egmont annual report 2011

THE EGMONT FOUNDATION

Annual Report 2011CVR No.: 11456111

The Egmont FoundationVognmagergade 111148 Copenhagen KTelephone: +45 3330 5550 Fax: +45 3332 4508 www.egmont.dk [email protected] office: Copenhagen

ContentsManagement’s Review .............................................................................................................................. 4

- Consolidated Financial Highlights ....................................................................................................... 4

- Profit Improvement in 2011 ............................................................................................................... 5

- Egmont Magazines ............................................................................................................................ 6

- Egmont Kids Media ........................................................................................................................... 8

- Egmont Books ................................................................................................................................... 10

- Egmont Nordisk Film .......................................................................................................................... 11

- TV 2, Norway ..................................................................................................................................... 13

- The Charitable Activities .................................................................................................................... 15

- Profit for the Egmont Foundation ....................................................................................................... 17

- Organisation...................................................................................................................................... 17

- Corporate Governance ...................................................................................................................... 17

- Corporate Social Responsibility .......................................................................................................... 17

- Special Risks ...................................................................................................................................... 18

- Outlook for 2012 ............................................................................................................................... 18

- Subsequent events ............................................................................................................................ 18

Statement by the Board of Trustees and Management Board ..................................................................... 19

Independent Auditor’s Report ................................................................................................................... 20

Income Statement of the Group ................................................................................................................ 22

Statement of Comprehensive Income of the Group ................................................................................... 23

Balance Sheet of the Group ....................................................................................................................... 24

Cash Flow Statement of the Group ............................................................................................................ 26

Statement of Changes in Equity of the Group ............................................................................................ 27

List of Notes to the Consolidated Financial Statements ............................................................................... 31

Notes to the Consolidated Financial Statements......................................................................................... 32

Income Statement of the Egmont Foundation ........................................................................................... 76

Balance Sheet of the Egmont Foundation .................................................................................................. 77

Notes of the Egmont Foundation ............................................................................................................... 78

The Board of Trustees and Management Board… ...................................................................................... 81

4 Management’s review

Management’s review

CONSOLIDATED FINANCIAL HIGHLIGHTS 2011 2010 2009 2008 2007 (FSA) (FSA)

Key figures (EUR million)

Revenue 1,386.3 1,423.1 1,443.1 1,564.8 1,492.0

Profit before net financials, depreciation, amortisation and impairment losses (EBITDA) 150.4 166.2 152.5 100.4 120.4

Operating profit (EBIT) 87.5 82.4 65.6 20.6 68.8

Profit/(loss) on net financials 6.2 (7.0) (1.6) (5.6) (3.9)

- of which profit/(loss) from investments in associates 8.3 (3.7) (8.8) (5.6) (3.7)

- of which financial income and expenses, net (2.1) (3.3) 7.2 0.0 (0.2)

Profit before tax (EBT) 93.7 75.3 64.0 15.1 64.9

Net profit for the year 73.6 49.6 66.2 2.6 52.0

Balance sheet total 1,294.8 1,267.0 1,192.4 1,111.9 1,122.6

Investments in intangible assets 43.6 41.6 40.6 57.7 7.9

Investments in property, plant and equipment 18.8 23.3 19.6 27.5 38.1

Net interest-bearing debt/(net balance) (104.7) (76.7) 31.2 145.2 49.0

Equity 505.9 461.1 421.5 382.1 435.7

Cash generated from operations 107.4 196.9 178.3 84.6 118.7

Financial ratios ( %)

Operating margin 6.3 5.8 4.5 1.3 4.6

Equity ratio 39.1 36.4 35.4 34.4 38.8

Return on equity 15.2 11.0 16.2 0.2 13.0

Average number of employees 4,161 4,312 4,754 5,134 4,399

The key figures and financial ratios for 2011, 2010 and 2009 have been prepared in ac cordance with the International Financial Reporting Standards (IFRS), as adopted by the EU. The key figures and financial ratios for 2008 and 2007 have not been adapted to IFRS and have been prepared in accordance with the Danish Financial Statements Act (FSA).

The financial ratios have been calculated in accordance with the Danish Society of Financial Analysts’ ‘Recommendations and Financial Ratios 2010’. Please see the definitions and terms used in the accounting policies.

5Management’s review

Egmont is a leading media group in the Nordic region.

Our media world spans magazines, books, films, cinemas, interactive games and TV. Egmont pub-lishes media in more than 30 countries and has 6,400 dedicated employees.

Our vision is to be the most attractive media group for our employees and business partners as well as consumers.

Egmont is a commercial foundation that donates a portion of its profits to help improve the lives of vulner-able children and young people.

PROFIT IMPROVEMENT IN 2011

RevenueEgmont’s total revenue in 2011 amounted to EUR 1,386.3 million, 2.6 % lower than in 2010. Magazines and TV 2 generated higher advertising revenue, and TV 2 boosted income generated from distributors and user-paid services. The Nordisk Film distribution busi-ness experienced a decrease after a solid year in 2010. The divestment of book clubs and the music business contributed to lower revenue.

83 % of Egmont’s revenue is generated in the Nordic region.

EarningsThe profit before net financials, depreciation, amortisa-tion and impairment losses (EBITDA) amounted to EUR 150.4 million in 2011, equivalent to a 10.8 % EBITDA margin. EBITDA was reduced by EUR 15.8 million com-pared with the previous year, primarily as a result of a lower activity level at Nordisk Film.

Operating profit (EBIT) rose to EUR 87.5 million in 2011 compared with EUR 82.4 million in 2010. Magazines, Kids Media and TV 2 improved their performance, while Books and Nordisk Film recorded lower earn-ings than in 2010. The lower earnings in Books are primarily attributable to the adjustment of the Danish book business , while the lower level of activity in the distribution business caused the earnings drop for Nordisk Film.

Net financials (excl. profit/(loss) from investments in associates) amounted to EUR (2.1) million against EUR (3.3) million in 2010.

The Group recorded a pre-tax profit of EUR 93.7 million in 2011, against EUR 75.3 million in 2010, correspond-ing to a 24 % increase. This is Egmont’s best pre-tax profit ever.

Tax on net profit for the year was EUR 20.1 million, equivalent to a tax rate of 21.4 %.

The net profit for 2011 was EUR 73.6 million against EUR 49.6 million the year before.

Balance sheetThe balance sheet total increased by EUR 27.8 million to EUR 1,294.8 million.

The Group’s net balance in the form of cash, cash equivalents and securities after the deduction of net interest-bearing debt rose from EUR 76.7 million in 2010 to EUR 104.7 million in 2011. The improvement results from the positive operating profit.

Egmont’s equity at end-2011 amounted to EUR 505.9 million, an increase of EUR 44.8 million compared with 2010.

Return on equity was 15.2 % compared with 11.0 % the year before.

The equity ratio at end-2011 was 39.1 %, compared with 36.4 % in 2010.

Cash generated from operations was EUR 107.4 mil-lion, down from EUR 196.9 million in 2010. The decline is due to the reduction in cash generated from working capital, provisions and increases in prepayments.

CHANGES IN ACCOUNTING POLICIESIn 2011 Egmont decided to present its consolidated financial statements according to the International Financial Reporting Standards (IFRS). The transition date was 1 January 2009. The effect of the transition to IFRS is explained in note 28 to the consolidated financial statements.

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Egmont Magazines

effect, although Sweden is faring somewhat better than Denmark and Norway. The division’s overall share of the magazine market increased in 2011.

Investments in digital activities were stepped up in 2011, and the division’s digital revenue increased more than the rest of the market. Furthermore various minor acqui-sitions were implemented to further strengthen digital activities. FAMILY MAGAZINES Egmont’s family magazines in Scandinavia – Hjemmet, Hemmets Journal, Norsk Ukeblad, Hendes Verden and Familien – had a total weekly circulation of 718,000, a decrease of 3.6 %. Despite this continued decline, family magazines remain a highly attractive part of the maga-zine portfolio. They have consistently generated earnings throughout the financial recession and are among the market bestsellers. In Norway Hjemmet, which celebrat-ed its centenary in 2011, is a clear contender for the title of biggest weekly family magazine. In Sweden Hemmets Journal celebrated 90 years of publication.

WOMEN’S MAGAZINESWith its attractive advertising potential, the women’s magazine market remains highly competitive. Egmont Magazines commands a leading position in Denmark with ALT for damerne, the most powerful advertising medium in the Danish market for magazines and week-lies, and Eurowoman, the leading advertising medium in the women’s monthly magazine market. In Norway

With more than 100 titles in Denmark, Norway, Sweden and Finland, Egmont Magazines is among the Scandinavian market’s largest publishers of weeklies and magazines. Catering primarily for the consumer market, the magazines provide a vehicle for advertisers to reach attractive target groups.

Egmont Magazines’ product portfolio includes family magazines, women’s and men’s magazines, illustrated weeklies, a broad selection of monthly and special inter-est magazines as well as a number of digital services and activities related to the division’s most popular brands.

Egmont Magazines generated revenue of EUR 296 mil-lion in 2011, an increase of 4.2 % over the previous year.

This improvement can be partly ascribed to an upturn in advertising income. Despite the economic recession during the second half of the year, advertising income from both print and digital publications rose in Denmark, Sweden and Norway. As a result, Egmont Magazines reinforced its market position in 2011.

Operating profit increased, amounting to EUR 33 million in 2011, against EUR 25 million in 2010.

The increase in earnings can chiefly be attributed to improvements in the Swedish business. Lastly, the vari-ous efficiency-enhancing initiatives implemented had a positive impact. However, the continuing decline in sale to non-subscribers of weeklies is having the reverse

Revenue 2011: EUR 296 million (2010: EUR 284 million)Operating profit 2011: EUR 33 million (2010: EUR 25 million)Employees 2011: 1,044 (2010: 1,026)


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stable growth in circulation enabled Camille to consoli-date its position as Norway’s largest women’s magazine. Furthermore, in 2011 ALT for damerne was launched in Norway, where it is vying with other women’s magazine titles for market shares in a segment under intense pres-sure.

MEN’S MAGAZINESEgmont Magazines commands a strong position in the market for men’s magazines. In Denmark, Euroman’s advertising sales have climbed steeply, and the magazine is now regularly published for iPad. In Norway Vi Menn is clearly the largest magazine for men, supplemented by the publication of Mann. Egmont Magazines has also acquired the rights to ALFA. In Sweden Egmont Magazines’ fashion magazine King has similarly boosted advertising sales and increased its circulation figures.

ILLUSTRATED WEEKLIESIn Denmark and Norway Egmont Magazines leads the market in the segment for lower-priced illustrated week-lies, publishing HER&NU and Her & Nå, respectively. The total weekly circulation is 199,000 copies. In Denmark, HER&NU’s editorial makeover has put the magazine in better stead than the rest of the market.

SPECIAL INTEREST MAGAZINES With more than 80 titles, Egmont Magazines commands a solid position in the Nordic market for special interest magazines and leads several country markets in the house-and-home, motor, boating, parenting, leisure, travel, health and hobby segments. In Norway Egmont Magazines, which now publishes five magazines in the house-and-home segment, bolstered its position in this market. The newest title, BoligDrøm, has gained a solid foothold in the market. In Denmark Gastro and

Rum both improved their performances despite keener competition. In 2010 Blossom was launched in Sweden, where weak sales prompted its closure in 2011. Living in Norway and Sirene in Denmark suffered the same fate.

INTERACTIVE MEDIAEgmont Magazines continuously invests in digital media, both throughout the division and in each of the countries. Various digital platforms reinforce the divi-sion’s brands, and the digital channel is a key vehicle for subscription sales. The division also operates an array of websites, including the klikk.no portal in Norway, which once again generated strong traffic growth in 2011 and now ranks as Norway’s 15th largest internet universe. In 2011 Egmont Magazines also rolled out three new websites in Denmark, Norway and Sweden under the Hjemmet/Hemmets Journal brand. The venture is Egmont Magazines’ first joint Nordic digital project.


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Revenue 2011: EUR 395 million (2010: EUR 415 million)Operating profit 2011: EUR 25 million (2010: EUR 21 million)Employees 2011: 1,237 (2010: 1,248)

way for developing a more effective publishing house that can benefit from business synergies while retain-ing local expertise in editorial material, marketing and distribution. Norway and Sweden enjoyed resounding success with the publication of a book series containing the collected works of Donald Duck illustrator, Don Rosa. Other suc-cessful launches in the region included a Lego magazine and new editions of the local Julia/Olivia and Goal brands repackaged for younger children. Numerous activities celebrating the 60th anniversary of the Petzi brand also attracted massive consumer interest.

CENTRAL AND EASTERN EUROPEAll Egmont Kids Media’s activities in Central and Eastern Europe were integrated under a single management structure. The division consolidated its key partnerships with licence holders by acquiring rights to Disney’s Marvel universe as well as new rights from Hasbro (Transformers) and Cartoon Network (Generator Rex) and by extending an agreement regarding the popular Hello Kitty brand. A new partnership secured the rights to the Maya the Bee brand in the region. Finally, Egmont Kids Media continued to develop its strong portfolio of fiction titles for children and young people, riding the wave of good results recorded in Turkey and Bulgaria.

GERMAN-SPEAKING COUNTRIES Egmont Ehapa maintained its market-leading position in the region by focusing strongly on its core business: the Mickey Mouse and Wendy magazines, which avoided

Egmont Kids Media

Egmont Kids Media is a leading provider of early reading experiences for children in 30 countries the world over. The division creates and sells magazines, books, digital media, games and merchandise for children and young people.

In 2011 the division generated revenue of EUR 395 million, EUR 20 million less than the previous year. The European crisis hit the Central and Eastern European markets, lowering consumers’ incentive to buy. However, many companies in the division made adjustments and successfully launched new products, thus enabling them to compensate for the toughening conditions in many markets. The division thus recorded an operating profit of EUR 25 million, an improvement of EUR 4 million on the 2010 profit. The profit includes non-recurring costs related to personnel adjustments and impairment losses.

Egmont Kids Media’s strategy is to revitalise its core business and strengthen market positions through effec-tive portfolio management and new title launches. The division is also focusing on making the transition from print-only publisher to multiplatform publisher by invest-ing in digital initiatives like e-publications, learn-and-play apps, edutainment platforms for pre-schoolers and e-commerce.

NORDIC REGIONBuilding on the good results achieved in 2010, the com-panies in the Nordic region exceeded financial expecta-tions. In 2011 the Nordic organisation was consolidated under a single management body, a move that paves the


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the general market decline in circulation, like the Disney Pocket Books, which recorded a 10 % sales increase. The launch of 20 new titles and a 45 % increase in internet sales also contributed to the favourable results. The German company VGS re-profiled its publication port-folio, which resulted in a new imprint for young people, INK, and the closure of a non-fiction label. With 1.6 million books sold, the publisher Lyx soared to a number two ranking in its genre and added a new sub-category focusing on crime fiction.

ENGLISH-SPEAKING COUNTRIESIn the UK Egmont Kids Media renewed a number of major licences, including the rights to Thomas the Tank Engine, and launched an all-new music magazine for teenagers, We Love Pop, with great success. Egmont USA continued to grow in its second publishing year, and one of Egmont’s local authors, Walter Dean Myers, received the prestigious title of US National Ambassador for Young People’s Literature. Despite the closure of The Red Group, Australia’s largest bookstore chain, Hardie Grant Egmont recorded growth rates driven in part by such hit new series as Billie B Brown. Finally, the bestselling cartoon series Tintin and the popular novel War Horse enjoyed an upsurge in interest following the 2011 premieres of Steven Spielberg blockbusters based on these brands.

ASIAEgmont Kids Media continued its good performance in China in 2011 despite a tough macro-economic climate. A number of factors underpinned the revenue increase from Children’s Fun Publishing: the company recorded healthy results in the book business and rising numbers of magazine subscribers; it added new science, education and parenting categories to the book range; and it embraced new media platforms, including digital

publications. The successful publication of an array of children’s bestsellers by well-known local authors helped to reinforce the company’s second-place market posi-tion in an increasingly competitive market. The worst floods in Thailand for 50 years brought all business in the region to a standstill in the fourth quarter of 2011, which affected the results for the year recorded by the Egmont Kids Media joint venture with The Nation Group.

DIGITAL MEDIAIn 2011 Egmont Kids Media established a new digital organisation and strategy. Combining stories, games and film in a successful entertainment platform for pre-school children and their parents, the Nordic online universe of Petzi’s World has ranked number one on the iTunes Nordic children’s list every weekend since its introduction in April 2011. The division also invested in a 24.42 % stake of the edutainment universe abcity.dk, where children can learn the alphabet and improve their reading skills. The Nordic Donald Duck magazine went online in an app version, and in Eastern Europe the edu-tainment portal Pluszaki for pre-schoolers was launched in the fourth quarter of 2011.


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Revenue 2011: EUR 146 million (2010: EUR 156 million)Operating profit 2011: EUR 0 million (2010: EUR 3 million)Employees 2011: 503 (2010: 512)

Egmont Books develops and produces literary fiction, non-fiction, children’s books, audio books, e-books and educational media that entertain readers and give them insight and knowledge.

Egmont Books comprises Norway’s leading book publish-ing house Cappelen Damm and the Danish publisher Lindhardt og Ringhof. Egmont’s non-Scandinavian book publishing activities are part of Egmont Kids Media.

CAPPELEN DAMMCappelen Damm is Norway’s largest book publisher with activities spanning general literature, education, book clubs, e-commerce, the bookstore chain Tanum, which has 17 book dealers in the Oslo area, and the distribution business Sentraldistribusjon. The publishing house is co-owned equally by Egmont and Bonnier.

Cappelen Damm consolidated its market position in 2011 and is a clear leader in the market for general literature – children’s books, literary fiction, non-fiction and docu-mentaries. Cappelen Damm is also a market leader in the market for books for upper secondary schools and com-mands a strong second position in books for primary and lower secondary schools.

Cappelen Damm delivered its best-ever performance in 2011, reflecting ongoing improvement despite the drop in revenue due to the decline in the primary and lower secondary school market as a whole and a weaker bookclub market.

Several publications attracted great interest in 2011. Cappelen Damm’s authors won three of a possible five Brage awards at the annual awards ceremony in November. The Norwegian flagship and café bookstore, Tanum Karl Johan in Oslo, re-opened in September after extensive renovation.

In early 2012 Cappelen Damm acquired educational materi-als and textbook publisher Høyskoleforlaget in Kristiansand.

Egmont Books

The acquisition was part of a strategic plan to strengthen the company’s market position in academic literature.

LINDHARDT OG RINGHOFThe division’s Danish activities are concentrated in Denmark’s second-largest publisher, Lindhardt og Ringhof, which includes its subsidiaries Alinea, Akademisk Forlag, L&R Business and Carlsen.

A change in company management was effected in April 2011. In addition, employee numbers were reduced and the book clubs sold to Gyldendal. A wide range of adjust-ments costs were also conducted. As a consequence, the financial results are unsatisfactory.

Despite the radical changes, Lindhardt og Ringhof has not only retained its most important authors, but also attracted big names such as Johannes Møllehave, who is making a comeback. The company enhanced its literary fiction profile, while the non-fiction department further cemented its lead in cookbooks, lifestyle, history, society and culture. The publishing house established a digital editorial department and now offers a selection of over 1,000 e-books for sale, available on iBooks. The ‘e-book of the month’ concept launched in association with SAXO.com has been a success.

During the year Lindhardt og Ringhof published approximately 580 new titles. The bestsellers included Leif Davidsen’s short story collection Utahs Bjerge, Jens Andersen’s royal biography M – 40 år på tronen and Claus Meyer’s cookbook Kager. Carlsen’s Pixi Alfabetet was another topseller.

In 2011 the educational publishers focused on develop-ing and investing significantly in digital learning media in preparation for the transition primary and lower secondary schools will make from analogue to digital materials in the coming four years. Alinea was Denmark’s largest supplier of digital learning media at end-2011.


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Egmont Nordisk Film is the leading developer, producer and distributor of creative content in the Nordic region. The division creates and tells stories through the media of film, TV and interactive games.

Revenue amounted to EUR 334 million in 2011 against EUR 390 million in the previous year. Whereas 2010 was a good year, revenue in 2011 decreased because the film distribution business distributed fewer games and films and the music business were divested. Operating profit amounted to EUR 11 million, against EUR 18 million in 2010. The decline is attributable to the lower level of activity in 2011 compared with the previous year.

FILMEgmont Nordisk Film produces and distributes feature films, animations and TV series, both as in-house productions and in association with Nordic and other international partners.

The critically acclaimed feature film R collected eight Danish ‘Robert’ awards and three ‘Bodil’ statues and was a highly popular rental title in 2011. Klassefesten sold 517,000 cinema tickets, thus becoming the most-viewed Danish film, while Dirch, co-produced by Nordisk Film, sold 485,000 tickets. Both titles helped improve the per-formance of Film Production, which also distinguished itself in 2011 by re-releasing Qivitoq on DVD and, in the television medium, by producing a documentary series about the Danish royal jewels, De kongelige juveler, and co-producing the Swedish TV series Arne Dahl.

The joint-venture company Zentropa implemented a a business restructuring and delivered significantly better results. In 2011 Susanne Bier’s In a Better World won an Oscar and a Golden Globe, and both In a Better World and Lars von Trier’s Melancholia received European Film Awards. Egmont sold 0.3 % of the shares in Zentropa, which means that as of 1 October 2011 it is recognised as an associate with an ownership share of 49.7 % rather than as a jointly controlled company.

Nordisk Film Distribution released 58 cinema titles pro-duced either in-house or by other production companies across the Nordic region. In 2011 Nordisk Film distrib-uted roughly one in every six cinema films shown in the Nordic countries.

The Twilight Saga: Breaking Dawn Part 1 sold 1,350,000 tickets, and expectations for Part 2, slated for release in November 2012, are high. The independent title The Fighter was nominated for seven Oscar awards and won two.

Furthermore the TV mini-series Millennium, based on the successful trilogy by Stieg Larsson, was awarded an Emmy.

Once again Egmont Nordisk Film was behind some of the biggest locally produced Scandinavian film titles in 2011. In its home country 560,000 cinema guests saw the Norwegian action thriller Headhunters, which sold 217,000 tickets in Denmark. The film was also Norway’s

Egmont Nordisk FilmRevenue 2011: EUR 334 million (2010: EUR 390 million)Operating profit 2011: EUR 11 million (2010: EUR 18 million)Employees 2011: 798 (2010: 946)


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bestselling Norwegian DVD title, with over 300,000 cop-ies sold. In Sweden Beyond sold 380,000 cinema tickets and also collected three Guldbagge awards.

In 2011 growth rates for VideoOnDemand distribution repeated their upward rise in step with consumers’ expanding options for watching films through a variety of different media and platforms.

In 2011 the Nordisk Film Shortcut post-production companies continued to gear their activities to the digital future. A new digital company was established in Sweden, and in Denmark activities in the analogue film laboratory were substantially reduced.

CINEMASNordisk Film Cinemas sold 5.4 million cinema tickets in Denmark and 354,000 in Norway. The Danish cinema market fell by 4.5 % compared to 2010. The numerous discounted tickets sold and the relatively small number of higher-priced tickets for extra-length features and 3D films brought a drop in average ticket prices for the first time in many years. The first sod was turned for the construction of a new cinema in Næstved, due to open in March 2012. Finally, Nordisk Film Cinemas started the process of digitalising the cinema chain, planned to be completed by early summer 2012. Kino.dk runs Denmark’s leading film website, handling ticket transactions that represent approximately 70 % of

all ticket sales in Denmark. Like the cinema commercials company Dansk Reklame Film, the company fared well in a media market under pressure.

INTERACTIVE GAMES2011 was a good year for PlayStation, which recorded sales exceeding 300,000 PS3 consoles in the Nordic region and captured a market share of over 45 %. Reducing the console price in September enabled PlayStation to gain a firm hold on a new group of con-sumers, a development underpinned by the continued success of the motion controller MOVE. MOVE has been particularly popular with families and others wishing to use PlayStation as a social experience, and a broad spec-trum of new social and active entertainment titles were released in 2011.

2011 also brought a wide range of major titles targeted more specifically at traditional PlayStation audiences. Uncharted 3, released on 1 November, was the year’s unchallenged success, selling over 100,000 copies, while other sequels to major, well-known series such as Killzone, Little Big Planet, Resistance and Ratchet & Clank maintained their popularity throughout the year.

Sales of accessories, in particular extra controllers, exceeded expectations, reflecting the fact that PlayStation has become a predominantly social experi-ence.


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Measured by daily use, TV 2 is Norway’s largest com-mercial media house. Seven out of ten Norwegians use one or more TV 2 products every day, and TV 2 is among Norway’s unequivocally strongest brands. TV 2 is a leading supplier of news, sports and entertainment through television, the internet, mobile phones and tablet computers. In 2011 TV 2 was 50/50 co-owned by Egmont and A-pressen. In February 2012 Egmont acquired A-pressen’s stake at a price of NOK 2.1 billion, thus making it a wholly owned Egmont company.

In 2011 TV 2 generated revenue of NOK 3,197 million against NOK 2,704 million in 2010. TV 2’s operating profit was NOK 485 million compared with NOK 335 million in 2010. Like the profit from the previous year, this year’s profit represents TV 2’s best to date. For the first time, TV 2 has also generated revenue exceeding NOK 3 billion. The profit is ascribable to a combination of a more favourable advertising market and growth in pay-per-transaction income from more recently added business areas such as pay-TV and internet services. TV 2 contributed EUR 210 million to the Egmont Group’s revenue and EUR 27 million to operating profit. TV 2’s total share of viewers was unchanged in 2011. In January 2012 TV 2 acquired Telenor’s 45 % sharehold-ing in TV 2 Zebra AS, thus becoming the sole proprietor. TV 2 Zebra runs the TV channels TV 2 Zebra and TV 2 SPORT.

TV 2 (MAIN CHANNEL) TV 2 commanded a market share of 19.3 % in 2011, down from 20.5 % in 2010. Fierce competition in the TV

market and the continued introduction of niche channels largely account for the main channel’s decline.

On 18 December 2011 TV 2 set a new viewing record when 1,611,000 viewers tuned in to the world cup handball final for women between Norway and France. The final of Idol, watched by 1,475,000 Norwegians in 2005, held the former record.

Norway was struck by a terrorist attack on 22 July 2011. For the first few days all coverage was transferred to the main channel, which broadcast news non-stop for 56 hours 11 minutes.

TV 2 ZEBRA In 2011 TV 2 Zebra held a market share of 2.7 %, down from 3.0 % in 2010. TV 2 Zebra’s content consists largely of entertainment and sport. TV 2 BLISS Launched in October 2010 TV 2 Bliss is an entertainment channel catering specially for young women. In 2011 it had a market share of 1.4 %. The launch of TV 2 Bliss is a key reason that TV 2’s share of the total market remained stable in 2011. TV 2 NYHETSKANALEN TV 2 Nyhetskanalen celebrated its fifth anniversary on 15 January 2012. The channel has consistently increased its market share, which has climbed from 0.5 % in 2007 to 2.2 % in 2011. The channel has intensified competi-tion among current affairs programmes in Norway and evolved into one of Norwegians’ chief sources of news – particularly for major events.

TV 2, Norway


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TV 2 FILMKANALEN TV 2 Filmkanalen airs films 24 hours a day. The channel was given a face-lift in 2011 and now has a market share of 0.7 %, a percentage that has remained stable since the channel launch in 2007.

TV 2 SPORT Norwegian Tippeliga football matches constitute the primary content of TV 2 SPORT.

TV 2 PREMIER LEAGUE TV 2 broadcasts Premier League programmes on three HD TV channels: TV 2 PL HD 1, TV 2 PL HD 2 and TV 2 PL HD 3. The channels broadcast nearly all games from the best English division in HD. The studio is located in Bergen. TV 2 took over the rights to broadcast Barclays Premier League games starting with the 2009/2010 season.

TV 2 SUMO TV 2 Sumo is the largest commercial internet-based TV supplier in the Nordic region. Subscribers to TV 2 Sumo have access to all TV 2’s TV channels, an extensive pro-gramme library and an interactive live centre based on sport that invites viewers to share a social viewing experi-ence. In 2011 TV 2 Sumo was launched for iPad, and many content elements became available on iPhone. In time TV 2 Sumo will also be accessible on other mobile platforms. In 2011 the number of subscribers increased by 50 %.

TV 2.NO In 2011 TV 2 once again enjoyed strong growth on the internet and mobile platforms. During the year tv2.no recorded a 37 % increase in traffic after a 31 % growth rate in 2010. In 2011 tv2.no thus ascended from 11th to 7th place on the list of largest Norwegian websites.

PURCHASE OF TV RIGHTS TO THE OLYMPIC GAMES In June 2011 TV 2 announced its acquisition of the TV broadcasting rights to the 2014 Winter Olympics in Sotsji, Russia, and the 2016 Summer Olympics in Rio de Janeiro, Brazil. TV 2 has acquired all rights to all plat-forms, from TV to the internet and mobile platforms.

SUBSIDIARIES TV 2 Mediehuset owns the subsidiaries OB-Team, TV 2 Torget, Vimond and Mosart Medialab, and holds owner-ship shares in RiksTV (33.33 %) and Norges televisjon (33.33 %).


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Since 1920 the Egmont Foundation has donated approx-imately EUR 250 million to support social and cultural initiatives. In 2011 Egmont’s financial support amounted to EUR 6.4 million, EUR 470,000 of which was donated via the Nordisk Film Foundation.

The Egmont Foundation is a commercial foundation that re-invests its profit in the media business and charitable activities. The Foundation’s charitable vision is to help give children and young people a good life by supporting their active and committed participation in society.

The Foundation supports projects that incorporate a learning perspective or help children and young people to handle life crises. In addition, the Foundation provides direct financial support to vulnerable families in need of help for special purposes like holidays, Christmas or recreational activities for children or for re-establishing a home after a stay in a crisis centre. Lastly, the Nordisk Film Foundation, also part of the Egmont Foundation, grants support to the Danish film industry every year.

SIGNS OF CRISIS IN SOCIETYIn 2011 Danish families felt the true impact of the European debt crisis and the general economic reces-sion. The Egmont Foundation’s charitable work in 2011 also reflected the crisis. For example, Christmas aid applications alone rose by 139 % compared with 2010. The Foundation also received many requests for support from public institutions and private organisations that work with the most vulnerable groups in society.

2011 showed that times of crisis pose a special challenge to those in need of protection and support. The Egmont Foundation is therefore looking forward to raising its level of grants by 20 % in 2012 and intensifying its efforts to help Danish children and young people lead the best lives possible.

FROM THE PERSPECTIVE OF VULNERABLE CHILDREN Throughout its almost century-long history, the Egmont Foundation has provided support to the most vulner-able children and families in Danish society. These are families who are often subjected to several life crises at once, e.g. experiencing violence, abuse and divorce close at hand. The children in such families need special care and support, for which reason the Foundation focused its efforts on this group in 2011. To this end, the Foundation increased its direct financial support to vulnerable families and implemented effective projects such as Mødrehjælpen’s counselling service for women and children exposed to domestic violence.

The Foundation always makes fostering the well-being and education of vulnerable children and youth a top priority. Support must be offered in cases of urgent need, but these children and young people also benefit from self-help assistance. This approach instils a sense of dignity, the best foundation for a good life. Ensuring that vulnerable children and young people get a good education is one of the best ways to help them help themselves. In 2011 the Egmont Foundation therefore

The Charitable Activities


16

took the initiative for an upcoming signature project to provide compassionate teaching and learning for chil-dren and young people in care.

NORDISK FILM FOUNDATION 2011Since 1992, as Denmark’s largest private media founda-tion and part of the Egmont Foundation, the Nordisk Film Foundation has granted support to the Danish film industry. In 2011 the Foundation donated EUR 470,000. Approximately 60 % of the Foundation’s support funds go towards developing creative talent and skills, about 30 % towards supporting industry development and internationalisation, and about 10 % towards upholding film culture throughout Danish society.

The following are examples of notable donations:• In 2011 the Nordisk Film Foundation awarded a total

of EUR 94,146 to help about 29 young, gifted film-makers study at international media schools.

• The National Film School of Denmark and the Super16 film school received support for study trips, graduation films, etc, totalling EUR 12,198.

• Nordisk Film donated EUR 26,899 for the develop-ment of a European cross-media programme in Copenhagen.

• In 2011 the Nordisk Film Pris talent award went to scriptwriter Anders August, while the Ballings Rejselegat travel grant was awarded to film director Martin Zandvliet.

• A number of conferences and festivals with an inter-national slant received EUR 81,000 during the year. Finally, the Foundation donated EUR 43,000 to the Danish Film Institute (DFI) for a project to digitalise old film reels.


17

Management’s reviewPROFIT FOR THE EGMONT FOUNDATIONThe profit of the Egmont Foundation, the parent entity of the Egmont Group, excluding dividends from equity investments in subsidiaries, was EUR 3.3 million. The Foundation’s Commercial Activities primarily comprise royalty income from the Foundation’s publishing rights and management of the Foundation’s assets.

In 2011 the Egmont Foundation changed its account-ing policies such that investments in subsidiaries are recognised at cost. The impact was a EUR 135.5 million reduction of equity as at 1 January 2010; see note 1 to the financial statements of the Foundation.

ORGANISATIONIn January 2011, an election was held in the Group to select employee representatives for the Board of Trustees of the Egmont Foundation. Peder Høgild and Anna von Lowzow were re-elected, while Marianne Oehlenschlæger was elected as a new board member. The changes took effect following the Annual Meeting in March 2011.

CORPORATE GOVERNANCEBased on the most recent recommendations from the Committee on Corporate Governance, the Board of Trustees and Management Board have updated the description of the framework for Corporate Governance at Egmont. This framework is described in full on Egmont’s website (www.egmont.com).

Egmont meets the above-mentioned Corporate Governance recommenda tions, with the exception of recommendations that are irrelevant because the parent entity, the Egmont Foundation, is a commercial founda-tion.

CORPORATE SOCIAL RESPONSIBILITYEgmont is committed to meeting current international standards for human rights, the environment, working conditions, business ethics and consumer matters.

In 2005 Egmont formulated a Code of Conduct, a defined set of standards concerning human rights, the environment and working conditions that Egmont requires its companies and suppliers to meet. Egmont’s Code of Conduct can be read in its entirety on the Egmont website (www.egmont.com). Egmont’s Social Compliance Programme and other initiatives have since focused on the issue of enforcing these requirements. In 2011 new managers at Egmont attended courses that included Egmont’s Code of Conduct as a fixed element on the agenda.

In 2011 Egmont Sourcing (HK) Ltd, whose main task is to purchase and quality-assure cover mounts, made another round of inspection visits, primarily to Egmont’s Asian suppliers. As some of these inspection visits are carried out as part of Egmont’s Social Compliance Programme, the focus is on social audits. The fac-tory’s procedures and quality control systems are also reviewed. The inspection visits have resulted in the specific training of our suppliers, particularly as regards the legal requirements concerning chemicals (REACH) as well as in recommendations to our suppliers regarding human rights, working conditions and the environment. Towards the end of 2011 a centralised purchasing organisation was established for cover mounts, Egmont Kids Media Sourcing. The objective of the organisation is to ensure that Egmont’s cover-mount purchasers use effective purchasing processes. In cooperation


18

with Egmont Social Compliance and Egmont Hong Kong’s QA/QC team, the organisation also ensures that Egmont’s purchasers provide better control and focus on product safety. Recommendations for process improve-ments will be available in 2012.

In 2005 Egmont UK established the Egmont Grading System, a paper standard to ensure that trees from endangered rain forests are not used for paper produc-tion. The Egmont Grading System has since become an industry standard in the UK under the title ‘Publishers Database for Responsible Environmental Paper Sourcing’ (PREPS).

In 2011 Egmont companies in the UK, Germany and Norway used the system, and efforts will be made in 2012 to extend its use to other Egmont companies.

More information about these initiatives will be available in the course of 2012 at www.egmont.com.

SPECIAL RISKS Part of the Egmont Group’s business is based on stable, long-standing relations with some of the world’s lead-ing rights holders. Egmont’s strength and geographic breadth underpin its constant efforts to sustain and expand these partnerships.

Furthermore, by virtue of its activities the Egmont Group is exposed to various financial risks. Please refer to note 23, Financial risks and financial instruments.

OUTLOOK FOR 2012Egmont will carry on developing media platforms, continuously adapting its media products to chang-ing consumer needs, profitability programmes and efficiency-enhancing measures. The greatest uncertainty is associated with advertising revenue, which is sensitive to economic fluctuations.

SUBSEQUENT EVENTSIn February 2012 Egmont acquired the remaining 50 % shareholding in TV 2, Norway. TV 2, Norway, will be recognised in full in Egmont’s consolidated financial statements as of 1 February 2012, which will positively impact Egmont’s total revenue and profit for 2012, as these items were formerly recognised at 50 %. Egmont additionally acquired all shares in Venuepoint Holding ApS (Billetlugen) on 9 March 2012. Please refer to note 26, Subsequent events.


19

The Board of Trustees and Management Board have today discussed and approved the annual report of the Egmont Foundation for the financial year 1 January - 31 December 2011.

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional Danish disclosure requirements according to the Danish Financial Statements Act. The financial statements of the Egmont Foundation have been prepared in accordance with the Danish Financial Statements Act and the financial report-ing requirements of the Foundation’s Charter.

In our opinion, the consolidated financial statements and

BOARD OF TRUSTEES:

Mikael Olufsen Steen Riisgaard Chairman Vice Chairman

Ulrik Bülow Peder Høgild Lars-Johan Jarnheimer

Anna von Lowzow Jeppe Skadhauge Torben Ballegaard Sørensen

Marianne Oehlenschlæger

Statement by the Board of Trustees and Management Board

MANAGEMENT BOARD:

Steffen Kragh Hans J. Carstensen President and CEO

the Foundation’s financial statements give a true and fair view of the Group’s and the Foundation’s assets, liabili-ties, and financial position at 31 December 2011, and of the results of the Group’s and the Foundation’s opera-tions and the consolidated cash flows for the financial year 1 January - 31 December 2011.

Furthermore, in our opinion, the Management’s review gives a fair review of the development in the Group’s and the Foundation’s activities and financial matters, the net profit of the year and the Group’s and the Foundation’s financial position.

Copenhagen, 26 March 2012

Statement by the Board of Trustees and Management Board

20

Independent Auditor’s ReportTO THE BOARD OF TRUSTEES OF THE EGMONT FOUNDATION

AUDITOR’S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FOUNDATION’S FINANCIAL STATEMENTS

We have audited the consolidated financial statements and the Foundation’s financial statements for the finan-cial year 1 January – 31 December 2011. The consoli-dated financial statements and the Foundation’s financial statements comprise the income statement, balance sheet and notes, including accounting policies for both the Group and the Foundation, as well as the statement of comprehensive income, statement of changes in equity and cash flow statement for the Group.

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional dis-closure requirements according to the Danish Financial Statements Act. The Foundation’s financial statements are prepared in accordance with the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter.

MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATE D FINANCIAL STATEMENTS AND THE FOUNDATION’S FINANCIAL STATEMENTSThe Management is responsible for the preparation of consolidated financial statements and financial state-ments for the Foundation that give a true and fair view

in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional dis-closure requirements according to the Danish Financial Statements Act (the consolidated financial statements), as well as the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter (the Foundation’s financial statements).

Moreover, the Management is responsible for the internal control considered necessary by them to prepare consolidated financial statements and financial state-ments for the Foundation that are free from material misstatement, whether due to fraud or error. AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on the consolidated financial statements and the Foundation’s financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish Audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consoli-dated financial statements and the Foundation’s finan-cial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and the Foundation’s financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated

Independent Auditor’s Report

21

financial statements and the Foundation’s financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Foundation’s preparation of consolidated financial statements and the Foundation’s financial statements 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 express-ing an opinion on the effectiveness of the Foundation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as the overall presentation of the consolidated financial statements and the Foundation’s financial statements

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

Our audit has not resulted in any qualification.

OPINION In our opinion, the consolidated financial statements and the Foundation’s financial statements give a true and fair view of the Group’s and the Foundation’s financial position at 31 December 2011, and of the results of the Group’s and the Foundation’s operations and the consolidated cash flows for the financial year 1 January - 31 December 2011 in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional disclosure requirements

according to the Danish Financial Statements Act in respect of the consolidated financial statements, and in accordance with the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter in respect of the Foundation’s financial statements.

STATEMENT ON THE MANAGEMENT’S REVIEWPursuant to the Danish Financial Statements Act, we have read the Management’s review. We have not performed any other procedures in addition to the audit of the consolidated financial statements and the Foundation’s financial statements. On this basis, it is our opinion that the information provided in the Management’s review is consistent with the consolidated financial statements and the Foundation’s financial statements.

Copenhagen, 26 March 2012

KPMGStatsautoriseret Revisionspartnerselskab

Jesper Ridder OlsenState-Authorised Public Accountant

Independent Auditor’s Report

22

Income Statement of the Group (EURk)

Income Statement of the Group

Note 2011 2010 2009

2 Revenue 1,386,320 1,423,112 1,443,148

Change in inventories of finished goods and work in progress (702) 2,117 9,378

3 Other operating income 10,851 12,744 28,282

Raw materials and consumables (60,444) (55,651) (63,748)

Other external expenses (859,641) (899,671) (930,807)

4 Personnel costs (323,151) (308,619) (325,689)

5 Depreciation, amortisation and impairment losses; (62,843) (83,807) (86,908) property plant and equipment and intangible assets

Other operating expenses (2,849) (7,845) (8,027)

Operating profit 87,541 82,380 65,629

Profit/(loss) after tax from investments in associates 8,263 (3,655) (8,751)

6 Financial income 13,226 13,468 28,269

7 Financial expenses (15,308) (16,861) (21,137)

Profit before tax 93,722 75,332 64,010

8 Tax on profit for the year (20,082) (25,689) 2,209

Net profit for the year 73,640 49,643 66,219

Attributable to:

The Foundation 71,980 47,826 63,060

Non-controlling interests 1,660 1,817 3,159

Total 73,640 49,643 66,219

23

Statement of Comprehensive Income of the Group(1.000 EURk)

Statement of Comprehensive Income of the Group

Note 2011 2010 2009


Foreign exchange adjustments on translation to presentation currency 1,207 (1,140) (825)

Foreign exchange adjustments on translation of foreign entities (2,826) 5,718 (2,834)

Value adjustments of hedging instruments:

Value adjustments for the year (14,083) (6,550) (1,988)

Value adjustments transferred to financial expenses 3,877 3,925 3,739

17 Actuarial gains/(losses) on defined benefit pension plans (14,714) (2,982) 1,559

8 Tax on other comprehensive income 4,360 1,057 (352)

Other comprehensive income after tax (22,179) 28 (701)

Total comprehensive income 51,461 49,671 65,518

Attributable to:

The Foundation 49,647 47,609 61,810

Non-controlling interests 1,814 2,062 3,708

Total 51,461 49,671 65,518

24

Balance Sheet of the Group at 31 december(1.000 EURk)

Balance Sheet of the Group at 31 december

1 January Note Assets 2011 2010 2009 2009

Film rights, etc. 38,047 35,143 44,672 58,776

In-house produced film rights 8,232 15,551 13,293 13,073

Goodwill 90,426 93,037 97,678 95,456

Trademarks 44,580 44,209 40,970 34,744

Intangible assets under development and prepayments for film rights 24,320 15,809 13,536 7,655

9 Intangible assets 205,605 203,749 210,149 209,704

Land and buildings 173,797 178,440 186,183 190,276

Plant and machinery 16,482 18,943 18,807 18,912

Tools and equipment 17,402 19,744 20,801 19,065

Leasehold improvements 3,812 4,540 5,399 5,901

Property, plant and equipment under construction 6,264 3,319 1,752 4,929

10 Property, plant and equipment 217,757 224,986 232,942 239,083

11 Investment properties 30,938 30,854 30,907 30,870

12 Investments in associates 12,238 9,335 10,462 19,715

Other investments 3,841 3,897 3,898 4,953

18 Deferred tax 22,156 22,184 17,840 26,738

Other non-current assets 38,235 35,416 32,200 51,406

Total non-current assets 492,535 495,005 506,198 531,063

13 Inventories 128,855 129,259 135,712 151,396

23 Trade receivables 206,773 231,087 234,997 246,591

Receivables from associates 3,648 2,405 3,342 3,382

Other receivables 60,811 60,663 81,185 58,229

Prepayments 64,432 47,478 38,575 45,385

Receivables 335,664 341,633 358,099 353,587

14 Securities 183,439 152,321 30,289 19,256

15 Cash and cash equivalents 154,259 148,807 162,061 36,220

Total current assets 802,217 772,020 686,161 560,459

TOTAL ASSETS 1,294,752 1,267,025 1,192,359 1,091,522

25Balance Sheet of the Group at 31 december

Balance Sheet of the Group at 31 december (continued)

1 January Note Equity and liabilities 2011 2010 2009 2009

Capital fund 29,593 29,513 29,564 29,528

Other reserves (20,348) (7,357) (10,021) (7,193)

Transferred comprehensive income 487,793 431,056 395,321 342,170

Foundation’s share of equity 497,038 453,212 414,864 364,505

Non-controlling interests 8,848 7,919 6,636 2,939

16 Equity 505,886 461,131 421,500 367,444

17 Pensions 48,642 32,591 25,649 25,064

18 Deferred tax 7,945 6,661 1,421 24,891

19 Other provisions 11,056 10,125 5,878 3,909

23 Mortgage debt 112,612 112,307 112,608 21,767

23 Other credit institutions 38,572 38,140 42,118 44,692

Other financial liabilities 7,891 5,922 6,878 6,802

Deferred income 5,002 5,252 11,370 11,609

Non-current liabilities 231,720 210,998 205,922 138,734

23 Other credit institutions 71,627 65,159 59,269 123,895

Prepayments from customers 56,611 54,267 49,846 47,237

Trade payables 201,749 222,370 225,789 221,455

Corporate income tax, etc. 13,637 18,175 9,241 3,154

Other payables 132,292 138,935 131,026 114,117

19 Other provisions 58,149 66,227 61,370 45,527

Deferred income 23,081 29,763 28,396 29,959

Current liabilities 557,146 594,896 564,937 585,344

Total liabilities 788,866 805,894 770,859 724,078

TOTAL EQUITY AND LIABILITIES 1,294,752 1,267,025 1,192,359 1,091,522

26

Cash Flow Statement of the Group (1.000 EURk)

Cash Flow Statement of the Group

Note 2011 2010 2009


Adjustment for non-cash operating items, etc.:

5 Depreciation, amortisation and impairment losses 62,843 83,807 86,908

Other non-cash operating items, net (1,376) (1,160) (16,214)

Provisions and deferred income (11,152) 21,797 30,716

Cash generated from operations 137,856 186,824 167,039 before change in working capital

Change in inventories (925) 12,536 26,811

Change in receivables 11,119 30,970 13,567

Change in trade payables and other payables (40,649) (33,462) (29,113)

Change in working capital (30,455) 10,044 11,265

Cash generated from operations 107,401 196,868 178,304

Interest received 10,921 4,915 6,868

Interest paid (10,527) (14,106) (16,155)

Corporate income tax paid (20,331) (16,183) (6,354)

Cash flows from operating activities 87,464 171,494 162,663

Acquisition of intangible assets (43,550) (41,618) (40,619)

Acquisition of property, plant and equipment (18,798) (23,305) (19,613)

Disposal of property, plant and equipment 2,618 4,211 2,811

Acquisition of financial assets (1,812) (1,115) (4,173)

Disposal of financial assets 10,226 0 3,695

Acquisition of securities (73,430) (151,401) (27,188)

Disposal of securities 43,150 26,846 15,647

Acquisition of subsidiaries and jointly controlled entities (296) (1,117) (400)

Disposal of subsidiaries and jointly controlled entities 805 3,992 25,000

Cash flows from investing activities (81,087) (183,507) (44,840)

Net addition from payables to credit institutions, etc. 3,258 (5,466) 5,945

Dividends to non-controlling shareholders (447) (704) (621)

Donations (7,403) (6,747) (6,895)

Cash flows from financing activities (4,592) (12,917) (1,571)

Net cash flows from operating, investing and financing activities 1,785 (24,930) 116,252

Cash and cash equivalents at 1 January 148,807 162,061 36,220

Foreign exchange adjustment of cash and cash equivalents 3,667 11,676 9,589

Cash and cash equivalents at 31 December 154,259 148,807 162,061

The cash flow statement cannot be derived directly from the balance sheet and income statement. The cash and cash

equivalents at the reporting date include cash and cash equivalents pledged as security in the amount of 8,448 (2010:

8,378 and 2009: 3,360); see note 15.

27

Capital fund

Reserve for hedging trans actions

Reserve for foreign

exchange adjustments

Transferred compre-hensive income

Non-controlling

interestsTotal

equity

Statement of Changes in Equity of the Group(1.000 EURk)

Statement of Changes in Equity of the Group

Equity at 1 January 2011 29,513 (9,446) 2,089 431,056 7,919 461,131

Net profit for the year 0 0 0 71,980 1,660 73,640

Foreign exchange adjustments on 80 (73) 6 1,172 22 1,207 translation to presentation currency

Foreign exchange adjustments on 0 0 (2,958) 0 132 (2,826)translation of foreign entities


Value adjustments for the year 0 (14,083) 0 0 0 (14,083)

Value adjustments transferred 0 3,877 0 0 0 3,877 to financial expenses

Actuarial gains/(losses) on 0 0 0 (14,714) 0 (14,714)defined benefit pension plans

Tax on other comprehensive income 0 240 0 4,120 0 4,360

Other comprehensive income 80 (10,039) (2,952) (9,422) 154 (22,179)

Total comprehensive income in 2011 80 (10,039) (2,952) 62,558 1,814 51,461

Used for charitable purposes 0 0 0 (7,403) 0 (7,403)and associated costs

Acquisition/disposal, 0 0 0 0 (438) (438)non-controlling interests

Dividends, non-controlling interests 0 0 0 0 (447) (447)

Other capital items 0 0 0 1,582 0 1,582

Equity at 31 December 2011 29,593 (19,485) (863) 487,793 8,848 505,886

28 Statement of Changes in Equity of the Group

Statement of Changes in Equity of the Group (continued)

Equity at 1 January 2010 29,564 (6,642) (3,379) 395,321 6,636 421,500


Foreign exchange adjustments on (51) (401) 6 (683) (11) (1,140)translation to presentation currency

Foreign exchange adjustments on 0 0 5,462 0 256 5,718 translation of foreign entities



Value adjustments transferred 0 3,925 0 0 0 3,925 to financial expenses

Actuarial gains/(losses) on 0 0 0 (2,982) 0 (2,982)defined benefit pension plans

Tax on other comprehensive income 0 222 0 835 0 1,057

Other comprehensive income (51) (2,804) 5,468 (2,830) 245 28

Total comprehensive income in 2010 (51) (2,804) 5,468 44,996 2,062 49,671

Used for charitable purposes and associated costs 0 0 0 (6,747) 0 (6,747)

Acquisition/disposal, non-controlling interests 0 0 0 0 (75) (75)


Other capital items 0 0 0 (2,514) 0 (2,514)

Equity at 31 December 2010 29,513 (9,446) 2,089 431,056 7,919 461,131

Capital fund


Reserve for foreign



Non-controlling

interestsTotal

equity

29Statement of Changes in Equity of the Group

Statement of Changes in Equity of the Group (continued)

Capital fund


Reserve for foreign



Non-controlling

interestsTotal

equity

Equity at 1 January 2009 29,528 (9,087) (30,243) 391,893 2,939 385,030

Effect of transition to IFRS 0 1,894 30,243 (49,723) 0 (17,586)

Restated equity at 1 January 2009 29,528 (7,193) 0 342,170 2,939 367,444


Foreign exchange adjustments on translation to presentation currency 36 (1,285) 0 420 4 (825)

Foreign exchange adjustments on translation of foreign entities 0 0 (3,379) 0 545 (2,834)



Value adjustments transferred to financial expenses 0 3,739 0 0 0 3,739

Actuarial gains/(losses) on defined benefit pension plans 0 0 0 1,559 0 1,559

Tax on other comprehensive income 0 85 0 (437) 0 (352)

Other comprehensive income 36 551 (3,379) 1,542 549 (701)

Total comprehensive income in 2009 36 551 (3,379) 64,602 3,708 65,518

Used for charitable purposes and associated costs 0 0 0 (6,895) 0 (6,895)

Acquisition/disposal, non-controlling interests 0 0 0 0 610 610


Other capital items 0 0 0 (4,556) 0 (4,556)

Equity at 31 December 2009 29,564 (6,642) (3,379) 395,321 6,636 421,500

31List of Notes to the Consolidated Financial Statements

List of Notes to the Consolidated Financial StatementsNOTE

1 Accounting policies 2 Revenue 3 Other operating income 4 Personnel costs 5 Depreciation, amortisation and impairment losses 6 Financial income 7 Financial expenses 8 Taxes 9 Intangible assets 10 Property, plant and equipment 11 Investment properties 12 Financial assets 13 Inventories 14 Securities 15 Cash and cash equivalents 16 Equity 17 Pensions 18 Deferred tax 19 Other provisions 20 Fees paid to elected auditor 21 Operating leases 22 Contingent liabilities and collateral 23 Financial risks and financial instruments 24 Related parties 25 Standards and interpretations not yet adopted 26 Subsequent events 27 Acquisition and disposal of businesses 28 Effect of transition to IFRS 29 Group entities

32 Notes to the Consolidated Financial Statements (EURk)

The Egmont Foundation is a commercial foundation

domiciled in Denmark. The annual report of the Egmont

Foundation for 2011 comprises both the consolidated

financial statements of the Egmont Foundation and its

subsidiaries (the Group) and the separate financial state-

ments of the Egmont Foundation.

The consolidated financial statements have been

prepared in accordance with the International Financial

Reporting Standards (IFRS), as adopted by the EU, and

additional Danish disclosure requirements for annual

reports.

The annual report for 2011 is the first annual report

in which the consolidated financial statements have

been prepared in accordance with IFRS. The Egmont

Foundation’s separate financial statements continue

to be prepared in accordance with the Danish Financial

Statements Act. The most recent annual report, compris-

ing both the consolidated financial statements and the

Egmont Foundation’s financial statements, was prepared

in accordance with the Danish Financial Statements

Act. The accounting effect of the transition to IFRS is

explained in note 28, to which reference is made.

BASIS OF PREPARATION

The Egmont Foundation’s functional currency is Danish

kroner (DKK). For communication and reporting reasons,

the consolidated financial statements are presented in

euro (EUR), rounded to the nearest thousand (EURk).

The consolidated financial statements have been

prepared on the historical cost basis except for the fol-

lowing assets and liabilities, which are measured at fair

value: derivative financial instruments, securities and

investment properties.

The accounting policies set out below have been applied

consistently to the financial year and to the comparative

figures for 2010 and 2009.

Use of estimates and judgements

Judgements, estimates and assumptions have to be

made about future events when determining the

carrying amount of certain assets and liabilities. The

estimates and assumptions made are based on historical

experience and other factors that the Group deems

appropriate in the circumstances, but which are uncer-

tain and unpredictable by nature. Therefore, the actual

results may deviate from such estimates. Consequently,

previous estimates may have to be changed as a result

of changes in the circumstances forming the basis of

such estimates, or because of subsequent events or the

emergence of new information.

Information about the most significant accounting

estimates is included in the following notes: note 9

Intangible assets, note 13 Inventories, note 17 Pensions,

note 18 Deferred tax and note 19 Other provisions.

Consolidated financial statements

The consolidated financial statements comprise the

Egmont Foundation and subsidiaries in which the

Egmont Foundation has control of financial and operat-

ing policies in order to obtain returns or other benefits

from its activities. Control is obtained when the Group

holds more than 50 % of the voting rights, whether

directly or indirectly, or otherwise has a controlling inter-

est in the relevant entity.

Entities in which the Group has significant influence,

but not a controlling interest, are considered associates.

Significant influence is typically obtained when the

Group, directly or indirectly, owns or holds more than

20 % of the voting rights, but less than 50 %.

When assessing whether the Egmont Foundation exer-

cises control or significant influence, the potential voting

rights that are exercisable at the end of the reporting

period are taken into account.

In the consolidated financial statements jointly

controlled entities are included according to the pro-

1 Accounting policies

33Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

rata method. The pro-rata method means that the

proportionate share of the entities’ items in the financial

statements is included in the corresponding items in the

consolidated financial statements.

The consolidated financial statements have been pre-

pared by consolidating the Egmont Foundation’s and the

individual subsidiaries’ financial statements, prepared in

accordance with the Group accounting policies. On con-

solidation, intra-group income and expenses, sharehold-

ings, intra-group balances and dividends, and realised

and unrealised gains and losses on transactions between

the consolidated entities are eliminated. Unrealised

gains on transactions with associates are eliminated in

proportion to the Group’s ownership share of the associ-

ate. Unrealised losses are eliminated in the same way as

unrealised gains to the extent that impairment has not

taken place. Transactions with pro-rata consolidated

entities are eliminated proportionally.

In the consolidated financial statements, the items of

subsidiaries are recognised in full. The non-controlling

interests’ shares of the profit for the year, comprehensive

income and of the equity of subsidiaries not wholly

owned are included in the Group’s net profit for the year,

comprehensive income and equity, respectively, but are

disclosed separately.

Business combinations

Businesses acquired or formed during the year are

recognized in the consolidated financial statements

from the date of acquisition or formation. Businesses

disposed of or wound up are recognised in the consoli-

dated financial statements until the date of disposal or

winding-up. The comparative figures are not restated for

newly acquired businesses. Discontinued operations are

disclosed separately; see below.

The acquisition method is used for acquisitions of new

businesses over which the Egmont Foundation obtains

control. The acquired businesses’ identifiable assets,

liabilities and contingent liabilities are measured at fair

value at the acquisition date. Identifiable intangible

assets are recognised if they are separable or arise from

a contractual right. Deferred tax related to the revalua-

tions made is recognised.

The acquisition date is the date when the Egmont

Foundation effectively obtains control of the acquired

business.

When the business combination is effected in stages,

where either control, joint control or significant influ-

ence is obtained, the existing equity interest is remeas-

ured at fair value and the difference between the fair

value and carrying amount is recognised in the income

statement. The additional equity investments acquired

are recognised at fair value in the balance sheet.

Any excess (goodwill) of the consideration transferred,

the value of non-controlling interests in the acquired

entity and the fair value of any existing equity interest

over the fair value of the identifiable assets, liabilities

and contingent liabilities acquired is recognised as good-

will under intangible assets. Goodwill is not amortised,

but is tested for impairment at least annually. The first

impairment test is performed before the end of the year

of acquisition. Upon acquisition, goodwill is allocated

to the cash-generating units, which subsequently form

the basis for the impairment test. Goodwill and fair

value adjustments in connection with the acquisition of

a foreign entity with another functional currency than

the presentation currency of the Egmont Foundation are

treated as assets and liabilities belonging to the foreign

entity and upon initial recognition translated into the

foreign entity’s functional currency at the exchange rate

at the transaction date. Negative differences (negative

goodwill) are recognised in profit for the year at the

acquisition date.

The consideration transferred for an acquired business

consists of the fair value of the agreed consideration in

the form of assets transferred, liabilities assumed and

equity instruments issued. If part of the consideration is

contingent on future events or compliance with agreed

conditions, this part of the consideration is recognised at

fair value at the date of acquisition. Costs attributable to

business combinations are expensed as incurred.



If uncertainties regarding the identification or measure-

ment of acquired assets, liabilities or contingent liabilities

or determination of the consideration exist at the

acquisition date, initial recognition will take place on the

basis of provisional values. If it subsequently becomes

apparent that the identification or measurement of the

transferred consideration, acquired assets, liabilities or

contingent liabilities was incorrect on initial recognition,

the determination is adjusted retrospectively, including

goodwill, until 12 months after the acquisition, and the

comparative figures are restated. Subsequently, goodwill

is not adjusted. Changes to estimates of contingent

considerations are recognised in the income statement.

The acquisition of further non-controlling interests after

obtaining control is considered an owner’s transaction,

and the difference between acquisition cost and the

share of such non-controlling interests acquired is recog-

nised directly in equity.

Gains or losses on the disposal or winding-up of sub-

sidiaries, jointly controlled entities and associates are

stated as the difference between the selling price or the

disposal consideration and the carrying amount of net

assets, including goodwill, at the date of disposal, less

the cost of disposal. If the disposal of either control, joint

control or significant influence takes place in stages, the

retained equity investment is remeasured at fair value,

and the difference between the fair value and carrying

amount is recognised in the income statement.

Non-controlling interests

On initial recognition, non-controlling interests are

measured at the fair value of the ownership share or at

the proportionate share of the fair value of the acquired

business’ identifiable assets, liabilities and contingent

liabilities. In the first scenario, goodwill in relation to

the non-controlling interests’ ownership share of the

acquired business is thus recognised, while, in the latter

scenario, goodwill in relation to the non-controlling

interests is not recognised. The measurement of non-

controlling interests is chosen transaction by transaction

and stated in the notes in connection with the descrip-

tion of acquired businesses.

Foreign currency translation

A functional currency is determined for each of the

reporting entities in the Group. The functional currency

is the currency used in the primary economic environ-

ment in which the individual reporting entity operates.

Transactions denominated in currencies other than the

functional currency are considered foreign currency

transactions.

On initial recognition, foreign currency transactions are

translated to the functional currency at the exchange

rates at the transaction date. Foreign exchange differ-

ences arising between the exchange rates at the transac-

tion date and at the date of payment are recognised in

the income statement as financial income or financial

expenses.

Receivables, payables and other monetary items

denominated in foreign currencies are translated to the

functional currency at the exchange rates at the end

of the reporting period. The difference between the

exchange rates at the end of the reporting period and

at the date at which the receivable or payable arose

or was recognised in the latest financial statements is

recognised in the income statement as financial income

or financial expenses.

In the consolidated financial statements, the income

statements of entities with another functional currency

than the presentation currency (EUR) are translated

at the exchange rates at the transaction date, and the

balance sheet items are translated at the exchange

rates at the end of the reporting period. An average

exchange rate for each month is used as the transaction

date exchange rate to the extent that this does not

significantly distort the presentation of the underlying

transactions. Foreign exchange differences arising on

translation of the opening balance of equity of such

foreign entities at the exchange rates at the end of the

reporting period and on translation of the income state-

ments from the exchange rates at the transaction date

to the exchange rates at the end of the reporting period

are recognised directly in other comprehensive income

and presented in equity under a separate translation



reserve. The exchange rate adjustment is allocated

between the equities of the Foundation and the non-

controlling interests.

Foreign exchange adjustments of intra-group balances

which are considered part of the total net investment in

foreign entities with another functional currency than

the presentation currency (EUR) are recognised in other

comprehensive income and presented in equity under a

separate translation reserve.

On recognition in the consolidated financial statements

of associates with another functional currency than the

presentation currency (EUR), the share of profit/loss for

the year is translated at average exchange rates and

the share of equity, including goodwill, is translated at

the exchange rates at the end of the reporting period.

Foreign exchange differences arising on the transla-

tion of the share of the opening balance of equity of

foreign associates at the exchange rates at the end of

the reporting period, and on translation of the share

of profit/loss for the year from average exchange rates

to the exchange rates at the end of the reporting

period, are recognised in other comprehensive income

and presented in equity under a separate translation

reserve.

On disposal of wholly-owned foreign entities with

another functional currency than the presentation cur-

rency (EUR), the exchange rate adjustments that have

been recognised in other comprehensive income and are

attributable to the entity are reclassified from other com-

prehensive income to the income statement together

with any gains or losses from the disposal.

On disposal of partially owned foreign subsidiaries with

another functional currency than the presentation cur-

rency (EUR), the amount of the translation reserve attrib-

utable to non-controlling interests is not transferred to

the income statement.

On partial disposal of foreign subsidiaries with another

functional currency than the presentation currency (EUR)

without a loss of control, a proportionate share of the

translation reserve is transferred from the Group to the

non-controlling interests’ share of equity.

On partial disposal of associates and jointly controlled

entities, the proportionate share of the accumulated

translation reserve recognised in other comprehensive

income is transferred to the income statement for the

year together with any gains or losses from the disposal.

Any repayment of intra-group balances which constitute

part of the net investment in the foreign entity is not

considered a partial disposal of that subsidiary.

Derivative financial instruments

Derivative financial instruments are recognised at the

date a derivative contract is entered into and measured

in the balance sheet at fair value. Positive and nega-

tive fair values of derivative financial instruments are

included in other receivables and payables, respectively,

and a set-off of positive and negative values is only

made when the entity has the right and the intention

to settle several financial instruments net. Fair values of

derivative financial instruments are computed on the

basis of current market data and generally accepted

valuation methods.

Changes in the fair value of derivative financial instru-

ments designated as and qualifying for recognition as a

hedge of the fair value of a recognised asset or liability

are recognised in the income statement together with

changes in the value of the hedged asset or liability as

far as the hedged portion is concerned. Hedging of

future cash flows according to agreement (firm commit-

ment), except for foreign currency hedges, is treated as a

fair value hedge. The portion of the value adjustment of

a derivative financial instrument that is not included in a

hedge is recognised under financial items.

Changes in the portion of the fair value of derivative

financial instruments designated as and qualifying as a

cash flow hedge that is an effective hedge of changes in

future cash flows are recognised in other comprehensive

income in equity under a separate hedging reserve until

the hedged cash flows affect the income statement. At

that time, any gains or losses resulting from such hedged

transactions are transferred to other comprehensive



income and recognised under the same item as the

hedged item.

If the hedging instrument no longer qualifies for

hedge accounting, the hedge will cease to be effec-

tive. The accumulated change in value recognised

in other comprehensive income is transferred to the

income statement when the hedged cash flows affect

the income statement. If the hedged cash flows are

no longer expected to be realised, the accumulated

change in value will be transferred to the income state-

ment immediately. The portion of a derivative financial

instrument not included in a hedge is recognised under

financial items.

For derivative financial instruments that do not qualify

for treatment as hedging instruments, changes in fair

value are currently recognised in the income statement

under financial items.

INCOME STATEMENT

Revenue

Revenue from the sale of goods for resale and finished

goods is recognised in the income statement when all

the following conditions have been satisfied:

• the Group has transferred to the buyer the signifi-

cant risks and rewards of ownership of the goods;

• the Group retains neither continuing managerial

involvement to the degree usually associated with

ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated

with the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the

transaction can be measured reliably.

Magazine subscriptions are accrued and recognised over

the period in which the items are dispatched (issued).

If, based on past experience or otherwise, the Group

can make a reliable estimate of the amount of goods

that will be returned, a provision for the goods esti-

mated to be returned will be recognised. When there is

uncertainty about the possibility of return, revenue is not

recognised until the goods have been delivered and the

time period for return has elapsed.

Advertising income is recognised on the delivery date,

typically when issued or broadcasted.

Revenue from the sale of film broadcasting rights is

recognised at the time when the film becomes accessible

to the customer (availability date).

Royalties received are accrued and recognised as income

in accordance with the concluded agreement.

Rental income is accrued and recognised as income on a

straight-line basis over the lease term in accordance with

the concluded agreement.

Barter agreements where the services exchanged are

dissimilar are recognised at fair value and accrued as

the services are performed or over the period specified

in the concluded agreement. Fair value is measured at

the value of either the delivered or the received services,

depending on which services can be measured reliably.

Revenue is measured at the fair value of the agreed con-

sideration exclusive of VAT and taxes charged on behalf

of third parties. All discounts granted are recognised as a

reduction of revenue.

Other operating income and expenses

Other operating income and expenses comprise items

secondary to the principal activities of the entities,

including gains and losses on the disposal of businesses,

which are not continuing operations, intangible assets

and property, plant and equipment, as well as continu-

ing value adjustments of investment properties at fair

value. Gains and losses on the disposal of entities,

intangible assets and property, plant and equipment are

determined as the selling price less disposal costs and

the carrying amount at the date of disposal.

Government grants

Government grants comprise film and ticket subsidies

for in-house produced films. Grants are recognised



when there is reasonable assurance that they will be

received. Film subsidies for in-house produced films

recognised in the balance sheet are offset against the

cost of in-house produced films. Ticket subsidies are

recognised in the income statement under other operat-

ing income.

Share of result from investments in associates

The proportionate share of the associates’ results after

tax and non-controlling interests and after elimination

of the proportionate share of intra-group gains/losses is

recognised in the consolidated income statement.

Financial income and expenses

Financial income and expenses comprise interest income

and expense, gains and losses on securities, payables

and transactions denominated in foreign currencies,

amortisation of financial assets and liabilities, including

finance lease commitments. Furthermore, changes in

the fair value of derivative financial instruments which

are not designated as hedging instruments as well as the

ineffective portion of the hedges are also included.

Borrowing costs relating to general borrowing or loans

directly relating to the acquisition, construction or devel-

opment of qualifying assets are allocated to the cost of

such assets.

Tax for the year

Tax for the year, which comprises current tax and

changes in deferred tax for the year, is recognised in the

income statement, in other comprehensive income or

directly in equity.

BALANCE SHEET

Film rights, etc.

Film rights comprise film, DVD and TV rights. Film rights

are recognised as an intangible asset at the time when

control over the asset is transferred. Prepayments for

film rights are recognised in the balance sheet as prepaid

intangible assets, and when control is gained over the

assets, the prepayments are reclassified to film rights.

Film rights are measured at cost. For purchases, the cost

is allocated proportionally to the cinema, DVD and TV

media, as well as to markets.

Film rights are amortised according to a revenue-based

method over the period during which they are expected

to generate income on the respective market and in the

respective media.

Other intellectual property rights with a limited useful

life, such as domain names and magazine titles, are

measured at cost on initial recognition and amortised

on a straight-line basis over the useful life (typically 5 to

10 years).

In-house produced film rights

In-house produced film rights are measured at cost,

which includes indirect production costs, less grants

received, accumulated amortisation and impairment, or

at the recoverable amount where this is lower.

In-house produced film rights are amortised according

to a revenue-based method over the period during

which they are expected to generate income.

Goodwill

On initial recognition, goodwill is recognised in the

balance sheet at cost as described under ‘Business

combinations’. Subsequently, goodwill is measured at

cost less accumulated impairment losses. Goodwill is not

amortised.

The carrying amount of goodwill is allocated to the

Group’s cash-generating units at the date of acquisition.

The identification of cash-generating units is based

on the management structure and internal financial

control.

Trademarks

Acquired intellectual property rights, including trade-

marks acquired in business combinations, are measured

at cost on initial recognition. Trademarks with an

indefinite useful life are not amortised but are tested for

impairment at least once annually.



Property, plant and equipment

Land and buildings, plant and machinery, tools and

equipment and leasehold improvements are measured

at cost less accumulated depreciation and impairment.

Cost comprises the purchase price and any costs directly

attributable to the acquisition until the date when the

asset is available for use.

Subsequent costs, e.g. in connection with replacing

components of property, plant and equipment, are

recognised in the carrying amount of the relevant asset if

it is probable that the costs will result in future economic

benefits for the Group. The replaced components are

derecognised in the balance sheet, and the carrying

amount is transferred to the income statement. All other

costs incurred for ordinary repairs and maintenance are

recognised in the income statement as incurred.

The cost of assets held under finance leases is recog-

nised at the lower of the fair value of the assets and the

present value of future minimum lease payments. In the

calculation of present value, the interest rate implicit in

the lease or the Group’s incremental borrowing rate is

used as the discount rate.

When individual components of an item of property,

plant and equipment have different useful lives, the cost

of such individual components is accounted for and

depreciated separately. Depreciation is provided on a

straight-line basis over the expected useful lives, based

on the following estimates of the useful lives of the

assets:

Corporate properties (head offices) 25, 50 years

Properties used for operational purposes 25 years

Installations and conversions 10, 15, 25 years(the useful life depends on the nature of conversion)

Plant and machinery 3 - 15 years

Tools and equipment 3 - 5 years

Leasehold improvements 5 - 10 years

Land is not depreciated.

Depreciation is made on the basis of the asset’s residual

value less any impairment losses. The residual value and

useful life of the assets are reassessed every year. If the

residual value exceeds the carrying amount, depreciation

is discontinued.

In case of changes in the useful life or the residual value,

the effect on depreciation is recognised prospectively as

a change in accounting estimates.

Gains and losses on the disposal of property, plant and

equipment are determined as the difference between

the selling price less disposal costs and the carrying

amount at the date of disposal. Gains or losses are rec-

ognised in the income statement under other operating

income or other operating costs, respectively.

Investment properties

Properties are classified as investment properties when

they are held for the purpose of obtaining rental income

and/or capital gains. On initial recognition, investment

properties are measured at cost, consisting of the

acquisition cost of the property and any costs directly

attributable to the acquisition. Subsequently, investment

properties are measured at fair value. Changes in the

fair value are recognised in the income statement as a

value adjustment of investment properties under other

operating income/costs in the financial year in which the

change occurs.

Realised gains and losses on the disposal of investment

properties are determined as the difference between

the carrying amount and the selling price and are also

recognised in the item ‘value adjustment of investment

properties’’ under other operating income/costs.

Investments in associates

Investments in associates are recognised in the con-

solidated financial statements according to the equity

method, which means that the investments are meas-

ured in the balance sheet at the proportionate share of

the associates’ net asset values calculated in accordance

with the Group’s accounting policies minus or plus the

proportionate share of unrealised intra-group gains



and losses and plus any excess values on acquisition,

including goodwill. Investments in associates are tested

for impairment when impairment indicators are identi-

fied.

Investments in associates with negative net asset values

are measured at EUR 0 (nil). If the Group has a legal or

constructive obligation to cover a deficit in the associate,

such deficit is recognised under liabilities.

Receivables from associates are measured at amortised

cost less any impairment losses.

On the acquisition of investments in associates, the

acquisition method is used; see the description of busi-

ness combinations.

Impairment of non-current assets

Goodwill and intangible assets with indefinite useful

lives are subject to annual impairment tests, initially

before the end of the acquisition year. Likewise, devel-

opment projects in process are subject to an annual

impairment test.

The carrying amount of goodwill is tested for impair-

ment together with the other non-current assets of

the cash-generating unit to which goodwill has been

allocated. If the carrying amount exceeds the recover-

able amount, it is written down to the recoverable

amount via the income statement. As a main rule, the

recoverable amount is calculated as the present value of

expected future net cash flows from the entity or activ-

ity (cash-generating unit) to which goodwill has been

allocated.

Deferred tax assets are subject to annual impairment

tests and are recognised only to the extent that it is

probable that the assets will be utilised.

The carrying amount of other non-current assets is

tested annually for impairment indicators. When there is

an indication that assets may be impaired, the recover-

able amount of the asset is determined. The recoverable

amount is the higher of an asset’s fair value less expected

disposal costs and its value in use. Value in use is the pre-

sent value of future cash flows expected to be derived

from an asset or the cash-generating unit to which the

asset belongs.

An impairment loss is recognised if the carrying amount

of an asset or a cash-generating unit exceeds the

recoverable amount of the asset or the cash-generating

unit. Impairment losses are recognised in the income

statement.

Impairment of goodwill is not reversed. Impairment of

other assets is reversed only to the extent that changes

in the assumptions and estimates underlying the impair-

ment calculation have occurred. Impairment is only

reversed to the extent that the asset’s increased carrying

amount does not exceed the carrying amount that

would have been determined (net of amortisation or

depreciation) had no impairment loss been recognised

for the asset in prior years.

Inventories

Inventories are measured at the lower of cost according

to the FIFO method and the net realisable value.

Goods for resale and raw materials and consumables

are measured at cost, comprising purchase price plus

delivery costs.

The cost of finished goods and work in progress com-

prises the cost of raw materials, consumables, direct

wages and salaries and indirect production overheads.

Indirect production overheads comprise indirect materi-

als, wages and salaries as well as maintenance and

depreciation of production machinery and equipment as

well as administration and management costs.

The net realisable value of inventories is calculated

as the selling price less costs of completion and costs

necessary to effect the sale and is determined taking into

account marketability, obsolescence and development in

expected selling price.



Receivables

Receivables are measured at fair value on initial recogni-

tion and are subsequently measured at amortised cost

less any impairment.The Group considers evidence of

impairment both on an individual level and on a group

level where considered relevant.

Prepayments

Prepayments, such as prepaid royalty and prepaid

authors’ fees, which are recognised under assets,

comprise costs incurred concerning subsequent financial

years. Prepayments are measured at cost.

Securities

Securities consist mainly of listed bonds that are held for

investment of excess liquidity and managed in accord-

ance with a documented investment strategy. Securities

are measured initially at the listed price at the trade date

and subsequently at the listed price at the end of the

reporting period using the fair value option. Value adjust-

ments are recognised directly in the income statement.

Pension obligations and similar

non-current liabilities

The Group has entered into pension plans and similar

arrangements with the majority of the Group’s employ-

ees.

Obligations relating to defined contribution plans where

the Group regularly pays fixed pension contributions

to independent pension funds are recognised in the

income statement in the period during which employ-

ees earn entitlement to them, and any contributions

outstanding are recognised in the balance sheet under

other payables.

For defined benefit plans, an actuarial calculation (the

Projected Unit Credit method) is performed annually of

the present value of future benefits payable under the

defined benefit plan. The present value is determined on

the basis of assumptions about the future development

in variables such as salary levels, interest rates, inflation

and mortality. The present value is determined only for

benefits earned by employees from their employment

with the Group. The actuarial present value less the fair

value of any plan assets is recognised in the balance

sheet under pension obligations.

If a pension plan constitutes a net asset, the asset is only

recognised if it represents future refunds from the plan

or will lead to reduced future payments to the plan.

Pension costs for the year are recognised in the

income statement based on actuarial esti mates and

financial expectations at the beginning of the year.

Any differenc e between the expected development

in pension plan assets and liabilities and the realised

amounts deter mined at year-end is termed an actuarial

gain or loss and is recognised in other comprehensive

income.

Non-current employee benefits are recognised at the

best estimate of the expenditure required to settle the

present obligation at the end of the reporting period.

Current tax payable/receivable and deferred taxes

Current tax payable and receivable is recognised in the

balance sheet as tax computed on the taxable income

for the year, adjusted for tax on the taxable income of

prior years and for tax paid on account.

Deferred tax is measured using the balance sheet

liability method on the basis of all temporary differences

between the carrying amount and the tax base of assets

and liabilities. However, deferred tax is not recognised

on temporary differences relating to goodwill that is not

deductible for tax purposes and on office premises and

other items where temporary differences, apart from

business combinations, arise at the date of acquisition

without affecting either result for the year or taxable

income. Where different tax rules can be applied to

determine the tax base, deferred tax is measured based



on Management’s planned use of the asset or settle-

ment of the liability.

Deferred tax assets, including the tax base of tax loss

carryforwards, are recognised under other non-current

assets at the expected value of their utilisation; either

as a set-off against tax on future earnings or as a set-off

against deferred tax liabilities in the same legal tax entity

and jurisdiction.

Deferred tax assets and liabilities are set off if the entity

has a legally enforceable right to set off current tax

liabilities and tax assets or intends either to settle current

tax liabilities and tax assets on a net basis or to realise the

assets and settle the liabilities at the same time.

Deferred tax is adjusted for eliminations of unrealised

intra-group gains and losses.

Deferred tax is measured according to the tax rules and

at the tax rates applicable in the respective countries

at the end of the reporting period when the deferred

tax is expected to be realised as current tax. Changes in

deferred tax due to changed tax rates are recognised in

the comprehensive income for the year.

Other provisions

Other provisions primarily consist of provisions for

goods sold with a right of return, where, based on past

experience or otherwise, the Group can make a reliable

estimate of the amount of goods that will be returned as

well as expected restructuring costs, etc.

Provisions are recognised when the Group incurs a

legal or constructive obligation due to an event occur-

ring before or at the end of the reporting period, and

meeting the obligation is likely to result in an outflow of

economic benefits.

Provisions are measured at the best estimate of the

expenses required to settle the obligation.

When provisions are measured, the costs required

to settle the obligation are discounted provided that

such discounting would have a material effect on the

measurement of the liability. A pre-tax discount rate is

used that reflects the current market interest rate level

plus risks specific to the liability. Changes in the discount

element during the financial year are recognised in the

income statement under financial expenses.

Warranty provisions are recognised as the underlying

goods are sold based on historical warranty costs experi-

ence in previous financial years.

Restructuring costs are recognised under liabilities

when a detailed, formal restructuring plan has been

announced to the employees affected no later than

at the end of the reporting period. On acquisition of

businesses , provisions for restructuring in the acquiree

are only included in goodwill when, at the acquisition

date, the acquiree had an existing liability for restructur-

ing.

A provision for onerous contracts is recognised when the

expected benefits to be obtained by the Group from a

contract are lower than the unavoidable costs of meet-

ing its obligations under the contract.

Financial and non-financial liabilities

Financial liabilities are recognised as at the date of bor-

rowing as the net proceeds received less transaction

costs paid. In subsequent periods, the financial liabilities

are measured at amortised cost, such that the difference

between the proceeds and the nominal value is recog-

nised under financial expenses in the income statement

over the term of the loan.



Financial liabilities also include the capitalised residual

lease commitment under finance leases, which is meas-

ured at amortised cost. Other liabilities are measured at

net realisable value.

Deferred income

Deferred income, including the sale of film broadcasting

rights, is measured at amortised cost.

Assets held for sale

Assets held for sale consist of non-current assets and dis-

posal groups held for sale. Disposal groups are defined

as a group of assets to be disposed of in a single transac-

tion, through sale or otherwise. Liabilities associated

with assets classified as held for sale are those liabilities

directly associated with the assets that will be trans-

ferred in the transaction. Assets are classified as held for

sale if their carrying amount will be recovered principally

through a sale within 12 months in accordance with a

formal plan rather than through continuing use.

Assets or disposal groups held for sale are measured at

the lower of their carrying amount at the date of clas-

sification as held for sale and their fair value less disposal

costs. Assets are not depreciated or amortised from the

date when they are classified as held for sale.

Impairment losses on initial recognition as held for sale

and gains and losses on subsequent remeasurement at

the lower of carrying amount and fair value less disposal

costs are recognised in the income statement under the

items to which they relate. Gains and losses are disclosed

in the notes.

Assets and associated liabilities are presented as sepa-

rate line items in the balance sheet, and the principal

items are specified in the notes. Comparative figures in

the balance sheet are not restated.

Presentation of discontinued operations

Discontinued operations represent a separate major line

of business whose activities and cash flows can be clearly

distinguished, operationally and for financial reporting

purposes, from the other business areas, provided that

the unit has been disposed of or that it is held for sale

and the sale is expected to be carried out within twelve

months in accordance with a formal plan. Discontinued

operations also include businesses which are classified as

held for sale in connection with the acquisition.

The profit after tax on discontinued operations and value

adjustments after tax of related assets and liabilities and

gains and losses on disposal are presented as a separate

line item in the income statement with a restatement of

comparative figures. The notes disclose revenue, costs,

value adjustments and tax for the discontinued opera-

tions.

Assets and related liabilities for discontinued operations

are presented in separate line items in the balance sheet

without a restatement of comparative figures; see the

section ‘Assets held for sale’, and the principal items are

specified in the notes.

CASH FLOW STATEMENT

The cash flow statement shows the cash flows from

operating, investing and financing activities for the year,

the year’s changes in cash and cash equivalents as well

as the Group’s cash and cash equivalents at the begin-

ning and end of the year.

The cash flow effect of acquisitions and disposals of

businesses is shown separately in cash flows from invest-

ing activities. Cash flows from acquired businesses are

recognised in the cash flow statement from the date of

acquisition, and cash flows from disposals of businesses

are recognised until the date of disposal.



Cash flows from operating activities are calculated

according to the indirect method as the profit for the

year before net financials, adjusted for non-cash operat-

ing items, changes in working capital and corporate

income tax paid.

Cash flows from investing activities comprise payments

in connection with the acquisition and disposal of busi-

nesses and activities and the acquisition and disposal of

intangible assets, property, plant and equipment and

other non-current assets, as well as securities.

Acquisitions of assets by means of finance leases are

treated as non-cash transactions.

Cash flows from financing activities comprise the rais-

ing of loans and repayment of interest-bearing debt,

donations made and transactions with non-controlling

interests.

Cash and cash equivalents comprise cash and market-

able securities with a residual term of less than three

months at the acquisition date which are subject to an

insignificant risk of changes in value.

Cash flows in other currencies than the functional

currency are translated using average exchange rates

unless these deviate significantly from the rates at the

transaction date.

Cash flows from operating, investing and financing

activities for discontinued operations are disclosed in a

note.

SEGMENT INFORMATION

The Egmont Foundation is not officially listed, and in

accordance with IFRS, segment informa tion need there-

fore not be presented.

FINANCIAL RATIOS

Financial ratios are calculated in accordance with the

Danish Society of Financial Analysts’ ‘Recommendations

and Financial Ratios 2010’.

The financial ratios stated under financial highlights

have been calculated as follows:

Operating margin

Operating profit x 100

Revenue

Equity ratio

Equity, excl. non-controlling interests, x 100

Total assets

Return on equity

Net profit for the year, excl. non-controlling interests, x 100

Average equity, excl. non-controlling interests

44

2 Revenue 2011 2010 2009

Sale of goods 1,326,867 1,371,027 1,383,563

Royalty 50,817 43,124 50,588

Rental income 8,636 8,961 8,997

Total 1,386,320 1,423,112 1,443,148

3 Other operating income 2011 2010 2009

Sale of TV productions 1,148 1,825 16,214

Government grants 665 1,616 1,497

Miscellaneous 9,038 9,303 10,571

Total 10,851 12,744 28,282

4 Personnel costs 2011 2010 2009

Wages and salaries (266,917) (256,750) (273,078)

Defined contribution pension plans (16,272) (16,521) (14,907)

Defined benefit pension plans (3,852) (1,801) (3,674)

Other social security costs (36,110) (33,547) (34,030)

Total (323,151) (308,619) (325,689)

Average number of employees, total 4,161 4,312 4,754

Compensation paid to the Management Board amounts to 3,088 (2010 and 2009: 2,742), of which pension contributions

amounts to 346 (2010: 331 and 2009: 284). Compensation paid to the Board of Trustees amounts to 377 (2010: 411 and

2009: 398).

5 Depreciation, amortisation and impairment losses 2011 2010 2009

Amortisation, intangible assets (34,920) (37,837) (45,124)

Impairment losses, intangible assets (1,952) (16,434) (12,936)

Depreciation, property, plant and equipment (23,746) (25,588) (27,618)

Impairment losses, property, plant and equipment (2,225) (3,948) (1,230)

Total (62,843) (83,807) (86,908)

6 Financial income 2011 2010 2009

Interest income, financial assets, measured at amortised cost 2,771 3,113 6,528

Interest income, securities 5,242 3,036 540

Foreign exchange gains, net 2,407 5,139 15,034

Change in fair value, derivative financial instruments 800 602 1,726

Other financial income 2,006 1,578 4,441

Total 13,226 13,468 28,269

Notes to the Consolidated Financial Statements (EURk)

45

7 Financial expenses 2011 2010 2009

Interest expenses, financial liabilities, measured at amortised cost (7,113) (7,929) (12,299)

Interest expenses, derivative financial instruments (3,877) (3,925) (3,739)

Change in fair value, securities, net (991) (2,471) (597)

Other financial expenses (3,327) (2,536) (4,502)

Total (15,308) (16,861) (21,137)

8 Taxes 2011 2010 2009

Current tax (14,752) (22,968) (12,349)

Deferred tax (5,667) (2,654) 14,651

Adjustment for prior years 337 (67) (93)

Total (20,082) (25,689) 2,209

Tax on the profit for the year results as follows:

Calculated tax, 25 % on profit before tax (23,431) (18,833) (16,003)

Adjustment of calculated tax in foreign entities relative to 25 % (2,083) (706) 1,135

Tax effect of:

Non-taxable income less non-tax deductible expenses 3,029 (8,643) 3,315

Share of net profit/(loss) after tax in associates 2,066 (914) (2,188)

Changes in deferred tax assets not previously recognised 0 3,474 16,043

Adjustment for prior years 337 (67) (93)

Total (20,082) (25,689) 2,209

Effective tax rate 21.4 % 34.1 % -3.5 %

In 2009, the Group recognised an unrecognised deferred tax asset in the Danish jointly taxed companies, as these

companies’ earnings made it probable at the end of the reporting period that the deferred tax asset could be utilised.

Tax recognised in other comprehensive income:

Tax on value adjustment of hedging instruments 240 222 85

Tax on actuarial gains/(losses) on defined benefit pension plans 4,120 835 (437)

Total 4,360 1,057 (352)


46

9 Intangible assets

Intangible assets under Film In-house development rights, produced Trade- and pre- etc. film rights Goodwill marks payments

Cost at 1 January 2011 103,716 79,698 130,270 46,773 16,420

Foreign exchange adjustments 165 1,229 4,091 1,023 (11)

Additions 6,962 13,644 739 0 31,746

Government grants 0 (9,541) 0 0 0

Transferred 23,934 (712) 0 0 (23,222)

Cost of assets disposed of (3,530) (10,973) (13,838) (502) 0

Cost at 31 December 2011 131,247 73,345 121,262 47,294 24,933

Amortisation and impairment losses at 1 January 2011 (68,573) (64,147) (37,233) (2,564) (611)

Foreign exchange adjustments 494 (1,022) (3,621) (652) (2)

Amortisation and impairment losses of assets disposed of 3,374 7,122 11,329 502 0

Transferred (338) 338 0 0 0

Impairment losses (641) 0 (1,311) 0 0

Amortisation (27,516) (7,404) 0 0 0

Amortisation and impairment (93,200) (65,113) (30,836) (2,714) (613) losses at 31 December 2011

Carrying amount at 38,047 8,232 90,426 44,580 24,320 31 December 2011

Cost at 1 January 2010 116,954 56,025 124,766 40,970 14,203

Adjustment, beginning of year 0 12,289 0 0 0

Foreign exchange adjustments 1,212 564 6,897 2,759 (2)

Additions 4,837 15,038 3,333 0 23,914


Transferred 15,437 6,698 (4,299) 3,044 (20,880)

Cost of assets disposed of (34,724) (5,412) (427) 0 (815)

Cost at 31 December 2010 103,716 79,698 130,270 46,773 16,420

Amortisation and impairment losses at 1 January 2010 (72,282) (42,732) (27,088) 0 (667)

Adjustment, beginning of year 0 (12,289) 0 0 0

Foreign exchange adjustments (1,275) (557) (791) 0 1

Amortisation and impairment losses of assets disposed of 34,345 4,423 0 0 55

Transferred 618 (3,204) 3,285 (699) 0

Impairment losses (801) (1,129) (12,639) (1,865) 0

Amortisation (29,178) (8,659) 0 0 0

Amortisation and impairment (68,573) (64,147) (37,233) (2,564) (611) losses at 31 December 2010

Carrying amount 35,143 15,551 93,037 44,209 15,809 at 31 December 2010


47

9 Intangible assets (continued)

Intangible assets under Film In-house development rights, produced Trade- and pre- etc. film rights Goodwill marks payments

Cost at 1 January 2009 118,777 47,510 110,077 34,744 7,861

Foreign exchange adjustments 3,651 223 15,347 6,226 15

Cost, business combinations 320 666 0 0 0

Additions 3,756 19,076 2,807 0 24,044


Transferred 17,353 (369) 0 0 (17,526)

Cost of assets disposed of (26,903) (2,017) (3,465) 0 (191)

Cost at 31 December 2009 116,954 56,025 124,766 40,970 14,203

Amortisation and impairment losses at 1 January 2009 (60,001) (34,437) (14,621) 0 (206)

Foreign exchange adjustments (2,015) (206) (1,363) 0 0

Amortisation and impairment losses of assets disposed of 26,702 1,336 0 0 0

Transferred 102 0 0 0 0

Impairment losses (1,371) 0 (11,104) 0 (461)

Amortisation (35,699) (9,425) 0 0 0

Amortisation and impairment (72,282) (42,732) (27,088) 0 (667) losses at 31 December 2009


Goodwill

The carrying amount of goodwill is tested annually for impairment. The impairment tests are carried out for the Group’s

cash-generating units, based on their management structure and internal financial control; see below:

2011 2010 2009

Magazines, Norway* 31,137 30,820 34,765

Books, Norway 10,592 10,228 9,609

Nordisk Film, Cinemas 4,187 4,187 4,187

Nordisk Film, Partners 0 2,191 4,134

TV 2, Norway 37,520 37,208 34,958

Other units 6,990 8,403 10,025

Carrying amount 90,426 93,037 97,678

*Incl. Magazines, Sweden in 2009

In the impairment test of the cash-generating units, the recoverable amount, equivalent to the discounted value of

expected future net cash flows, is compared with the carrying amount of the cash-generating units.

The recoverable amount is based on the value in use, determined by using expected net cash flows that are based on

management-approved budgets and business plans for 2012, projections for subsequent years up to and including

2016, and average growth during the terminal period. For the primary cash-generating units, the following pre-tax

discount rates have been used: 11.5 to 14.4 % (2010: 11.5 to 14.0 % and 2009: 11.2 to 14.9 %).


48

9 Intangible assets (continued)

The average expected growth during the terminal period is -4.1 % for Magazines, Norway (2010 and 2009: -4.7 %),

2.0 % for Books, Norway, and 2.6 % for TV 2, Norway (2010 and 2009: 2.0 % and 2.6 %). Expected growth during

the terminal period is not estimated to exceed the long-term average growth rate in the business areas.

The impairment tests for goodwill for 2011, 2010 and 2009 show that the recoverable amount exceeds the carrying

amount of the Group’s primary cash-generating units, Magazines, Norway; Books, Norway; Nordisk Film, Cinemas;

and TV 2, Norway. The impairment of goodwill of 12,639 in 2010 and 11,104 in 2009 is mainly attributable to

restructuring or the shutdown/disposal of activities in Magazines, Sweden, in 2009, Nordisk Film, Partners and Other

units.

Trademarks

Trademarks with an indefinite useful life relate to the individual cash-generating units’ primary sales. The Group is

testing the carrying amount of trademarks with an indefinite useful life for impairment annually; see below:

2011 2010 2009

Magazines, Norway 17,242 17,098 17,060

Books, Norway 9,566 9,487 8,853

TV 2, Norway 17,772 17,624 15,057

Carrying amount 44,580 44,209 40,970

Trademarks for Magazines, Norway, and TV 2, Norway, are tested by using the Relief from Royalty method to assess

future cash flows from royalty income for the individual trademark. The royalty rate, determined on the basis of the

cash-generating unit’s products and the reputation of such products, ranged from 5 to 14 % for 2009 to 2011. The

trademark of Books, Norway, has been tested together with the goodwill of the cash-generating unit to which it

relates.

The following pre-tax discount rates have been used: 9.9 to 11.0 % (2010: 10.0 to 11.0 % and 2009: 8.0 to 11.0 %).

The average expected growth during the terminal period is -3.5 % for Magazines, Norway (2010 and 2009: -3.5 %),

2.0 % for Books, Norway, and 2.5 % for TV 2, Norway (2010 and 2009: 2.0 % and 2.5 %).

The impairment tests for trademarks for 2009 to 2011 show that the recoverable amount exceeds the carrying

amount.

The Group assesses that probable changes in the assumptions underlying the impairment calculations will result in no

need for impairment of goodwill and trademarks in the Group’s primary cash-generating units.

Film rights and in-house produced film rights

The Group makes regular estimates of the useful lives of film rights and in-house produced film rights based on its

expected sales in the cinema, DVD and TV media and in markets, which are naturally subject to uncertainty as actual

sales may differ from estimated sales.

The Group continuously receives sales estimates, and if impairment indicators are identified, film rights and in-house

produced film rights are written down for impairment. The useful lives of film rights and in-house produced film

rights for 2009 to 2011 were at the expected level.


49

10 Property, plant and equipment

Property, plant and Leasehold equipment Land and Plant and Tools and improve- under buildings machinery equipment ments construction

Cost at 1 January 2011 210,992 104,552 79,343 15,239 3,319

Foreign exchange adjustments 613 707 290 96 10

Additions 430 7,557 5,390 542 4,879

Transferred 614 142 412 750 (1,918)

Cost of assets disposed of (1,701) (7,535) (3,423) (2,159) (26)

Cost at 31 December 2011 210,948 105,423 82,012 14,468 6,264

Depreciation and impairment losses at 1 January 2011 (32,552) (85,609) (59,599) (10,699) 0

Foreign exchange adjustments 177 (88) 179 5 0

Depreciation and impairment losses of assets disposed of 1,330 6,972 2,889 1,636 (28)

Impairment losses 0 (2,253) 0 0 28

Depreciation (6,106) (7,963) (8,079) (1,598) 0

Depreciation and impairment (37,151) (88,941) (64,610) (10,656) 0 losses at 31 December 2011


Hereof assets held under finance leases 0 2,151 336 0 0

Cost at 1 January 2010 211,686 98,956 77,630 15,776 1,752

Foreign exchange adjustments (291) 11,852 2,644 (649) (4)

Additions 1,861 9,127 8,905 681 2,731

Transferred 586 62 (282) 794 (1,160)

Cost of assets disposed of (2,850) (15,445) (9,554) (1,363) 0

Cost at 31 December 2010 210,992 104,552 79,343 15,239 3,319


Foreign exchange adjustments (7) (11,040) (1,917) 755 0

Depreciation and impairment losses of assets disposed of 1,703 14,510 8,596 1,335 0

Transferred 0 208 384 (592) 0

Impairment losses (3,136) (78) (579) (155) 0

Depreciation (5,609) (9,060) (9,254) (1,665) 0



Hereof assets held under finance leases 0 3,093 944 0 0


50

10 Property, plant and equipment (continued)

Property, plant and Leasehold equipment Land and Plant and Tools and improve- under buildings machinery equipment ments construction

Cost at 1 January 2009 210,663 83,787 65,730 12,619 4,929

Foreign exchange adjustments 695 14,549 5,703 1,147 359

Cost, businesses combinations 0 0 1,062 46 0

Additions 1,034 6,158 8,191 722 3,508

Transferred 169 4,402 568 2,447 (7,044)

Cost of assets disposed of (875) (9,940) (3,624) (1,205) 0

Cost at 31 December 2009 211,686 98,956 77,630 15,776 1,752


Foreign exchange adjustments (146) (12,702) (4,345) (936) 0

Depreciation and impairment losses of assets disposed of 755 9,627 3,078 605 0

Transferred 0 (706) 1,401 (797) 0

Impairment losses 0 (758) (1,230) (441) 0

Depreciation (5,725) (10,735) (9,068) (2,090) 0



Hereof assets held under finance leases 0 3,448 1,892 0 0

The cost of land and buildings totalled 210,663 at 1 January 2009. Of this amount, land and buildings recognised at

fair value at 1 January 2009 according to the annual report for 2010, presented in accordance with the Danish Financial

Statements Act, came to 163,627. The latter value has been used as the new cost.

11 Investment properties 2011 2010 2009

Fair value at 1 January 30,854 30,907 30,870

Foreign exchange adjustments 84 (53) 37

Fair value at 31 December 30,938 30,854 30,907

Investment properties consist of a rental property in Denmark, let out under a long-term lease. The fair value is calculated

according to the net rental method, and thus the value of the property has been calculated on the basis of its expected

operating income from 2010 to 2011 of about 1,800 and a required rate of return of 6 %, determined on the basis of the

general market level and specific circumstances relating to the property.

The cost at 1 January 2009 of 30,870 is equivalent to the fair value at 1 January 2009 according to the annual report for

2010, presented in accordance with the Danish Financial Statements Act. The latter value has been used as the new cost.

Rental income amounted to 2,285 (2010: 2,227 and 2009: 1,838) and operating costs to 567 (2010: 467 and 2009: 361).


51

12 Financial assets

Investments in jointly controlled entities

Note 29 includes an outline of the Group’s investments in jointly controlled entities. The Group’s investments in jointly

controlled entities are consolidated on a pro-rata basis. The Group’s shares of jointly controlled entities’ revenue, costs, assets

and liabilities are as follows:

2011 2010 2009

Revenue 345,716 322,883 283,258

Costs (311,786) (304,325) (271,450)

Profit/(loss) before tax 33,930 18,558 11,808

Non-current assets 48,743 55,529 51,577

Current assets 199,261 182,229 164,466

Total assets 248,004 237,758 216,043

Non-current liabilities 109,629 138,217 133,922

Current liabilities 135,871 123,138 109,429

Total liabilities 245,500 261,355 243,351

The Group’s operating lease commitments, contingent liabilities and collateral provided in jointly controlled entities appear

from notes 21 and 22.

Investments in associates 2011 2010 2009

Cost at 1 January 26,320 24,916 25,502

Foreign exchange adjustments 172 1,502 3,154

Additions 7,214 1,207 1,677

Disposals (6,267) (1,305) (5,417)

Cost at 31 December 27,439 26,320 24,916

Adjustments at 1 January (16,985) (14,454) (5,787)

Foreign exchange adjustments (336) (1,256) (2,066)

Share of profit/(loss) for the year 8,263 (3,655) (8,751)

Additions 128 376 0

Dividends (846) (221) (305)

Disposals (6,196) 436 1,122

Transferred for set-off against receivables 771 1,921 1,575

Transferred to provisions 0 (132) (242)

Adjustments at 31 December (15,201) (16,985) (14,454)

Carrying amount at 31 December 12,238 9,335 10,462

Note 29 includes an outline of the Group’s investments in associates. The revenue, profit/loss for the year, assets and liabilities

of the primary associates are as follows:

Net profit/(loss) Revenue for the year Assets Liabilities

2011 194,676 6,613 80,594 161,514

2010 183,988 2,873 71,712 159,132

2009 122,967 (26,649) 59,273 144,284


52

13 Inventories 2011 2010 2009

Raw materials and consumables 2,487 3,382 3,631

Work in progress 3,447 3,371 4,850

Manufactured goods and goods for resale 101,530 96,634 100,883

TV programmes 21,391 25,872 26,348

Total 128,855 129,259 135,712

At the end of the reporting period, the Group estimates the write-down to realisable value for manufactured goods

and goods for resale, which primarily relates to books and game consoles. The estimate is based on expected sales

and therefore subject to some uncertainty. The inventories of Lindhardt og Ringhof were reduced from 2010 to 2011,

mainly as a consequence of the divestment of the Books Clubs to Gyldendal and the closure of the map publisher

Legind, as well as increased digitalisation in educational publishers.

The inventories and impairment of inventories, expensed for the year amounted to 229,494 (2010: 172,461 and 2009:

180,808) and 13,356 (2010: 11,215 and 2009: 16,463), respectively. Reversed impairment of inventories in the income

statement amounted to 3,760 (2010: 4,799 and 2009: 4,905). Inventories included capitalised payroll costs in the

amount of 8,437 (2010: 8,733 and 2009: 9,500).

14 Securities 2011 2010 2009

Listed bonds 181,205 149,456 27,576

Other 2,234 2,865 2,713

Total 183,439 152,321 30,289

The average duration of the bonds is 6 months.

15 Cash and cash equivalents 2011 2010 2009

Cash and bank account deposits 154,259 148,807 162,061

Total 154,259 148,807 162,061

Of which deposited in fixed-term deposit 31,405 (2010: 44,726) and cash and cash equivalents pledged as collateral 8,448

(2010: 8,378 and 2009: 3,360).

16 Equity

The Egmont Foundation is a commercial foundation and thus subject to special conditions relating to its capital, as set

out in the Foundation’s Charter. The Foundation’s assets are used for donations in connection with the Foundation’s

Charitable Activities. The balance of the Foundation’s assets is transferred to a reserve to ensure that the Foundation are

provided with the necessary capital for consolidation and expansion in accordance with sound business principles. The

Foundation’s equity ratio stood at 39.1 % (2010: 36.4 % and 2009: 35.4 %).


53

17 Pensions

The Group mainly has defined contribution pension plans, as the Group’s defined benefit pension plans in both

its wholly-owned and its jointly controlled Norwegian entities were closed to new members in 2004 and 2008,

respectively.

In addition, the Group has pension plans in Sweden that have been established together with other enterprises as

part of collective agreements (multi-employer plans). Such plans are defined benefit plans, but are treated as defined

contribution plans because the pension funds are unable to provide the information necessary to calculate the

individual enterprise’s share of the obligation.

For defined benefit pension plans, the obligation is calculated at the actuarial present value at the end of the reporting

period. These pension plans are funded in whole or in part through pension funds for the employees. The present value

of the defined benefit pension obligations depends on the assumptions used as a basis for the actuarial calculation.

The calculation is based on assumptions relating to discount rate, expected return on assets, future wage or salary

increases, mortality and future development of the pension obligation.

The primary assumptions lie within the framework determined by the public authorities in Norway and are reviewed as

at the reporting date. The lower discount rate affected the defined benefit pension obligations for 2011. In 2010, the

Group reviewed the primary assumptions to ensure that they were representative of the Group’s pension plans, which

resulted in a change to the assumptions for pension, wage and salary adjustments.

Pensions 2011 2010 2009

Defined benefit pension obligations (39,269) (23,779) (21,022)

Other pension obligations (9,373) (8,812) (4,627)

Total (48,642) (32,591) (25,649)

Defined benefit pension obligations are specified below:

Present value of defined benefit pension obligations (84,576) (68,401) (63,392)

Fair value of pension plan assets 50,142 47,842 45,207

Payroll tax (4,835) (3,220) (2,837)

Net liability at 31 December (39,269) (23,779) (21,022)

Movement in the present value of the defined benefit pension obligations:

Liability at 1 January (68,401) (63,392) (56,055)

Foreign exchange adjustments (575) (4,079) (10,223)

Current service cost (3,287) (3,124) (4,062)

Past service cost (909) 1,826 (172)

Calculated interest relating to liability (2,678) (2,818) (2,669)

Actuarial gains/(losses) (11,686) 430 5,541

Curtailments and repayments 0 0 1,993

Benefits paid, etc. 2,960 2,756 2,255

Liability at 31 December (84,576) (68,401) (63,392)


54

17 Pensions (continued) 2011 2010 2009

Movement in the fair value of pension plan assets:

Pension assets at 1 January 47,842 45,207 40,212

Foreign exchange adjustments 401 2,790 7,334

Adjustments relating to previous year(s) 529 0 0

Expected return on pension plan assets 2,668 2,713 2,690

Actuarial gains/(losses) (1,278) (1,347) (3,661)

Contributions paid into the pension plans 2,156 2,076 2,586

Curtailments and repayments 28 (1,451) (2,166)

Benefits paid, etc. (2,204) (2,146) (1,788)

Pension assets at 31 December 50,142 47,842 45,207

Return on pension assets:

Actual return on pension plan assets 1,390 1,366 (971)

Expected return on pension plan assets (2,668) (2,713) (2,690)

Actuarial losses on pension plan assets (1,278) (1,347) (3,661)

Average composition of pension plan assets:

Bonds 48.7 % 49.1 % 57.5 %

Shares 11.9 % 17.1 % 11.3 %

Money market and the like 21.4 % 16.9 % 14.4 %

Property 18.0 % 16.9 % 16.8 %

Average assumptions used for the actuarial calculations at the end of the reporting period in the individual pension plans:

Discount rate 2.6 % 4.2 % 4.9 %

Inflation rate 3.3 % 3.8 % 4.0 %

Adjustment of wages and salaries 3.5 % 4.0 % 4.3 %

Expected return on pension funds 4.1 % 5.3 % 5.6 %

Amount of defined benefit pension obligations for current and previous years:

Defined benefit pension obligations (84,576) (68,401) (63,392)

Pension assets 50,142 47,842 45,207

Payroll tax (4,835) (3,220) (2,837)

Net liability at 31 December (39,269) (23,779) (21,022)

Pension costs in the income statement:

Current service cost 3,342 3,647 4,002

Calculated interest relating to liability 2,721 2,842 2,726

Curtailments and repayments 0 0 (1,042)

Expected return on pension plan assets (2,656) (2,614) (2,633)

Impact of change to pension plans 0 (2,479) 140

Payroll tax 445 405 481

Pension costs 3,852 1,801 3,674

Actuarial gains/(losses) recognised (14,714) (2,982) 1,559 in other comprehensive income


55

18 Deferred tax 2011 2010 2009

Deferred tax at 1 January 15,523 16,419 1,847

Foreign exchange adjustments (5) 701 273

Deferred tax for the year recognised in the income statement (5,667) (2,654) 14,651

Deferred tax for the year recognised in other comprehensive income 4,360 1,057 (352)

Deferred tax at 31 December 14,211 15,523 16,419

Deferred tax has been recognised in the balance sheet as follows:

Deferred tax, asset 22,156 22,184 17,840

Deferred tax (liability) (7,945) (6,661) (1,421)

Deferred tax, net 14,211 15,523 16,419

Deferred tax assets are recognised for all unutilised tax losses to the extent it is considered probable that taxable profits

will be realised in the foreseeable future against which the losses can be offset. The amount to be recognised in respect

of deferred tax assets is based on an estimate of the probable time of realising future taxable profits and the amount of

such profits.

The Group has assessed that deferred tax assets totalling 22,156 (2010: 22,184 and 2009: 17,840), primarily

attributable to Norway, can be realised in the foreseeable future. This is based on the forecast earnings base of the

enterprises in which the tax assets can be utilised.

2011 2010 2009

The deferred tax relates to:

Intangible assets (8,534) (4,732) (2,833)

Property, plant and equipment (3,276) (6,396) (600)

Receivables (46) (151) 634

Inventories 3,620 2,981 6,768

Other current assets 836 (200) (429)

Provisions 14,431 12,104 9,790

Other liabilities (1,032) 1,878 3,387

Tax loss carry-forwards, etc. 8,212 10,039 (298)

Total 14,211 15,523 16,419

Unrecognised deferred tax assets relate to:

Tax losses 1,837 1,871 213

Temporary differences 977 2,235 3,232


56

Goods sold with 19 Other provisions a right of return Other

Other provisions at 1 January 2011 66,034 10,318

Foreign exchange adjustments 61 21

Provisions made 53,972 5,118

Provisions used (54,185) (3,262)

Reversed (6,375) (2,497)

Other provisions at 31 December 2011 59,507 9,698

Goods sold with a right of return include magazines and books that the shops can return according to agreement. At

the date of sale, the Group estimates how many goods are expected to be returned or exchanged based on historical

experience of selling such goods. This estimate is naturally subject to uncertainty, as the quantity actually returned may

deviate from the estimated quantity. However, the uncertainty concerning the return of magazines is limited due to the

short period allowed for returning them.

Other provisions include warranty provisions, in respect of which expected partial compensation from the supplier is

recognised in other receivables.

20 Fees to elected auditor 2011 2010 2009

Statutory audit (1,510) (1,554) (1,620)

Tax consultancy (87) (158) (590)

Other assurance statements (71) (70) (128)

Other services (778) (583) (470)

Total fees to KPMG (2,446) (2,365) (2,808)

Statutory audit (215) (204) (255)

Tax consultancy (50) (28) (13)

Other assurance statements 0 (17) (3)

Other services (98) (24) (102)

Total fees to other auditors (363) (273) (373)

Total (2,809) (2,638) (3,181)

21 Operating leases

Operating leases comprise leases for properties of 138,082 (2010: 145,754 and 2009: 120,856) and other leases of 8,696

(2010: 5,999 and 2009: 2,679). These figures include leases for properties entered into by jointly controlled entities of

65,258 (2010: 64,542 and 2009: 61,494).

2011 2010 2009

Non-cancellable operating lease payments amount to:

Up to 1 year 32,167 33,708 29,172

Between 1 to 5 years 88,132 81,093 67,486

More than 5 years 26,480 36,952 26,876

Total 146,779 151,753 123,534

During 2011 32,273 (2010: 35,679 and 2009: 36,858) was recognised as expense in the income statement in respect of

operating leases.


57

22 Contingent liabilities and collateral

The Group has provided security to mortgage credit institutions of 112,612 (2010: 112,379 and 2009: 112,524)

over corporate and investment properties, for which the carrying amount constitutes 166,192 (2010: 168,375 and

2009: 170,679). The Group’s jointly controlled entities have provided security of 2,414 to other credit institutions over

miscellaneous assets (a floating charge). The carrying amount of such assets amounted to 161,436 (2010: 117,139 and

2009: 95,347).

Contractual investment commitments relating to intangible film rights amount to 29,893 (2010: 28,323 and 2009:

16,319).

Entities in the Group have furnished miscellaneous guarantees, etc., for 16,526 (2010: 20,606 and 2009: 17,972).

These figures include guarantees furnished by jointly controlled entities for 10,429 (2010: 7,425 and 2009: 7,420).

23 Financial risks and financial instruments

As a result of its operations, investments and financing, the Egmont Group is exposed to a number of financial risks,

including market risks.

Corporate Treasury is handling the centralised management of liquidity and financial risks in the Group’s wholly

owned entities. Corporate Treasury operates as a counterparty to the Group’s entities, thus undertaking centralised

management of liquidity and financial risks. Liquidity and financial risks arising at jointly controlled entities are reported

to Corporate Treasury and thus managed on a decentralised basis. Management monitors the Group’s financial risk

concentration and financial resources on an ongoing basis.

The overall framework for financial risk management is laid down in the Group’s Treasury Policy. The Treasury Policy

comprises the Group’s currency and interest rate policy, financing policy and policy regarding credit risks in relation to

financial counterparties and includes a description of approved financial instruments and risk framework. The overall

framework is assessed on an ongoing basis.

The Group’s policy is to refrain from engaging in speculative transactions. Thus, the Group’s financial management

focuses exclusively on managing and reducing financial risks that are a direct consequence of the Group’s operations,

investments and financing.

There are no major changes in the Group’s risk management policy relative to 2010 and 2009.

Currency risks

The Group is exposed to exchange rate fluctuations as a result of the individual consolidated enterprises entering

into purchase and sales transactions and having receivables and payables denominated in currencies other than their

functional currency. If the exposure exceeds the Group’s limit for currency exposure, such exposure is hedged by

means of forward exchange contracts, among other hedging instruments. The value of forward exchange contracts is

recognised in the income statement.

The Group’s primary currency exposure is denominated in NOK and EUR and relates to the Group’s investments in wholly

owned and jointly controlled entities, including long-term intra-group loans. Basically, these currency risks are not

hedged, as ongoing hedging of such long-term investments is not considered to be the best strategy based on overall

risk and cost considerations.

A 5 % and 1 % drop in the exchange rates of NOK and EUR, respectively, would have impacted the 2011 profits by

about EUR -8.4 million (2010: EUR -8.2 million) and about EUR 0.6 million (2010: EUR 0.5 million), respectively, and the

equity at 31 December 2011 in terms of NOK by about EUR -6.8 million (2010: EUR -6.6 million), and in terms of EUR


58

by about EUR 5.0 million (2010: EUR 4.4 million). A positive change in foreign exchange rates would have had a reverse

impact on profits and equity based on the financial instruments recognised at end-2011 and end-2010, and unchanged

figures for production/sales, unchanged price and interest rate levels.

Interest rate risks

As a result of its investment and financing activities, the Group has an exposure related to fluctuations in interest levels

in the Nordic countries.

The Group’s policy is to hedge interest rate risks relating to loans when it is assessed that interest payments may be

secured at a satisfactory level. The Group’s interest rate risks are managed by entering into interest swap contracts, with

floating rate loans being converted into fixed interest loans. The principal amount of interest swap contracts concluded

by the Group for hedging purposes was EUR 90 million at 31 December 2011 and at 31 December 2010. The fair value

in the balance sheet amounted to EUR 20.1 million at 31 December 2011 and EUR 9.8 million in 2010, and the value

adjustment of the equity for 2011 was negative by EUR 10 million and EUR 2.8 million after tax in 2010.

As a result of the Group’s use of derivative instruments to hedge its interest rate exposure relative to instruments of

debt, changes in the fair value of the hedging instruments will impact the Group’s reserve for hedging transactions

under equity. A one percentage point drop in interest rates would reduce equity by about EUR 11 million. In addition,

such an interest rate drop would reduce the income statement by about EUR 1 million (on a 12-month rolling basis) by

way of loss of interest income from net deposits and market value changes to derivative financial instruments.

Liquidity risks

The Group’s liquidity reserve comprises cash and cash equivalents, securities and unutilised credit facilities. To ensure

optimum utilisation of cash and cash equivalents, the Group operates with cash pools. T he Group has net deposits of

EUR 104.7 million (2010: EUR 76.7 million).

The Group’s financing consists primarily of Danish floating rate mortgage loans expiring in 2028 and floating rate loans

denominated in NOK maturing in 2012-13. The bulk of the latter loans were refinanced in January 2012, with the

refinanced loans thus expiring in 2015.

The Group’s liabilities other than provisions fall due as shown below. The debt repayment schedule is based on

undiscounted cash flows incl. estimated interest payments based on current market conditions:

Contrac- Carrying tual cash Within 1 to 4 After amount flows 1 year years 5 years

Mortgage debt 112,612 144,356 2,611 15,775 125,970

Other credit institutions 110,199 110,281 71,622 38,659 0

Other financial liabilities 91,724 95,130 87,239 7,891 0

Finance lease liabilities 2,151 2,151 687 1,464 0

Trade payables 201,749 201,749 201,749 0 0

Non-derivative financial instruments 518,435 553,667 363,908 63,789 125,970

Derivative financial instruments 23,410 36,815 4,897 12,126 19,792

31 December 2011 541,845 590,482 368,805 75,915 145,762


23 Financial risks and financial instruments (continued)

59


Contrac- Carrying tual cash Within 1 to 4 After amount flows 1 year years 5 years

Mortgage debt 112,307 154,983 2,812 16,566 135,605



Finance lease liabilities 4,038 4,597 2,010 2,343 244

Trade payables 222,370 222,370 222,370 0 0



31 December 2010 545,585 623,837 384,087 79,701 160,049

Mortgage debt 112,608 173,589 3,552 17,765 152,272



Finance lease liabilities 5,340 5,886 2,230 3,417 239

Trade payables 225,789 225,789 225,789 0 0



31 December 2009 541,503 648,242 381,149 85,982 181,111

Credit risks

The Group’s credit risks relate primarily to trade receivables, securities and cash and cash equivalents. The Group is not

exposed to any significant risks associated with a particular customer or business partner. According to the Group’s

policy for accepting credit risk, all major customers are regularly credit rated.

Trade receivables

The Group has received collateral relating to sales. This occurs typically in connection with the distribution of magazines

where deposits are received. In addition, some of the Group’s entities take out credit insurance against losses on

trade receivables to the extent deemed relevant. Collateral provided is included in an assessment of the need to make

impairment. Trade receivables backed by collateral, with a consequent reduction in overall credit risk, amount to

32,322 (2010: 46,234 and 2009: 39,311).


60


Trade receivables, including trade receivables backed by collateral, that have not yet fallen due and have not been impaired,

can be broken down by geographical area as follows:

2011 2010 2009

Denmark 36,391 47,311 54,416

Other Nordic countries 85,834 103,976 99,386

Other European countries 38,131 45,874 43,261

Other countries 3,430 2,773 2,163

Total 163,786 199,934 199,226

In addition, the aging of trade receivables past due is as follows:

Up to 30 days 25,183 17,574 17,428

Between 30 and 90 days 14,473 12,705 13,169

Over 90 days 13,732 13,219 16,762

Total 53,388 43,498 47,359

Impairment losses at 1 January 12,345 11,588 10,728

Foreign exchange adjustments (52) (637) (602)

Impairment losses for the year 4,010 4,762 6,033

Realised impairment losses (3,193) (1,730) (1,412)

Reversed impairment losses (2,709) (1,638) (3,159)

Impairment losses at 31 December 10,401 12,345 11,588

Securities, cash and cash equivalents

The Group is exposed to counterparty risk through its cooperation with financial counterparties via funds deposited, but also

via credit commitments. The Group manages this risk by cooperating with banks with a sound credit rating.

Categories of financial instruments

Financial instruments are broken down into categories of financial assets and liabilities below:

2011 2010 2009

Securities (fair value option) 183,439 152,321 30,289

Financial assets measured at fair value 183,439 152,321 30,289 via the income statement

Trade receivables 206,773 231,087 234,997

Receivables from associates 3,648 2,405 3,342

Other receivables 60,811 60,663 81,185

Cash and cash equivalents 154,259 148,807 162,061

Receivables 425,491 442,962 481,585

Derivative financial instruments 3,925 8,749 9,956

Financial liabilities designated at fair value 3,925 8,749 9,956 via the income statement

Derivative financial instruments 19,485 9,803 6,777

Financial liabilities used as hedging instruments 19,485 9,803 6,777


61


2011 2010 2009

Mortgage debt 112,612 112,307 112,608

Other credit institutions (non-current) 38,572 36,654 41,293

Other credit institutions (current) 71,627 65,159 59,269

Other financial liabilities 91,724 89,057 84,986

Finance lease liabilities 2,151 4,038 5,340

Trade payables 201,749 222,370 225,789

Financial liabilities measured at amortised cost 518,435 529,585 529,285

The carrying amount of receivables and other financial liabilities (current) is equal to the fair value.

Mortgage debt and debt to other credit institutions (non-current) are floating rate cash loans, and thus the fair value is

equal to the carrying amount.

Securities are measured at listed prices (level 1). Derivative financial instruments are valued at fair value on the basis of

inputs other than listed prices that are observable for the liability, either directly or indirectly (level 2).

24 Related parties

The Egmont Foundation is a commercial foundation and has no related parties with control.

The Egmont Group’s related parties with significant influence comprise the Foundation’s Board of Trustees, Management

Board and their close relatives, as well as enterprises in which this group of persons has material interests. The

compensation paid to the Board of Trustees and Management Board appears from note 4.

Related parties with significant influence also comprise associates; see notes 12 and 29. Transactions with associates

consisted of short-term loans to associates of 12,489 (2010: 10,475 and 2009: 3,342).

25 Standards and interpretations not yet adopted

The IASB has issued a number of new standards and interpretations that have not yet become mandatory for the Egmont

Foundation’s consolidated financial statements for 2011. None of these new standards or interpretations are expected to

have a significant effect on the consolidated financial statements, except for:

IFRS 11, Joint arrangements, will become effective from the 2013 financial year. According to the standard, it will no

longer be possible to consolidate jointly controlled entities on a pro-rata basis. Jointly controlled entities are subsequently

to be recognised according to the equity method, which means that the share of net profit or loss must be recognised

under financial items. This will primarily result in a reduction of the Group’s revenue and operating profit (EBIT) in respect

of the Norwegian part of Egmont Books, while the net profit or loss will remain unchanged. Comparative figures will

have to be restated.

26 Subsequent events

On 8 January 2012, the Group entered into an agreement regarding the acquisition of the remaining 50 % shareholding

in TV 2, Norway, the acquisition date being 1 February 2012. The Group additionally acquired all shares in Venuepoint

Holding ApS (Billetlugen) on 9 March 2012. Information about business combinations after the end of the reporting

period appears from note 27.


62

27 Acquisition and disposal of businesses

Acquisitions and disposals in 2011, 2010 and 2009

In 2009, the Group disposed of the TV production business area. The selling price in 2009 amounted to EUR 25 million

in cash, excl. disposal costs. In 2010, the Group received additional contingent consideration of EUR 3.9 million in

cash and expects no further income from the disposal. Previously recognised non-current assets amounted to EUR 1.5

million, net working capital to EUR 1.1 million and cash and cash equivalents to EUR 2.9 million.

ACQUISITIONS IN 2012

TV 2, Norway

On 8 January 2012, the Group entered into an agreement regarding the acquisition of the remaining 50 %

shareholding in TV 2, Norway, with effect from 1 February 2012. With 100 % ownership of TV 2, the Group’s

acquisition helps underpin its position as one of the Nordic region’s leading media groups.

The purchase consideration totalled EUR 274 million and included the takeover of a loan to the owners of EUR

135 million. Thus the purchase consideration for the shares amounted to EUR 139 million. Goodwill, which is not

deductible for tax purposes, represents the value of personnel, know-how, a platform for future income from

advertising, distribution and user-paid services, as well as full ownership of the shares.

The acquisition was effected after the end of the reporting period, and the expected opening balance sheet is

therefore based on provisionally determined fair values.

1 February 2012

Intangible assets 195,536

Other non-current assets 68,495

Current assets 155,665

Loan to owners (135,325)

Other non-current liabilities (233,609)

Current liabilities (87,969)

Identifiable net assets (37,207)

Non-controlling interests (150)

Fair value of 50 % shareholding (99,270)

Goodwill 275,475

Purchase consideration 138,848

Transaction costs (advisers’ fees) attributable to the acquisition amount to EUR 0.9 million.

The fair value of the 50 % shareholding recognised in 2011 less the estimated control premium was provisionally

determined at EUR 99 million at 1 February 2012. Based on this value and the IFRS rules regarding business

combinations achieved in stages, an amount of EUR 162 million is expected to be recognised as an unrealised gain in

connection with the acquisition of the remaining 50 % in 2012. The revenue and results of TV 2, Norway, are expected

to remain at the same level as in 2011.

Venuepoint

On 9 March 2012, the Group acquired all shares in Venuepoint Holding ApS (Billetlugen). The purchase consideration

amounted to EUR 5.4 million in cash plus a subsequent payment expected to amount to EUR 3.4 million. The

subsequent payment is based on expectations for future earnings. Due to the short interval between the acquisition

and the approval of the annual report, it has not been practically feasible to allocate the purchase consideration to the

assets and liabilities acquired.


63

28 Effect of transition to IFRS

Changes in accounting policies on transition to IFRS

The annual report for 2011 is the first annual report in which the consolidated financial statements have been prepared

in accordance with IFRS, as adopted by the EU. The consolidated financial statements in the annual report for 2010 were

prepared in accordance with the Danish Financial Statements Act.

On the transition to IFRS in the consolidated financial statements, the Group has used IFRS 1, “First-time adoption of

International Financial Reporting Standards”. The opening balance sheet and comparative figures have been prepared in

accordance with the standards and interpretations applicable at 31 December 2011. According to IFRS 1, the opening

balance sheet is dated 1 January 2009 (date of transition) and has been prepared as if the relevant standards and

interpretations had always applied, except where the special transitional and commencement provisions of IFRS have been

used.

The transition to IFRS has resulted in the following changes to the Group’s accounting policies:

• Goodwill and trademarks with indefinite useful lives are not amortised, but are tested for impairment at least once

annually. Previously, goodwill and trademarks were amortised on a straight-line basis over their useful lives.

• Properties are recognised at cost less accumulated depreciation according to the cost price method. The Group’s

rental property is classified as an investment property and recognised at fair value, with value adjustments made via

the income statement. Previously, properties were recognised at fair value, with revaluations made via equity.

• Revenue from the sale of film broadcasting rights to TV stations is recognised at the availability date. Previously, the

sale of film broadcasting rights to TV stations was recognised at the invoice date. Royalty costs, etc. attributable to

the deferred revenue are accrued and recognised under prepayments in the balance sheet.

• Marketing costs are recognised in the income statement at the date of delivery from the supplier. Previously,

marketing costs were recognised under prepayments until the time of utilisation.

• Acquired film rights are recognised as an intangible asset at the time when control over the asset is obtained. Until

such time, payments are recognised as prepayments for intangible assets. Previously, acquired film rights were

recognised in the balance sheet under inventories at the time of conclusion of the agreement, and the portion of

film rights for which the rights owner had not been paid was recognised under current trade payables.

• The portion of in-house produced film rights attributable to the sale of broadcasting rights is included in deferred

revenue and is recognised as revenue in the income statement once the TV stations and distribution companies can

freely use the asset. Previously, the sale of broadcasting rights was included in the net asset comprising in-house

produced film rights.

• Actuarial gains and losses on defined benefit pension plans are recognised directly in other comprehensive income.

Previously, actuarial gains and losses were recognised as personnel costs in the income statement.

• Securities managed in accordance with a documented investment strategy are recognised at fair value at the

end of the reporting period, using the fair value option. Value adjustments are recognised directly in the income

statement. Previously, securities were recognised at cost and fair value in the balance sheet, respectively, and value

adjustments were recognised in the income statement.

• The fair value changes of interest rate swaps are recognised in the income statement in the cases where the swaps

are ineffective according to the IFRS documentation requirements, or where the Group has chosen not to use IFRS

hedge accounting.


64

28 Effect of transition to IFRS (continued)

• Barter agreements where the services exchanged are dissimilar are recognised at fair value and accrued as the

services are performed or over the period specified in the concluded agreement. Fair value is measured at the value

of either the delivered or the received services, depending on which services can be measured accurately.

• Impact of the changes on deferred tax.

The Group has chosen to make use of the following optional exemptions in IFRS 1:

• Business combinations effected before the date of transition, 1 January 2009, have not been adapted to IFRS.

• For corporate and investment properties, the cost at the date of transition has been fixed at the carrying amount

according to the annual report for 2010 (equivalent to the fair value).

• The reserve for foreign exchange adjustments was reset to zero at the date of transition.

Reclassifications

Apart from the changes in the accounting policies relating to recognition and measurement, the following reclassifications

and layout changes, including a restatement of comparative figures, have been made:

• Compensation from third parties relating to warranty provisions is recognised as other receivables. Previously,

compensation from third parties was recognised under warranty provisions.

• Non-controlling interests are presented as part of the Group’s equity.

• Provisions are divided into non-current and current liabilities.

• Deferred tax is presented under other non-current assets and non-current liabilities.

• The portfolio of TV programmes is presented under inventories.

• Foreign exchange adjustments arising on the translation of foreign entities, etc., value adjustments of hedging

instruments and actuarial gains/losses on defined benefit pension plans are recognised as other comprehensive

income.


65


Previous Effect of Reconciliation of balance sheet accounting transition and equity at 1 January 2009 policies to IFRS IFRS

1 Intangible assets 166,674 43,030 209,704

2 Property, plant and equipment 284,448 (45,365) 239,083

3 Investment properties 0 30,870 30,870

Other non-current assets 24,668 0 24,668

Deferred tax 0 26,738 26,738


4 Inventories incl. film rights 209,398 (58,002) 151,396

5 Receivables 345,357 8,230 353,587

Deferred tax 26,738 (26,738) 0

6 Securities 18,352 904 19,256

Cash and cash equivalents 36,220 0 36,220

Current assets 636,065 (75,606) 560,459

Assets 1,111,855 (20,333) 1,091,522

7 Equity excl. non-controlling interests 382,091 (17,586) 364,505

Non-controlling interests 2,939 0 2,939

Equity 385,030 (17,586) 367,444

8 Provisions 104,336 (50,472) 53,864

9 Non-current liabilities 73,261 11,609 84,870

10 Current liabilities 549,228 36,116 585,344

Liabilities 726,825 (2,747) 724,078

Equity and liabilities 1,111,855 (20,333) 1,091,522


66


Previous Effect of Reconciliation of balance sheet accounting transition and equity at 31 December 2010 policies to IFRS IFRS

1 Intangible assets 132,480 71,269 203,749

2 Property, plant and equipment 272,395 (47,409) 224,986

3 Investment properties 0 30,854 30,854

Other non-current assets 13,232 0 13,232

Deferred tax 0 22,184 22,184


4 Inventories incl. film rights 190,215 (60,956) 129,259

5 Receivables 332,140 9,493 341,633

Deferred tax 22,184 (22,184) 0

6 Securities 151,700 621 152,321

Cash and cash equivalents 148,807 0 148,807

Current assets 845,046 (73,026) 772,020

Assets 1,263,153 3,872 1,267,025

7 Equity excl. non-controlling interests 441,497 11,715 453,212

Non-controlling interests 7,919 0 7,919

Equity 449,416 11,715 461,131

8 Provisions 115,349 (65,972) 49,377

9 Non-current liabilities 156,369 5,252 161,621

10 Current liabilities 542,019 52,877 594,896

Liabilities 813,737 (7,843) 805,894

Equity and liabilities 1,263,153 3,872 1,267,025


67


Notes to reconciliation of balance sheet and equity 31.12.2010 01.01.2009

1 Intangible assets

Film rights 20,425 30,793

Prepayments relating to film rights 15,564 7,273

In-house produced film rights 5,792 4,964

Reversal of amortisation and any recognised impairment of goodwill and trademarks 29,488 0

71,269 43,030

2 Property, plant and equipment

Properties recognised at cost (48,588) (45,365)

Reversal of depreciation of investment properties 1,179 0

(47,409) (45,365)

3 Investment properties

Reclassification of investment property 30,870 30,870

Foreign exchange adjustments, net (16) 0

30,854 30,870

4 Inventories incl. film rights

Film rights, etc. (60,956) (58,002)

5 Receivables

Sale of TV broadcasting rights 7,152 8,230

Compensation from third party relating to warranties 2,341 0

9,493 8,230

6 Securities

Adjustment to fair value 621 904

7 Equity excl. non-controlling interests

Reversal of amortisation and any recognised impairment of goodwill and trademarks 26,879 0

Film rights 1,033 865

Deferred revenue relating to sale of film broadcasting rights (3,586) (7,767)

Properties recognised at cost (12,417) (11,588)

Deferred revenue relating to sale of goods (842) 0

Provisions for return of goods (1,312) 0

Adjustment of securities to fair value 927 904

Foreign exchange adjustments, etc. 1,033 0

11,715 (17,586)


68


Notes to reconciliation of balance sheet and equity 31.12.2010 01.01.2009

8 Provisions

Film rights 15 19

Compensation from third party relating to warranties 2,341 0

Adjustment of deferred tax, net (4,253) (5,400)

Provisions for return of goods 1,225 0

Reclassification of other provisions (66,227) (45,527)

Reclassification of non-current employee obligations 927 436

(65,972) (50,472)

9 Non-current liabilities

Deferred revenue relating to sale of film broadcasting rights 5,252 11,609

10 Current liabilities

Film rights (27,500) (20,817)

Reclassification of non-current employee obligations (927) (436)

Deferred revenue relating to sale of film broadcasting rights 12,186 11,842

Reclassification of other provisions 66,227 45,527

Deferred revenue relating to sale of goods 2,891 0

52,877 36,116

Previous Effect of accounting transition policies to IFRS IFRS

Reconciliation of income statement and total comprehensive income 2010 2010 2010

11 Revenue 1,420,084 3,028 1,423,112

Change in inventories of finished goods and work in progress 2,117 0 2,117

Other operating income 12,744 0 12,744

Raw materials and consumables (55,651) 0 (55,651)

12 Other external expenses (923,572) 23,901 (899,671)

13 Personnel costs (311,601) 2,982 (308,619)

14 Depreciation, amortisation and impairment losses;

property plant and equipment and intangible assets (68,283) (15,524) (83,807)

15 Other operating expenses (7,805) (40) (7,845)


Profit after tax from investments in associates (3,655) 0 (3,655)

16 Financial income 12,758 710 13,468

17 Financial expenses (16,846) (15) (16,861)

Profit before tax 60,290 15,042 75,332

18 Tax on profit for the year (23,617) (2,072) (25,689)


19 Other comprehensive income after tax 0 28 28

Total comprehensive income 36,673 12,998 49,671


69


Notes to reconciliation of income statement and total comprehensive income 2010

11 Revenue

Sale of TV broadcasting rights 1,498

In-house produced rights 5,646

Deferred revenue relating to goods (2,891)

Provisions for return of goods (1,225)

3,028

12 Other external expenses

Film rights 23,059

Sale of TV broadcasting rights (840)

Deferred revenue relating to goods 1,578

Provisions for return of goods 104

23,901

13 Personnel costs

Accumulated actuarial gains/(losses) 2,982

14 Depreciation and amortisation of property plant and equipment and intangible assets

Goodwill and trademarks 11,570

Film rights (23,059)

In-house produced film rights (1,498)

Properties (3,180)

Investment properties 643

(15,524)

15 Other operating expenses

Adjustment of earn-out (40)

16 Financial income

Amortisation of film payables 4

Interest rate swap(s) 602

Financial income of the Egmont Foundation’s Charitable Activities 104

710

17 Financial expenses

Adjustment of securities to fair value (15)

(15)

18 Tax on profit for the year

Adjustment of tax on profit for the year, net (2,072)

(2,072)

19 Other comprehensive income after tax

Accumulated actuarial gains/(losses) (2,982)

Other items 3,010

28


70


Previous Effect of accounting transition policies to IFRS IFRS

Reconciliation of cash flow statement 2010 2010 2010

20 Cash flows from operating activities 142,081 29,413 171,494

21 Cash flows from investing activities (32,918) (150,589) (183,507)

22 Cash flows from financing activities (12,213) (704) (12,917)

Change in cash and cash equivalents 96,950 (121,880) (24,930)

Cash and cash equivalents at 1 January 189,637 (27,576) 162,061

Foreign exchange adjustment 11,676 0 11,676

Cash and cash equivalents at 31 December 298,263 (149,456) 148,807

Notes to reconciliation of cash flow statement 2010

20 Cash flows from operating activities

IFRS changes, primarily film rights and sale of TV broadcasting rights; see above 29,413

21 Cash flows from investing activities

Reclassification (124,555)

IFRS changes (26,034)

(150,589)

22 Cash and cash equivalents

Reclassification (27,576)


71

29 Group entities

Unless otherwise stated, the entities are wholly owned. Insignificant – including primarily dormant – entities are not included

in the outline.

The entities marked with * are owned directly by the Egmont Foundation.

SUBSIDIARIES

Ownership share

Country Entity Registered office 2011 2010 2009

Denmark Egmont International Holding A/S* Copenhagen

Egmont Holding A/S Copenhagen

Egmont Magasiner A/S Gentofte

Egmont Specialblade A/S Gentofte

Go-Card A/S Gentofte

De Danske Vægtkonsulenter A/S Farum - -

Egmont Serieforlaget A/S Copenhagen

Egmont Creative Center A/S Copenhagen

Lindhardt og Ringhof Forlag A/S Copenhagen

Nordisk Film A/S Copenhagen

Nordisk Film Distribution A/S Copenhagen

Nordisk Film Shortcut A/S Copenhagen

Nordisk Film Production A/S Copenhagen

Nordisk Film Biografer A/S Copenhagen

Scala Bio Center Aalborg ApS Aalborg 80 % 80 % 80 %

BioCenter Kolding A/S Kolding - 50 % 50 % (Fully consolidated in 2009 and 2010 and merged with Nordisk Film Biografer A/S in 2011)

NF Live A/S Copenhagen - -

Victoria Film Rights A/S Copenhagen - (Merged with Nordisk Film Production A/S in 2011)

Kino.dk A/S Copenhagen 74 % 74 % 74 %

Vild med Underholdning A/S Copenhagen

Dansk Reklame Film A/S Copenhagen

Fine & Mellow A/S Copenhagen - 60 % 60 %

Nordisk Trading Company A/S Kolding 50.1 %

(Owned by MBO in 2009)

Nordisk Special Marketing A/S Aalborg - 75 % (Merged with Nordisk Film Distribution A/S in 2011, wholly owned in 2010, jointly controlled with MBO in 2009)

Nordisk Film TV A/S Copenhagen - -

Substanz A/S Copenhagen - 50.1 % 50.1 %

Egmont Administration A/S Copenhagen

A.Film A/S Copenhagen 50 % 50 %

Ejendomsselskabet Vognmagergade 11 ApS* Copenhagen

Ejendomsselskabet Gothersgade 55 ApS* Copenhagen

Ejendomsaktieselskabet Lygten 47-49 Copenhagen

Norway Egmont AS Oslo

Egmont Holding AS Oslo

Egmont Serieforlaget AS Oslo


72

29 Group entities (continued)

SUBSIDIARIES

Ownership share


Norway Nordisk Film AS Oslo

Nordisk Film Produksjon AS Oslo - (Merged with Nordisk Film Production AS in 2011)

Nordisk Film Post Production AS Oslo

Nordisk Film Distribusjon AS Oslo

Nordisk Film & TV AS Oslo - -

Nordisk Film Production AS Oslo

Nordisk Film ShortCut AS Oslo 66 % 66 %

Drammen Kino AS Drammen 66.7 % 66.7 % 66.7 %

Neofilm AS Oslo 66.7 % 66.7 % 66.7 %

Sportskort AS Oslo 96.82 % 96.25 % 52.6 %

Egmont Hjemmet Mortensen AS Oslo

Hjemmet Mortensen Trykkeri AS Oslo

Hjemmet Mortensen Fagmedia AS Oslo

Hjemmet Mortensen Markedskontakt AS Nittedal - - (Merged with Hjemmet Mortensen Fagmedia AS in 2010)

Sweden Egmont Holding AB Malmö

Egmont Tidskrifter AB Malmö

Auto, Motor och Sport Sverige AB Stockholm 51 %

Egmont Tidskrifter BM AB Stockholm

Vagabond Media AB Stockholm - (Merged with Egmont Tidskrifter AS in 2011)

Egmont Kärnan AB Malmö

Egmont Editions AB Malmö

Sudd AB Stockholm 60 % 60 % 60 %

Sören och Anders Interessenter AB Malmö

Änglatroll AB Malmö

Skandinaviske Skoledagböcker AB Stockholm

Nordisk Film Sverige AB Stockholm

Nordisk Film Produktion Sverige AB Stockholm

Nordisk Film Post Produktion AB Stockholm

Nordisk Film Distribution AB Stockholm

Nordisk Film ShortCut AB Stockholm 66 % - -

Nordisk Film TV-Produktion AB Stockholm - -

Nordic Media Link AB Stockholm

Spiderbox Entertainment AB Stockholm -

Finland Egmont Holding Oy/Egmont Holding Ab Helsinki

Oy Nordisk Film Ab Helsinki

Dominova Oy/AB Helsinki

BK Pro Fitness Oy Vasa


73


SUBSIDIARIES

Ownership share


Germany Egmont Holding GmbH Berlin

Egmont Ehapa Verlag GmbH Berlin

Egmont Verlagsgesellschaften mbH Cologne

Mitte-Editionen GmbH Berlin

Egmont Ehapa Rights Management GmbH Berlin - -

Egmont Ehapa Comic Collection GmbH Berlin - -

Egmont Horizont Verlag GmbH Stuttgart - - (Merged with Egmont Holding GmbH in 2010)

United Kingdom Egmont Holding Ltd. London

Egmont UK Ltd. London

Poland Egmont Polska sp. z o.o. Warsaw

Czech Republic Egmont CR s.r.o. Prague

Hungary Egmont Hungary Kft. Budapest

Russia ZAO Egmont Russia Ltd. Moscow

Estonia Egmont Estonia AS Tallinn

Latvia Egmont Latvija SIA Riga

Lithuania UAB Egmont Lietuva Vilnius

Ukraine Egmont Ukraine LLC Kiev

Romania Egmont Romania S.R.L. Bukarest

Bulgaria Egmont Bulgaria EAD Sofia

Croatia Egmont d.o.o. Zagreb

USA Egmont US Inc. New York

The Student Planner LLC Denver 50.5 % 50.5 % 50.5 %

China Egmont Hong Kong Ltd. Hong Kong

Egmont Sourcing (HK) Ltd. Hong Kong


74

JOINTLY CONTROLLED ENTITIES

Ownership share


Denmark Pumpehuset af 2011 A/S Copenhagen 50 % - -

Respirator Media & Development A/S Copenhagen - - 50.1 %

Scandinavian Media Alliance A/S Copenhagen - 50 % 50 %

MBO Group A/S Aalborg - 50.1 % 50.1 %

Norway AE-TV Holding AS Bergen 50 % 50 % 50 %

TV 2 Gruppen AS Bergen 50 % 50 % 50 %

TV 2 AS Bergen 50 % 50 % 50 %

Nydalen Studios AS Oslo 50 % 50 % 50 %

OB-Team AS Oslo 50 % 50 % 50 %

Nordic World AS Oslo

TV 2 AS owns 50 % 50 % 50 %

Mediehuset Nettavisen AS Oslo 50 % 50 % 50 %

Outside Broadcast Team AS Bergen 50 % 50 % 50 %

Eventyrkanalen AS Bergen 50 % 50 % 50 %

TV 2 Torget AS Bergen 50 % 50 % 50 %

Vimond Media Solutions AS Bergen 50 % - -

Kanal 24 Norge AS Fredrikstad 50 % 50 % 50 %

TV 2 Zebra AS Bergen

TV 2 Gruppen AS owns 55 % 55 % 55 %

Mosart Medialab AS Bergen

TV 2 Gruppen AS owns 84.5 % 84.5 % 100 %

Cappelen Damm Holding AS Oslo 50 % 50 % 50 %

Cappelen Damm AS Oslo 50 % 50 % 50 %

Cappelen Damm Salg AS Oslo 50 % 50 % 50 %

Tanum AS Oslo 50 % 50 % 50 %

Map Solutions AS Oslo - 50 % 50 %

(Merged with Cappelen Damm AS in 2011)

Sentraldistribusjon ANS Oslo 50 % 50 % 50 %

Larsforlaget AS Oslo

Cappelen Damm Holding AS owns 66 % 66 % 66 %

Flamme Forlag AS Oslo

Cappelen Damm Holding AS owns 80 % - -

Barnemagasinet AS Oslo 50 % 50 % 50 %

Maipo Film AS Oslo 55.1 % 55.1 % 50.1 %

Sweden Fladen Film AB Stockholm 50 % 50 % 50 %

Finland Solar Films Oy Helsinki 50.1 % 50.1 % 50.1 %

Egmont Kustannus Oy Ab Helsinki 50 % 50 % 50 %



75

JOINTLY CONTROLLED ENTITIES

Ownership share


Turkey Dogan ve Egmont Yayincilik A.S. Istanbul 50 % 50 % 50 %

Australia Hardie Grant Egmont Pty Ltd Melbourne 50 % 50 % 50 %

China Children’s Fun Publishing Company Ltd. Beijing 49 % 49 % 49 %

Thailand Nation Egmont Edutainment Company Ltd. Bangkok 50 % 50 % 50 %

ASSOCIATES

Ownership share


Denmark Zentropa Folket ApS Hvidovre 49.69 % 50 % 50 %

(Jointly controlled company in 2010 and 2009)

Ugebladenes Fælles Opkrævningskontor I/S Albertslund 50 % 50 % 50 %

I/S Ugebladsdistributionen* Albertslund 50 % 50 % 50 %

Copenhagen Bombay Holding ApS Copenhagen - 33.3 % 33.3 %

Publizon A/S Aarhus 36 % 36 % 40 %

Oxygen Magasiner A/S Copenhagen 40 % - -

ABCiTY A/S Copenhagen 24.42 % - -

Norway Motor ANS Oslo 50 % 50 % 50 %

Filmweb AS Oslo 34 % 34 % 34 %

Biip.no AS Oslo

Egmont Serieforlaget AS owns 45 % 45 % 45 %

TV 2 AS owns 45 % 45 % 45 %

Norges Televisjon AS Oslo

TV 2 Gruppen AS owns 33.3 % 33.3 % 33.3 %

RiksTV AS Oslo


Norges Mobil TV AS Oslo


Sweden Golfresan AB Stockholm 24.7 % 24.7 % 24.7 %

Finland Matila Röhr-Nordisk Oy Helsinki 30 % 30 % 30 %

HD-Post Oy Helsinki 40 % 40 % 40 %

United Kingdom Wendy Promotion Ltd. London 50 % 50 % 50 %

* Danish partnerships forming part of associates do not prepare official annual reports.



76

Income Statement of the Egmont Foundation(1.000 EURk)

Income Statement of the Egmont Foundation

Note 2011 2010

Royalty income, etc. 3,940 4,624

2 Personnel costs (161) (165)

Other external expenses (868) (962)

Operating profit 2,911 3,497

Dividends from investments in subsidiaries 4,842 0

Financial income 853 693

Financial income from assets of the charitable and liquid reserve funds 0 104

Financial expenses (40) (557)

Profit before tax 8,566 3,737

3 Tax on profit for the year (382) (918)

Net profit for the year 8,184 2,819

Distribution of net profit

Transfer to reserve fund 1,637 545

Transfer to charitable fund 4,910 0

Transfer to liquid reserve fund 1,637 2,274

Total 8,184 2,819

77

Balance Sheet of the Egmont Foundation at 31 December(1.000 EURk)

Balance Sheet of the Egmont Foundation at 31 December

Note Assets 2011 2010

4 Investments in subsidiaries 181,699 181,214

5 Investments in associates 252 252

Financial assets 181,951 181,466

Total non-current assets 181,951 181,466

Receivables from group enterprises 105,535 103,847

Other receivables 292 4,484

Receivables 105,827 108,331

Securities 565 565

Cash and cash equivalents 469 1,613

Total current assets 106,861 110,509

TOTAL ASSETS 288,812 291,975

Equity and liabilities 2011 2010

6 Capital fund 29,593 29,513

7 Reserve fund 230,678 230,701

8 Charitable fund 11,628 10,630

9 Liquid reserve fund 4,588 4,114

Total equity 276,487 274,958

Pensions 397 380

Non-current liabilities 397 380

Payables to group enterprises 170 359

Donations committed but not yet paid 8,424 9,126

Other payables 3,334 7,152

Current liabilities 11,928 16,637

Total liabilities 12,325 17,017

TOTAL EQUITY AND LIABILITIES 288,812 291,975

78 Notes of the Egmont Foundation (EURk)

1 Accounting policies

The financial statements of the Egmont Foundation have been prepared in accordance with the provisions of the

Danish Financial Statements Act applying to class C enterprises (large) and the financial reporting requirements of the

Foundation’s Charter.

The accounting policies have been changed such that investments in subsidiaries and associates, which were previously

recognised according to the equity method, are now measured at cost. As a consequence of this change, value

adjustments to investments and equity have been reversed. Comparative figures have been restated. The change has

been introduced to achieve better coherence between the Foundation’s financial statements and the provisions of the

Charter concerning distribution of net profit. The effect is a EUR 135.5 million reduction of equity at 1 January 2010;

see note 7.

No cash flow statement has been included for the Egmont Foundation, as reference is made to the consolidated cash

flow statement.

Royalty income, etc.

Royalties received are accrued and recognised as income in accordance with the concluded agreement.

Investments in subsidiaries and associates

Investments in subsidiaries and associates are measured at cost. Where cost is lower than the recoverable amount,

impairments are made to this lower value.

Dividends

Dividends from investments in subsidiaries and associates are recognised in the financial year in which the dividend is

declared, typically at the time when the general meeting approves the distribution of dividend by the relevant company.

To the extent that the dividend distributed exceeds accumulated earnings after the acquisition date, dividend is

recognised as a reduction of the cost of the investment.

Equity

Profit is distributed according to the Foundation’s Charter. The Charitable Activities’ donations and associated expenses

are charged directly to the liquid reserve fund under equity.

The Foundation’s equity consists of a capital fund and a reserve fund intended for the Commercial Activities. The capital

fund is an undistributable reserve, while the reserve fund comprises distributable reserves. The charitable fund serves to

ensure the existence of funds required for the Egmont Foundation’s Charitable Activities. The liquid reserve fund is the

amount which is to be used for charitable purposes under the Foundation’s Charter within the scope of the Charitable

Activities.

In the calculation of tax, due allowance is made for the deductibility of charitable donations made according to the

Egmont Foundation’s Charter. These are charged to equity. Tax provisions for future donations are also taken into

account. Provision for deferred tax is made in case the Egmont Foundation does not expect to use liquid funds for

charitable purposes equal to the tax provisions.

79Notes of the Egmont Foundation (EURk)

2 Personnel costs 2011 2010

Wages and salaries (107) (143)

Pensions (37) (37)

Adjustment of pension obligation (17) 15

Total (161) (165)

Compensation paid to the Board of Trustees amounted to 124 in 2011 (2010: 124), of which 60 (2010: 60) was included in

the costs of the Charitable Activities.

The Management Board of the Foundation is also employed by Egmont International Holding A/S, which pays all salaries

to the Management Board. The Foundation pays an overall fee to Egmont International Holding A/S for this administration.

3 Tax on profit for the year 2011 2010

Calculated royalty tax for the year (382) (918)

Total (382) (918)

Tax on profit for the year consists of royalty tax.

4 Investments in subsidiaries 2011 2010

Cost at 1 January 181,214 181,528

Foreign exchange adjustments 485 (314)

Cost at 31 December 181,699 181,214

Value adjustments at 1 January 0 135,595

Change in accounting policies 0 (135,595)

Value adjustments at 31 December 0 0

Carrying amount at 31 December 181,699 181,214

5 Investments in associates 2011 2010

Cost at 1 January 252 252

Foreign exchange adjustments 0 0

Cost at 31 December 252 252

Investments in associates consist of 50 % of the equity in I/S Ugebladsdistribu tionen, Albertslund.

6 Capital fund 2011 2010

Balance at 1 January 29,513 29,564


Balance at 31 December 29,593 29,513

80 Notes of the Egmont Foundation (EURk)

7 Reserve fund 2011 2010



Change in accounting policies 0 (135,595)

Transfer from distribution of net profit 1,637 545

Transfer to liquid reserve fund (2,287) (671)


8 Charitable fund 2011 2010



Transfer from distribution of net profit 4,910 0

Transfer to liquid reserve fund (3,941) (1,717)


Use according Use according 9 Liquid reserve fund to articles 6-10 to article 11 Total

Balance at 1 January 2010 5,794 415 6,209

Foreign exchange adjustments (10) 0 (10)

Used for charitable purposes (5,284) (470) (5,754)

Costs (993) 0 (993)

Transfer from reserve fund 604 67 671

Transfer from charitable fund 1,717 0 1,717

Transfer from distribution of net profit 2,048 226 2,274

Balance at 31 December 2010 3,876 238 4,114

Foreign exchange adjustments 11 1 12

Used for charitable purposes (5,939) (466) (6,405)

Costs (998) 0 (998)

Transfer from reserve fund 2,058 229 2,287

Transfer from charitable fund 3,941 0 3,941

Transfer from distribution of net profit 1,473 164 1,637

Balance at 31 December 2011 4,422 166 4,588

The liquid reserve fund is the amount which is to be used for charitable purposes under the Foundation’s Charter within the

scope of the Charitable Activities.

81Board of Trustees and Management Board of the Egmont Foundation

Board of Trustees and Management Board of the Egmont FoundationBOARD OF TRUSTEES

Mikael Olufsen (Chairman)Director, born 1943, took office 1993Member of the Boards of TryghedsGruppen smba (CM), Tryg A/S (FM), Tryg Forsikring A/S (CM), Malaplast Ltd., Thailand (CM), Advisory Board to Careworks Africa Ltd. (CM), Gigtforeningen (CM), WWF Verdensnaturfonden, Danmark-Amerika Fondet

Steen Riisgaard (Vice Chairman)CEO, Novozymes A/S, born 1951, took office 2002Member of the Boards of WWF Verdensnaturfonden (CM), Rockwool International A/S (VC), ALK-Abello A/S, CAT Science A/S

Ulrik BülowCEO, Otto Mønsted A/S; CEO, House of Business Partners A/S, born 1954, took office 2003Member of the Boards of GateHouse A/S (CM), Intersport Danmark A/S (CM), Arator A/S (CV), Oreco A/S, Plaza Ure & Smykker A/S, Royal Unibrew A/S, Tivoli Friheden A/S, Toms Gruppen A/S, Gigtforeningen

Torben Ballegaard SørensenDirector, born 1951, took office 2006Member of the Boards of CAT Forsknings- og Teknologipark A/S (CM), Tajco Group A/S (CM),Thomas A/S (CM), Realfiction ApS (CM), Monberg & Thorsen A/S (VC), Systematic A/S (VC), LEGO A/S, Pandora A/S, AS3 Companies A/S, AB Electrolux, Sweden

Jeppe SkadhaugeAttorney and partner, Bruun & Hjejle, born 1954, took office 2009Member of the Boards of Blindes Støttefond (CM), Tømmerhandler Johannes Fogs Fond (VC),

the Danish Arbitration Association (CM), the Council of the Danish Bar and Law Society, the Danish Institute of Arbitration

Lars-Johan JarnheimerDirector, born 1960, took office 2011Member of the Boards of BabyBjörn AB (CM), Sweden; BRIS (Children’s Rights in Society) (CM), Sweden; Arvid Nordquist HAB, Sweden; CDON-Group AB, Sweden, INGKA Holding BV, the Netherlands Anna von LowzowJournalist and film director, born 1961, took office 1996

Peder HøgildOperator supervisor, born 1958, took office 2009

Marianne Oehlenschlæger HR consultant, born 1958, took office 2011

MANAGEMENT BOARD

Steffen KraghPresident and CEO, born 1964Member of the Boards of Nykredit Realkredit A/S (VC), Nykredit Holding A/S (VC), Foreningen Nykredit, Cappelen Damm Holding AS (CM), Norway

Hans J. CarstensenChief Financial Officer, born 1965

CM: Chairman, VC: Vice Chairman.

All information as of 26 March 2012.

egmont annual report 2011

Documents

egmont foundationvognmagergade

egmont magazines

egmont books

egmont foundationannual

egmont kids media

egmont nordisk film

income statement

board of trustees