financial statements2015 · . 1 financial statements 2015 table of contents report of the board of...
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FINANCIAL STATEMENTS
2015
www.ixonos.com
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1 Financial statements 2015
Table of contents Report of the Board of Directors 2Key figures 10Calculation of key figures 11Information about shares, shareholders and options 12
Consolidated financial statements, IFRS Consolidated comprehensive income statement 14Consolidated balance sheet 15Consolidated cash flow statement 16Consolidated statement of changes in shareholders’ equity 17Accounting policies for the consolidated financial statements 18
Parent company financial statements, FAS Parent company income statement 50Parent company balance sheet 51Parent company cash flow statement 52Parent company statement of changes in shareholders’ equity 53Accompanying notes to the parent company financial statements 55Signatures to the financial statements and to the report of the Board of Directors 60Auditors´ report 61
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2 Financial statements 2015
Report of the Board of Directors
COMPANY BALANCE SHEET STRENGTHENED SIGNIFICANT-LY THROUGH FINANCING ARRANGEMENT. In 2015 the main actions of the Board of Directors were linked to renewing com-pany strategy and management group as well as continuously securing the company’s financial situation. The company’s cost structure was further developed at the same time that the service-offering portfolio was renewed. The company strength-ened its user research and design know-how by acquiring the Finnish privately owned company Cresense.
When the company moved into the era of the new manage-ment in July 2015, forming the new Consulting Services unit alongside Design- and Technology units sharpened the com-pany’s strategy. This renewed the company’s offering to serve customers in different industries even more diversely than be-fore. At the same time the company’s vision “Dream-Design-De-liver”, was updated to “Discover-Design-Deliver”. The Cresense acquisition did especially strengthen the “Discover” part.
Finland, USA and UK remained as the main markets, and Sin-gapore joined as a new market. The offering is similar on all markets offering Design-, Technology- and Consulting Services as a combination or separately.
The company’s measures to restore the profitability contin-ued from the previous year by cutting costs, and by simplifying the structure of the company. The size of the management team was reduced from six to three members.
The decrease in turnover did again pose challenges to the company’s operations. Renegotiation of loans and capitaliza-tion restructured the balance sheet. Even though the operating profit loss increased from the previous year, the net result did improve due to the financing arrangement.
EVENTS DURING THE FINANCIAL PERIOD
Market events in the financial period. During the financial year we have strengthened the development done through user re-search and design. Since the entire industry has become more design oriented we organized IXD-events in San Francisco and Helsinki. The events acted as a meeting point for design, technol-ogy and business. The awards and appreciation that the solutions we have designed together with our customers have earned dur-ing the fiscal year, are proof of the company’s change towards a service house combining consultancy, design and technology:
• Al Jazeera Plus (AJ+) “Society of News Design” nomination – Top 10 global news service for mobile devices
• AJ+ nomination in the Webby Awards – mobile applications category
• Al Jazeera America nomination in Webby Awards – online movie and video category
• CES Innovation of the Year award for Samsung Galaxy Tab S. Samsung Galaxy Tab S utilises the patent pending Ixonos SuperApp™ innovation.
• Consumer Electronics Show “Best of Show” for Hewlett Packard Sprout. Innovation honouree at Consumer Electronics Show.
• LG webOS – nomination in the TV Connect Indusrty Awards 2015 – Best TV Experience Enhancement category.
Ixonos Super AppTM, which is for example utilised in the Sam-sung Galaxy Tab Pro device, was granted a patent in the USA in the end of 2015. This innovative and versatile application frame-work is still interesting our customers because of the opportuni-ties for enhanced user experience that it provides.
During the year we also released new customer references. Most noted within the industry were:• The new IVI system that Honda launched in its vehicles in
Europe use the Ixonos Experience Store for AutomotiveTM and is designed by Ixonos.
• The online store that we developed for Stockmann.• The long-term service design and development work to digi-
talise the cruise experience that we have done with Viking Line was launched in the autumn 2015. Especially the design has earned us several awards and honours.
• The multichannel shopping solution that we have done to-gether with Sherri Hill. When coming up in the spotlight on New York Fashion Week, it will allow a completely new way for consumers to participate in Fashion Week and in the dif-ferent stages of the shopping experience.
We did increase our added value and competitiveness by part-nering up with leading actors in the industry.• We partnered with Maxicaster to bring new OTT (Over-the-
top) services to a new level. OTT services allow the delivery of film and TV content via the Internet, without requiring users to subscribe to a traditional cable or satellite pay-TV service.
• Our customer services got a strong partnership in Gigya the cloud service for social media identity and customer man-agement.
• To respond to the global increase in video distribution, we strengthened our Media solutions with Brightcove partnership.
• Concerning Industrial Internet our strategy is to choose the correct platform or platforms on top of which we will build our offering. We will announce our chosen IoT platforms and partnerships during Q1/2016.
New registration document and securities note on March 3, 2015. The Finnish Financial Supervisory Authority approved on March 3, 2015, the Ixonos Plc’s securities note related to the Com-pany’s directed share issue announced on February 10, 2015.
Public takeover bid of Ixonos Plc’s shares. On February 10, 2015 the new majority owner of Ixonos, Tremoko Oy Ab an-nounced a public takeover bid. Tremoko Oy Ab, a limited liabil-ity company in private Finnish ownership, acquired on February 10, 2015 altogether 49,008,088 shares of Ixonos Plc from Turret Oy Ab and Holdix Oy Ab. In addition, Tremoko subscribed for altogether 96,670,000 new shares of Ixonos in a directed share issue decided upon by Ixonos’s Board of Directors.
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3 Financial statements 2015
Thereby Tremoko owned altogether 145,678,088 of Ixonos’s shares and, thus, Tremoko’s share of ownership and votes rose to altogether 71.8 per cent of all of Ixonos’s shares and votes.
As a result of the share acquisition and the share subscrip-tion, an obligation to launch a public takeover bid for all other shares of Ixonos and for securities entitling thereto were formed to Tremoko Oy Ab, as referred to in Chapter 11 Section 19 of the Finnish Securities Markets Act.
The offer of Tremoko was published on March 2, 2015 and was valid until March 24, 2015. The payment offered for the shares was EUR 0.06 in cash per each share. The payment of-fered for the options was EUR 0.008 for options marked with IV/A in the option Scheme 2011 and EUR 0.017 for options marked with IV/C. The payment offered for options marked with 2014A in the Option Scheme 2014 was EUR 0.010.
The Board of Directors of the company published their state-ment on the mandatory takeover bid made by Tremoko Oy Ab on March 9, 2015. The statement was based on the overall as-sessment made by the qualified and independent members. Paul Ehrnrooth, member of the board of the company, did not participate in the assessment since Turret Oy Ab, which can be described as a company in which Paul Ehrnrooth exercises con-trol, owns 65 per cent of the bidder’s shares and votes. In order to assess the takeover bid, the Board of Directors acquired from an independent expert, Fairness Opinion a statement on the reasonableness in economic terms of the payment offered for the shares from the perspective of all shareowners.
Tremoko Oy Ab announced on March 26, 2015 that the 20,454,656 shares tendered during the offer period repre-sented approximately 10.1 per cent of all of Ixonos shares and resulting votes. Tremoko’s share of ownership of the shares and votes of Ixonos Plc was therefore altogether 166,132,744 shares, i.e. approximately 81.8 per cent.
Moreover, a total of 1,540,000 options were offered to Tremoko. Tremoko has the opportunity to raise its ownership to approximately 82.0 per cent of all Ixonos Shares and votes by using the said options to subscribe for Ixonos Shares.
Annual General Meeting on April 29, 2015. The Annual General Meeting of Ixonos Plc was held on April 29, 2015. Minutes of the Annual General Meeting and decisions taken are available on the company’s website, www.ixonos.com.
Extraordinary general meeting on December 2, 2015. On No-vember 11, 2015 the board of Ixonos published an invitation of Ixonos Plc’s extraordinary general meeting to be held on De-cember 2, 2015. The board of directors proposal was that the extraordinary general meeting authorizes the Board to decide on a paid share issue and on granting option rights and other special rights entitling to shares that are set out in Chapter 10 Section 1 of the Finnish Limited Liability Companies Act (LLCA) or on the combination of some of the aforementioned instru-ments in one or more tranches. The total number of new shares to be issued pursuant to the authorisation may not exceed 210,000,000 shares, which is equivalent to approximately 100 per cent of all company shares at the time of convening the Extraordinary General Meeting.
The general meeting authorized the Board to decide on a paid share issue as per their proposal.
Share rights issue on December 2, 2015. On December 2, 2015 the board of Ixonos decided on a rights issue in a maximum amount of approximately EUR 8.2 million. The subscription price was EUR 0.06 per each share. The largest owner of the compa-ny, Tremoko Oy Ab, gave a commitment to subscribe for shares that are not otherwise subscribed. A total amount of 136,582,157 shares were subscribed and the gross proceeds raised by the company were approximately EUR 8.2 million. New shares were registered with the Finnish Trade Register on December 30, 2015.
New Registration document and securities note on December 3, 2015.The Finnish Financial Supervisory Authority approved on December 3, 2015, the Ixonos Plc’s securities note related to the Company’s directed share issue announced on December 2, 2015. The Registration Document is valid for 12 months after its approval.
A directed share issue and financing arrangement on Decem-ber 22, 2015. The Board of Directors of the Company decided on a Directed Share Issue in derogation of the shareholders’ pre-emptive subscription right, on the basis of the authorisa-tion of the Annual General Meeting 29 April 2015, on issuing 6,856,345 new Company shares for subscription by Nordea Bank Finland Plc, Elo Mutual Pension Insurance and Fennia Mutual Insurance Company for the subscription price of EUR 0.085 per share, altogether worth approximately EUR 0.58 mil-lion. The subscription price of a share was decided by parties as part of the total financing arrangement. In the Directed Share Issue Nordea Bank Finland Plc, Elo Mutual Pension Insurance and Fennia Mutual Insurance Company were entitled to pay the subscription price of the Shares they subscribe for by setting off claims they have from the Company. All 6,856,345 new shares were subscribed and new shares were registered with the Finn-ish Trade Register on December 30, 2015.
New guidance. Ixonos published new market guidance on Oc-tober 13, 2015. The company forecasted the turnover for 2015 to be between 16-18 million Euros. The company assessed its oper-ating result to decrease in comparison to 2014 and its operative cash flow for the year to be negative.
Previously the company assessed that its operating result be-fore non-recurring items was expected to improve compared to 2014. The cash flow was expected to remain negative but to improve in the second half of the year 2015 in comparison to beginning of the year.
Improving operational efficiency. On January 22, 2015 Ixonos started co-operational negotiations in order to secure its produc-tion efficiency. The negotiations concerned the personnel in Jy-väskylä, excluding those who performed their work at customer’s premises. On March 9, 2015 Ixonos informed that the negotia-tions had been concluded and that a maximum of 20 people will be made redundant. Ixonos continues its operations in Jyväskylä.
On March24, 2015 Ixonos started co-operational negotiations with the aim of adjusting the personnel costs. The negotiations concerned the whole personnel in Finland, excluding the office in Jyväskylä.
On April 8, 2015 Ixonos informed that the negotiations had been concluded. As a result, 15 persons were temporary laid-off
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4 Financial statements 2015
(with maximum duration of 90 working days). 8 of these tempo-rary lay-offs were part-time in nature. In addition, 4 permanent lay-offs were implemented in roles where there were perma-nently diminished grounds for work continuation.
Changes in the Management Team. In the later half of the year 2015 the company reduced the size of the Management Team to three members. The company management team consists of CEO Sami Paihonen, COO Teppo Kuisma, and CFO Kristiina Simola.
During the fiscal year the following changes have taken place:• Sami Paihonen was appointed Chief Executive Officer (CEO)
on July 1, 2015. He succeeded Esa Harju who resigned on August 31, 2015.
• Teppo Kuisma was appointed Executive Vice President on July 1, 2015.
• Chief Financial Officer (CFO) Mikael Nyberg resigned on May 23, 2015 and the interim CFO Pekka Pylkäs acted as CFO during June 1 – September 30. Pekka Pylkäs will continue as a Member of the Board.
• Kristiina Simola was appointed as CFO on October 1, 2015. • Marko Tiesmäki (SVP, Sales) left the company on July 3, 2015 • Bo Lönnqvist (SVP, Technology) resigned on August 14, 2015.
OPERATIONS. Ixonos is a service company that combine design and technology in a versatile way. We offer creative and versa-tile digital solutions and consulting services for several customer segments. The most important part of our services is a deep un-derstanding of, and our employees’ high knowledge in, our cus-tomer’s digital challenges, such as utilising digitalisation in their business and operations.
We create new digital services for our customers. These ser-vices are based on the latest technologies and trends that af-fect their business. Premium user experience requires design and technology to work seamlessly together and Ixonos strive to be the leading expert on that.
We have updated our Dream – Design – Deliver vision to Dis-cover – Design – Deliver in order to match the user research in the initial phases, strategic design and defining feasible tech-nology. The basic idea is to find the right components that are needed to build the customer design work, in order to ensure a premium user experience.
Our operations are centralised in Finland, USA and Great Brit-ain and increasingly in Singapore. The software development is mostly based in Finland but it has been strengthened also in the other locations. There are Design-functions in all locations.
Our Design services consists of digital-, mobile- and web de-sign as well as service- and industrial design. We offer design services all the way from design strategy and user research to designing visuals and interaction and further to workshops, de-signing prototypes and usability testing. All our design innova-tions are implemented on different devices and platforms, al-ways striving for the best possible implementation that can be done within the time frame requested by the customer.
As a technology company we have a deep knowledge in developing creative software solutions for embedded systems and software. We use open standardised technologies (like Linux, Android, iOS, Windows). We combine knowledge in soft-ware development with world-class technology competence,
deep knowledge in user interface- and usability design and top class project management skills. Our technology expertise comprise for example of wireless connectivity, RF-, audio-, im-aging-, cloud- and video technologies.
As a new unit and service we have founded the Consulting Services-unit that generates specifications for end-to-end solu-tions to meet our customer’s challenges. Concurrently we help our customers to understand new kinds of business models and competition and how these can be met on the long term.
Our customer segments can be divided into following:• Industrial Internet• Media and Online services• Smart devices• Cloud services• Consultative services
ORGANISATION. Our organisation consist of the following functions:• Design, that is responsible of holistic design capabilities that
generate strategic service design, deep understanding of users and innovative design of user interfaces and product design.
• Technology, that is responsible of implementing technical solutions, software development and customer projects and delivering them cost efficiently.
• Consulting services, that is responsible of the specification of end-to-end projects and steering them as a consultative service
• New sales, Marketing and Regions that is responsible of new sales, new customers, marketing and steering the foreign op-erations.
Group Services that is supporting the entire organisation con-sists of Finance, HR, It and Legal functions.
LOCATIONS. Our offices are situated in our main markets Fin-land, USA, Great Britain and Singapore. • Our Technology development sites are mainly located in Fin-
land. Additionally we have customer-facing technical person-nel in USA and Great Britain.
• Our Design Studios are located in Finland, USA, Great Britain and Singapore.
• Our Sales offices are located in Finland, USA and Great Britain.
SEGMENTS. Ixonos reports its business as one single segment.
TURNOVER. The company’s turnover during the fiscal year was EUR 17.0 million (2014: EUR 23.9 million, 2013: EUR 33.4 million), which is 29.0 percent lower than in the comparison period.
The lower turnover was mainly caused by challenges in the do-mestic market and there has been delays in project continuations.
During the fiscal year, no single customer generated a domi-nating share of the turnover, but the revenue of one customer exceeded 10%.
FINANCIAL RESULT. The operating result for the fiscal year was EUR -8.7 million (2014: EUR -7.4 million, 2013: EUR -13.4 million) and result before tax was EUR -5.7 million (2014: EUR -8.5 mil-lion, 2013: EUR -14.3 million). The result for the fiscal year was EUR -10.6 million (2014: EUR -8.3 million, 2013: EUR -12.5 mil-lion) Earnings per share were EUR -0.05 (2014: EUR -0.09, EUR
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5 Financial statements 2015
2013:- 0.65). Cash flow per share from operating activities in the fiscal year was EUR -0.03 (2014: EUR -0.06, 2013: EUR -0.13).
The result of the financial period decreased due to write off of deferred tax assets by -4.9 MEUR made Q2/2015 and low-er than estimated turnover. The result of the financial period strengthened because of the partial waiver granted from the financiers, value 4.0 million euro during Q4/2015.
RETURN ON CAPITAL. The group’s total shareholders’ equity was EUR 2.7 million and return-on-equity ratio was -1421.9 per-cent. Due to negative value of total shareholders’ equity the return-on-equity ratio has not been provided for the year 2014.
Return on investment (ROI) was -29.9 per cent (2014: -46.4 per cent, 2013: -75.4 per cent).
INVESTMENTS. Gross investments during the fiscal year to-talled EUR 1.5 million (2014: EUR 1.1 million, 2013: EUR 0.5 mil-lion). Investments consisted of capitalisation of R&D expendi-ture in media and industrial internet businesses, investments in fixed assets and Cresense acquisition.
RESEARCH AND DEVELOPMENT. The group’s R&D expenses during the financial period 2015 were EUR 1.8 million (2014: EUR 2.4 million, 2013: EUR 1.2 million). The profit for the financial pe-riod includes EUR 1.7 million (2014: EUR 1.6 million, 2013: EUR 1.2 million) in R&D expenses. A total of EUR 0.1million (2014: EUR 0.8 million, 2013: EUR 0 million) in R&D expenses was ca-pitalised during the financial period. The R&D expenses during 2015 were primarily associated to the media and industrial in-ternet business areas. Based on re-evaluation of R&D projects with the new strategy EUR -0.2 million of capitalized R&D pro-jects were written down during the financial year.
BALANCE SHEET AND FINANCING. The balance sheet totalled to EUR 18.3 million (2014: EUR 21.9 million, 2013: EUR 25.8 mil-lion). Shareholders’ equity was EUR 2.7 million (2014: EUR -1.2 million, 2013: EUR 3.7 million). The equity to total assets -ratio was 14.8 per cent (2014: -5.6 per cent, 2013: 14.2 per cent). The group’s liquid assets at the end of the fiscal year amounted to EUR 1.9 million (2014: EUR 0.3 million, 2013: EUR 0.5 million). Non-controlling interest of the equity was EUR 0.2 million (2014: EUR 0.2 million, 2013: EUR 0.2 million).
The change in shareholders’ equity was caused by negative financial result, write-off of company’s deferred tax assets and the rights issues and the directed share issues completed dur-ing the year.
At the end of the fiscal year, the balance sheet included EUR 3.0 million (2014: EUR 10.5 million, 2013: EUR 9.6 million) in loans. This amount covers the overdrafts in use. In addition to this the company has received approximately EUR 7.2 million new loans from Tremoko. The loan agreements related to the Arrangement include covenants regarding equity ratio, EBITDA and net debts/EBITDA which will be considered at the first time on 31 December, 2016.
On February 10, 2015 the company repaid its loans amount-ing to EUR 2.3 million to Turret Oy Ab, a related party. At the same time the EUR 3.5 million long-term convertible bond and its interests were used to pay part of the directed share issue.
On February 10, 2015 the company also raised a EUR 4.0 mil-
lion loan guaranteed by its main owner Tremoko Oy Ab from financial institutions.The company made an announcement re-garding the financing arrangements on February 10, 2015.
On June 10, 2015 the company agreed upon EUR 1.0 million short term bridge loan with related party Turret Oy Ab, a related party, for working capital purposes.
On July 13, 2015 the company signed a credit facility agree-ment of EUR 3.0 million with its main owner Tremoko Oy. The company made an announcement regarding the financing ar-rangements on June 23, 2015 and July 14, 2015.
On October 29, 2015 the company has renewed its 1.0 million loan to Turret Oy Ab.
On October 29, 2015 the company raised a EUR 0.5 million short-term loan with Turret Oy Ab.
On December 2, 2015 the Board of Directors decided on a rights issue in a maximum amount of approximately EUR 8.2 million. The rights issue was subscribed in full. All 136,582,157 new shares were registered with the Finnish Trade Register on December 30, 2015. Additional information regarding the rights issue can be found in this interim report in the section “other events during the financial period”.
On December 22, 2015 the company made a financing agreement with its five financiers not related to its owners and Tremoko Oy Ab and its five financiers. The following actions re-garding the financing arrangement were carried out:
• The Financial Institutions granted in addition to other arrange-ments a partial waiver of the Company’s debts with the total value of approximately EUR 4 million.
• The company´s borrowed capital with interest was restructed and after the execution of the Arrangement, the Company has an approximately EUR 0.8 million financial institution loan from Nordea Bank Finland Plc. The loan have been granted a directly enforceable guarantee by Tremoko and its owners Turret Oy Ab and Holdix Oy Ab and a guarantee by Finnvera Plc and the company has received approximately amount of EUR 7.2 million new loans from Tremoko.
• The Board of Directors of the Company decided on a Directed Share Issue for subscription by financiers not related to the owners. 6,856,345 new Company shares were subscribed. The shares were registered with the Finnish Trade Register on December 30, 2015.
CASH FLOW. Consolidated cash flow from operating activities dur-ing the fiscal year was EUR -11.5 million (2014: EUR -5.8 million).
In order to reduce the turnaround time of its receivables the Group sells most of its Finnish account receivables. Out of the ac-counts receivables in the balance sheet on December 31, 2015, the group sold EUR 0.5 million (2014: EUR 1.3 million) to the financing companies during the beginning of January 2016. During 2015 EUR 10.2 million (2014: EUR 12.8 million) trade receivables were sold.
DEFERRED TAX ASSETS. The management assessed during the first half of the year the prerequisites for capitalizing the deferred tax assets. Due to continuing uncertainties in the markets, the management concluded that the conditions and certifying future views that need to be fulfilled to enable the company to continue capitalizing its deferred tax assets may not be assuredly verified. Based on this change of management
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6 Financial statements 2015
assessment the company decided not to capitalize the deferred tax assets and decided to write off the existing capitalized val-ues from its balance sheet, total of EUR -4.9 million.
GOODWILL. On December 31, 2015, the consolidated balance sheet included EUR 12.0 million in goodwill (2014: EUR 10.8 mil-lion). The before mentioned goodwill includes an addition of EUR 1.2 million as a result of the acquisition of Cresense Oy’s shares.
The following parameters were used in the goodwill impair-ment testing:
• The fiscal year of 4 years • WACC discount rate 10 per cent• 1 per cent growth estimate used for terminal value calculation
The company made an impairment test on December 31, 2015 confirming that there is no need for an impairment. The present value of future cash flows exceeded the carrying value of assets by EUR 15.8 million.
The present value of the cash flow calculation EUR 28 million is lower than the sum of the company’s financial liabilities EUR 10.7 million and the sum of the market price of the shares EUR 24.7 millions of December 31, 2015.
ACQUSITION OF CRESENSE OY. On the second half of 2015 the company has acquired the Finnish privately owned com-pany Cresense Oy in order to strengthen Ixonos’ position as an innovative digitalization and transformation partner by enforc-ing the company’s user research and design know-how. The corporate transaction was completed on September 2, 2015. As part of the aquisition, a total of 27 employees joined Ixonos.
In the transaction, all Cresense shares apart from shares owned by the company itself were transferred to the ownership of Ix-onos. Cresense Oy owns 300 own shares, which represents 14 per cent of the company’s total shares. As compensation, Ixonos issued a total of 7,142,860 new Ixonos shares in a directed share issue to be subscribed by the existing owners of Cresense Oy.
The sellers have subscribed all the shares that were offered in the share issue and Ixonos Board of Directors has approved the subscriptions. The shares represent 3.4 per cent of Ixonos shares and votes on December 31, 2015. The shares are regis-tered in the Trade Register and the shareholders’ register of the company and are entitled to full dividends possibly distributed by Ixonos and to other distribution of assets as well as carry other shareholder rights in the company. The shares of the sell-ers continuing to work for the group are subject to a selling and transfer restriction during a two (2) year period starting from the closing date. If certain prerequisites are met, the sellers will be entitled to an additional purchase price of EUR 380,000 at most. Ixonos may pay the possible additional purchase price in cash or as Ixonos shares.
The share issue was carried out by the decision of Ixonos’ Board of Directors on the authorization of the Annual General Meeting held on April 29, 2015. The share issue was carried out in order to develop the group’s business and to finance a corpo-rate transaction, therefore there was a weighty financial reason for the share issue and the deviation from the pre-emptive right of the shareholders within the meaning of the Finnish Limited Li-
ability Companies Act. The subscription price of the shares was EUR 0.07 per share. The subscription price has been defined as the mean price weighted with the trading amounts of the Ixonos share of the period June 26, 2015 – August 25, 2015. The sub-scription took place and Cresense Oy’s shares were transferred to Ixonos in connection with the execution of the acquisition.
In connection to the acquisition of Cresense Oy’s shares EUR 1.2 million was written under goodwill.
The acquisition of Cresense Oy responds to the customer de-mand to combine user research knowledge with digitalization. Through the acquisition Ixonos’ Dream-Design-Deliver concept can be evolved to a Discover-Design-Deliver business concept that serves the companys customers better. The increased of-fer book is believed to increase the united company’s turnover. In addition synergy advantage will be obtained by combining office facilities and utilizing the companies’ best practice and equipment.
PERSONNEL. The average number of employees during the fiscal year was 217 (2014: 320, 2013: 505) and in the end of the period 200 (2014: 264, 2013: 442) employees. In the end of the fiscal year, the Group had 161 employees (2014: 230, 2013: 312) stationed in Finnish companies, while Group companies in other countries employed 38 (2014: 34, 2013: 312). During the review period the number of employees decreased by 64. Em-ployee benefit costs during the fiscal year were EUR 15.8 million (2014: EUR 18.4 million, 2013: EUR 28.8 million).
SHARES AND SHARE CAPITAL
Share turnover and price. During the financial period, the high-est price of the company’s share was EUR 0.11 (2014: EUR 0.16) and the lowest price was EUR 0.05 (2014: EUR 0.05). The clos-ing price on December 31, 2015 was EUR 0.07 (2014: EUR 0.06). The weighted average price was EUR 0.06 (2014: EUR 0.11). The number of shares traded during the fiscal year was 52,023,432 (2014: 40,744,745), which corresponds to 14.7 per cent (2014: 38.3 percent) of the total number of shares at the end of the fiscal year. The market value of the share capital was EUR 24,749,543 (2014: EUR 5,953,558) at closing on December 31, 2015.
On February 10, 2015 the company realized a directed share issue. Tremoko Oy Ab, a related party, subscribed 96,670,000 shares at a price of EUR 0.06 per share corresponding to ap-proximately EUR 5.8 million.
In March 2015 in connection with Tremoko’s mandatory pub-lic takeover bid a total of 20,454,656 shares and 1,540,000 op-tions were transferred to Tremoko Oy Ab, whereby its owner-ship rose to 81.8 percent. With the options right the ownership percentage may be raised to 82.0 percent.
On September 2, 2015 Ixonos Plc issued a total of 7,142,860 new Ixonos shares in a directed share issue in connection with the acquisition of Cresense Oy. The shares were entered into the Trade Register on September 10, 2015 and were released for subscription in Nasdaq Helsinki on September 30, 2015 equal to the existing Ixonos shares. Some shares are subject to a lock-up period from six (6) months to two (2) years counting from the issuing date. After this share issue Ixonos Plc’s total amount of shares and votes increased to 210,126,396.
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7 Financial statements 2015
In December 2015 the company carried out a rights issue were all issued 136,582,157 new shares were subscribed and a directed share issue were all issued 6,856,345 new shares were subscribed. All new shares were registered in with the Finnish Trade Register on December 30, 2015. The new shares were combined with Ix-onos’s existing class of shares and were subject to public trading on the official list of NASDAQ Helsinki Ltd on January 4, 2016. Ixonos now has a total of 353,564,898 shares and votes.
Share capital. At the beginning of the fiscal year, the company’s registered share capital was EUR 585,394.16 and the number of shares was 106,313,536. At the end of the fiscal year, the re-gistered share capital was EUR 585,394.16 and the number of shares was 353,564,898.
The company has one share series and the company does not own its own shares in the end of the fiscal year.
OPTION PLANS 2011 AND 2014
2011 plan. The Board of Directors of Ixonos Plc decided on No-vember 30, 2011 to grant new options. This decision was based on the authorisation given by the Annual General Meeting on March 29, 2011.
The options were issued by December 31, 2011, free of charge, to a subsidiary wholly owned by Ixonos Plc. This subsidiary will distribute the options, as the Board decides, to employees of Ix-onos Plc and other companies in the Ixonos Group, to increase their commitment and motivation. Options will not be issued to members of the Board of Directors of Ixonos Plc or to the Ixonos Group’s senior management.
The options will be marked IV/A, IV/B and IV/C. A total of 600,000 options will be issued per option plan. According to the terms of the options, the Board of Directors decides how the op-tions will be divided between option series and, if needed, how undistributed options will be converted from one series to another.
Originally each option entitles its holder to subscribe for one new or treasury share in Ixonos Plc.
The exercise period for the IV/A options began on October 1, 2014, The option plans for IV/B options have been cancelled and for the IV/C options the exercise period will begin on Oc-tober 1, 2016. The exercise periods for all options will end on December 31, 2018. The exercise price for each option series is a trade volume weighted average price at NASDAQ OMX Helsinki. The exercise prices will be reduced by the amount of dividends, and they can also be adjusted under other circum-stances specified in the option terms.
In order to ensure the equal treatment of shareholders and the holders of stock options, the Board of Directors of Ixonos has, due to the Rights Offering in December 2015, adjusted the subscription ratios and the subscription prices of the Option Rights 2011 in accordance with the terms and conditions of the aforementioned option rights as follows:
The subscription ratio of stock options IV/A shall be amended to 8.287 and the subscription price shall be amended to EUR 0.2 per share. As regards stock options IV/C, the subscription ratio shall be amended to 8.287 and the subscription price shall be amended to EUR 0.1497 per share.
The total amount of shares is rounded down to full shares in connection with subscription of the shares and the total
subscription price is calculated using the rounded amount of shares and rounded to the closest cent. Due to the above men-tioned adjustments concerning stock options IV/A, the adjusted maximum total number of shares to be subscribed for based on the 2011 stock options shall be 4,971,966.
2014 plan. The Board of Directors of Ixonos Plc decided to issue stock options on February 18, 2014, on the basis of the authori-zation granted by the Extraordinary General Meeting held on October 30, 2013.
The stock options will be offered to the global management team and certain key personnel of Ixonos Plc and its subsidiar-ies for the purpose of improving commitment and motivation. The stock options will be marked as series 2014A, 2014B and 2014C. The aggregate number of stock options is 5,000,000. The Board of Directors will, in accordance with the terms and conditions of the stock options, decide on the allocation of the stock options between different series and, if necessary, on the conversion of stock options that has not been allocated into another series of stock options.
Each option entitles its holder to subscribe for one new or treasury share in Ixonos Plc. The share subscription period with 2014A stock options starts on March 1, 2016, with 2014B stock options on March 1, 2017 and with 2014C stock options on March 1, 2018. The share subscription period ends with all stock options on December 31, 2018. The share subscription price for each series is the volume weighted average price of the company’s share on the Helsinki Exchange during the period March 1 to May 31, 2014 for 2014A, January 1 to March 31, 2015 for 2014B and January 1 to March 31, 2016 for 2014C. The subscription price may be decreased with the amount of dividends paid and may also otherwise be subject to change in accordance with the terms and conditions of the stock options among others.
In order to ensure the equal treatment of shareholders and the holders of stock options, the Board of Directors of Ixonos has, due to the Rights Offering in 2015, adjusted the subscrip-tion ratios and the subscription prices of the Option Rights 2014 in accordance with the terms and conditions of the aforemen-tioned option rights as follows:
The subscription ratio of stoc options 2014A is 1.65 and the subscription price is EUR 0.0903 per share. The subscription ratio of stock options 2014B is 1.65 and the subscription price is EUR 0.06 per share.
The total amount of shares is rounded down to full shares in connection with subscription of the shares and the total sub-scription price is calculated using the rounded amount of shares and rounded to the closest cent. Due to the above adjustments, the adjusted maximum total number of shares to be subscribed based on the Option Rights 2014 shall be 8,250,000.
SHAREHOLDERS. On December 31, 2015, the company had 3,035 shareholders (2014: 4,045). Private persons owned 12.5 per cent (2014: 40.3 per cent) and institutions 87.5 per cent (2014: 52.8 per cent) and foreigners 0.54 per cent (2014: 1.9 per cent) and nominee registered ownership was 1.85 per cent (2014: 5.0 per cent) of all shares.
Tremoko Oy Ab, a related party, owns 82.17 percent of the company’s shares. With the options held by Tremoko the own-ership can be increased to 82.29 percent.
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8 Financial statements 2015
Related-party transactions. On February 10, 2015 in connection with the financing arrangement the company repaid the loans and interest amounting to EUR 2.3 million to Turret Oy Ab, a re-lated party. In the same arrangement Tremoko Oy Ab, a related party, used the EUR 3.5 million long term convertible loan and related interests, which had been transferred to it by Turret Oy Ab, as a partial payment for the shares subscribed.
On February 10, 2015 the company also withdraw loans of EUR 4.0 million in total from financial institutes that where se-cured by the company’s main owner Tremoko Oy Ab. The com-pany made an announcement concerning its financial arrange-ments on February 10, 2015.
On June 10, 2015 Ixonos withdraw an EUR 1.0 million short term loan from Turret Oy Ab.
During the reporting period Ixonos Finland Oy sold receiva-bles to Finance Link, a related party, for a total of EUR 0.9 million.
On July 13, 2015 the company signed a credit facility agree-ment of EUR 3.0 million with its main owner Tremoko Oy. The company made an announcement regarding the financing ar-rangements on June 23, 2015 and July 14, 2015.
On October 29, 2015 the company signed a short term loan agreement of EUR 500,000 with a related party.
On December 22, 2015 the company signed a loan agreement of EUR 7.16 million with Tremoko Oy Ab in connection with the total financial arrangement. All earlier loans withdrawn from related par-ties were paid back.
BOARD AUTHORISATIONS Annual general meeting April 29 2015, board authorisations. The Annual General Meeting on April 29 2015 authorised the Board to decide on a paid share issue and on granting option rights and other special rights entitling to shares that are set out in Chapter 10 Section 1 of the Finnish Limited Liability Companies Act or on the combination of some of the aforementioned instruments in one or more tranches on the following terms and conditions:
The number of shares to be issued under the authorisation may not exceed 40,596,706, which corresponds to approxi-mately 20 per cent of all company shares at the time of conven-ing the Annual General Meeting.
Within the limits of the aforementioned authorisation, the Board of Directors may decide on all terms and conditions applied to the share issue and to the special rights entitling to shares.
The Board of Directors are entitled to decide on crediting the subscription price either to the company’s share capital or, en-tirely or in part, to the invested unrestricted equity fund.
Shares as well as special rights entitling to shares may also be issued in a way that deviates from the pre-emptive rights of shareholders, if a weighty financial reason for this exists as laid out in the Limited Liability Companies Act. In such a case, the authorisation may be used to finance corporate acquisitions or other investments related to the operations of the company as well as to maintain and improve the solvency of the group of companies and to carry out a system for incentives.
The authorisation is effective until the Annual General Meet-ing held in 2016.
Authorising of the Board of Directors to acquire own shares. The Annual General Meeting authorised the Board to decide on
acquiring or accepting as pledge, a maximum of 20,298,353 own shares, which corresponds to around 10 per cent of the compa-ny’s total shares at the time of convening the meeting, using the company’s non-restricted equity. The acquisition may take place in one or more lots. The acquisition price will not exceed the high-est market price in public trading at the time of the acquisition. In executing the acquisition of its own shares, the company may en-ter into derivative, share lending and other contracts customary on the capital market, within the limits set by law and regulations. The authorisation also entitles the Board to decide on a directed acquisition, i.e. on acquiring shares in a proportion other than that of the shares held by the shareholders.
The company may acquire the shares to execute corporate acquisitions or other business arrangements related to the company’s operations, to improve its capital structure, or to oth-erwise transfer the shares or cancel them.
The authorisation includes the right for the Board of Direc-tors to decide on all other matters related to the acquisition of shares. The authorisation is effective until the Annual General Meeting held in 2016, yet no longer than until 30 June 2016.
EVENTS AFTER THE FINANCIAL PERIODAfter the balance sheet date, no significant events have taken place within the Group.
RISK MANAGEMENT AND NEAR-FUTURE UNCERTAINTY FAC-TORS. Ixonos Plc’s risk management aims to ensure undisturbed continuity and development of the company’s operations, sup-port attainment of the commercial targets set by the company and promote increasing company value. Details on the risk man-agement organisation and process as well as on recognised risks are presented on the company’s website at www.ixonos.com.
Changes in key customer accounts may have adverse effects on Ixonos’ operations, earning power and financial position. Should a major customer switch its purchases from Ixonos to its competitors or make forceful changes to its own operating model, Ixonos would have limited ability to, in the short term, ac-quire new customer volume to compensate for such changes.
The group’s turnover consists primarily of relatively short term customer contracts. Forecasting the starting dates and scope of new projects is from time to time challenging and at the same time the cost structure is fairly rigid. This may result in unex-pected fluctuation in turnover and profitability.
Part of the company’s business operations is based on fixed-price project deliveries. Fixed-price projects may include risks related to their duration and content. These risks are being managed by means of contract management as well as project management.
A significant part of the group’s turnover is invoiced in foreign currency. Risks related to currency fluctuation are managed through different means.
The company’s balance sheet includes a significant amount of goodwill, which may still be impaired should internal or ex-ternal factors reduce the profit expectations of the company’s cash flow. Goodwill is tested each quarter and, if necessary, at other times.
The company’s financial agreements have covenants at-tached to them. A covenant breach may increase the com-
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9 Financial statements 2015
pany’s financial expenses or lead to a call for swift partial or full repayment of non-equity loans. The main risks related to covenant breaches are associated with EBITDA fluctuation due to the market situation and with a potential need to increase the company’s working capital through non-equity funding. The company manages these risks by negotiating with financiers and by maintaining readiness for various financing methods.
The company’s existing working capital may not be sufficient to cover the company’s funding needs over the next 12 months. The company estimates that its working capital is expected to be sufficient to fund the company’s operations over the next 12 months if the sales development is better than the current forecast or the company is able to make larger cost savings than forecasted. A possible financial shortage remaining can be filled with bridge financing.
CORPORATE GOVERNANCE. Ixonos complies with the Finnish Corporate Governance Code, issued by the Securities Market Association (Arvopaperimarkkinayhdistys ry), as entered into force on 1 October 2015. The Corporate Governance Statement required by the Finnish Corporate Governance Code was is-sued on 16 March 2016 with information for 2015. The corporate governance statement is issued separately from the report of the board of directors and published on March 16, 2016.
LOANS TO AND FROM RELATED PARTIES. During the financial period 2010, members of Ixonos’ management established the limited liability company Ixonos Management Invest Oy for the purpose of share ownership pertaining to the management incen-tive plan. As part of this arrangement, Ixonos Plc granted Ixonos Management Oy a EUR 920,000 loan to fund the share acqui-sition. The interest rate of the loan corresponds to the twelve-month Euribor plus one per cent. The 93,526 shares acquired have been pledged to Ixonos Plc as security for the loan. The value of the loan has been written down in Ixonos Plc’s books.
On February 10, 2015 the company repaid its loans amount-ing to EUR 2.3 million to Turret Oy Ab, a related party. At the same time the EUR 3.5 million long-term convertible bond and its interests were used to pay part of the directed share issue.
On February 10, 2015 the company also raised a EUR 4.0 mil-lion loan guaranteed by its main owner Tremoko Oy Ab from financial institutions.The company made an announcement re-garding the financing arrangements on February 10, 2015.
On June 10, 2015 the company agreed upon EUR 1.0 million short term bridge loan with Turret Oy Ab, a related party, for working capital purposes.
On July 13, 2015 the company signed a credit facility agree-ment of EUR 3.0 million with its main owner Tremoko Oy. The company made an announcement regarding the financing ar-rangements on June 23, 2015 and July 14, 2015.
On October 29, 2015 the company has renewed its 1.0 million loan to Turret Oy Ab, a related party.
On October 29, 2015 the company raised a EUR 0.5 million short-term loan with Turret Oy Ab, a related party.
On December 22, 2015 the company made a financing agreement with its five financiers not related to its owners and Tremoko Oy Ab. In the financing arrangement the company´s borrowed capital was restructed and after the execution of the Arrangement, the company has an approximately EUR 0.8 million financial institution loan from Nordea Bank Finland Plc. The loan have been granted a directly enforceable guarantee by Tremoko and its owners Turret Oy Ab and Holdix Oy Ab and a guarantee by Finnvera Plc and the company has received approximately amount of EUR 7.2 million new loans from Tremoko.
PARENT COMPANY. The parent company Ixonos Plc had no turnover in 2015 or 2014. Operating profit was EUR −2.1 million (2014: EUR −2.4 million). Profit for the financial period was nega-tive, EUR −1.0 million (2014: EUR −3.4 million).
The balance sheet total was EUR 31.9 million (2014: EUR 28.9 million). Shareholders’ equity was EUR 20.1 million (2014: EUR 4.0 million). The equity ratio was 63.2 per cent (2014: 13.9 per cent). The liquid assets of the parent company at the end of the financial period stood at EUR 1.3 million (2014: EUR 0.01 million).
The number of personnel averaged 7 (2014: 10) during the financial period. At the end of the period, the company had 6 (2014: 10) employees. Salaries and fees came to EUR 1.0 million (2014: EUR 1.0 million), pension expenses were EUR 0.1 million (2014: EUR 0.2 million) and other indirect personnel costs to EUR 0.0 million (2014: EUR 0.0 million). The personnel expenses of the company totalled EUR 1.1 million (2014: EUR 1.2 million), ap-proximately 24.5 per cent of total expenses (2014: 23.9 per cent).
Cash flow from operating activities during the financial period was EUR -12.9 million (2014: EUR -6.9 million).
FUTURE PROSPECTS. The operating profit of the company is expected to improve compared to 2015.
THE BOARD OF DIRECTORS’ PROPOSAL TO THE ANNUAL GENERAL MEETING. The Board of Directors of Ixonos Plc pro-poses to the Annual General Meeting that the distributable funds are left in shareholders’ equity and that no dividend for the financial period 2015 will be paid to shareholders. The par-ent company’s distributable funds on 31 December 2015 are EUR 19,344,732.
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10 Financial statements 2015
Consolidated key figures
IFRS IFRS IFRS IFRS IFRS
1.1.-31.12.2015 1.1.-31.12.2014 1.1.-31.12.2013 1.1.-31.12.2012 1.1.-31.12.2011
Turnover, 1000 EUR 17 001 23 939 33 397 56 852 81 408
Turnover, increase % -29,0 % -28,3 % -41,3 % -30,2 % -4,2 %
EBITDA, 1000EUR -7 392 -4 646 -9 014 -7 491 6 146
Percentage of turnover -43,5 % -19,4 % -27,0 % -13,2 % 7,5 %
Operatingprofit,1000EUR -8702 -7424 -13399 -24317 1937
Percentage of turnover -51,2 % -31,0 % -40,1 % -42,8 % 2,4 %
Profitbeforetax,1000EUR -5656 -8477 -14289 -25018 1409
Percentage of turnover -33,3 % -35,4 % -42,8 % -44,0 % 1,7 %
Balance sheet total, 1000 EUR 18 347 21 897 25 843 33 331 52 970
Return on equity, per cent -1421,9 % -672,5 % -224,2 % -119,0 % 3,2 %
Return on investment, per cent -29,9 % -46,4 % -75,4 % -81,6 % 5,4 %
Interest-bearingliabilities,1000EUR 10685 17266 14265 12606 9555
Financial assets, cash and cash equivalents, 1000 EUR 1 901 255 496 477 1 466
Net Gearing 324,4 % -1397,7 % 375,1 % 162,0 % 27,5 %
Equity ratio 14,8 % -5,6 % 14,2 % 22,5 % 55,6 %
Investments,1000EUR 1 477 1 138 459 3 157 2 940
Percentage of turnover 8,7 % 4,8 % 1,4 % 5,6 % 3,6 %
Averagenumberofemployees 217 320 505 824 1118
Numberofemployeesattheendoftheperiod 200 264 442 610 1031
Key figures on shares 1.1.-31.12.2015 1.1.-31.12.2014 1.1.-31.12.2013 1.1.-31.12.2012 1.1.-31.12.2011
Earnings per share, diluted, EUR*) -0,05 -0,09 -0,65 -2,13 0,09
Earnings per share, undiluted, EUR*) -0,05 -0,09 -0,65 -2,13 0,09
P/E ratio 9,03 -2,08 -0,12 -0,15 5,93
Share price at the end of the period, EUR 0,07 0,06 0,08 0,48 0,80
Numberofshares,adjustedforissues,average 194418208 96651722 19131798 15102484 15102484
Numberofsharesattheendoftheperiod 353564898 106313536 75858359 15102484 15102484
Numberofshares,adjustedforoptiondilutionandissue,average 194 418 208 96 651 722 19 131 798 10 341 001 10 341 001
Dividend per earnings, % 0,0 % 0,0 % 0,0 % 0,0 % 0,0 %
Dividend per share, EUR 0,00 0,00 0,00 0,00 0,00
Effectivedividendyield,% 0,0% 0,0% 0,0% 0,0% 0,0%
Equity per share, EUR 0,01 -0,01 0,05 0,48 1,94
*) The number of the shares and related key performance indicators of year 2015 are affected by rights issue in February and December 2015 and
acquisition of Cresense.
There is no dilution 31.12.2015.
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11 Financial statements 2015
Calculation of key figures
EBITDA =Earningsbeforeinterest,taxesdepreciatonandamortizaton
Return on equity = Profitfortheperiod
Equity, average x100
Return on investment = Profitbeforetax+financialexpenses
Balancesheettotal−non-interest-bearingliabilities,average x100
Equity ratio = Shareholders’ equity
Balancesheettotal−advancesreceived x100
Net Gearing = Interest-bearingliabilities−interest-bearingassets
Shareholders’ equity
Diluted earnings per share = Profitfortheperiod,attributabletoequityholdersoftheparent
Numberofshares,adjustedforissuesandforoptiondilution,average
Equity per share = Equityattributabletoequityholdersoftheparent
Amount of shares on the closing date
Dividend/earnings = Dividends for the period
Profitfortheperiod
P/E ratio = Share price at the end of the period
Diluted earnings per share
Effectivedividendyield = Dividend/share
Share price at the end of the period x100
Dilution =Numberofsharesplusallocatedoptions−numberofsharesobtainablewiththeexercisepriceforoptions,
accordingtotheturnover-weightedaverageprice
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12 Financial statements 2015
SHARESShare capital and sharesThe share capital of Ixonos Plc at December 31, 2015 was EUR 585,394.16. The total number of shares at December 31, 2015 was 353,564,898.
STOCK EXCHANGE INFORMATION
IxonosPlcislistedatNasdaqOMXHelsinki.
Thecompanyhasonelistedserieofshares:XNS1V.
2015 2014
SharesubscriptionpriceatlistingonOctober1,1999 5,75EUR 5,75EUR
Highestsharepriceduringtheperiod 0,11EUR 0,16EUR
Lowestsharepriceduringtheperiod 0,05EUR 0,05EUR
ClosingpriceonDecember31 0,07EUR 0,06EUR
MarketvalueatDecember31 24749543EUR 5953558EUR
TurnoverofsharesJanuary1–December31 52023432Shares 40744746Shares
3 079 642 EUR 4 422 526 EUR
AveragepriceJanuary1–December31(* 0,06EUR 0,11EUR
Shareturnover,percentageofnumberofsharesonDecember31(* 14,7% 38,3%
NumberofsharesonDecember31,adjustedforissues(* 194418208Shares 96651722Shares
Numberofshares,adjustedfordilutionandissuesonDecember31(* 194418208Shares 96651722Shares
NumberofthesharesonDecember31 353564898Shares 106313536Shares
*)Thenumberofthesharesandrelatedkeyperformanceindicatorsofyear2015areaffectedbyrightsissueinFebruaryandDecemberandacqui-
sitionofCresense.Thenumbersofyear2014areaffectedbyrightsissuesinMarchandApril2014.
DISTRIBUTION OF THE SHARES
Shares Percentagevotingrights Numberofowners
Private persons 44 335 763 12,54% 2 922
Corporations 309 229 135 87,46% 113
Total(* 353564898 100,00% 3035
Corporations
Companies 293 798 258 95,02%
Financial and insurance institutions 11 969 884 3,87%
Publicinstitutions 1514478 0,49%
Non-profitorganisations 2 0,00%
Foreign holdings 1 919 513 0,62%
Total(* 309202135 100,00%
fromwhichadministrativeregistered 6534428 1,85%
and shares in especial accounts 27 000 0,00%
*)Thenumberofthesharesin2015hasbeenaffectedbyrightsissuesinFebruaryandDecemberandacquisitionofCresense.
Thenumberofthesharesin2014hasbeenaffectedbyrightsissuesinMarchandApril.
Information about shares, shareholders and options
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13 Financial statements 2015
MAJOR SHAREHOLDERS
Shares Percentage of shares
TremokoOyAb 290527638 82,17%
NordeaPankkiSuomiOyj 4585763 1,30%
GripenbergJarlDödsbo 2000000 0,57%
LombardInternationalAssuranceS.A 1849431 0,52%
MäkiPetteri 1552795 0,44%
LaaksonenLars 1520000 0,43%
EloMutualPensonInsurance 1514478 0,43%
4capes Oy 1 500 000 0,42%
SjöblomKatri 1443806 0,41%
HeinoPetriJuhani 1350000 0,38%
HämäläinenKariHeikkiKristian 1100003 0,31%
RapeliMarkoTeoMikael 1086957 0,31%
SädeSimo 1086957 0,31%
SuihkonenRaisaMaria 1086957 0,31%
PiirainenMerjaHannele 776398 0,22%
FenniaMutualInsurance 756104 0,21%
SuutariPekkaJohannes 734101 0,21%
SjöblomJoukoJuhani 728664 0,21%
SjöblomKariTapio 725437 0,21%
AaltonenManuVeikko 660000 0,19%
Others 36 979 409 10,46%
Total(* 353,564,898 100,00%
DISTRIBUTION OF THE SHARES
Percentage of
Shares shareholders Shares Percentage of shares
1-100 shares 636 20,96% 26 853 0,01%
101-1,000 shares 794 26,16% 362 961 0,10%
1,001-10,000 shares 1 059 34,89% 4 545 783 1,29%
10,001-100,000 shares 477 15,72% 14 537 270 4,11%
100,001-1,000,000 shares 54 1,78% 15 876 407 4,49%
over 1,000,000 shares 15 0,49% 318 215 624 90,00%
Total 3 035 100,00% 353 564 898 100,00%
SHARE HOLDINGS AND OPTION RIGHTS OF THE COMPANY MANAGEMENT
Holdings2015 Percentageofvotes Holdings2014
Shareholdings of the CEO and Board of Directors 0 0,00% 33 943 661
Option rights of the CEO and Board of Directors 0 0,00% 500 000
*)Thenumberofthesharesin2015hasbeenaffectedbyrightsissuesinFebruaryandDecemberandacquisitionofCresense.
In 2014 the number of the shares was 106 313 536. CEO and the Board of Directors holdings were 31,93 per cent of the votes.
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14 Financial statements 2015
Consolidated income statement (IFRS)
Statement of comprehensive income
1 000 EUR Notes 1.1.-31.12.2015 1.1.-31.12.2014
Turnover 2,4 17 001 23 939
Other operating income 5 301 37
Materialsandservices 6 -2 014 -2 463
Employeebenefitcosts 7 -15 792 -18 384
Depreciationandamortisation 9 -1 096 -2 788
Impairmentofgoodwill 9,13 0 0
Otheroperatingexpenses 10 -7102 -7 765
Total expenses -26 004 -31 400
Operating profit -8 702 -7 424
Financial income 4 307 329
Financial expenses -1 260 -1 383
Totalfinancialincomeandexpenses 11 3047 -1 054
Profit before tax -5 656 -8 477
Income tax 12 -4 956 210
Profit for the period -10 612 -8 267
Attributableto
Equityholdersoftheparent -10599 -8 249
Non-controlling interests -12 -18
Earningspershare,undiluted,EUR 25 -0.05 -0.09
NumberofsharesDecember31 25 353 564 898 106 313 536
Earningspershare,adjustedfordilution,EUR 25 -0.05 -0.09
NumberofsharesDecember31,adjustedfordilutionandissues 25 194 418 208 96 651 722
1 000 EUR 1.1.-31.12.2015 1.1.-31.12.2014
Profit for the period -10 612 -8 267
Other comprehensive income
Changeintranslationdifference -187 -138
Totalcomprehensiveincomefortheperiod -10 799 -8 405
Totalcomprehensiveincomeattributableto
Equityholdersoftheparent -10 787 -8387
Non-controlling interests -12 -18
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15 Financial statements 2015
Consolidated balance sheet (IFRS)
1 000 EUR Notes 31.12.2015 31.12.2014
ASSETS
Non-current assets
Goodwill 13 12 043 10 847
Otherintangibleassets 13 548 1 254
Tangibleassets 14 372 697
Deferredtaxassets 15 0 4 947
Available-for-saleinvestments 14 23 3
Total non-current assets 12 987 17 748
Current assets
Tradereceivables 4,16 2 688 3 273
Otherreceivables 16 771 621
Cashandcashequivalents 17 1 901 255
Total current assets 5 360 4 149
TOTAL ASSETS 18 347 21 897
1 000 EUR Notes 31.12.2015 31.12.2014
EQUITY AND LIABILITIES
Shareholders’ equity
Equityattributabletoequityholdersoftheparent
Share capital 18 585 585
Share premium reserve 18 219 219
Investednon-restrictedequityfund 18 46 994 32 345
Retainedearnings -34 712 -26 346
Results for the period -10 599 -8 249
Totalequityattributabletoequityholdersoftheparent 2 487 -1 446
Non-controlling interests 221 229
Total equity 2 708 -1 217
Non-current liabilities
Financialliabilities 20,21 7 846 3 698
Deferredtaxliabilities 15,20 228 211
Total non-current liabilities 8 074 3 909
Current liabilities
Tradepayables 22 754 1 050
Currentfinancialliabilities 20,21,22 2 839 13 568
Short-term provisions 19, 22 21 21
Taxliabilities 22 69 75
Otherliabilities 22 3 882 4 490
Total current liabilities 7 565 19 204
TOTAL EQUITY AND LIABILITIES 18 347 21 897
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16 Financial statements 2015
Consolidated cash flow statement
1 000 EUR Notes 1.1.-31.12.2015 1.1.-31.12.2014
Cash flow from operating activities
Profitfortheperiod -10 599 -8 267
Adjustmentstocashflowfromoperatingactivities
Incometaxes 12 4 956 -210
Otherincomeandexpenses,nocashtransactions -4 047 0
Depreciationandamortisation 9 1 310 2 788
Change in provisions 19 0 -67
Impairmentofgoodwill 9,13 0 0
Otheradjustments -261 130
Financialincomeandexpenses 11 871 731
Netcashgeneratedbeforeworkingcapitalchanges,interestandtax -7 769 -4 896
Changeinworkingcapital 23 -2 339 -113
Interest received 11 122 181
Interestpaid 11 -1 524 -799
Incometaxespaid 12 -7 -141
Net cash flow from operating activities -11 517 -5 767
Cash flow from investing activities
Acquisitionsofsubsidiaries,netofcashacquired -125 0
Investmentsinproperty,plantandequipmentandinintangibleassets 13,14 -164 -1 138
Proceeds from sale of property, plant and equipment 14 0 113
Net cash flow from investment activities -288 -1 025
Cash flow before financing -11 805 -6 793
Cash flow from financing activities
Increaseinlong-termborrowings 20,21 10 794 1 000
Repaymentoflong-termborrowings 20,21 -4 000 -1 000
Increaseinshort-termborrowings 21 7 500 3 526
Repaymentofshort-termborrowings 21 -5 784 -366
Expensesforequityprocurement -386 -104
Proceedsfromrightsissues 5 793 3 655
Financial lease payments -466 -159
Net cash flow from financing activities 13 451 6 553
Change in cash and cash equivalents 1 646 -240
Cashandcashequivalentsatthebeginningoftheperiod 17 255 496
Cashandcashequivalentsattheendoftheperiod 17 1 901 255
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17 Financial statements 2015
Consolidated statement of changes in equity
Invested
non-
Share restricted Non-
Share premium equity Translation Retained controlling Total 1 000 EUR capital reserve fund difference earnings Total interest equity
Shareholders’ equity at January 1, 2014 585 219 28 794 67 -26 243 3 423 247 3 670
Comprehensiveincomefortheperiod -138 -8 249 -8 387 -18 -8 405
Transactionswithshareholders
Rightsissue 3 656 3 656 3 656
Expensesforequityprocurement -104 -104 -104
Share-basedremuneration -34 -34 -34
Shareholders’ equity at December 31, 2014 585 219 32 345 -71 -34 524 -1 447 229 -1 217
Invested
non-
Share restricted Non
Share premium equity Translation Retained controlling Total
1 000 EUR capital reserve fund difference earnings Total interest equity
Shareholders’equityatJanuary1,2015 585 219 32 345 -71 -34 524 -1 447 229 -1 217
Comprehensiveincomefortheperiod -187 -10 599 -10 787 -7 -10 794
Transactionswithshareholders
Rightsissue 15 078 15 078 15 078
Expensesforequityprocurement -429 20 -409 -409
Share-basedremuneration 50 50 50
Shareholders’ equity at December 31, 2015 585 219 46 994 -259 -45 054 2 486 221 2 708
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18 Financial statements 2015
Accounting policies for the consolidated finan-cial statementsBASIC DATA OF THE GROUP. Ixonos Plc is a Finnish public company established in accordance with Fin-land’s legislation. The company’s domicile is Helsinki.“The shares of the parent company Ixonos Plc are list-ed on NASDAQ OMX Helsinki since 1999.
A copy of consolidated financial statements are available at www.ixonos.com.
Ixonos is a service company that combines design and technology in a versatile way. We offer creative and versatile digital solutions and consulting services for several customer segments. The most important part of our services is a deep understanding of and our employees’ high knowledge in our customer’s digital challenges, such as utilising digitalisation in their busi-ness and operations.
Our operations are centralised in Finland, USA and Great Britain and increasingly in Singapore. The soft-ware development is mostly based in Finland but it has been strengthened also in the other locations. There are Design-functions in all locations.
We create new digital services for our customers. These services are based on the latest technologies and trends that affect their business. Premium user experience requires design and technology to work seamlessly together and Ixonos strive to be the lead-ing expert on that.
We have updated our Dream – Design – Deliver vi-sion to Discover – Design – Deliver in order to match the user research in the initial phases, strategic design and defining feasible technology. The basic idea is to find the right components that are needed to build the customer delivery, in order to ensure a premium user experience.
Our Design services consists of digital-, mobile- and web design as well as service- and industrial design. We offer design services all the way from design strategy and user research to designing visuals and interaction and further to workshops, designing prototypes and us-ability testing. All our design innovations are implement-ed on different devices and platforms, always striving for the best possible implementation that can be done within the time frame requested by the customer.
As a technology company we have a deep knowl-edge in developing creative software solutions for em-bedded systems and software. We use open standard-ised technologies (like Linux, Android, iOS, Windows). We combine knowledge in software development with world-class technology competence, deep knowledge in user interface- and usability design and top class project management skills. Our technology expertise comprise for example of wireless connectivity, RF-, au-dio-, imaging-, cloud- and video technologies.
As a new unit and service we have founded the Con-sulting Services-unit that generates specifications for end-to-end solutions to meet our customer’s challeng-es. Concurrently we help our customers to understand new kinds of business models and competition and how these can be met on the long term.Our customer segments can be divided into following:• Industrial Internet• Media and Online services• Smart devices• Cloud services• Consultative services
The Board approval. The Board has approved the finan-cial statement to be published on March 16, 2016. Ac-cording to the Finnish Limited-liability Companies Act, the shareholders have an opportunity to approve or re-ject the financial statement in the annual meeting after the publishing. The annual meeting has also the right for making a decision on changing the financial statement.
BASIS OF PREPARATION. Ixonos’ consolidated finan-cial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements follow the IAS and IFRS stand-ards, as well as the SIC and IFRIC interpretations, that were effective on 31 December 2015. For the purposes of Finland’s Accounting Act (1336/1997) and the stat-utes enacted by virtue of it, ’international accounting standards’ refers to standards approved for applica-tion within the European Union according to the pro-cedure enacted by Regulation (EC) No 1606/2002 of the European Parliament and of the Council as well as to interpretations of such standards. The accompany-ing notes to the consolidated financial statements also comply with Finnish accounting and corporate legisla-tion complementary to IFRS regulations.
These financial statements have been made accord-ing to the going concern principle taking into account the planned financial arrangements, new strategy and financial estimations made up to the end of year 2016. The estimates take into consideration probable or foreseeable changes in future expectations in rev-enues as well as costs.
The company’s existing working capital may not be sufficient to cover the company’s funding needs over the next 12 months. The company estimates that its working capital is expected to be sufficient to fund the company’s operations over the next 12 months if the sales development is better than the current forecast or the company is able to make larger cost savings than forecasted. A possible financial shortage remain-ing can be filled with bridge financing.
Loan agreements related to the financing arrange-ment in December 2015 include semi-annual cov-enants regarding equity ratio, EBITDA and net debts/EBITDA which will be considered at the first time on 31 December, 2016.
1.
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19 Financial statements 2015
The information in the consolidated financial state-ments is presented in thousand euros and the infor-mation of the parent company financial statements in euros, if not otherwise mentioned. It is based on the historical cost convention, except for financial assets re-corded at fair value through profit and loss.
STANDARDS, INTERPRETATIONS AND CHANGES THAT HAVE ENTERED INTO FORCE DURING 2015 DID NOT INFLUENCE OF THE GROUP FINANCIAL STATEMENT.
Since 2015, the Group applies the following new or revised standards and interpretation. As of January 1, 2015, the Group has applied the following new and revised standards and interpretations. The amended standards and interpretations have not had an impact on the consolidated financial statements:• Amendment to IAS 19 Employee Benefits: Defined
Benefit Plans – Employee Contributions.• Annual Improvements to IFRSs 2010–2012 and An-
nual Improvements to IFRSs 2011–2013.
AMENDMENTS THAT WILL ENTER INTO FORCE THE FOLLOWING YEAR. In 2016, the Group will adopt the standards and interpretations whose application is not yet compulsory in the financial statements.• Amendment to IAS 1: Disclosure inititative. The target is
to assess the notes being disclosed and their classifi-cation. The amendment is not estimated to have signif-icant effects on the consolidated financial statements.
• Amendment IFRS 11: Joint Arrangements. The amendment to the standard requires that for the ac-quisition of an interest in a joint operation, in which the activity constitutes a business, the principles for business combinations accounting are applied. The amendment is not estimated to have significant ef-fects on the consolidated financial statements.
• Amendment IAS 16 and IAS 38: Clarification of ac-ceptable methods of depreciation and amortization. The amendment prohibits a revenue-based depre-ciation method for tangible assets and allows the application for intangible assets to a limited extent. The amendments do not have an effect on the con-solidated financial statements.
• Amendments to IAS 16 and IAS 41 Agriculture: IAS 16 Property, Plant and Equipment to be applied to bearer plants meeting the criteria instead of IAS 41 Agriculture. The amendments do not have an effect on the consolidated financial statements.
• Annual Improvements to IFRSs 2010–2012 and An-nual Improvements to IFRSs 2011–2013.
AMENDMENTS THAT WILL ENTER INTO FORCE AT A LATER TIME. The group will adopt the following stand-ards and amendments to standards published by the IASB during subsequent financial periods, provided that they are approved by the EU.
• Amendments to IFRS 10, IFRS 12 and IAS 28 Invest-ment entities (estimated effective date January 1, 2017): Applying the Consolidation Exception. The amendment is not estimated to have significant ef-fects on the consolidated financial statements.
• FRS 15 Revenue from Contracts with Customer (es-timated effective date January 1, 2018). The stand-ard provides a phased revenue recognition model. Revenue is recognized as control of the item or ser-vice sold is passed to the customer. The recognition model includes clearly more detailed instructions than the currently valid standards IAS 11 Construction Contracts and IAS 18 Revenue. The requirements for disclosures also expand significantly. The Group is still assessing the effect of the standard.
• IFRS 9 Financial Instruments (estimated effective date January 1, 2018). IFRS 9 will completely replace the current IAS 39 Financial Instruments: Recognition and Measurement standard. All financial assets are ini-tially measured at fair value. Financial assets that are debt instruments and to which the fair value option is not applied are measured, after initial recognition, at either amortized cost or fair value, depending on the business model of the management of the company’s financial assets and contractual cash flows of finan-cial assets. As a rule, all equity instruments are, after initial recognition, measured at fair value, with value changes recognized in profit or loss or in “other com-prehensive income”. With regard to financial liabilities, the key amendment is that when the fair value op-tion is applied, a change in fair value attributable to changes in credit risk of the liability will be presented in other comprehensive income. The Group estimates that the amendment will not have a significant effect on future consolidated financial statements.
• IFRS 16 Leases (estimated effective date January 1, 2019). Standard draft determines lease agreement as an agreement where lessor gives lessee right-to-use asset for a period of time against payment or peri-odic payments. At the beginning of lease time lessor records upcoming payments current value as right-to-use asset and corresponding amount to liability for lease payments. Classification of agreements affects i.a. amount of profit and loss recordings. All over year long lease agreements are capitalized per se. Asset and liability bookkeeping value are evaluated again if new actual matters and circumstances indicate that liability and asset value (current value of lease) have significantly changed. The Group estimates that the amendment will not have a significant effect on fu-ture consolidated financial statements.
• Amendments to IFRS 10 and IAS 28 Sale or Contribu-tion of assets between an Investor and its associate or joint venture. The amendment is not estimated to have effects on the consolidated financial statements
CONSOLIDATION PRINCIPLES. The consolidated fi-nancial statements include the parent Ixonos Plc and
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20 Financial statements 2015
all subsidiaries in which the parent directly or indirectly holds more than 50 per cent of the votes or which it otherwise controls.
Mutual shared ownership between Group companies has been eliminated through the cost method. Acquired subsidiaries are integrated in the consolidated financial statements from the moment the Group obtains control and all released subsidiaries until the authority ends. All transactions, receivables, liabilities and unrealised prof-its within the Group as well as internal profit distribution are eliminated when preparing the consolidated finan-cial statements. The the company’s assets and liabilities are appreciated to their current values at the purchase moment and the remaining part is the goodwill from the difference of the purchase price and net assets.
CHANGES IN GROUP LEGAL STRUCTURE. In the fi-nancial year 2015 , the company acquired 100 per cent ownership of Cresense Oy. There has not been any changes in group structure in 2014.
SPECIAL PURPOSE ENTITY. Ixonos Management In-vest Oy is combined to the Group’s financial stement. It has been establihsed for the share rewarding of the Group management. Ixonos Plc controls Ixonos Man-agement Invest Oy based on the shareholder and loan agreement and therefore the company is joined to the Group Financial statement. Ixonos Plc does not own any Ixonos Management Invest Oy shares. The income statement and balance sheet of Ixonos Management In-vest Oy have been integrated in the consolidated finan-cial statements since the beginning of the arrangement.
The Board of Ixonos Plc decided on December 2015 to demolite Ixonos Management by requiring all com-pany shares. The case is pending and will be conclud-ed during the spring 2016.
SEGMENT REPORTING. Ixonos reports its business operations in one segment.
FOREIGN CURRENCY ITEMS. The figures related to the result and financial status of the Group’s units are determined in the currency of each unit’s main operat-ing environment, i.e. in the unit’s functional currency. The consolidated financial statements are presented in euros. The euro is the functional and presentation currency of the Group’s parent company.
Foreign currency transactions are recorded in the functional currency using the exchange rate prevail-ing on the transaction dates. Monetary items in foreign currencies are translated into the functional currency using the exchange rates prevailing on the closing date. Non-monetary items that are denominated in a foreign currency and measured at fair value are trans-lated into the functional currency using the exchange rates prevailing on the measurement date. Other non-monetary items are measured at the exchange rate prevailing on the transaction date.
Gains and losses resulting from transactions in a for-eign currency and from the translation of monetary items are recognised as financial items in the income state-ment. Foreign exchange gains and losses related to busi-ness operations are included in the corresponding items above the operating profit.
The profit and loss items in the income statements of the foreign Group companies have been translated to euros using the average rate for the current month. Changing the profit of the financial period and the ex-tensive result with various exchange rates in the profit and loss account, in the extensive profit and loss ac-count, and the balance causes a translation difference to the equity, which is recognised in the other items of the extensive result.
GOODWILL. Goodwill represents the excess of the cost over the Group’s share of the net fair value, at the time of acquisition, of identifiable assets, liabilities and conditional liabilities of companies acquired after January 1, 2004.
Goodwill is allocated to cash generating units. It is not subject to depreciation. Goodwill is tested for im-pairment annually and whenever an event or a change in circumstances indicates that a carrying amount may not be recoverable.
OTHER INTANGIBLE ASSETS. Intangible assets ac-quired in a business combination are capitalised at their fair value at the time of acquisition. Intangible as-sets deriving from an integration of Group operations normally pertain to customer relationships and con-tracts with known useful lives.
Other intangible assets are recognised originally in the acquisition cost of the balance sheet in case the acquisition cost can be defined reliablly and it is likely that benefit from the asset item will benefit the Group.
An intangible asset with a limited useful life is re-corded as a depreciation expense on a straight-line basis through profit and loss during its known or esti-mated useful life.
The group does not have other intangible assets with unlimited useful life.
RESEARCH AND DEVELOPMENT COSTS. Research costs are recorded as expenses in the income state-ment. Development costs arising from the design of new or more advanced products are capitalised as in-tangible assets when the product is technically feasible, can be exploited commercially and is expected to bring future financial benefits that cover those development costs. Intangible assets are measured at cost less de-preciation and impairment losses. The useful lives of capitalised development expenses is 3–4 years, during which time the capitalised expenses are entered as de-preciation costs on a straight-line basis.
Previously expensed development expenditure will not be capitalised.
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21 Financial statements 2015
The group’s R&D expenses during the financial pe-riod 2015 were EUR 1.8 million (2014: EUR 2.4 million). The profit for the financial period includes EUR 1.7 mil-lion (2014: EUR 1.6 million) in R&D expenses. A total of EUR 0.1 million (2014: EUR 0.8 million) in R&D expenses was capitalised during the financial period. The R&D expenses during 2015 were primarily associated to the media and industrial internet business areas. Based on re-evaluation of R&D projects with the new strategy EUR 0.2 million of capitalized R&D projects were writ-ten down during the financial year.
PROPERTY, PLANT AND EQUIPMENT. Machinery and equipment form the major part of the company’s tangi-ble assets. They have been recognised in the balance sheet at historical cost less accrued depreciation and any impairment.
Gains or losses from the sales or transfer of tangible assets are entered into the income statement.
THE GROUP OBSERVES THE FOLLOWING DEPRECIATION CONVENTIONS:
Intangibleassetsacquiredthrough
businesscombinations 5-10yearsstraight-line
Intangiblerights 3-4yearsstraight-line
Internally generated
intangibleassets 3-4yearsstraight-line
Otherlong-termexpenses 3-5yearsstraight-line
Machineryandequipment 3-5yearsstraight-line
Machineryacquiredthrough
financialleasing 3-5yearsstraight-line
Intangible assets acquired
throughfinancialleasing 3-5yearsstraight-line
GOVERNMENT GRANTS. Government grants are en-tered as a reduction of the carrying amount of oth-er intangible assets when it is fairly certain that the grants will be received and that the Group meets the conditions attached to them. The grants are recog-nised in the income statement as lower depreciation on the respective asset during its useful life. Grants received as compensation for costs already realised are recorded through profit and loss for the period during which the right to the grant arises. Such grants are recorded in other operating income or netting expenses. The amount of the government grants are presented in the note 5.
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS. On each balance sheet date, the Group assesses whether there are indications that any asset has been impaired. If such indications exist, the recoverable amount of the as-set is assessed. In addition, the recoverable amount of goodwill as well as of intangible assets with infinite useful lives is assessed annually, regardless of whether there are indications of impairment. The impairment tests are per-formed for cash generating unit.
The recoverable amount is either the asset’s fair value less costs to sell or its value in use, whichever is higher. The value in use is defined as the projected future net cash flow for the asset or the cash generat-ing unit, discounted to its present value. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money as well as of the risks specific to the asset.
An impairment loss is recognised if the balance sheet value of an asset exceeds the recoverable amount for the asset. Losses from impairment are entered into the income statement. When an impairment loss is entered, the use-ful life of the depreciated asset is re-estimated. Any other depreciation loss recognised from any other property item than goodwill is cancelled in the case that there has been a change in those estimations that were used when defin-ing the cash mount from the asset item. However, such a reversal will not exceed the carrying amount that would prevail if no impairment loss had been recognised. An im-pairment loss entered for goodwill is never reversed.
LEASES. A lease of property, plant and equipment where a substantial part of the risks and rewards of ownership lies with the Group is classified as a finance lease. Assets acquired through finance leases are re-corded in the balance sheet when the lease period be-gins, either at the fair value of the asset or at the lower present value of the minimum lease payments. Assets acquired through finance leases are depreciated over their useful lives or a shorter lease term. Leases to be paid are divided into financial cost and a decrease in debt during the lease term so that the interest rate on the remaining debt is the same each financial period.Leases in which the risks and rewards of ownership remain with the lessor are treated as other leases. Rent paid under other leases is recognised as an expense in the income statement in equal amounts over the term of the lease.
FINANCIAL ASSETS AND LIABILITIES. The Group has classified its financial assets into the following catego-ries: financial assets recorded at fair value through profit and loss; investments held to maturity; loans and other receivables; and financial assets available for sale. The classification, which is performed at the time of the original acquisition, is based on the purpose of acquiring the financial asset.
Financial assets are initially recorded at fair value. Transaction costs are included in the original carrying amount of the financial assets when the item is not measured at fair value through profit and loss. All pur-chases and sales of financingassets are recognised on the date of trade.
Financial assets are derecognised when the Group has lost its contractual right to the cash flow or trans-ferred a substantial part of the risks and rewards out-side the Group. The definition of the financing assets and liabilities in note 24.
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22 Financial statements 2015
Financial assets and liabilities recorded at fair value through profit and loss. The Group records interest rate swaps at fair value through profit and loss. They are recognised in the balance sheet as current assets or liabilities. Changes in fair value are entered in the in-come statement as financial income or expenses. The fair value of swaps has been calculated by discounting the future cash flows. The agreements are presented in the financing assets or liabilities of the balance and they were acquired for protective purposes. The com-pany does not apply hedge accounting.
Loans and other receivables. After their initial record-ing, loans and other receivables are measured at am-ortised cost using the effective interest rate method. Loans and other receivables include trade and other receivables. They are included in current and non-current assets. The category includes sales and other receivables. Trade receivables are recorded at their original value. The Group estimates the amount of re-ceivables in each financial statement and records an impairment if there is objective evidence that individual items have been impaired.
Such evidence includes the debtor’s considerable fi-nancial problems, high probability of bankruptcy and de-faulted or significantly overdue payments. Impairment is recognised as an expense in the income statement.
Available-for-sale investments. The Group classifies shares in housing companies as well as other shares, such as golf shares, as available-for-sale investments. These shares are unlisted and their fair value cannot be reliably determined. Consequently, such invest-ments are measured at cost.
On each closing date, the Group assesses whether there is objective evidence that any individual finan-cial asset or any group of financial assets has been impaired. If such evidence exists, the impairment is en-tered as an expense in the income statement.
Cash and cash equivalents. Cash and cash equiva-lents comprise cash as well as bank deposits payable on demand.
Financial liabilities. Financial liabilities are initially rec-ognised at the original value corresponding to the consideration received. Transaction costs are included in the original carrying amount of the financial liabil-ity. Non-derivative financial liabilities are subsequently measured at amortised cost using the effective inter-est rate method. The non-current and current liabilities include financial liabilities. Borrowing costs are record-ed as interest expense for the period during which they are incurred.
PENSION PLANS. The Group currently uses defined-contribution pension plans only. The payments for these plans are expensed in the income statement for
the period during which they occur.The Group has no legal or constructive obligation to
make additional contributions should the recipient of the contributions be unable to pay the relevant retirement benefits.
SHARE-BASED PAYMENTS. The Group operates in-centive schemes in which payments are made as eq-uity instruments. Any benefits admitted in the arrange-ments will be appreciated to a current value at the moment of their admission and recognised as cost in the financial statement evenly during the generation period. The impact of these arrangements on the fi-nancial results is shown in the income statement under employee benefit costs.
The cost determined at the time of granting options is based on the Group’s estimate of the amount of op-tions that are expected to be vested at the end of the investing period., The Group updates its assumption of the final amount of options on each closing date. Changes in the estimates are recorded in the income statement. The fair value of the option arrangements is determined according to the Black–Scholes option pricing model.
When options are exercised, the proceeds are rec-ognised in shareholders’ equity, net of any transaction costs. The proceeds from exercise of options granted have been recognised in the share capital and in the share premium reserve, in accordance with the terms of the option plan.
The President and CEO of the company as well as nine other members of the Group’s management were awarded a share-based incentive plan during the 2010 period. The plan was carried out through Ixonos Man-agement Invest Oy. 93,526 shares were awarded to members of management. The subscription price, EUR 2.44 per share, corresponds to the average price of Ixonos shares between 5 and August 11, 2010. Trans-fer of shares owned by Ixonos Management Invest is restricted during the term of the plan. Should the employee’s employment with the Group company end due to a reason arising from the employee and before the plan is dissolved, his or her share may be redeemed before dissolution without providing him or her with financial benefit through the plan.
INCOME TAXES. The tax expense in the consolidated income statement consists of performance-based tax corresponding to the result of Group companies for the period and based on the taxable income recog-nised by each Group company according to local tax regulations as well as of tax adjustments for previous periods and of changes in deferred tax.
Deferred tax is recognised for all temporary differ-ences between carrying amounts and taxable values. However, a deferred tax liability is not recorded if it arises from initial recognition of an asset or liability in a transaction other than a business combination and
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23 Financial statements 2015
this recognition does not affect the accounting result or the taxable income at the time of carrying out the transaction. Deferred tax is not recognised for good-will that is not tax-deductible. Deferred tax on retained earnings of subsidiaries is not recognised for the por-tion of the difference that is not estimated to dissolve during the foreseeable future.
Deferred tax is determined using the tax rates en-acted by the closing date.
Deferred tax assets are recognised to the extent that future taxable profit against which the temporary dif-ferences can be utilised is likely to become available.
EQUITY, DIVIDENDS AND TREASURY SHARES. The dividend distribution proposal of the Board of Direc-tors is not recorded in the financial statements since dividends are recognised based on the decision of the Annual General Meeting.
When purchasing Ixonos Plc’s own shares, the amounbt paid for them will be recognised as deduc-tion from equity.
REVENUE RECOGNITION. Turnover includes income from services provided. It is measured at the fair value of the consideration received, and it is corrected for indirect taxes as well as for discounts. Turnover is recognised for the financial period during which the service is provided. The revenues from services are entered as income for the financial period when the service is provided.
If the final result of a long-term project can be evalu-ated reliably, any income and costs from the project are recognised as income and costs during the pro-ject. The Group uses an income entry method accord-ing to the production degree for defining the income and costs of each period. The stage of completion for a specific contract is defined as the percentage of completed working hours at the time of review in proportion to the estimated total working hours the total expenses for a contract are likely to exceed the total income from the contract, the expected loss is ex-pensed immediately.
INTEREST AND DIVIDEND INCOME. Interest income is recorded using the effective interest rate method. Dividend income is recorded when the right to receive dividend is established.
OTHER OPERATING INCOME. Other operating in-come includes gains from the sale of assets as well as other income unrelated to the sales of services, such as government grants.
ACCOUNTING POLICIES REQUIRING CONSIDERA-TION BY MANAGEMENT AND ESSENTIAL UNCER-TAINTY FACTORS RELATED TO ESTIMATIONS. Pre-paring the financial statements requires the company’s management to make estimations and assumptions that affect the amounts of assets, liabilities, income
and expenses recorded in the financial statements as well as the amount of contingent assets and liabilities presented in the accompanying notes. Although these estimations are based on the management’s best judgment of current events and actions, actual results may differ from estimates.
The Group’s management exercises judgment in se-lecting and applying accounting policies. This particu-larly concerns cases in which the IFRS norms in force provide mutually alternative recording, measurement or presentation methods. The most essential estimations and assumptions in the context of the financial state-ments are related to impairment testing, cost allocation, recognition of income from construction contracts.
Uncertainties related to estimations. The estimates made when preparing the financial statements are based on the management’s best assumptions at that time. Previous experience, and such assumptions re-garding the future as are considered the most prob-able at the time of preparing the financial statements are applied. These assumptions relate to, among oth-ers, the expected development of the Group’s eco-nomic operating environment in terms of sales and cost-level. The Group and its business units regularly use various internal and external information sources to monitor the realisation of the estimates and assump-tions as well as any changes in background factors. Changes in estimates and assumptions are entered into the accounts for the period during which they oc-cur and for all subsequent periods.
Such critical estimations of the future, as well as es-sential uncertainty factors related to estimations on the closing date, as pose a significant risk of substantial changes in the carrying amounts of the Group’s as-sets and liabilities within the next financial period are disclosed below. The Group’s management has con-sidered these portions of the financial statements the most central ones, as their related accounting policies are the most complex from the Group’s viewpoint and as applying them requires the most use of estimations and assumptions, such as when measuring asset items. These areas of the financial statements are also the ones in which any changes in the assumptions and esti-mations used are assumed to have the greatest impact.
Impairment testing. The Group annually tests goodwill and intangible assets for potential impairment. Any in-dicators of impairment are evaluated according to the above accounting policies. The recoverable amounts for the cash generating units have been defined using calcu-lations based on value in use. These calculations require the use of estimations. Further information on impairment testing is presented in note 13. Goodwill at the end of 2015 was EUR 12.0 million. (note 3)
Recognition of construction contracts. The Group uses the stage of completion method in recognizing
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24 Financial statements 2015
turnover from construction contracts. The manage-ment estimates the final result of the project regu-larly. The income entry according to the preparaion is based on teh total hourly estimates the project. Recognised earnings and profits may change if the estimate of the total income from and expenses for a contract is adjusted. The cumulative effect of ad-justed estimates is recognised for the period during which the change becomes probable and can be esti-mated reliably. The turnover between 2015 and 2014 includes EUR 0,0 million based on the stage of com-pletion of construction contracts.
Capitalisation of development costs. The Group rec-ognises the product development costs that meet the activation requirements. The board estimates the ful-filliment of the activation criteria and the progress of product development projects regularly.
Deferred tax assets. Due to tax losses there are no deferred tax assets included in the balance sheet.
The business operations are reported to the Board of Directors in one operational segment.
During the financial year no single customer was dominant and did not exceed the fourth of the turnover.
Geographical information. The Group operates in three geographical areas: Europe, America and Asia.
Turnover for the geographical areas is presented ac-cording to the location of the customers. The assets for the geographical areas are presented according to the location of the assets. Proceeds from sales to external customers are determined according to IFRS.
2. Segment-information2015 Turnover Non-current assets
1 000 EUR
Europe 11 839 12 916
fromwhichFinland 10 809 11 588
America 5 051 59
Asia 111 12
Group total 17 001 12 987
2014 Turnover Non-current assets
1 000 EUR
Europe 17 490 17 700
fromwhichFinland 15 728 17 652
America 5 955 48
Asia 494 0
Group total 23 939 17 748
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25 Financial statements 2015
Acquired business operations
CRESENSE. The company has acquired the Finn-ish privately owned company Cresense Oy in order to strengthen Ixonos’ position as an innovative digi-talization and transformation partner by enforcing the company’s user research and design know-how. The corporate transaction was completed on September 2, 2015. As part of the aquisition, a total of 27 employees joined Ixonos.
In the transaction, all Cresense shares apart from shares owned by the company itself were transferred to the ownership of Ixonos. Cresense Oy owns 300 own shares, which represents 14 per cent of the com-pany’s total shares. As compensation, Ixonos issued a total of 7,142,860 new Ixonos shares in a directed share issue to be subscribed by the existing owners of Cresense Oy. The sellers have subscribed all the shares that were offered in the share issue and Ixonos Board of Directors has approved the subscriptions. The shares will represent 3.4 per cent of Ixonos shares and votes after the share issue. The shares will enti-tle to full dividends possibly distributed by Ixonos and to other distribution of assets as well as carry other shareholder rights in the company starting from when the shares have been entered in the Trade Register and the shareholders’ register of the company. The shares of the sellers continuing to work for the group are subject to a lock-up period from six (6) months to two (2) years starting from the issue date. If certain pre-requisites are met, the sellers will be entitled to an ad-ditional purchase price of EUR 380,000 at most. Ixonos may pay the possible additional purchase price in cash or as Ixonos shares at its option.
The share issue was carried out in derogation from the pre-emptive subscription right of the shareholders by the decision of Ixonos’ Board of Directors on the au-thorisation of the Annual General Meeting held on April 29, 2015. The share issue was carried out in order to develop the group’s business and to finance a corpo-rate transaction therefore there was a weighty finan-cial reason for the share issue and the deviation from the pre-emptive right of the shareholders within the meaning of the Finnish Limited Liability Companies Act. The subscription price of the shares was EUR 0.07 per share, total of EUR 500,000. The subscription price has been defined as the mean price weighted with the trad-
3. ing amounts of the Ixonos share of the period June 26, 2015 – August 25, 2015. The subscription took place and Cresense Oy’s shares were transferred to Ixonos in connection with the execution of the acquisition.
In connection to the acquisition of Cresense Oy’s shares EUR 1.2 million was recognized under goodwill.
Expenses incurred for aquisition of EUR 0.13 million has been recorded in the invested unrestricted eq-uity fund, as well as administrative expenses in the income statement.
Purchase price I 1000 EUR - Shares 500Purchase price II 380Aquisition cost 880 Cresense shareholders equity 316Share capital 39Invested non-restricted equity fund 6Retained earnings -361Total equity -316Goodwill 1 196
Costs of 139 thousand euros incurred for the aquisi-tion are recognized as follows:
Invested non-restricted equity fund 43Administration costs 97Total 139
The acquisition of Cresense Oy responds to the cus-tomer demand to combine user research knowledge with digitalization. Through the acquisition Ixonos’ Dream-Design-Deliver concept evolved to a Discover-Design-Deliver business concept that serves the com-pany’s customers better. The increased offer book is believed to increase the united company’s turnover. In addition synergy advantage will be obtained by combining office facilities and utilizing the companies’ best practice and equipment.
The corporate transaction on September 2, 2015 Cresense Oy had in its balance sheet trade receiva-bles EUR 145 thousand and other receivables EUR 55 thousand. Trade payables EUR 118 thousand, other li-abilities EUR 61 thousand and accrual liabilities EUR 140 thousand.
There has not been any acquired business opera-tions during 2014.
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26 Financial statements 2015
Turnover and construction contracts
2015 2014
Turnover 17001 23 939
Revenuefromservices 16490 23 770
Revenue recognised for construction contracts 511 169
Revenue recognised for contracts in progress 0 0
AdvancedpaymentsEUR0in2015havebeenreceivedfromconstructioncontractsinprogress(2014:EUR0).
Other operating income 2015 2014
Gainsonsalesoffixedassets 0 16
Government grants 117 7
Other items 184 14
Total 301 37
Group has received government grants totalled EUR 146 thousand during the financial year 2015 (2014: EUR 45 thousand).
Government grants relates mainly to product development. Part of the grants has been recorded to profit and loss as expense reduction,
mainly to personnel expenses.
Materials and services 2015 2014
Materials -546 -592
Services -1 468 -1 871
Total -2 014 -2 463
Employee benefit expenses 2015 2014
Salaries and remuneration of the President and CEO and the Board of Directors -540 -467
Option rights -50 34
Salariesandremuneration -12 592 -14 946
Total -13 182 -15 379
Definedcontributionpensioncosts -1 856 -2 601
Otherpersonnelexpenses -754 -404
Personnelexpensesintheincomestatement -15 792 -18 384
Relatedpartytransactions(note29).
4.
5.
6.
7.
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27 Financial statements 2015
Personnel
Average employed 2015 2014
Specialists 175 267
Administrative and sales personnel 42 53
Total 217 320
-fromwhichworkingoutsideFinland 38 65
Employed at the end of the period 2015 2014
Specialists 162 211
Administrative and sales personnel 38 53
Total 200 264
-fromwhichworkingoutsideFinland 39 34
Depreciation and impairment 2015 2014
Impairmentofgoodwill 0 0
Depreciationandamortisationofintangibleassetsacquiredinbusinesscombinations -68 -68
Depreciationandamortisationofintangibleassets -543 -1 321
Impairmentofintangibleassets 0 -3
Depreciationandamortisationofproperty,plantandequipment -485 -1 396
Total -1 096 -2 788
8.
9.
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28 Financial statements 2015
Other operating expenses
2015 2014
Employee-relatedexpenses -708 -442
Premisesexpenses -1 980 -2 465
Machineryandequipmentexpenses -1 497 -1 889
Travelexpenses -598 -714
Marketingandsalesexpenses -351 -206
Credit losses -29 -64
Otheroperatingexpenses -1 725 -1 985
Total -6 888 -7 765
TheincomestatementincludesEUR1,779thousand(2014:EUR1,585thousand)inexpensedR&Dcosts.
Auditor’s fees 2015 2014
KPMGOyAb,PricewaterhouseCoopersOy,KHTOyAb
Audit fee -51 -76
Taxadvice -21 -42
Other services -33 -36
Total -105 -154
Others
Audit fee -2 -4
Total -2 -4
Financial income and expenses 2015 2014
Interestincomefromloansandotherreceivables 1 1
Foreignexchangegains 259 328
Otherfinancialincome 4 047 0
Totalfinancialincome 4 307 329
Interestexpenseforborrowingsmeasuredatamortisedcost -733 -873
Valuechangesinfinancialassetsrecordedatfairvaluethroughprofitandloss
- Derivative interest rate contracts 45 -13
Foreignexchangelosses -67 -86
Interestonfinancialleasingdebt -22 -43
Otherfinancialexpenses -483 -367
Totalfinancialexpenses -1260 -1 383
Totalfinancialincomeandexpenses 3 047 -1 054
10.
11.
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29 Financial statements 2015
Income tax
Income tax in the income statement 2015 2014
Taxfortheperiod -1 -206
Taxforpreviousperiods 0 -4
Deferred tax -4 955 420
Total -4 956 210
Synchronisation of the Group’s tax rate with Finland’s tax rate 2015 2014
Profitbeforetax -5 656 -8 478
IncometaxaccordingtoFinland’staxrate 1 131 1 695
Othernon-deductibleitems -46 -27
Non-taxbleitems 4 047 32
Taxforpreviousperiods 0 -63
Differenttaxrateofforeignsubsidiaries 192 -21
Unrecordeddeferredtaxassetsfromlosses -5 133 -715
Recordeddeferredtaxassetswrite-down -4 956 -625
Other -192 -66
Consolidatedincometax -4 956 210
Deferredtaxassetsonunusedtaxlossesarewrittendowninfiscalyear2015duetothecontinuationofloss-makingresultoftheperiod
andcontinuinguncertaintiesinthemarket.
Formoreinformationondeferredtaxassetsandliabilitiesaswellastaxlossesarepresentedinnote15.
12.
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30 Financial statements 2015
13. Intangible assets Internally generated Other Intangible assets in 2015 Goodwill intangible assets intangible assets Total
Acquisition cost at January 1, 2015 33 639 4 430 15 623 53 692
Additions 1 196 109 0 1 305
Disposals and transfers 0 0 11 11
Exchangeratedifference 0 0 0 0
Acquisition cost at December 31, 2015 34 835 4 539 15 634 55 008
Accumulated depreciation and impairment at January 1, 2015 -22 792 -3 725 -15 074 -41 591
Depreciation for the period 0 -318 -294 -612
Impairment 0 -214 0 -214
Exchangeratedifference 0 0 0 0
Accumulated depreciation and impairment at December 31, 2015 -22 792 -4 257 -15 368 -42 417
Book value at January 1, 2015 10 847 705 549 12 101
Book value at December 31, 2015 12 043 282 266 12 591
Internally generated Other Intangible assets in 2014 Goodwill intangible assets intangible assets Total
Acquisition cost at January 1, 2014 33 639 3 645 15 351 52 635
Additions 0 785 277 1 062
Disposals and transfers 0 0 -5 -5
Exchangeratedifference 0 0 0 0
Acquisition cost at December 31, 2014 33 639 4 430 15 623 53 692
Accumulated depreciation and impairment at January 1, 2014 -22 792 -2 932 -14 479 -40 203
Depreciation for the period 0 -793 -595 -1 388
Impairment 0 0 0 0
Exchangeratedifference 0 0 0 0
Accumulated depreciation and impairment at December 31, 2014 -22 792 -3 725 -15 074 -41 591
Book value at January 1, 2014 10 847 713 872 12 432
Book value at December 31, 2014 10 847 705 549 12 100
Otherintangibleassetscompriseintangiblerightsformedthroughcorporateacquisitionsandlicensefees.
Goodwill impairment testing. Goodwill has been allo-cated to one cash generating unit (CGU) starting from November 1, 2013.
The carrying amount of goodwill is EUR 12.0 million. The present value of the cash flows calculated, EUR 28.0 million, is lower than the sum of the company’s fi-nancial liabilities (EUR 10.7 million) and the market price of the shares (24.7 million) on December 31, 2015.
The impairment test of the company is based on val-ue in use. The forecasting period used in impairment testing at December 31, 2015 included forecasted years 2016 to 2019.
In the forecast the year 2016 is a year of consolida-tion and stabilization with relatively small growth. For the years 2017-2019 the company expects to reach stronger growth, on average of 11.0 per cent, as digi-talization will impact an ever growing part of the busi-ness community. When calculating the forecasted EBIT level an average of 11.2 per cent was used. Cash flow forecasts are discounted by using the WACC before taxes. Discounting rate has been derived from the ex-ternal assesment of the required return on equity as well as the cost of debt increased by risk spread. Used discounting factor is 10 per cent.
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31 Financial statements 2015
The impairment test is most sensitive besides to the cash flow forecast itself and the assumptions behind it, to the growth rate used when calculating the termi-nal value and to the discount factor. If the growth rate -19.5 per cent had been used instead of 1 per cent, the tested value would have been equal to the discounted cash flow. If the discount factor had been 20 per cent instead of 10 per cent, the tested value would have been equal to the discounted cash flow. If the EBIT percentage used had been 2.4 per cent instead of 1.0 per cent, the tested value would have been equal to the discounted cash flow.
The table below indicates the limits within which the carrying value and value-in-use are equal.
Terminalgrowthrate Discountrate AverageEBIT
-19,5% 20.0% 2.0%
At December 31, 2015 value-in-use exceeds carrying value by EUR 16.0 million.
Goodwill have been allocated the following units (starting from November 1, 2013 only one unit):
OneIxonos Total
Goodwill1.Jan.2015 10 847 10 847
Impairment 1 196 1 196
Goodwill 31. Dec. 2015 12 043 12 043
OneIxonos Total
Goodwill1.Jan.2014 10 847 10 847
Impairment 0 0
Goodwill 31. Dec .2014 10 847 10 847
Keyassumptionsusedwhentestinggoodwill 2015 2014
Forecast period 4 4
Annualgrowthinturnover 11% 17%
Growthfactorofcashflowsaftertheforecastperiod 1% 1%
Discount rate 10 % 10 %
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32 Financial statements 2015
Tangible assets and other assets
Machinery and Other tangible Available-for-sale
Tangible Assets 2015 equipment assets investments Total
Acquisition cost at Jan. 1, 2015 10 924 34 3 10 962
Additions 102 11 20 133
Disposals and transfers 39 0 0 39
Exchange rate difference 5 3 0 8
Acquisition cost at Dec. 31, 2015 11 070 48 23 11 141
Accumulated depreciation at Jan. 1, 2015 -10 257 -3 0 -10 260
Depreciation for the period -481 -4 0 -485
Exchange rate difference 0 -1 0 -1
Accumulated depreciation at Dec. 31, 2015 -10 738 -8 0 -10 746
Book value at January 1, 2015 667 31 3 701
Book value at December 31, 2015 332 40 23 395
Machinery and Other tangible Available-for-sale
Tangible Assets 2014 equipment assets investments Total
Acquisition cost at Jan. 1, 2014 10 892 27 14 10 933
Additions 73 4 1 78
Disposals and transfers -95 0 -12 -107
Exchange rate difference 54 3 0 57
Acquisition cost at Dec. 31, 2014 10 924 34 3 10 962
Accumulated depreciation at Jan. 1, 2014 -8 813 -1 0 -8 814
Depreciationfortheperiod -1 396 -3 0 -1 399
Exchange rate difference -48 0 0 -48
Accumulated depreciation at Dec. 31, 2014 -10 257 -3 0 -10 260
Book value at Jan. 1, 2014 2 079 27 14 2 120
Book value at Dec. 31, 2014 667 31 3 701
14.
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33 Financial statements 2015
Deferred tax assets and liabilities
In the income
Deferred tax assets 2015 1.1.2015 statement 31.12.2015
Confirmedlosses 4 517 -4 517 0
Other items 430 -430 0
Total 4 947 -4 947 0
In the income
Deferred tax assets 2014 1.1.2014 statement 31.12.2014
Confirmedlosses 4 517 0 4 517
Other items 0 430 430
Total 4 517 430 4 947
In the income
Deferred tax liabilities 2015 1.1.2015 statement 31.12.2015
Other items 211 16 228
Total 211 16 228
In the income
Deferred tax liabilities 2014 1.1.2014 statement 31.12.2014
Other items 215 -4 211
Total 215 -4 211
15.
Deferred tax assets on unused tax losses were writ-ten down in the fiscal year 2015 due to continued loss of earnings season and continuing uncertainties in the markets.
Confirmedloss fortaxpurposes expires MEUR2009 2019 0.12010 2020 0.32011 2021 0.02012 2022 7.72013 2023 11.12014 2024 5.9
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34 Financial statements 2015
16. Trade and other receivables
Currentreceivables 2015 2014
Tradereceivables 2 688 3 273
Otherreceivables 771 621
Total 3 459 3 894
Other receivables 2015 2014
Otherreceivables 409 225
Accruals 362 396
Total 771 621
Breakdownoftradereceivablesbymaturity
2014 Impairment loss Net 2014
Notdueforpayment 1 848 -1 1 847
Due since 1–30 days 591 -3 587
Due since 31–60 days 99 -4 95
Due since 61–90 days 35 -1 34
Due since 91–180 days 55 -8 47
Due since more than 180 days 133 -57 76
Total 2 761 -73 2 688
2014 Impairment loss Net 2014
Notdueforpayment 2 091 0 2 091
Due since 1–30 days 603 -3 600
Due since 31–60 days 388 -2 386
Due since 61–90 days 144 -3 141
Due since 91–180 days 3 -2 1
Due since more than 180 days 463 -409 54
Total 3 692 -419 3 273
The financial assets do not include due items.The current receivables include EUR 0 thousand
(2014: EUR 0 thousand) in receivables for construction contracts.
The company has written off EUR 29 thousand (2014: EUR 11 thousand) in credit losses during the period.
The methods used to estimate the fair value of the receivables are disclosed in note 24.
Credit risk management is part of Ixonos’ risk man-agement. Of the company’s turnover, 79 per cent is de-rived from the company’s 20 largest customers. Ixonos’ major customers are companies based or operating in Finland in the telecommunications, information technol-
ogy, banking and insurance sectors and in public ad-ministration. Majority of these customers are billed in euros. The receivables do not include any significant concentration of credit risk. The counterparties in exter-nal financing transactions are the major Nordic banks.
In order to reduce the turnaround time of its re-ceivables the group sells most of its Finnish account receivables. Out of the accounts receivables in the balance sheet on December 31, 2015, the group sold EUR 0.5 million (2014: EUR 1.3 million) to the financ-ing companies during the beginning of January 2016. During 2015 EUR 10.0 million (2014: EUR 12.8 million) receivables were sold.
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35 Financial statements 2015
Cash and cash equivalents
2015 2014
Cashandcashequivalents 1 901 255
The cash and cash equivalents comprise cash on hand as well as bank deposits in current accounts.
Equity
Share Invested non- Number of premium restricted shares Share capital reserve equity fund Total
1. Jan. 2015 106 313 536 585 219 32 345 33 149
Rights issue 247 251 362 0 0 15 078 15 078
Expensesforequityprocurement 0 0 0 -429 -429
31. Dec. 2015 353 564 898 585 219 46 994 47 798
InFebruary2015atotalof96,670,000newshareswereissuedinadirectedshareissue.
InSeptember2015atotalof7,142,860newIxonosshareswereissuedinadirectedshareissueinconnectionwiththeacquisitionof
CresenseOy.InDecember2015thecompanycarriedoutarightsissuewereall136,582,157issuednewsharesweresubscribedanda
directedshareissuewereallissued6,856,345newsharesweresubscribed.
Share Invested non-
Number of premium restricted shares Share capital reserve equity fund Total
1. Jan. 2014 75 858 359 585 219 28 794 29 598
Rights issue 30 455 177 0 0 3 655 3 655
Expensesforequityprocurement 0 0 0 -104 -104
31. Dec. 2014 106 313 536 585 219 32 345 33 149
InNovember2014inadirectedrightsissue15,255,177shareswereissued.
InApril2014inadirectedrightsissue15,200,000shareswereissued.
Ixonos Plc has one class of shares. The share capi-tal has been paid in full. Pursuant to the Articles of Association, there is no maximum to the number of shares or the share capital. Ixonos Plc does not hold any treasury shares. Descriptions of reserves: Share premium reserve. The income from exercise of options granted under Finland’s repealed Companies Act (734/1978) has been recorded in share capital and in the share premium reserve according to the terms of the plans, net of transaction costs.
17.
18.
Invested non-restricted equity fund. The invested non-restricted equity fund includes other equity-type investments as well as the subscription price of shares to the extent that a specific decision to recognise it in share capital has not been made. The income from exercise of options granted after September 1, 2006, when Finland’s new Limited Liability Companies Act (624/2006) became effective, is recorded entirely in the invested non-restricted equity fund.
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36 Financial statements 2015
Provisions
2015 2014
Long-term provisions 0 0
Short-term provisions 21 21
Total 21 21
Restructuring provision
1. Jan. 2015 21
Decrease in provisions 0
31. Dec. 2015 21
Restructuring provision
1. Jan. 2014 87
Decrease in provisionss -66
31. Dec. 2014 21
Therestructuringprovisionisrelatedtorestructuringpremisesandpermanentlayoffcosts.
Non-current liabilities Deferred tax Other non-current Other loans liabilities liabilities Total
Non-current liabilities at January 1, 2015 3 500 211 198 3 909
Convertible bond conversion -3 500 0 0 -3 500
New loans from financial institutions 7 766 0 0 7 766
Change in finance leasing debt 0 0 -117 -117
Deferred tax liabilities 0 16 0 16
Non-current liabilities at December 31, 2015 7 766 228 81 8 074
Deferred tax Other non-current
Other loans liabilities liabilities Total
Non-current liabilities at January 1, 2014 0 215 331 546
New loans from financial institutions 3 500 0 0 3 500
Change in finance leasing debt 0 0 -133 -133
Deferred tax liabilities 0 -4 0 -4
Non-current liabilities at December 31, 2014 3 500 211 198 3 910
Themethodsusedtoestimatethefairvaluesofliabilitiesaredisclosedinnote24.
19.
20.
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37 Financial statements 2015
21.
The credit from main owners in use EUR 2,6 million on December 31, 2015 have not included in the specification.
More information about covenant terms can be found in note 33.
Financial liabilities
Non-current 2015 2014
Convertablebond 0 3 500
Borrowingsfromfinancialinstitutions 607 0
Otherloans 7 158 0
Financialleasingdebt 81 198
Non-currentfinancialliabilities 7 846 3 698
Current 2015 2014
Borrowingsfromfinancialinstitutions 2 388 10 459
Otherloans 34 2 300
Financialleasingdebt 417 809
Financialliabilitiesrecordedatfairvaluethroughprofitandloss(* 13 60
Currentfinancialliabilities 2 852 13 628
*)Thefinancialliabilitiesrecordedatfairvaluethroughprofitandlossarederivatives.Thebalanceisincludedinotherliabilities.
The methods used to estimate the fair values of financial liabilities are disclosed in note 24.
Instalment scheme for interest-bearing borrowings from financial institutions were at December 31, 2015:
Borrowingsfromfinancialinstitutionsat31.12.2015 10 187
Instalments 2016 0
Instalments 2017 -380
Instalments2018 -1 134
Instalments 2019 -755
Instalments 2020 -755
Instalments2021 -2 264
Duringtheperiod,theaverageinterestrateontheborrowingsfromfinancialinstitutionswas5.87percent.
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38 Financial statements 2015
22.
23.
Trade and other payables
Currentliabilities 2015 2014
Tradepayables 754 1 050
Taxliabilities 69 75
Borrowingsfromfinancialinstitutions 2 388 10 459
Otherloans 34 2 300
Financialleasingliabilities 417 809
Provisions 21 21
Otherliabilities 1 112 1 501
Accruedexpenses 2 770 2 989
Total 7 565 19 204
Breakdownofotherliabilities 2015 2014
Withholdingtaxdebt 261 593
Socialsecuritycontributiondebt 95 95
Valueaddedtaxdebt 540 750
Otherliabilities 217 63
Totalotherliabilities 1 112 1 501
Breakdownofaccruedexpenses 2015 2014
Provisionforholidaypay 1 536 1 978
Pensioninsurancecontributionliabilities 9 61
Otheraccruedexpenses 1 225 950
Totalaccruedexpenses 2 770 2 989
Cash flow statement
2015 2014
Changeinworkingcapital -2 339 -113
Tradereceivablesandotherreceivables -435 2 351
Tradepayablesandotherpayables -1 904 -2 464
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39 Financial statements 2015
Earnings per share (* 2015 2014
Profitattributabletoequityholdersoftheparentcompany,1000EUR -10 599 -8 249
Numberofsharesduringtheperiod,adjustedforissues,average 194 418 208 96 651 722
Earningspershare,basic,EUR -0,05 -0,09
Dilutedweightedaveragenumberofsharesduringtheperiod 194 418 208 96 651 722
Earnings per share, diluted, EUR -0,05 -0,09
Dilutioneffect,numberofshares 159 146 690 9 661 814
*) The number of the shares has been affected by rights issue in February and December and in connection with closing of the acquisition of shares in Cresence Oy on September 2015.
At December 31, 2015 market value of the share is below the option exercise price thus no dilution is recorded.
25.
24. Book and fair values of financial assets and liabilities
METHODS USED TO ESTIMATE FAIR VALUE
Financial liabilities. Liabilities are discounted at the rate the Group would pay for an equivalent borrowing on the clos-ing date. As most interest-bearing liabilities have floating rates, the effect of discounting is not material.
Trade and other receivables. As the terms of payment for trade and other receivables are short, the effect of discounting is not material. Consequently, the original values of trade and other receivables correspond to their fair values. Note 16 contains a breakdown of trade receivables by maturity.
Other liabilities. Other liabilities, i.e. trade payables and other non-interest-bearing liabilities, are recorded at their original values. Considering the maturity of such liabilities, the effect of discounting is not material. Accordingly, the original values correspond to the fair values.
Nominal values of derivative contracts, 1000 EUR
Interestrateswaps 2015 2014
Fallingduewithin1year 253 0
Fallingduewithin1–5years 506 4 941
Falling due after 5 years 0 0
Total 759 4 941
Fair value 13 60
Allinterestrateswapsareclassifiedatlevel2.
The fair value of a financial instrument that is not trad-ed in an active market is determined by using valuation techniques. These techniques maximise the use of ob-servable market data where it is available and they rely
as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is at level 2.
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40 Financial statements 2015
Leasing and rental liabilities
Operating leasing liabilities 2015 2014
Operatingleasingliabilities,12months 110 123
Operating leasing liabilities, more than 12 months but less than 60 months 86 66
Total 195 189
The company’s leases give the company a temporary right to use the machinery and equipment included in the leases. The company has no leasing liabilities with a maturity of more than 60 months.
Rentalandotherliabilities 2015 2014
Rentalandotherliabilities,12months 1 536 2 066
Rentalandotherliabilities,morethan12monthsbutlessthan60months 1 547 3 239
Rental and other liabilities, more than 60 months 0 0
Total 3 083 5 305
The rental liabilities are mainly due to the rental liability arising from the company’s head office. Leases are presented in accordance with the situation of 31.12.2015.
27.
MAJOR LEASES
Kiinteistö Oy Opus 1 (Hitsaajankatu 24). In accordance with the signed contract dated on March 10, 2016 the lease has a fixed term extending until October 31, 2016. The company is currently looking for new premises.
The rent consists of absolute net rent as well as
maintenance charges. It is linked to the cost-of-living index (1951:10=100) produced by Statistics Finland.The rent adjustments are based on rent excluding val-ue added tax. The rent is adjusted twice annually. The term of notice is six months for both the lessor and the lessee. The rent, excluding tax, is EUR 76,704,91 per month from July 1, 2015.
Dividend per share
The Board of Directors proposes to the Annual Gener-al Meeting that the distributable funds be left in share-
26. holders’ equity and that no dividend for the financial period 2015 be paid to shareholders. No dividend for the financial period 2014 was paid to shareholders.
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41 Financial statements 2015
Group companies
Name Parentownership Domicile,Cityandcountry
IxonosOyj Parent Helsinki,Finland
IxonosFinlandOy 100% Helsinki,Finland
IxonosEstoniaOÜ 100% Tallinn,Estonia
IxonosGermanyGmbH 100% Berlin,Germany
IxonosSlovakias.r.o. 100% Košice,Slovakia
BeijingIxonosTechnologyCo.,Ltd.(* 100% Beijing,China
ChengduIxonosTechnologyCo.,Ltd.(* 100% Chengdu,China
IxonosDenmarkApS(* 100% Copenhagen,Denmark
IxonosUSALtd. 100% SanFrancisco,UnitedStates
IxonosUKLtd 100% London,UnitedKingdom
IxonosHongKongLimited(* 100% HongKong,China
CresenseOy 100% Helsinki,Finland
Cresense Pte.Ltd. 0% Singapore,Singapore
Cresense,Inc. 0% SanFrancisco,UnitedStates
Cresense HongKongLimited(* 0% Hongkong,China
Cresense China(Company)Limited(* 0% Shanghai,China
Changes in the Group structure
*)ThecompaniesinChinaandDenmarkhavebeendecidedtoclosedown.Processesarestillonprocess.
28.
The consolidated financial statements includes Ixonos Management Invest Oy, a company owned by mem-bers of Ixonos’ management.
Group’s owneship of the company is zero per cent and it has been represented as non-controlling inter-est in the group.
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42 Financial statements 2015
Related party disclosures
The related parties of Ixonos Plc comprise the members of the Board of Directors as well as the President and CEO and the members of the Group’s Management Team.
29.
Salariesandothershort-termemployeebenefits,1000EUR 2015 2014
EsaHarju1.1-30.6.2015 229 300
SamiPaihonen1.7.-31.12.2015 128 0
Board of Directors
EhrnroothPaul(ViceCharimanuntill29April2015,Chairmansince29April2015) 45 35
ErviPertti(Chairmanuntill29April2015,ViceChairmansince29April2015) 41 52
HeikkonenMatti 9 26
KonttinenSamu 26 26
KoskeloIlari 17 0
PylkäsPekka(since29April2015) 17 0
WiialaMay 28 28
ManagementTeam 396 592
Total 936 1 058
Salaries and other short-time employee benefits are presented on an accrual basis.
The Board of Directors, the President and CEO and the Management Team have 0 option rights (2014: 1,505,000 pcs).
Total 0 pcs of the CEO and the Management Team share options is feasible on December 31, 2015. The to-tal fair value of options are 0 thousand euros (2014: 0,1 thousand euros)
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43 Financial statements 2015
The company did not hold any own shares. Ixonos Management Invest Oy holdings are eliminated in the consolidated statements.
The number of the shares in 2015 has been affected by rights issues in February and December and acqui-sition of Cresense. In 2014 the number of the shares during the financial period was 106,13,536.
The pension arrangements of the President and CEO conform to Finland’s employee pension legislation. In addition, the President and CEO has a voluntary supple-mentary pension arrangement to which EUR 8.5 thou-sand was contributed in 2015 (2014: EUR 8.5 thousand).
The term of notice of the President and CEO is 6 months. If the company dismisses the President and CEO, he is entitled to a severance payment equivalent to 6 months’ salary. Compensation for terminating em-ployment agreement for president and CEO and man-agement team have been paid severance payments of EUR 23.0 thousand.
Ixonos Finland Oy has used Finance Link’s service to sell a part of it’s accounts receivables. During finan-cial period 2015, the company has sold EUR 0.9 million (2014: EUR 4.7 million) to Finance Link and have been recorded charge of EUR 28 thousand in the current sale of receivables (2014: EUR 106 thousand). Open re-ceivalbles of Finance Link in December 31, 2015 were EUR 88 thousand (2014: EUR 422 thousand).
Loans to related parties. During the financial period 2010, an incentive plan for the Group’s management was announced. The plan had been decided on by the
Board of Directors of Ixonos Plc. President and CEO Kari Happonen and nine other members of Ixonos’ manage-ment participate in the incentive plan. For the purpose of the share ownership, members of the management es-tablished the limited liability company Ixonos Manage-ment Invest Oy, whose entire share capital they own. As part of the arrangement, the Board of Directors of Ixonos Plc decided to grant Ixonos Management Invest Oy an interest-bearing loan of EUR 1.2 million to fund the share acquisition. At the end of the financial period 2015, EUR 0.9 million of the loan had been drawn down (2014: EUR 0.9 million). The interest rate of the loan cor-responds to the twelve-month Euribor plus 1 per cent. The acquired shares have been pledged to Ixonos Plc as security for the loan. Ixonos Management Invest Oy has been consolidated to financial statements. Ixonos’ Board of Directors has decided in December 2015 to acquire the Ixonos Management Invest’s share capital. The case is pending and the dissolution of the company will be finalized in the spring of 2016.
Voluntary financial interest-bearing debt was restruc-tured in December 2015. After the execution of the Ar-rangement, the Company has amount of EUR 0.8 million financial institution loan from Nordea Bank Finland Plc, to which loan have been granted a directly enforceable guarantee by Tremoko and its owners Turret Oy Ab and Holdix Oy Ab and a guarantee by Finnvera Plc. Com-pany has received approximately amount of EUR 7.2 mil-lion new loans from Tremoko. The interest rate is tied to the 6 -month Euribor rate , the margin is 8.5%, P.A. and guarantee commission of 1.5 % p.a.
OwnershipbythemembersoftheBoardofDirectors,
thePresidentandCEOandtheManagementTeam,pcs 2015 2014
PresidentandCEO 0 222 778
BoardofDirectors(* 290 527 638 33 718 699
ManagementTeam 0 293 526
Total 290527638 34 235 003
*)TherelatedpartyTremokoOyAbowns290527638pcscompanyshares.TremokoOyAbisownedbyTurretOyAb:nandHoldix
OyAb.TurretOyAb,whichisthecontrollingcompanyofIxonosPlcChairmanoftheBoardPaulEhrnroothin,owns65%ofthecompany
sharesandHoldixOyAbowns35%ofTremokoOyAbshares.
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44 Financial statements 2015
Share-based payments
Option Plan 2011. The Board of Directors of Ixonos Plc decided on November 30, 2011 to grant new options. This decision was based on the authorisation given by the Annual General Meeting on March 29, 2011.
The options were issued by December 31, 2011, free of charge, to a subsidiary wholly owned by Ixonos Plc. This subsidiary will distribute the options, as the Board decides, to employees of Ixonos Plc and other compa-nies in the Ixonos Group, to increase their commitment and motivation. Options will not be issued to members of the Board of Directors of Ixonos Plc or to the Ixonos Group’s senior management (Ixonos Management In-vest Oy shareholders).
The options will be marked IV/A, IV/B and IV/C. The option rights will be issued per stock option plan 600,000. According to the terms of the options, the Board of Directors decides how the options will be di-vided between option series and, if needed, how un-distributed options will be converted from one series to another.
Originally each option entitled its holder to sub-scribe for one new or treasury share in Ixonos Plc.
The exercise period for the IV/A options will begin on October 1, 2014, and for the IV/C options on October 1, 2016. For the IV/B options, option rights have not been allocated and have been lapsed. The exercise periods for all options will end on December 31, 2018. The ex-ercise price for each option series is a trade volume weighted average price at NASDAQ OMX Helsinki. The exercise prices will be reduced by the amount of dividends, and they can also be adjusted under other circumstances specified in the option terms.
In order to ensure the equal treatment of sharehold-ers and the stock option holders, the Board of Directors of Ixonos has due to the Rights Offering in December 2015 adjusted the subscription ratio and the subscrip-tion price of the 2011 stock options in accordance with the terms and conditions of the 2011 stock options. As regards stock options IV/A, the subscription ratio shall be amended to 8.287 and the subscription price shall be amended to EUR 0.2 per share. As regards stock options IV/C, the subscription ratio shall be amended to 8.287 and the subscription price shall be amended to EUR 0.1497 per share.
The total amount of shares is rounded down to full shares in connection with subscription of the shares and the total subscription price is calculated using the rounded amount of shares and rounded to the closest cent. Due to the above adjustments concerning stock options IV/A, the adjusted maximum total number of shares to be subscribed for based on the 2011 stock options shall be 4,971,966.Option Plan 2014. The Board of Directors of Ixonos Plc has decided to issue stock options on February 18, 2014, on the basis of the authorization granted by the Extraor-
30. dinary General Meeting held on October 30, 2013.The stock options will be offered to the global man-
agement team and certain key personnel of Ixonos Plc and its subsidiaries for the purpose of improving com-mitment and motivation.
The stock options will be marked as series 2014A, 2014B and 2014C. The aggregate number of stock options is 5,000,000. The Board of Directors will, in accordance the terms and conditions of the stock op-tions, decide on the allocation of the stock options be-tween different series and, if necessary, on the conver-sion of stock options that has not been allocated into another series of stock options.
Each option entitles its holder to subscribe for one new or treasury share in Ixonos Plc.
The share subscription period with 2014A stock op-tions starts on March 1, 2016, with 2014B stock options on March 1, 2017 and with 2014C stock options on March 1, 2018. The share subscription period ends with all stock options on December 31, 2018. The share sub-scription price for each series is the volume weighted average price of the company’s share on the Helsinki Exchanges during the period March 1 to May 31 2014 for 2014A, January 1 to March 31, 2015 for 2014B and January 1 to March 31, 2016 for 2014C. The subscrip-tion price may be decreased with e.g. the amount of dividends paid and may also otherwise be subject to change in accordance with the terms and conditions of the stock options.
In order to ensure the equal treatment of sharehold-ers and the stock option holders, the Board of Directors of Ixonos has due to the Rights Offering on December 2015 adjusted the subscription ratio and the subscrip-tion price of the 2014 stock options in accordance with the terms and conditions of the 2014 stock options as follows: As regards stock options 2014A, the subscrip-tion ratio shall be amended to 1.65 and the subscrip-tion price shall be amended to EUR 0.0903 per share. As regards stock options 2014B, the subscription ratio shall be amended to 1.65 and the subscription price shall be amended to EUR 0.06 per share.
The total amount of shares is rounded down to full shares in connection with subscription of the shares and the total subscription price is calculated using the round-ed amount of shares and rounded to the closest cent.
Due to the above adjustments concerning stock op-tions , the adjusted maximum total number of shares to be subscribed for based on the 2014 stock options shall be 8,250,000
The options are valued using the Black–Scholes pricing model. During the financial period, an expense of EUR 49.7 thousand (2014: EUR 33.5 thousand) for stock options and share-based compensation EUR 0.0 thousand (2014: EUR 0.0 thousand) was entered in the consolidated income statement.
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45 Financial statements 2015
31. Commitments and contingent liabilitiesAt December 31, 2015, the Group had pledged nine-teen company mortgages of EUR 1 million each, one company mortgage of EUR 800 thousand one com-pany mortage of EUR 55 thousand two company mortage of EUR 50 thousand and one company mortage of EUR 45 thousand as guarantee for leasing and other commitments and credit limits with financial institutions. Two company mortgage of EUR 1 million and three company mortgage of EUR 500 thousand were as security for its short term borrowings from Oy Turret Ab. The total amount of company mortgages is EUR 23.5 million.
Option plan 2014A 2011A 2011C
Dateofissue 30.6.14 30.11.11 24.9.13
Numberofshares,dateofissue 2500000 495000 155000
SubscriptionPrice 0,11 0,86 0,31
Endofexerciseperiod 31.12.18 30.12.18 31.12.18
Share price, date of issue 0,12 0,81 0,24
Numberofpersons,dateofissue 17 100 9
Numberofoptionson31.12.2014 2190000 225000 155000
Granted options 0 0 0
Expiredoptionrights -500 000 -15 000 -35 000
Number of options on 31.12.2015 1 690 000 210 000 120 000
Volatility 53 % 35 % 35 %
Dividend yield 0 % 0 % 0 %
Closing share price 31.12.2014 0,06 0,06 0,06
Closing share price 31.12.2015 0,07 0,07 0,07
Fair value 31.12.2014 131 400 13 500 9 300
Fair value 31.12.2015 118 300 14 700 8 400
Fair value of options in determining the most significant assumptions used
The mortgages are pledged as security for EUR 10,685,301 for its own borrowings and credit limits with financial institutions.
Civil actions. The Group is involved in a pending case in the district court of Pirkanmaa which is related to receiving payment for services the company has ren-dered. Ixonos has initiated the case in order to recover the amounts due. The client has denied the claim and issued a counterclaim as per which the delivery would not be in accordance with what has been agreed. Ix-onos has objected to the customer’s claim. The compa-ny does not expect the dispute to cause any significant economic impact on the company, but realization of the risk depends on the final outcome of the trial.
Events after the financial period
After the balance sheet date, no significant events have taken place within the Group.
32.
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46 Financial statements 2015
Financial risk management
The company is exposed to several financial risks in the course of its normal business operations. The manage-ment of financial risks aims to minimise any adverse ef-fects that changes on the finance market might have on the company’s profit. The main financial risks of the Ixonos Group are capital adequacy risk and interest rate risk.
The long-term funding of the Ixonos Group has chiefly been arranged through two main financiers. Later, the company may also resolve to issue shares. Should the general economic situation tumble into an exception-ally long decline, the Ixonos Group’s financial expenses in proportion to the earnings from the Group’s opera-tions would be likely to increase, as the Group’s earning power as well as the cash flow from its business opera-tions presumably would decrease during a general re-cession. The same circumstances might also reduce the availability of external funding for the Ixonos Group and weaken the Group’s financial standing.
The financing function of the parent company is re-sponsible for the implementation of risk management. It is tasked with identifying and estimating as well as hedging against financial risk in co-operation with the business units.
33. Interest rate risk. The company’s income and its op-erational cash flow are largely independent from fluc-tuations in market rates. The company is exposed to cash flow interest rate risk through its loan portfolio, which consists of short- and long-term variable rate borrowings. In respect of interest rate risk, the com-pany’s risk management aims to minimise any adverse effects that changes in interest rates may inflict on the company’s profit. The company manages interest rate risk by using various interest rate hedging instruments. The company has interest rate swaps for a total loan capital of EUR 0.8 million. The company has used inter-est rate swaps to convert a floating rate to a fixed rate plus margin. The fixed rate of the interest rate swaps is 0,92 per cent plus margin. At December 31, 2015, the company has EUR 2.2 million (2014: EUR 6.5 mil-lion) in unhedged floating rate loan capital including overdrafts in use. The company’s average interest rate between 1 January and 31 December 2015 has been 5.95 per cent (2014: 6.53 per cent). An interest rate rise of one percentage point would increase the interest costs for the company’s floating-rate borrowings from financial institutions by approximately EUR 22 thou-sand per year. The realization of interest risk exposure would have a negative impact on the availability of ex-ternal funding and financial position of the company.
Interest rate risk of borrowings from financial institutions should the interest rate rise by one percentage point during the next year.
1 000EUR Amount Avaragerate,percent Interestratesensitivity
Borrowingsfromfinancialinstitutions
31.12.15 2 995 5,95 -22
31.12.14 10 459 5,41 -65
Other loans
31.12.15 7 192 10 -72
31.12.14 2 300 9,6 -22
Loans’interestratehedgingshavebeentakenintoaccountincalculations.
The company does not use IAS 39 hedge accounting. Changes in the fair value of derivatives acquired for hedging are recorded through profit and loss as finan-cial income and expenses. The amount of such chang-es in the fair value of derivatives as were recorded through profit and loss was EUR 45,000 for the period from January 1 to December 31, 2015 and EUR -13,000 for the financial period ending on December 31, 2014. Profit and loss entries related to hedging can cause substantial variation in financial income and expenses from one financial period to another. At December 31, 2015, an interest rate rise of one percentage point would have had a positive effect of approximately EUR 70,000 (2014: EUR 49,000) on the fair value of the
company’s derivative position. The effect of taxes has not been considered in the sensitivity analyses.
Of the company’s borrowings at December 31, 2015, a portion of 75 per cent (2014: 81 per cent) have float-ing rates. Considering the effect of derivative interest-rate contracts, 75 per cent (2014: 34 per cent) of the borrowings have floating rates. The figures include the overdrafts in use.
Liquidity risk. In respect of liquidity risk, the company’s risk management aims to ensure sufficient liquid assets for financing the company’s operations and repaying loans due. To reach this goal, the company aims con-tinuously to assess and monitor the amount of financing
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47 Financial statements 2015
its operations require. At December 31, 2015, almost all the company’s liquid assets consisted of funds in bank accounts. The function responsible for the Group’s fi-nancing continuously monitors the company’s liquidity and the adequacy of the company’s funding. Possible disruption in the cash flow from basic business opera-tions would weaken the company’s financial position.
The company has been granted an open-ended EUR 3.0 million credit facility of which EUR 2.6 million was used at 31 December 2015.
The company’s existing working capital may not be sufficient to cover the company’s funding needs over
the next 12 months. The company estimates that its working capital is expected to be sufficient to fund the company’s operations over the next 12 months if the sales development is better than the current forecast or the company is able to make larger cost savings than forecasted. A possible financial shortage remain-ing can be filled with bridge financing.
Loan agreements related to the financing arrange-ment on December 2015 include semi-annual cov-enants regarding equity ratio, EBITDA and net debts/EBITDA which will be considered at the first time on 31 December, 2016.
Maturity of financial liabilities
Balance Less More than
31.12.2015 sheet value Cash flow than 1 year 1-5 years 5 years
Bankloans 2 995 3 092 2 465 627 0
Otherdebts 7 192 9 543 716 8 827 0
Financialleasingdebt 497 504 379 126 0
Accountspayables 754 754 754 0 0
Balance Less More than
31.12.2014 sheet value Cash flow than 1 year 1-5 years 5 years
Bankloans 10 459 10 782 10 782 0 0
Otherdebts 2 300 2 346 2 346 0 0
Convertiblebonds 3 500 4 228 0 4 228 0
Financialleasingdebt 1 007 1 012 827 185 0
Tradepayables 1 050 1 050 1 050 0 0
The Company has agreed with its main financiers an instalment free period for the loans until June 22, 2018. The company has been granted an open-ended EUR 3.0 million credit facility of which MEUR 2.6 was used at 31 December 2015.
Loans granted in December 2015 by the company’s financiers have covenants attached. Should the com-pany not be within the limits of a covenant, the financi-ers are entitled to call in the loans to which that cov-enant applies. The covenant levels are adjusted for the first time on December 31, 2016 and thereafter semi-annually on a rolling twelve-month basis.
Depending on the point in time, the equity ratio must be at least 15–35 per cent. Depending on the point in time the ratio of interest-bearing liabilities (i.e. interest-bearing liabilities in the balance sheet, including leas-ing liabilities) to EBITDA must be at least 3.0-1.0. The ratios of interest-bearing liabilities to EBITDA as well as the ratio of interest-bearing net liabilities to EBITDA are calculated based on IFRS principles.
The rolling 12 past month EBITDA may not exceed EUR -1.0 million euros on December 31, 2016.
At December 31, 2015, covenanted financial institu-tion borrowings were MEUR 8.2 (2014: MEUR 6.1).
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48 Financial statements 2015
2015 2014
1 000€ USD CNY DKK GBP SGD HKK USD CNY DKK GBP SGD HKK
Effectonprofitbeforetax 53 0 1 5 0 0 57 -1 1 13 0 0
Foreign exchange risk. The functional currency of the parent is the euro. The assets and liabilities in foreign currencies, translated to euros at the exchange rates prevailing at the closing date, are presented below.
2015 2014
EUR 1,000 USD CNY DKK GBP SGD HKK USD CNY DKK GBP SGD HKK
Current assets
Otherfinancialassets 307 1 0 27 2 10 153 1 17 29 0 1
Tradeandotherreceivables 1 064 0 22 216 0 0 1 281 0 2 312 0 0
Currentliabilities
Non-interest-bearingliabilities -314 -2 -11 -144 0 -16 -286 -16 -7 -73 0 0
Openposition 1 058 -1 10 99 2 -6 1 147 -15 12 269 0 1
A sensitivity analysis of the foreign currency translation risk associated with the United States dollar, the Chine-se yuan renminbi, the Danish krone, the Great Britain pound, the Singapore dollar and the Hong Kong dollar is presented in the following table. The effects of +5/-5
per cent exchange rate changes on assets and liabili-ties in foreign currencies at the closing date have been taken into account in the analysis. The analysis does not include net investments in foreign units.
Capital management. With the help of an optimal capital structure, Ixonos’ capital management strives to support the Group’s business operations by safeguarding normal operational conditions as well as to increase shareholder value with a view to achieving the best possible profit. An optimal capital structure also ensures smaller capital costs.
The company considers as capital both sharehold-ers’ equity and borrowings from financial institutions and related party company Tremoko Oyj Ab.
The capital structure is influenced e.g. through dis-tribution of dividends and through share issues. The Group may vary and adjust the amount of dividends or capital refunds paid to shareholders as well as the number of shares to be issued. The Group may also resolve to sell assets in order to reduce debt.
The Group netgearing ratio were December 31, 2015 and December 31, 2014 the following:
EUR 1,000 2015 2014
Interest-bearingliabilities -10 685 -17 266
Cashandcashequivalents 1 901 255
Interest-bearingnetliabilities -8 784 -17 011
Totalequity 2 708 -1 217
Gearing 324,4% -1397,7%
Net gearing from the equity attributable to the owners of the parent was 353.3 per cent.Borrowings from financial institutions have covenants attached. Those covenants are described under ‘Liquidity risk’.
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49 Financial statements 2015
Financial lease agreements
2015 2014
Initialcarryingvalueofintangibleassets
underfinancingleaseagreements 473 397
Accumulated depreciations -319 -139
Carrying amount at the end of the financial period 154 258
Initialcarryingvalueoftangibleassets
underfinancingleaseagreements 3 235 5 843
Accumulateddepreciations -3 161 -5 480
Carrying amount at the end of the financial period 74 363
ThePVoftheminimumleasepaymentsattheendoftheperiod
non-cancellablefinancialleaseagreements
Futureminimumleasepayments,total 508 1 017
Lessinterestexpenses -11 -5
Present value of the minimum lease payments 497 1 012
Thegrossliabilityoffinancialleases-minimumleasepayments
bymaturity
Within a year 429 833
After a year to 5 years 80 184
After 5 years 0 0
Total 508 1 017
Futurefinancingexpenses -11 -5
PV of the financing lease liabilities 497 1 012
MaturityofPVofthefinancingleaseliabilities
Within 1 year 425 828
After a year to 5 years 73 184
After 5 years 0 0
Total 497 1 012
34.
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50 Financial statements 2015
EUR 1.1.-31.12.2015 1.1.-31.12.2014
Otheroperatingincome 2 563 803 2 780 678
Materialsandservices
Rawmaterialsandconsumables 456 0
Externalservices 0 0
Materialsandservicestotal 456 0
Personnelexpenses
Salariesandremuneration -970 640 -1 036 251
Indirect employee costs
Pensioncosts -153 904 -177 622
Otherindirectemployeecosts -19 949 -20 302
Indirectemployeecoststotal -173 854 -197 924
Personnelcoststotal -1 144 494 -1 234 176
Depreciation and impairment
Depreciationontangibleandintangibleassets -110 558 -202 917
Depreciationandimpairmenttotal -110 558 -202 917
Otheroperatingexpenses -3 410 553 -3 721 858
Expensestotal -4 665 149 -5 158 950
Operating profit -2 101 346 -2 378 272
Financialincomeandexpenses
Interestandfinancialincome
Interestincome 63 879 86 996
Otherfinancialincome 4 061 377 0
Interestandfinancialincometotal 4 125 255 86 996
Interestandotherfinancialexpenses
Interestexpenses -580 535 -742 266
Impairmentofnon-currentassests 0 -172 478
Otherfinancialexpenses -403 429 -202 127
Interestandfinancialexpensestotal -983 964 -1 116 870
Financialincomeandexpensestotal 3 141 291 -1 029 874
Profit before appropriation and taxes 1 039 945 -3 408 146
Profit for the period 1 039 945 -3 408 146
Income statement of the parent company (FAS)
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51 Financial statements 2015
Balance sheet of the parent company (FAS)
EUR 31.12.2015 31.12.2014
ASSETS
FIXEDASSETS
Intangibleassets
Intangible rights 4 426 90 821
Intangibleassetstotal 4 426 90 821
Tangibleassets
Machineryandequipment 63 405 85 920
Other tangible assets 11 477 11 477
Tangibleassetstotal 74 883 97 397
Investments
SharesinGroupcompanies 23 649 488 22 630 472
Other shares 2 453 2 453
Investmentstotal 23 651 941 22 632 925
TOTAL FIXED ASSETS 23 731 250 22 821 143
CURRENT ASSETS
Currentreceivables
Tradereceivables 2 762 212 2 561 934
Loanreceivables 0 0
Accruals 67 595 140 724
Other receivables 4 077 165 3 395 043
Currentreceivablestotal 6 906 972 6 097 702
Cash and cash equivalents
Cashonhandandinbanks 1 257 381 5 000
TOTALCURRENTASSETS 8 164 353 6 102 701
TOTAL ASSETS 31 895 603 28 923 844
EQUITY AND LIABILITIES 31.12.2015 31.12.2014
SHAREHOLDERS’EQUITY
Sharecapital 585 394 585 394
Sharepremiumreserve 218 725 218 725
Investednon-restrictedequityfund 48 374 170 33 296 252
Retainedearnings -30 069 383 -26 661 237
Result for the period 1 039 945 -3 408 146
TOTAL SHAREHOLDERS’ EQUITY 20 148 851 4 030 988
LIABILITIES
Non-currentliabilities
Borrowingsfromfinancialinstitutions 506 060 0
Othernon-currentliabilities 7 158 108 0
Theconvertiblebond 0 3 500 000
Non-currentliabilitiestotal 7 664 168 3 500 000
Currentliabilities
Borrowingsfromfinancialinstitutions 253 030 10 759 456
Tradepayables 490 977 334 177
Othercurrentliabilities 2 581 013 9 388 982
Accruedexpenses 757 563 910 242
Currentliabilitiestotal 4 082 584 21 392 857
TOTAL LIABILITIES 11 746 752 24 892 857
TOTAL EQUITY AND LIABILITIES 31 895 603 28 923 844
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52 Financial statements 2015
EUR 1.1.-31.12.2015 1.1.-31.12.2014
Cash flow from operating activities
Profitfortheperiod 1 039 945 -3 408 146
Adjustmentstocashflowfromoperations
Otherincomeandexpenseswithnopaymentrelation -4 047 314 0
Depreciationandamortisation 110 559 202 916
Impairmentofsubsidiaryshares 0 151 349
Write-downonloanreceivable 0 0
Otheradjustments 0 11 223
Financialincomeandexpenses 776 513 707 461
Netcashgeneratedbeforeworkingcapitalchanges,interestandtax -2 120 297 -2 335 197
Changeinworkingcapital -9 621 355 -4 063 366
Interestreceived 66 374 70 470
Interestpaid -1 249 456 -530 173
Taxpaid 0 0
Net cash flow from operating activities -12 924 734 -6 858 266
Cash flow from investing activities
Acquisitionofsubsidiaries,netofcashacquired -124 651 0
Investmentsinproperty,plantandequipmentandinintangibleassets -1 649 -19 406
Total cash flow from investing activities -126 300 -19 406
Cash flow before financing -13 051 034 -6 877 672
Cash flow from financing activities
Increaseinlongtermloans 10 794 189 1 000 000
Paymentoflongtermloans -4 000 000 -1 000 000
Increaseinshorttermloans 5 500 000 3 526 465
Paymentofshorttermloans -3 783 765 -13 393
Repaymentofintercompanyloans 0 -396 000
Proceedsfromrightsissues 5 792 991 3 654 622
Net cash flow from financing activities 14 303 415 6 771 694
Change in cash and cash equivalents 1 252 381 -105 978
Cashandcashequivalentsatthebeginningoftheperiod 5 000 110 978
Cashandcashequivalentsattheendoftheperiod 1 257 381 5 000
Cash flow statement of the parent company
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53 Financial statements 2015
Invested non-
restricted
Share premium equity Retained
EUR Share capital reserve fund earnings Total
Shareholders equity at January 1, 2014 585 394 218 725 29 641 631 -26 661 237 3 784 513
Proceeds from rights issues 0 0 3 654 620 0 3 654 620
Profit for the period 0 0 0 -3 408 146 -3 408 146
Shareholders equity at December 31, 2014 585 394 218 725 33 296 251 -30 069 383 4 030 988
Shareholders equity at January 1, 2015 585 394 218 725 33 296 251 -30 069 383 4 030 987
Proceeds from rights issues 0 0 15 077 918 0 15 077 918
Profit for the period 0 0 0 1 039 945 1 039 945
Shareholders equity at December 31, 2015 585 394 218 725 48 374 169 -29 029 438 20 148 850
The parent company’s distributable funds at December 31, 2015 were EUR 19,344,732 (2014: EUR 3,226,868).
Changes in equity of the parent company
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54 Financial statements 2015
Accounting policies
Tangible and intangible assets. Tangible and intangi-ble assets are shown in the balance sheet at histori-cal cost less depreciation and impairment according
INVESTMENTS. Long term investments are valued at acquisition cost or lower estimated discounted future value.
VALUATION OF FINANCIAL ASSETS
Derivatives. The derivatives of the company include in-terest rate swaps, which are used to convert the float-ing rate of the borrowings from financial institutions to a fixed rate. The fair value of swaps are included char-acteristically either to current receivables or liabilities.
Retirement benefits. The pension cover of parent employees is handled by external pension compa-nies. Pension expenditure is expensed in the year of accrual.
Foreign currency items. Receivables and liabilities de-nominated in foreign currencies have been translated into euros using the exchange rate prevailing on the closing date.
The notes of the parent company has been present-ed as euros, unless mentioned otherwise.
1.
Depreciation periods:
Machineryandequipment 25percent,reducingbalanceorstraight-linedepreciation3-5years
Intangiblerights 4years,straight-line
Otherlong-termexpenses 3–5years,straight-line
to plan. Depreciations begin from the commissioning date of each asset.
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55 Financial statements 2015
Accompanying notes to the income statement of the parent company
2015 2014
OTHER OPERATING INCOME
Finland,conciststotallyofmanagementservicefees 2 475 495 2 773 859
Governmentgrants 0 6 819
Other items 88 308 0
Total 2 563 803 2 780 678
ACCOMPANYING NOTES ON PERSONNEL AND OFFICERS
Numberofparentemployeesduringtheperiod,average 8 10
Numberofparentemployeesattheendoftheperiod 6 10
Personnel expenses
SalariesandremunerationofthemanagementandtheBoardofDirectors -918 823 -931 637
Salariesandremuneration -51 817 -104 614
Pensioncosts -153 904 -177 622
Otherpersonnelexpenses -19 949 -20 302
Total -1 144 493 -1 234 176
AUDITOR’S FEE 2015 2014
KPMGOyAb
Auditfees -43 389 -51 842
Taxadvice -10 436 0
Otherservices -32 629 -29 903
Auditor’sfeestotal -86 454 -81 745
DEPRECIATION AND IMPAIRMENT
Depreciationandamortisationofintangiblerights -86 395 -174 504
Depreciationandamortisationoftangibleassets -24 163 -28 412
Depreciationandamortisationofotherlong-termexpenses 0 0
Total -110 558 -202 917
FINANCIAL INCOME AND EXPENSES
Interestandfinancialincome
Fromgroupcompanies 63 866 56 184
Fromothers 4 061 389 30 811
Total 4 125 255 86 996
Interestandfinancialexpenses
Interestandfinancialexpenses
Fromgroupcompanies -4 524 -11 746
Impairmentofnon-currentassets 0 -172 478
Toothers -979 441 -932 647
Total -983 964 -1 116 870
2.
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56 Financial statements 2015
ACCOMPANYING NOTES ON OFFICERS 2015 2014
Salaries and remuneration
EsaHarjuCEO(until30.6.2015) 229 100 299 681
SamiPaihonenCEO(from1.7.2015) 127 560 0
Board of Directors
EhrnroothPaul(Deputychairmanuntil29.4.2015, 45 167 35 000
chairmanfrom29.4.2015)
ErviPertti(Chairmanuntil29.4.2015, 41 083 52 000
deputychairmanfrom29.4.2015)
HeikkonenMatti(until29.4.2015) 9 417 26 250
KonttinenSamu 26 250 26 000
KoskeloIlari 16 833 0
PylkäsPekka(from29.4.2015) 16 583 0
WiialaMay 27 750 27 762
Totalsalariesandremunerationofofficers(* 539 744 466 693
*)Includingfringebenefits.
The President and CEO has a voluntary supplementary pension arrangement. Please refer to note 29.
Ixonos Management Invest Oy has been granted a loan in connection with the bonus arrangement of the
Group’s management. The arrangement is disclosed in detail in notes 29, ‘Related party transactions’, and 1, ‘Accounting policies for the consolidated financial statement’.
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57 Financial statements 2015
Accompanying notes to the parent company balance sheet
ASSETS 2015 2014
Intangible assets
Acquisitioncostatthebeginningofthefinancialperiod 7 004 939 7 004 939
Acquisitioncostattheendofthefinancialperiod 7 004 939 7 004 939
Accumulated depreciations 0
Depreciationandamortisationforthefinancialperiod -7 004 939 -7 004 939
Accumulateddepreciationsattheendofthefinancialperiod -7 004 939 -7 004 939
Bookvalueattheendofthefinancialperiod 0 0
Intangiblerights
Acquisitioncostatthebeginningofthefinancialperiod 1 570 766 1 567 166
Additionsduringthefinancialperiod 0 3 600
Acquisitioncostattheendofthefinancialperiod 1 570 766 1 570 766
Accumulateddepreciations -1 479 945 -1 305 441
Depreciationandamortisationforthefinancialperiod -86 395 -174 504
Accumulateddepreciationsattheendofthefinancialperiod -1 566 340 -1 479 945
Bookvalueattheendofthefinancialperiod 4 426 90 821
Tangible assets
Machineryandequipment
Acquisitioncostatthebeginningofthefinancialperiod 793 283 778 095
Additionsduringthefinancialperiod 1 649 15 806
Disposalsduringthefinancialperiod 0 -618
Acquisitioncostattheendofthefinancialperiod 794 933 793 283
Accumulateddepreciations -695 887 -668 092
Depreciationandamortisationforthefinancialperiod -24 163 -27 794
Accumulateddepreciationsattheendofthefinancialperiod -720 049 -695 886
Bookvalueamountattheendofthefinancialperiod 74 883 97 397
Investments
Acquisitioncostatthebeginningofthefinancialperiod 22 632 925 22 795 499
Additionsduringthefinancialperiod 1 019 016 0
Disposalsduringthefinancialperiod 0 -162 574
Acquisitioncostattheendofthefinancialperiod 23 651 941 22 632 925
3.
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58 Financial statements 2015
CURRENT ASSETS 2015 2014
Receivables from Group companies
Tradereceivables 2 762 212 2 561 934
Loanreceivablesandgroupaccountreceivables 0 0
Otherreceivables 4 039 541 3 244 128
Total 6 801 754 5 806 062
Receivables from others
Accruals 67 595 140 724
Otherreceivables 37 624 150 915
Total 105 219 291 639
Currentreceivablestotal 6 906 972 6 097 702
Accruals and other receivables
Prepaidexpenses 66 251 106 167
Rentguarantees 36 424 103 973
Valueaddedtaxreceivables 0 46 943
Others 2 543 34 557
Total 105 219 291 639
NON-CURRENT LIABILITIES
Theconvertiblebond 0 3 500 000
Borrowingsfromfinancialinstitutions 7 664 168 0
CURRENT LIABILITIES 2015 2014
Borrowings from financial institutions 253 030 10 759 456
Liabilities to Group companies
Tradepayables 133 271 145 825
Loansandgroupaccountliabilities 2 193 567 9 340 722
Otherliabilities 14 783 10 374
Total 2 341 621 9 496 922
Liabilities to others
Tradepayables 357 706 188 352
Othercurrentliabilities 372 664 37 885
Accruedexpenses 757 563 910 242
Total 1 487 933 1 136 479
Current liabilities total 4 082 584 21 392 857
Accrued expenses
Provisionforholidaypay 89 595 14 192
Interestratehedge 12 662 59 827
Salaries 17 250 12 440
Others 638 056 823 784
Total 757 563 910 242
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59 Financial statements 2015
2015 2014
CONTINGENT LIABILITIES AND GUARANTEES
Leasing and rental liabilities
Leasingliabilities,12months 72 443 74 451
Leasingliabilities,over12months 64407 52708
Leasingliabilitiestotal 136 849 127 159
Rentalliabilities 2 093 258 3 908 100
Otherliabilities 0 0
FinancialguaranteecontractsonbehalfofGroupcompanies 2 015 254 8 781 767
Mortgages. At December 31, 2015, the company had pledged nine company mortgages of EUR 1,000,000 each and one company mortgage of EUR 800,000 as collateral for its borrowings from financial institutions and two company mortgages of EUR 1,000,000 and three mortgages of EUR 500,000 as collateral for its
borrowing from Tremoko Oy Ab. The total amount of company mortgages is EUR 13,300,000. The mort-gages are collateral for EUR 759,089.70 in borrowings from financial institutions and EUR 7,158,108.24 loans from Oy Tremoko Oy Ab.
SUBSIDIARIES
Name Domicile Parent
Cityandcountry ownership
IxonosFinlandOy Helsinki,Finland 100%
IxonosEstoniaOÜ Tallinn,Estonia 100%
IxonosGermanyGmbH Berlin,Germany 100%
IxonosSlovakias.r.o. Košice,Slovakia 100%
BeijingIxonosTechnologyCo.,Ltd. Beijing,China 100%
ChengduIxonosTechnologyCo.,Ltd. Chengdu,China 100%
IxonosDenmarkApS Alborg,Denmark 100%
IxonosUSALtd. SanFrancisco,USA 100%
IxonosHongKongLtd HongKong,China 100%
IxonosUKLtd London,UnitedKingdom 100%
CresenseOy Helsinki,Finland 100%
Cresense Pte.Ltd. Singapore,Singapore 0%
Cresense,Inc. SanFrancisco,USA 0%
Cresense HongKongLimited Hongkong,China 0%
Cresense China(Company)Limited Shanghai,China 0%
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60 Financial statements 2015
Signatures to the financial statements and to the report of the Board of Directors
Helsinki, ____ / ____ 2016
Esa Harju Pertti Ervi President and CEO Chairman of the Board of Directors
Paul Ehrnrooth Matti Heikkonen Vice Chairman of the Board of Directors Member of the Board of Directors
Samu Konttinen Ilari Koskelo Member of the Board of Directors Member of the Board of Directors
May Wiiala Member of the Board of Directors
Auditor’s note
An auditor’s report has been issued today.
Helsinki, ____ / ____ 2016
KPMG OyAuthorised Public Accountants
Esa KailialaAuthorised Public Accountant
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61 Financial statements 2015
Auditor’s Report
To the Annual General Meeting of Ixonos Plc. We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Ixonos Plc for the year ended December 31, 2015. The financial statements comprise the consolidated statement of financial position, in-come statement, statement of comprehensive income, state-ment of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company’s balance sheet, income statement, cash flow statement and notes to the financial statements.
Responsibility of the Board of Directors and the Managing Di-rector. The Board of Directors and the Managing Director are re-sponsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Fi-nancial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accord-ance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropri-ate arrangement of the control of the company’s accounts and finances, and the Managing Director shall see to it that the ac-counts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Auditor‘s Responsibility. Our responsibility is to express an opin-ion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the re-quirements of professional ethics. We conducted our audit in ac-cordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Direc-tors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Com-panies Act or the articles of association of the company.
An audit involves performing procedures to obtain audit evi-dence about the amounts and disclosures in the financial state-ments and the report of the Board of Directors. The procedures selected depend on the auditor’s judgment, including the as-sessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropri-ateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluat-ing the overall presentation of the financial statements and the report of the Board of Directors.
We believe that the audit evidence we have obtained is suf-ficient and appropriate to provide a basis for our audit opinion.
Opinion on the consolidated financial statements. In our opin-ion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Opinion on the company’s financial statements and the report of the Board of Directors. In our opinion, the financial state-ments and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of the fi-nancial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
Emphasis of a matter. We would like to draw attention to the fact that the company has been generating significant losses in recent years. As described in the report of the Board of Directors and in the notes of the financial statements, the company’s exist-ing working capital may not be sufficient to cover the company’s funding needs over the next 12 months. The company estimates that its working capital is expected to be sufficient to fund the company’s operations over the next 12 months if the sales de-velopment is better than the current forecast or the company is able to make larger cost savings than forecasted. A possible financial shortage remaining can be filled with bridge financing. As elaborated in the report of the Board of Directors, the com-pany has strengthened its balance sheet and restructured its debts, whilst attempting to improve its operational profitability. The objective of these measures is to ensure the continuance as a going concern. There is however substantial uncertainty re-lated to operational profitability improvements, which may cast doubt upon the company‘s ability to continue as a going con-cern. Our opinion has not been qualified by this matter.
Helsinki, March 16, 2016
KPMG OY ABEsaKailialaAuthorisedPublicAccountant
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62 Financial statements 2015
Ixonos Plc | PL 284, 00811 Helsinki | www.ixonos.comBusiness ID 0997039-6