc., USA, Biohit OOO, Russia, Biohit Biotech (Suzhou) Co., Ltd, China ja Biohit Biotech Systems (India) Pvt. Ltd has been sold 14 Dec 2011 to Sartorius Lab Holding GmbH. Oy Finio Ab and Vantaan Hienomekano Oy did not conduct any business operations in 2011 or 2010.
| Collaterals given for the parent company | 2011 | 2010 |
|---|---|---|
| Corporate mortgages | - | 2,511 |
| Mortgage on real estate | - | 2,744 |
| Guarantees | - | 41 |
| Collaterals given on behalf of subsidiaries | 2011 | 2010 |
| Guarantees | - | 150 |
| Other liabilities | 2011 | 2010 |
| Leasing commitments: | ||
| Due for payment before one year | 1,203 | 830 |
| Due for payment after 1 year but not later than 5 years | 146 | 1,057 |
| Due for payment after 5 years | - | - |
| Total | 1,349 | 1,887 |
| Other rental commitments: | ||
| Due for payment before one year | 140 | 940 |
| Due for payment after 1 year but not later than 5 years | 140 | 2,034 |
| Due for payment after 5 years | - | 2,002 |
| Total | 280 | 4,976 |
| Total other liabilities | 1,629 | 6,863 |
| Total collaterals and contingent liabilities | 1,629 | 12,309 |
Include leasing commitments in the amount of EUR 1.1 million to be transferred to Sartorius. The transfer date has been set 1 April 2012.
| IFRS 2007 |
IFRS 2008 |
IFRS 2009 |
IFRS 2010 |
IFRS 2011 |
|
|---|---|---|---|---|---|
| Net sales | 33,011 | 35,095 | 35,366 | 40,044 | 39,922 |
| Change in net sales, % | 5.1% | 6.3% | 0.8% | 13.2% | -0.3% |
| Operating profit/loss | -197 | 1,314 | 1,190 | 507 | 44,262 |
| % of net sales | -0.6% | 3.7% | 3.4% | 1.3% | 110.9% |
| Profit/loss before extraordinary items and taxes | -1,116 | 996 | 669 | 388 | 43,789 |
| % of net sales | -3.4% | 2.8% | 1.9% | 1.0% | 109.7% |
| Profit/loss before taxes | -1,116 | 996 | 669 | 388 | 43,789 |
| % of net sales | -3.4% | 2.8% | 1.9% | 1.0% | 109.7% |
| Return on equity, % | -11.9% | 7.4% | 3.1% | 0.5% | 114.54% |
| Return on investment (ROI), % | -0.6% | 8.2% | 5.8% | 4.2% | 69.75% |
| Equity ratio, % | 43.6% | 46.5% | 46.8% | 44.5% | 74.0% |
| Investments in fixed assets | 2,081 | 1,213 | 2,439 | 2,569 | 4,069 |
| % of net sales | 6.3% | 3.5% | 6.9% | 6.4% | 10.2% |
| R&D expenditure | 2,005 | 2,044 | 2,409 | 2,542 | 2,213 |
| % of net sales | 6.1% | 5.8% | 6.8% | 6.3% | 5.5% |
| Total assets | 27,337 | 27,107 | 27,399 | 29,383 | 71,472 |
| Personnel, continuing operations | 36 | 32 | 33 | 38 | 36 |
| Personnel, average | 352 | 369 | 370 | 412 | 422 |
| IFRS 2007 |
IFRS 2008 |
IFRS 2009 |
IFRS 2010 |
IFRS 2011 |
|
|---|---|---|---|---|---|
| Earnings per share, undiluted, EUR | -0.12* | 0.07* | 0.03* | 0.00* | 2.86 |
| Equity per share attributable to the equity | |||||
| holders of the parent company, EUR | 0.92 | 0.97 | 0.99 | 1.01 | 3.88 |
| Price/earnings ratio, (P/E) | -14 | 18 | 50 | 525 | 1.0 |
| Dividend per share | - | - | - | - | - |
| Dividend/earnings, % | - | - | - | - | - |
| Effective dividend yield, % | - | - | - | - | - |
| Series B share price trend, EUR | |||||
| average | 2.42 | 1.41 | 1.55 | 3.42 | 2.30 |
| low | 1.51 | 0.91 | 1.27 | 1.50 | 1.74 |
| high | 3.29 | 1.92 | 1.90 | 4.91 | 3.96 |
| price at 31 Dec | 1.57 | 1.27 | 1.50 | 2.10 | 2.93 |
| Market capitalisation, EUR 1,000 (assuming | |||||
| the market price of the Series A share is | |||||
| the same as that of the Series B share) | 20,312 | 16,431 | 19,406 | 27,169 | 39,894 |
| Turnover of Series B shares, 1,000 shares | 3,436 | 1,742 | 1,996 | 9,415 | 3,001 |
| % of total number of shares | 37.9% | 17.5% | 20.0% | 94.5% | 30.1% |
| Average number of shares, adjusted | |||||
| for share issues | 12,937,627 | 12,937,627 | 12,937,627 | 12,937,627 | 13,163,616 |
| accounting for the dilutive effect of | |||||
| options and bonds | 13,837,627 | 13,837,627 | 13,837,627 | 13,837,627 | 14,063,616 |
| Total number of shares at the closing date, | |||||
| adjusted for share issues | 12,937,627 | 12,937,627 | 12,937,627 | 12,937,627 | 13,615,593 |
| accounting for the dilutive effect | |||||
| of options and bonds | 13,837,627 | 13,837,627 | 13,837,627 | 13,837,627 | 14,515,593 |
*) options and bonds have no dilutive effect
| Series A shares | No of shareholders, no. |
No of shareholders, % |
No of shares, no. |
No of shares, % |
|---|---|---|---|---|
| 1. Companies | 1 | 0.1 | 24,990 | 0.8 |
| 2. Households | 9 | 99.9 | 2,950,500 | 99.2 |
| Shares on the waiting list | - | - | 10 | 0.0 |
| Total Series A shares | 10 | 100.0 | 2,975,500 | 100.0 |
| Series B shares | No of shareholders, no. |
No of shareholders, % |
No of shares, no. |
No of shares, % |
|---|---|---|---|---|
| 1. Companies | 188 | 4.1 | 3,058,631 | 28.7 |
| 2. Financial and insurance institutions | 6 | 0.1 | 6,837 | 0.1 |
| 3. Public sector organisations | 1 | 0.0 | 346,138 | 3.3 |
| 4. Non-profit organisations | 4 | 0.1 | 3,921 | 0.0 |
| 5. Households | 4,103 | 89.2 | 6,471,425 | 69.2 |
| 6. Foreign ownership | 16 | 0.3 | 747,549 | 7.0 |
| Shares on the joint book-entry account | - | - | 5,592 | 0.1 |
| Total Series B shares | 4,602 | 93.8 | 10,640,093 | 108.4 |
| Total Series A and B shares | 4,612 | - | 13,615,593 | - |
| Series A shares | No of shareholders, no. |
No of shareholders, % |
No of shares, no. |
No of shares, % |
|---|---|---|---|---|
| 1–1,000 | - | - | - | 0.0 |
| 1,001–10,000 | 3 | 30.0 | 25,000 | 0.8 |
| 10,001–100,000 | 3 | 30.0 | 156,990 | 5.3 |
| Over 100,001 | 4 | 40.0 | 2,793,500 | 93.9 |
| Shares on the waiting list | - | - | 10 | 0.0 |
| Total Series A shares | 10 | 100.0 | 2,975,500 | 100.0 |
| Series B shares | No of shareholders, no. |
No of shareholders, % |
No of shares, no. |
No of shares, % |
|---|---|---|---|---|
| 1–1,000 | 3,912 | 85.0 | 1,241,722 | 11.7 |
| 1,001–10,000 | 623 | 13.5 | 1,703,917 | 16.0 |
| 10,001–100,000 | 56 | 1.2 | 1,318,326 | 12.4 |
| Over 100,001 | 11 | 0.2 | 6,370,549 | 59.9 |
| Shares on the joint book-entry account | - | - | 5,582 | 0.1 |
| Total Series B shares | 4,602 | 100.0 | 10,640,096 | 100.0 |
| Total Series A and B shares | 4,612 | 13,615,596 |
| The 10 largest shareholders by number of shares | Series A shares | Series B shares | Total shares | % |
|---|---|---|---|---|
| Suovaniemi, Osmo | 2,265,340 | 965,207 | 3,230,547 | 23.7 |
| Biocosmos Oy | - | 1,142,735 | 1,142,735 | 8.4 |
| Interlab Oy | - | 1,021,762 | 1,021,762 | 7.5 |
| Suovaniemi, Ville | 208,280 | 371,300 | 579,580 | 4.3 |
| Suovaniemi, Joel | 208,280 | 333,000 | 541,280 | 4.0 |
| Suovaniemi, Oili | 111,600 | 288,935 | 400,535 | 2.9 |
| Etera Mutual Pension Insurance Company | - | 343,138 | 343,138 | 2.5 |
| Oy Etra Invest Ab | - | 333,000 | 333,000 | 2.5 |
| Härkönen, Matti | 57,200 | 269,515 | 326,715 | 2.4 |
| Suovaniemi ,Vesa | 74,800 | 187,819 | 262,619 | 1.9 |
| Administrative registered and foreigners | - | 739 560 | 739 560 | 5.4 |
| The 10 largest shareholders by number of votes | Series A shares | Series B shares | Total shares | % |
| Suovaniemi, Osmo | 45,306,800 | 965,207 | 46,272,007 | 66.0 |
| Suovaniemi, Ville | 4,165,600 | 371,300 | 4,536,900 | 6.5 |
| Suovaniemi, Joel | 4,165,600 | 333,000 | 4,498,600 | 6.4 |
| Suovaniemi, Oili | 2,232,000 | 288,935 | 2,520,935 | 3.6 |
| Suovaniemi, Vesa | 1,496,000 | 193,339 | 1,683,819 | 2.4 |
| Härkönen, Matti | 1,144,000 | 269,515 | 1,413,515 | 2.0 |
| Biocosmos Oy | - | 1,142,735 | 1,142,735 | 1.6 |
| Interlab Oy | - | 1,021,762 | 1,021,762 | 1.5 |
| Oy Tech Know Ltd | 499,800 | 70,000 | 569,800 | 0.8 |
| Etera Mutual Pension Insurance Company | - | 343,138 | 343,138 | 0.5 |
On 31 December 2011, members of the Board of Directors and the President and CEO owned a total of 2,376,940 Series A shares and 3,479,539 Series B shares. These represent 43.0% of the total number of shares ountstanding and 72.7% of the voting rights conferred.
| Return on equity, % | = | profit for the period shareholders' equity (average over the year) |
x | 100 |
|---|---|---|---|---|
| Return on investment, % | = | profit before extraordinary items + interest and other financial expenses balance sheet total – non-interest-bearing liabilities (average over the year) |
x | 100 |
| Equity ratio, % | = | shareholders' equity in the balance sheet balance sheet total – advance payments received |
x | 100 |
| Earnings per share, EUR | = | profit for the period average number of shares, adjusted for share issues |
x | 100 |
| Equity per share, EUR | = | shareholders' equity in the balance sheet number of shares on the closing date |
x | 100 |
| Dividends per share, EUR | = | dividends for the period number of shares on the closing date |
x | 100 |
| Dividends per earnings, % | = | dividends per share earnings per share |
x | 100 |
| Effective dividend yield, % | = | dividends per share closing share price |
x | 100 |
| Price per earnings ratio, (P/E) | = | closing share price earnings per share |
x | 100 |
| 1,000 € | Note | 1 Jan–31 Dec 2011 | 1 Jan–31 Dec 2010 |
|---|---|---|---|
| Net sales | 6.2 | 26,749 | 25,025 |
| Change in inventories of finished goods and work in progress | -1,349 | 11 | |
| Other operating income | 6.3 | 44,899 | 237 |
| Materials and services | 6.4 | -8,143 | -7,168 |
| Personnel expenses | 6.5 | -8,876 | -8,937 |
| Depreciation, amortisation and impairment | 6.6 | -1,425 | -1,651 |
| Other operating expenses | 6.7 | -6,313 | -7,784 |
| Operating profit/loss | 45,541 | -266 | |
| Financial income and expenses | 6.8 | -541 | -269 |
| Profit/loss before appropriations and taxes | 45,000 | -534 | |
| Income taxes | -3,658 | - | |
| Other taxes | -870 | - | |
| Profit/loss for the period | 40,472 | -534 |
| 1,000 € | Note | 31 Dec 2011 | 31 Dec 2010 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Intangible assets | 6.9 | 248 | 3,136 |
| Tangible assets | 6.10 | 56 | 4,642 |
| Investments | |||
| Participations in Group companies | 6.11 | 201 | 3,957 |
| Other investments | 6.11 | 7 | 7 |
| Total non-current assets | 512 | 11,741 | |
| Current assets | |||
| Inventories | 6.12 | 307 | 3,560 |
| Non-current receivables | 6.13 | 7,145 | 31 |
| Current receivables | 6.13 | 5,944 | 8,439 |
| Marketable securities | 6.14 | 10,000 | 500 |
| Cash at bank and in hand | 6.15 | 47,712 | 487 |
| Total current assets | 71,108 | 13,016 | |
| Total assets | 71,621 | 24,757 | |
| Liabilities | |||
| Shareholders' equity | |||
| Share capital | 6.16 | 2,315 | 2,199 |
| Fund for investments of non-restricted equity | 6.16 | 14,114 | 12,230 |
| Accumulated profit/loss from previous years | 6.16 | -4,277 | -3,742 |
| Profit/loss for the period | 6.16 | 40,472 | -534 |
| Total shareholders' equity | 52,625 | 10,152 | |
| Statutory provisions | 6.17 | - | 50 |
| Liabilities | |||
| Non-current liabilities | 6.19 | - | 8,194 |
| Capital loans | 6.20 | - | 696 |
| Current liabilities | 6.21 | 18,360 | 5,666 |
| Capital loans | 6.20 | 636 | - |
| Total liabilities | 18,996 | 14,555 | |
| Total liabilities | 71,621 | 24,757 |
| 1,000 € | 2011 | 2010 |
|---|---|---|
| Cash flow from operating activities: | ||
| Profit/loss before extraordinary items | 45,000 | -534 |
| Adjustments for: | ||
| Depreciation according to plan | 1,425 | 1,651 |
| Unrealised exchange rate gains and losses | 164 | -113 |
| Financial income and expenses | 376 | 164 |
| Sales gain from business divestment | -44,805 | |
| Other adjustments | 4 | 62 |
| Change in working capital: | ||
| Increase (-) or decrease (+) in current non-interest-bearing trade receivables | -1,119 | -799 |
| Increase (-) or decrease (+) in inventories | 3,252 | -179 |
| Increase (+) or decrease (-) in current non-interest-bearing liabilities | 81 | 1,251 |
| Realised exchange rate gains and losses | 412 | 351 |
| Interest and other financial items paid | -644 | -452 |
| Dividends received | - | 246 |
| Interest received from operating activities | 12 | 2 |
| Cash flow from operating activities | 4,158 | 1,651 |
| Cash flow from investing activities: | ||
| Investments in tangible and intangible assets | -1,561 | -1,768 |
| Investments in other investments | -9,500 | -100 |
| Capital gain from the sale of liquid handling business | 51,930 | - |
| Sale of the subsidiaries | 3,754 | - |
| Cash flow from investing activities | 44,623 | -1,868 |
| Cash flow from financing activities: | ||
| Share issue | 2,000 | |
| Increase in long-term borrowings | 500 | 5,650 |
| Repayments of long-term borrowings | -4,056 | -5,413 |
| Cash flow from financing activities | -1,556 | 237 |
| Increase (+) or decrease (-) in cash and cash equivalents | 47,225 | 20 |
| Cash and cash equivalents at the beginning of the financial period | 487 | 467 |
| Cash and cash equivalents at the end of the financial period | 47,712 | 487 |
When preparing financial statements in accordance with generally accepted accounting principles, the company's management must make estimates and assumptions. Actual results may differ from these estimates.
These financial statements have been prepared in accordance with the Finnish Accounting Act.
The financial statements are presented in thousands of euros and are based on initial transaction values, except for the marketable securities included in current assets, which have been measured at fair value.
Property, plant, and equipment have been entered in the balance sheet at the original acquisition cost less grants received, depreciation according to plan, and impairment. Depreciation according to plan has been calculated on a straight-line basis over the useful economic lives of the items of property, plant, or equipment.
Depreciation periods according to plan are:
| 3–10 years |
|---|
| 10 years |
| 5 years |
| 5–10 years |
| 20 years |
| 3–10 years |
Inventories are presented according to the FIFO principle at acquisition cost, or at the lower of the replacement cost and the probable sale price. In addition to the direct costs, the acquisition cost of inventories includes an appropriate proportion of production overheads.
Marketable securities included in current assets are measured at fair value. The fair value of all investments is measured on the basis of released price quotations on well-functioning markets – that is, buy quotations on the closing date. Both gains and losses due to changes in fair value are recorded in the income statement in the period in which they materialised.
Research expenditure is expensed in the year it is incurred. Development expenditure for new products has been capitalised as intangible assets in the balance sheet since 1 January 2004 and amortised over the economic lives of the products to a five-year maximum.
Net sales are calculated as gross sales less indirect sales taxes and discounts. Revenues from products and services are recognised upon delivery.
Maintenance and repair costs are recorded as expenses in the financial year they are incurred. The costs for renovating rented premises have been capitalised under 'other capitalised expenditure', with depreciation calculated on a straight-line basis over the remainder of the term of lease.
Pension schemes and any additional pension benefits required by Finnish law are arranged through pension insurance companies. Pension costs are recorded over the term of service of employees on an accrual basis.
Deferred taxes have not been recognised in the balance sheet. In accordance with the general guidelines of the Finnish Accounting Standards Board, issued on 12 September 2006, the notes to the financial statements present the amount of deferred taxes that could be recognised in the balance sheet and assets that are unlikely to materialise and as such should not be recognised in the balance sheet.
Figures for receivables and liabilities in foreign currencies are converted into euros at the exchange rate quoted by the European Central Bank on the closing date. Exchange rate gains and losses are recognised through profit or loss.
| 2011 | 2010 | |
|---|---|---|
| Liquid handling | 25,348 | 23,542 |
| Diagnostics | 1,401 | 1,483 |
| Total | 26,749 | 25,025 |
| 2011 | 2010 | |
|---|---|---|
| Finland | 1,801 | 1,770 |
| The rest of Europe | 11,377 | 10,789 |
| North and South America | 5,008 | 5,061 |
| Asia | 4,236 | 3,985 |
| Other countries | 4,327 | 3,420 |
| Total | 26,749 | 25,025 |
| 2011 | 2010 | |
|---|---|---|
| From Group companies | 62 | 36 |
| Other | 44,837 | 201 |
| Total | 44,899 | 237 |
| 2011 | 2010 | |
|---|---|---|
| Purchases during the year | 9,253 | 7,088 |
| Change in inventories | -1,279 | -167 |
| Total raw materials and consumables | 7,974 | 6,921 |
| External services | 169 | 247 |
| Total materials and services | 8,143 | 7,168 |
| 2011 | 2010 | |
|---|---|---|
| Salaries and wages | 7,724 | 7,800 |
| Pension expenses | 1,298 | 1,274 |
| Other personnel expenses | 361 | 386 |
| Wages and salaries capitalised in non-current assets | -507 | -522 |
| Total personnel expenses | 8,876 | 8,937 |
During the financial year, EUR 449 thousand (EUR 408 thousand) was capitalised in development expenditure and EUR 58 thousand (EUR 114 thousand) in relation to mould production.
| Average number of employees by the parent company during the year | 2011 | 2010 |
|---|---|---|
| Salaried employees | 87 | 97 |
| Non-salaried employees | 101 | 95 |
| Average number of personnel | 188 | 192 |
| Personnel at end of period | 27 | 201 |
| 2011 | 2010 | |
|---|---|---|
| Intangible assets | 459 | 601 |
| Buildings | 137 | 142 |
| Machinery and equipment | 830 | 907 |
| Total | 1,425 | 1,651 |
| 2011 | 2010 | |
|---|---|---|
| Travel and other personnel-related expenses | 759 | 1,040 |
| Rent and maintenance expenses | 2,049 | 2,026 |
| Marketing and sales expenses | 621 | 2,018 |
| Other external services | 2,074 | 1,655 |
| Impairment of trade receivables | -291 | 48 |
| Other operating expenses | 1,100 | 997 |
| Total | 6,313 | 7,784 |
Impairment of trade receivables 2011 includes EUR 352 thousand cancellation of bad debt of Japan subsidiary.
| 2011 | 2010 | |
|---|---|---|
| Income from shares in Group companies | - | 246 |
| Interest income from long-term investments | ||
| From others | 33 | 2 |
| Other interest and financial income | 33 | 2 |
| Total financial income | 33 | 248 |
| Interest expenses and other financial expenses | ||
| Outgoing to Group companies | -14 | -14 |
| Outgoing to others | -559 | -503 |
| Total financial expenses | -574 | -517 |
| Total financial income and expenses | -541 | -269 |
| Foreign exchange losses included under 'Financial income and expenses' (Net) | -14 | -25 |
The items presented as components of operating profit include EUR 247 thousand in (net) exchange rate gains (EUR 464 thousand).
| Development | Intangible | Other capitalised |
|||
|---|---|---|---|---|---|
| 2011 | expenditure | rights | Goodwill | expenditure | Total |
| Acquisition cost at beginning of year | 2,372 | 2,092 | 6,558 | 1,831 | 12,853 |
| Increases | 592 | 73 | - | 419 | 1,084 |
| Decreases | -2,964 | -1,625 | - | -1,280 | -5,870 |
| Transfers between items | - | - | - | -201 | -201 |
| Acquisition cost at end of year | - | 540 | 6,558 | 769 | 7,866 |
| Accumulated amortisation and impairment | |||||
| at beginning of year | -468 | -1,426 | -6,558 | -1,264 | -9,716 |
| Accumulated depreciation of decreases | 468 | 1,130 | - | 533 | 2,132 |
| Amortisation and impairment during the year | - | -25 | - | -9 | -34 |
| Accumulated amortisation at end of year | - | -320 | -6,558 | -739 | -7,618 |
| Carrying amount at beginning of year | 1,903 | 666 | - | 567 | 3,136 |
| Carrying amount at end of year | - | 219 | - | 29 | 248 |
Acquisition costs consist of patents transferred and a liquidation loss as a result of the dissolution of Locus genex Oy.
| 2010 | Development expenditure |
Intangible rights |
Goodwill | Other capitalised expenditure |
Total |
|---|---|---|---|---|---|
| Acquisition cost at beginning of year | 1,806 | 1,832 | 6,558 | 1,562 | 11,759 |
| Increases | 565 | 260 | - | 545 | 1,370 |
| Decreases | - | - | - | - | - |
| Transfers between items | - | - | - | -276 | -276 |
| Acquisition cost at end of year | 2,372 | 2,092 | 6,558 | 1,831 | 12,853 |
| Accumulated amortisation and impairment | |||||
| at beginning of year | -356 | -1,312 | -6,206 | -1,241 | -9,115 |
| Amortisation and impairment during the year | -112 | -114 | -352 | -23 | -601 |
| Accumulated amortisation at end of year | -468 | -1,426 | -6,558 | -1,264 | -9,716 |
| Carrying amount at beginning of year | 1,450 | 520 | 352 | 321 | 2,644 |
| Carrying amount at end of year | 1,903 | 666 | - | 567 | 3,136 |
| Machinery and | ||||
|---|---|---|---|---|
| 2011 | Land | Buildings | equipment | Total |
| Acquisition cost at beginning of year | - | 2,803 | 13,821 | 16,624 |
| Increases | 1 | 11 | 313 | 324 |
| Decreases | -1 | -2,814 | -13,792 | -16,606 |
| Transfers between items | - | - | 201 | 201 |
| Acquisition cost at end of year | - | - | 542 | 542 |
| Accumulated depreciation and impairment | ||||
| at beginning of year | -1,286 | -10,695 | -11,982 | |
| Accumulated depreciation of decreases | 1,286 | 10,236 | 11,522 | |
| Depreciation during the year | - | -27 | -27 | |
| Accumulated depreciation at end of year | - | -487 | -487 | |
| Carrying amount at beginning of year | - | 1,517 | 3,125 | 4,642 |
| Carrying amount at end of year | - | - | 56 | 56 |
The undepreciated acquisition cost of production machinery and equipment is EUR 0 (EUR 2,858 thousand).
| Machinery and | ||||
|---|---|---|---|---|
| 2010 | Land | Buildings | equipment | Total |
| Acquisition cost at beginning of year | - | 2,776 | 13,397 | 16,174 |
| Increases | - | 27 | 321 | 347 |
| Decreases | - | - | -174 | -174 |
| Transfers between items | - | - | 276 | 276 |
| Acquisition cost at end of year | - | 2,803 | 13,821 | 16,624 |
| Accumulated depreciation and impairment at | ||||
| beginning of year | -1,144 | -9,886 | -11,030 | |
| Accumulated depreciation of decreases | - | 98 | 98 | |
| Depreciation during the year | -142 | -907 | -1,050 | |
| Accumulated depreciation at end of year | -1,286 | -10,695 | -11,982 | |
| Carrying amount at beginning of year | - | 1,632 | 3,511 | 5,143 |
| Carrying amount at end of year | 1,517 | 3,125 | 4,642 |
| Shares 2011 | Group companies | Other shares | Total |
|---|---|---|---|
| Carrying amount at beginning of year | 3,957 | 7 | 3,963 |
| Decreases | -3,755* | - | -3,755 |
| Carrying amount at end of year | 201 | 7 | 208 |
* Shares in Group companies were sold to Sartorius Lab Holding GmbH in conjunction with the liquid handling business transaction on 14 December 2011.
| Shares 2010 | Group companies | Other shares | Total |
|---|---|---|---|
| Carrying amount at beginning of year | 3,849 | 7 | 3,856 |
| Increases | 108 | - | 108 |
| Carrying amount at end of year | 3,957 | 7 | 3,963 |
| 2011 | 2010 | |
|---|---|---|
| Raw materials and consumables | 198 | 1,952 |
| Products in progress | 26 | 441 |
| Finished products/goods | 83 | 1,166 |
| Total inventories | 307 | 3,560 |
| Non-current receivables | 2011 | 2010 |
|---|---|---|
| Recivables from Group companies | ||
| Loan receivables | 345 | - |
| Receivables from others | ||
| Prepayments and accrual income | 6,800 | 31 |
| Total non-current receivables | 7,145 | 31 |
| Current receivables | 2011 | 2010 |
| Receivables from Group companies | ||
| Trade receivables | 54 | 5,802 |
| Other receivables | 28 | 24 |
| Total | 82 | 5,826 |
| Receivables from others | ||
| Trade receivables | 4,253 | 2,152 |
| Other receivables | 1,302 | 256 |
| Prepayments and accrual income | 306 | 206 |
| Total | 5,861 | 2,613 |
| Total current receivables | 5,944 | 8,439 |
As of 31 December 2011, EUR 31 thousand (EUR 31 thousand) in convertible bond issue costs were capitalised in pre-payments and accrued income. Capitalised expenditure is expensed in 2012.
| 2011 | 2010 | |
|---|---|---|
| Investments in funds | 10,000 | 500 |
Marketable securities consist of investments in interest funds.
| 2011 | 2010 | |
|---|---|---|
| Cash at bank and in hand | 47,712 | 487 |
| 2011 | 2010 | |
|---|---|---|
| Share capital, 1 Jan | 2,199 | 2,199 |
| Share issue | 115 | - |
| Share capital, 31 Dec | 2,315 | 2,199 |
| Invested unrestricted equity fund, 1 Jan | 12,230 | 12,230 |
| Share issue | 1,885 | - |
| Invested unrestricted equity fund, 31 Dec | 14,114 | 12,230 |
| Accumulated profit/loss from previous years, 1 Jan and 31 Dec | -4,277 | -3,742 |
| Reported profit/loss for the year | 40,472 | -534 |
| Total shareholders' equity | 52,625 | 10,152 |
Biohit's shares are divided into Series A and B shares. The series differ to the extent that each Series A share confers twenty (20) votes at General Meetings and Series B shares confer one (1) vote. However, in the payment of dividends, a dividend two (2) per cent higher than the nominal value is paid for Series B shares than is paid for Series A shares.
| Structure of the parent company's shareholders' equity |
2011 no. |
EUR | % of shares |
% of votes |
2010 no. |
EUR |
|---|---|---|---|---|---|---|
| Series A shares (20 votes per share) | 2,975,500 | 505,835 | 21.9 | 84.8 | 2,975,500 | 505,835 |
| Series B shares (1 vote per share) | 10,640,093 | 1,808,816 | 78.1 | 15.2 | 9,962,127 | 1,693,562 |
| Total | 13,615,593 | 2,314,651 | 100.0 | 100.0 | 12,937,627 | 2,199,397 |
According to the Articles of Association, the company´s minimum share capital is EUR 1,063,101.29 and the maximum share capital EUR 4,252,402.16. Within these limits, the share capital can be increased or decreased without amnement to the Articles of Association.
The company does not own any of its own shares. Based on resolution of the AGM held on 13 April 2011, the Board of the company authorised to decide on the issue of shares and to issue the special rights referred to in Chapter 10. Section 1 of the Limited Liability Companies Act so that the maximum number of the new series B shares to be issued pursuant to the special rights is 2,000,000, which corresponds to approximately 20% of the company´s Series B shares. The company has no share option schemes.
| Warranty provisions | 2011 | 2010 |
|---|---|---|
| Provision 1.1. | 50 | - |
| Increases in provisions | 50 | |
| Decreases in provisions | -50 | - |
| Provision | - | 50 |
| Total provisions | - | 50 |
As the company has been able to use all its confirmed losses, deferred income tax assets have been recognised as expenses.
| 2011 | 2010 | |
|---|---|---|
| Loans from Group companies | - | 231 |
| Loans from financial institutions | - | 3,255 |
| Convertible bonds | - | 4,050 |
| Other non-current liabilities | - | - |
| Interest on capital loans | - | 657 |
| Total non-current liabilities | - | 8,194 |
| Liabilities falling due after five years | 2011 | 2010 |
| Loans from financial institutions | - | 511 |
| Capital loans | - | 696 |
| Total | - | 1,207 |
Convertible bonds EUR 4,050 thousand has been booked in 2011 in the current liabilities. The loan has been paid back in February 2012. The main terms for these bonds are presented in the notes to the consolidated financial statements, under Note 2.23.
| 2011 | 2010 | |
|---|---|---|
| From related parties | 636 | 696 |
| Total | 636 | 696 |
The company has capital loans totalling EUR 636 thousand. The main terms for these loans are detailed in the notes to the consolidated financial statements. Capital loan has been paid back in February 2012 to the principal shareholders.
| 2011 | 2010 | |
|---|---|---|
| Capital loans | 636 | - |
| Convertible bonds | 4,050 | - |
| Loans from financial institutions, current portion | 384 | 577 |
| Other non-current liabilities, current portion | - 47 |
|
| Advances received | 39 | 42 |
| Trade payables | 3,015 | 1,477 |
| Accrued liabilities and pre-paid income | 1,376 | 2,308 |
| Other liabilities | 5,666 | 195 |
| Liabilities to Group companies | ||
| Trade payables | - 888 |
|
| Accrued liabilities and pre-paid income | 3,600 | 132 |
| Other current liabilities | 231 | - |
| Total current liabilities | 18,996 | 5,666 |
Accrued liabilities and pre-paid income include wage and salary accruals totalling EUR 199 thousand (EUR 1,405 thousand), leasing cost amortisation of EUR 38 thousand (EUR 180 thousand), and interest cost amortisation of EUR 644 thousand (EUR 117 thousand).
| Liabilities for which mortgages have been pledged as collateral | 2011 | 2010 |
|---|---|---|
| Loans from financial institutions | - | 3,448 |
| Corporate mortgages | - | 2,276 |
| Mortgages on real estate | - | 1,500 |
| Other liabilities | - | 47 |
| Mortgages on real estate | - | 763 |
| Rental agreements | - | 1,292 |
| Corporate mortgages | - | 235 |
| Leasing commitments | ||
| Due for payment the following year | 1,203 | 832 |
| Due for payment at a later date | 146 | 1,301 |
| Total | 1,349 | 2,133 |
| Rental commitments | ||
| Due for payment the following year | 140 | 431 |
| Due for payment at a later date | 140 | 861 |
| Total | 280 | 1,292 |
Leasing commitments and rents mainly consist of fixed-term leasing and rental under agreements that are effective for more than one year. Include leasing commitments in the amount of EUR 1.1 million to be transferred to Sartorius. The transfer date has been set 1 April 2012.
| Contingent liabilities on behalf of Group companies | 2011 | 2010 |
|---|---|---|
| Guarantees given on behalf of Group companies | - | 150 |
| Other contingent liabilities | 2011 | 2010 |
| Guarantees | 3 | 8 |
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.1973 per A share and a dividend of EUR 0.2007 per B share be paid for the financial year and a repayment of capital EUR 0.80 per each A and B shares. The remaining profit of the period is transferred to retained earnings.
Helsinki 16 March 2012
Osmo Suovaniemi Chairman of the Board Mikko Salaspuro Member of the Board
Kalle Kettunen Member of the Board
Eero Lehti Member of the Board Petteri Kilpinen Member of the Board Saila Miettinen-Lähde Member of the Board
Seppo Luode Member of the Board
Semi Korpela President & CEO
We have today issued an auditor's report on the audit performed.
Helsinki 20 March 2012
Ernst & Young Oy
Authorised Public Accounting Firm
Erkka Talvinko Authorized Public Accountant
We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Biohit Oyj for the financial period 1.1.–31.12.2011. The financial statements comprise the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected
depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view 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 policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
Helsinki, March 20, 2012
Ernst & Young Oy Authorized Public Accountant Firm
Erkka Talvinko Authorized Public Accountant
Laippatie 1 00880 Helsinki, Finland Tel: +358 9 773 861
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