The Incap Group will adopt reporting in accordance with International Financial Reporting Standards (IFRS) in the 2005 financial statements. This release presents the effects of IFRS on the Group's opening balance sheet at 1 January 2004 and the 2004 financial statements. The IFRS figures are unaudited.
Quarterly IFRS comparative information on 2005 will be published with each Interim Report in 2006.
The IFRS financial information was prepared in accordance with the standards in force when the release was prepared. Earlier financial statement information was drafted in accordance with Finnish Accounting Standards (FAS).
Share-based Payment (IFRS 2)
In accordance with the transitional provision, the standard is applied to transactions granted after 7 November 2002 that had not fully vested on 1 January 2005, when the standard came into force. Periodised annual expenses amounting to about EUR 0.05 million have been booked on the stock option scheme granted to Incap Corporation's key employees in 2004.
Business Combinations (IFRS 3)
Annual goodwill amortisation is discontinued under IFRS. In accordance with FAS, the Incap Group amortised about EUR 0.1 million in goodwill in the 2004 financial statements. Impairment testing in line with IAS 36 indicated that goodwill on consolidation was not impaired in 2004. Accordingly, in the 2004 IFRS financial statements, goodwill has been reversed to its value at the beginning of 2004.
Non-current Assets Held for Sale and Discontinued Operations (IFRS 5)
In January 2005, the Incap Group took a decision to divest its aluminium machining and plating operations. The income and expenditure of these operations in 2004 have been separated out from the profit and loss account for continuing operations, and the operating result of the discontinued operations is presented as a separate item in the IFRS profit and loss account.
Inventories (IAS 2)
In accordance with IFRS, the Incap Group's inventories comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The change in the accounting method increases inventories in the balance sheet at 1 January 2004 by about EUR 0.5 million and at 31 December 2004 by about EUR 0.5 million.
Income Taxes: deferred tax assets (IAS 12)
In accordance with IAS 12, deferred tax assets amounting to EUR 0.7 million have been recognised in the Incap Group's opening balance sheet at 1 January 2004. The deferred tax assets recognised in the IFRS financial statements for 2004 and the FAS financial statements for 2004 are equal in amount. The deferred tax assets are attributable to a tax-deductible loss on the dissolution of a subsidiary. Deferred tax assets have not been recognised either on any of the losses confirmed in the taxation of the parent company or on the loss on dissolution in its entirety. The total amount of the deferred tax assets arising from temporary differences between accounting and taxation as well as losses confirmed in tax filings is considerably larger than the amount recognised in the balance sheet. The amount of off-balance sheet deferred tax assets will be reassessed annually.
Income Taxes: deferred tax liabilities (IAS 12)
Deferred tax liabilities have been recognised on all taxable temporary differences arising between the carrying amounts and tax values of items in the consolidated balance sheet. The deferred tax liabilities recognised in the balance sheets dated 1 January 2004 and 31 December 2004 do not differ materially from the amounts recognised under FAS.
Segment Reporting (IAS 14)
The Incap Group does not have business or geographical segments that should be reported on in accordance with IAS 14.
Property, Plant and Equipment (IAS 16)
The values of machinery, equipment and property leased under finance lease agreements increase the total amount of property, plant and equipment in the opening balance sheet at 1 January 2004 by about EUR 4.3 million and in the balance sheet at 31 December 2004 by about EUR 2.9 million.
Leases (IAS 17)
The recognition of finance lease agreements in the balance sheet in line with IAS 17 increases long-term and short-term interest-bearing liabilities in the Incap Group's balance sheet. Short-term interest-bearing liabilities in the Incap Group's opening balance sheet at 1 January 2004 were about EUR 1.4 million higher than in the corresponding FAS balance sheet, and long-term interest-bearing liabilities were EUR 4.0 million greater. In the balance sheet at 31 December 2004, short-term interest-bearing liabilities were about EUR 1.4 million higher than in the corresponding FAS balance sheet, while long-term interest-bearing liabilities were about EUR 3.0 million greater.
Employee Benefits (IAS 19)
The Incap Group treats the Finnish pension system under the Employees' Pension Act (TEL) as a defined contribution system. Expenditure incurred due to benefits from occupational disability pensions as part of employees' pension insurance is recognised when the event leading to occupational disability has occurred. For this reason, there is no change in the amount of pension liabilities.
CONSOLIDATED BALANCE SHEET, 31 Dec. 2004
(EUR thousands, unaudited)
The consolidated balance sheet includes discontinued operations.
|
FAS |
IFRS
adjustments |
IFRS |
ASSETS |
|
|
|
Non-current assets |
10 196 |
2 984 |
13 180 |
Tangible assets |
8 060 |
2 909 |
10 969 |
Intangible assets |
471 |
75 |
546 |
Investments |
15 |
- |
15 |
Deferrend tax assets |
1 650 |
- |
1 650 |
|
|
|
|
Current assets |
25 904 |
454 |
26 358 |
Stocks |
12 260 |
454 |
12 714 |
Accounts receivable and other receivables |
13 232 |
- |
13 232 |
Liquid assets |
412 |
- |
412 |
|
|
|
|
Assets, total |
36 100 |
3 438 |
39 538 |
|
|
|
|
|
|
|
|
CAPITAL, RESERVES AND LIABILITIES |
|
|
|
Capital and reserves |
11 712 |
-875 |
10 837 |
Subscribed capital |
20 487 |
- |
20 487 |
Share premium account |
44 |
- |
44 |
Retained earnings from previous years |
-7 602 |
178 |
-7 424 |
Profit/loss for the financial year |
-1 217 |
-1 053 |
-2 270 |
|
|
|
|
Long-term liabilities |
6 749 |
2 912 |
9 661 |
Deferred tax liabilities |
80 |
-79 |
1 |
Interest-bearing liabilities |
6 669 |
2 991 |
9 660 |
|
|
|
|
Short-term liabilities |
17 639 |
1 401 |
19 040 |
Interest-bearing liabilities |
4 339 |
1 401 |
5 740 |
Non-interest-bearing liabilities |
13 300 |
- |
13 300 |
|
|
|
|
Capital, reserves and liabilities, total |
36 100 |
3 438 |
39 538 |
|
|
|
|
CONSOLIDATED PROFIT AND LOSS ACCOUNT
1 January 2004 - 31 December 2004
(EUR thousands, unaudited)
|
FAS |
IFRS
adjustments |
IFRS |
Continuing operations |
|
|
|
Net turnover |
70 790 |
- |
70 790 |
Other operating income |
12 |
- |
12 |
Operating expenses |
65 502 |
-1 469 |
64 033 |
Depreciation and impairment |
1 467 |
1 655 |
3 122 |
Operating profit/loss |
3 833 |
-186 |
3 647 |
Financial income and expenses |
-453 |
-230 |
-683 |
Profit/loss before taxes |
3 380 |
-416 |
2 964 |
Income taxes |
1 711 |
-624 |
1 087 |
Profit/loss from continuing operations |
5 091 |
-1 040 |
4 051 |
Profit/loss from discontinued operations |
-6 308 |
-13 |
-6 321 |
Profit/loss for the financial year |
-1 217 |
-1 053 |
-2 270 |
|
|
|
|
Earnings per share, continuing operations, EUR |
0,28 |
|
0,24 |
Earnings per share, total, EUR |
0,09 |
|
-0,28 |
|
|
|
|
CHANGE IN CAPITAL AND RESERVES
(EUR thousands, unaudited)
|
1 Jan. 2004 |
31 Dec. 2004 |
Capital and reserves, FAS
|
12 929 |
11 712 |
IFRS adjustments: |
|
|
Reversal of goodwill amortisation, IFRS 3 |
- |
75 |
Stocks, IAS 2 |
475 |
454 |
Income taxes, IAS 12 |
702 |
79 |
Finance lease agreements, IAS 17
|
-1 144 |
-1 483 |
IFRS adjustments, total |
33 |
-875 |
Capital and reserves, IFRS |
12 962 |
10 837 |
|
|
|
INCAP CORPORATION
Juhani Hanninen
President and CEO