FINA NC IA L S TATE ME NTS 20 12
BUILDING THE BIGGER PICTURE
F I N A N C I A L S TAT E M E N T S 2 0 1 2 CONTENTS
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Parent company income statement (FAS) Parent company balance sheet (FAS) Parent company cash flow statement (FAS) Parent company accounting principles (FAS) Notes to financial statements, Parent company Destia Ltd. (FAS) Parent company notes concerning assets in the balance sheet (FAS) Parent company notes concerning equity and liabilities in the balance sheet (FAS) Parent company contingent liabilities Group´s key figures Board of Director’s proposal of the disposal of profit Auditor’s report
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BUILDING THE BIGGER PICTURE
Report of the Board of Directors 1 Consolidated income statement and consolidated statement of comprehensive income (IFRS) 7 Consolidated balance sheet (IFRS) 8 Consolidated cash flow statement (IFRS) 9 Consolidated statement of changes in equity 10 1. Accounting principles 11 2. Business operations sold 20 3. Revenue 21 4. Long-term projects 22 5. Material and services 23 6. Other operating income and expenses 24 7. Depreciations 25 8. Impairments 26 9. Employee benefits 27 10. Research and development expenses 28 11. Financial income and expenses 29 12. Income taxes 30 13. Discontinued operations 31 14. Earning per share 32 15. Tangible assets 33 16. Goodwill 34 17. Impairment tests 35 18. Other intaglible assets 36 19. Available receivables and other receivables 37 20. Inventories 38 21. Account receivables and other receivables 39 22. Cash and cash equivalents 40 23. Deferred tax assets and liabilities 41 24. Equity 42 25. Financial liabilities 43 26. Account payable and other liabilities 44 27. Pension obligations 45 28. Provisions 46 29. Financial risk management 47 30. Other lease agreement 50 31. Conditional liabilities and assets 51 32. Insiders 52 33. Events after the end of the reporting period 53
Report of the Board of Directors Operating Environment In 2012, investments in the sector decreased in comparison with the previous year as a result of fixed-price government civil engineering investments. According to a trend assessment by VTT Technical Research Centre of Finland, infrastructure construction contracted by about 2 per cent. In 2012, shrinking sectors included the regional construction of new buildings and street and water supply construction. Cost rises in civil engineering were rapid in comparison to other price rises. According to Statistics Finland, the costs of the civil engineering industry rose 3.1 per cent from December 2011 to December 2012. It is now felt, however, that cost rises are starting to flatten out. Economic uncertainty continues both in Finland and elsewhere in Europe. The eurozone crisis is causing uncertainty and weakening the economic operating environment and the availability of finance, and in that infrastructure construction is no exception. The economic conditions of the civil engineering sector are affected by the development of the Finnish national economy, the public sector financial deficit and the decline in building construction. Megatrends affecting the operations of companies in the infrastructure sector are urbanisation, climate change, the ageing of the population, and safety. Factors that are important to Finnish companies include efficient transport connections, main roads and the feeder routes that support them. A special challenge for Finland is safeguarding the efficiency of the industrial logistical network, especially that concerning wood supply as the countryside suffers from depopulation. The growth in population is concentrated on major population centres: the Helsinki metropolitan area, Tampere, Oulu, Jyväskylä, Vaasa and Turku. In civil engineering, growth is greatest in the large urban areas of Southern Finland. Urbanisation and the resulting increasing passenger traffic also increase the need for new roads and streets, both within growth centres and between them. In the public sector, the focus is being shifted towards the construction and maintenance of growth centres and the routes connecting them. The low volume of repair work in recent decades necessitates the basic improvement of roads and railways. New rail connections are also needed, especially if the planned mining projects come to fruition. Energy distribution networks will be renovated on account of their age and service reliability requirements. Power station projects also need a new trunk line. Infrastructure investments in air and water transport are, on the other hand, predicted to be low. In the commercial premises sector, increase in space utilisation efficiency is reducing the need for new construction. Laborious planning and permit processes are putting the brakes on the construction of wind farms. In infrastructure construction, the government’s project basket contains both government-led projects and joined undertakings with municipalities up to 2020. Major infrastructure investments will maintain service demand for roads and railways. The Ministry of Transport and Communications’ budget for 2013 contains the major government-term road development projects for 2013−2016 approved in the government discussion on spending limits. The size of the programme is €1.0 billion and includes such projects as E18 Hamina–Vaalimaa, National Road 3 Tampere–Vaasa (at Laihia), National Road 5 Mikkeli–Juva, National Road 8 Turku–Pori, the upgrading and electrification of the Ylivieska–Iisalmi–Kontiomäki railway section, the upgrading of Ring Road I, the improvement of Ring Road III (E18), National Road 22 Oulu–Kajaani, and the upgrading of Helsinki Railway Yard. Last year saw much corporate restructuring in the sector, some medium-to-large-sized players disappearing from the market. Infrastructure construction service areas remain, however, rather fragmented as a competitive field. Most of those in the sector are relatively small local companies specialising in a single or limited range of services. The entry threshold to the sector is mainly low. In small and technically simple jobs, Destia’s field of competitors is quite local, but grows to include larger players as the size and level of technical difficulty of projects increase. There are some nationally-operating companies providing a wider range of services. Major infrastructure builder competitors have been aiming for regional markets, and medium-sized companies have in recent years expanded their operations geographically and have got involved in major contracts in the role of main contractor. More international operators have joined the Finnish infrastructure market. The use of foreign labour is growing. It is estimated that the volume of infrastructure construction in 2013 will remain at the same level as the previous year. There will be fewer new major contracts to be won, so competition for them will be fierce. Government investments in infrastructure will decline in the next few years. The budget in deficit is affecting the already scarce financing opportunities for infrastructure construction, in spite of new financing solutions. According to forecasts, the volume of construction will start to increase very slightly in 2014. During the past hundred years, the Finnish climate has changed with a rise in temperature and an increase in precipitation and wind. Climate change makes road weather conditions more difficult and hampers road maintenance. The infrastructure investments and maintenance requirements of cities are increasing. In Finland, the share of over-65-year-olds in the population is increasing rapidly. The labour market is contracting, so functions must be made more efficient and the EU labour market must be utilised. An emphasis on safety is forcing a change in attitudes in the construction industry. Future trends which also concern the infrastructure sector include digitalisation, ecology and user-friendliness. W hen preparing the operating environment, the following sources have been used: Euroconstruct, the Finnish Transport Agency, the Confederation of Finnish Construction Industries, Statistics Finland, the VTT Technical Research Centre of Finland, and the Finnish Ministry of Finance. 1/68
Finnish Ministry of Finance.
IFRS financial statements Since 2011, the consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). The 2012 interim financial reports with their comparative information have been prepared in accordance with IFRS regulations. Before that, the Group’s financial reporting was based on the Finnish Accounting Standards (FAS). The date on which the Group adopted the IFRS was 1 January 2010. The effect on the result of the Norwegian discontinued operations is shown in ‘Discontinuing operations’.
Business development In the 1 January–31 December 2012 accounting period, the operations of Destia Group (hereinafter Destia) consisted of five regional (Cap of the North, W estern Finland, South-W estern Finland, Southern Finland and Eastern Finland) and three national business units (Railways, Rocks and Consulting Services). The Support Functions included Finance, Legal Services, Human Resources, Communications, and Processes. In 2012, Destia’s revenue from continuing operations increased by 3.0 per cent on the previous year to MEUR 507.3 (MEUR 492.5 1 January−31 December 2011). Major ongoing projects, such as the E18 Koskenkylä−Kotka life-cycle project and the Kalasatama project in Helsinki, impacted the growth in revenue over the previous year.
The most significant orders received during the year and the order book The Group’s comparable order book of MEUR 600.8 was 19.4 per cent less than the previous year (745.1). The order book at the end of 2011 contained the order book for the Kalasatama project, the value of which was decreased by about MEUR 60 during the first quarter of 2012. The order book from 2011 has been changed to be comparable. The change in the order book over the previous year is mainly a result of the round of maintenance contracts in spring 2012, when the value of the order book for contracts won was significantly lower than the value of the maintenance contracts received in spring the previous year. Furthermore, the E18 Koskenkylä−Kotka project was almost completely in the order book of the comparison year, and nearly one-third was transferred to the 2012 revenue. Destia has also invested in improving profitability, which has had an impact on the winning of projects and on the order book. Ongoing major projects in 2012 included the E18 Koskenkylä−Kotka life-cycle project, which has progressed according to plan, the Kalasatama project and the KT51 Kivenlahti−Kirkkonummi project. In January, Destia won the 2012−2013 bridge maintenance contract for which bids were requested by the Uusimaa Centre for Economic Development, Transport and the Environment. This two-year contract also includes an option for 2014−2015. Bridge repair work takes place in the regions of Uusimaa, Kanta-Häme and Päijät-Häme. Destia carried out the contract municipal engineering work for the Kotirinne residential district in Hattula. The contract covered the streets and municipal engineering in a town-plan area of about 34 hectares. The work began in February and was completed in October. Destia is carrying out the contract for the construction of the Simola−Sieraniemi connecting road for the town of Nilsiä. The connecting road is a parallel route running from the centre of Nilsiä to the Tahko tourist area. The contract included the construction of a new carriageway and pedestrian and bicycle traffic route over a distance of about 2.9 km. This contract was, by and large, completed by November 2012. The work will reach a full conclusion by August 2013. In the spring rounds of the public invitation for tenders for the regional contracts of main road maintenance, Destia won eight regional contracts out of 15. The five-year contracts won were at Sastamala, Kiuruvesi, Heinola, Lahti, Pello and Siikalatva and the seven-year contracts won were at Kitee and Kokkola. Destia built a 700 metre-long street near the Teivo Trotting Track at Ylöjärvi in Häme, and provided the related municipal engineering work. The construction contract began at the end of April and was completed in the autumn. Destia won the Finnish Transport Agency contract for the Karkkila−Loukku section of National Road 2. This included roadwidening, groundwater protection, interchanges and the construction of animal fences. The work begun in May was concluded in late 2012. Destia quarried out the Kuninkaanväylä pass commissioned by the City of Raisio, in which about 130,000 cubic metres of rock was quarried and a 500 metre-long stretch of road built. The construction work begun in June will be completed in November 2012. The sale of the crushed materials will continue until May 2013. Destia is the contractor for the Sammalisto planning area in Nokia. In addition to street and municipal engineering, the work also included the construction of an electricity distribution network and fibre optics. The contract began in August and will be completed at the end of November 2013. Destia is building a water supply line commissioned by the City of Salo between Teijo and Vuohensaari. The contract involves the installation of a seawater pressure sewer and water pipeline over a distance of about 13.9 km. The seawater work for this contract began in September, and the project will be fully completed in spring 2014. Destia is carrying out the Kalkku water supply contract ordered by Tampereen Vesi. The contract includes the construction of a connecting line and depression embankment as well as quarrying work. The year-long project began in October 2012. 2/68
Consolidated balance sheet (IFRS) EUR 1,000
31.12.2012
31.12.2011
Note
ASSETS
Non-current assets
Tangible assets
15
66,866
71,825
Goodwill
16
16,985
16,985
Other intangible assets
18
2,287
2,744
Pension receivables
27
132
1,047
Available-for-sale financial assets
19
1,661
1,659
Deferred tax assets
23
4,612
5,089
Non-current assets, total
92,542
99,349
Current assets
Inventories
20
24,336
25,389
Accounts and other receivables
21
45,501
83,496
Cash and cash equivalents
22
61,077
53,732
Current assets, total
130,915
162,618
Assets, total
223,458
261,967
EQUITY AND LIABILITIES
24
Equity attributable to equity holders of the parent company
Share capital
17,000
17,000
Invested unrestricted equity fund
56,430
56,430
Other items
-1,259
-1,238
Retained earnings
-2,758
-12,810
Equity, total
69,413
59,382
Non-current liabilities
Deferred tax liabilities
23
1,417
2,407
Provisions
28
15,303
7,601
Financial liabilities
25
32,626
63,263
Non-current liabilities, total
49,346
73,272
Current liabilities
Accounts payable and other liabilities
26
65,066
76,468
Provisions
28
13,162
18,489
Financial liabilities
25
409
3,008
Advances received
26,060
31,346
Current liabilities, total
104,699
129,312
Equity and liabilities, total
223,458
261,967
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Consolidated cash flow statement (IFRS) EUR 1,000
1.1.-31.12.2012
OPERATING CASH FLOW STATEMENT
Cash receipts from customers Expenses paid to suppliers and personnel Interests paid Dividends received Interests received Other financial items Tax paid Net operating cash flow, continuing operations
1.1.-31.12.2011
535,248
490,742
-488,657
-460,544
-1,736
-2,442
2
2
333
624
-2,131
-648
-792
-83
42,267
27,650
Net operating cash flow, discontinued operations
-3,143
1,343
Net operating cash flow
39,124
28,994
INVESTMENT CASH FLOW
Investments in intangible and tangible assets Sale of intangible and tangible assets Investments in other assets Proceeds from the sale of other investments Net investment cash flow, continuing operations
-7,179
-4,665
5,818
15,207
-4
-51
266
-1,365
10,757
Net investment cash flow, discontinued operations
-43
-1,365
10,713
Net investment cash flow
FINANCIAL CASH FLOW
Decrease in non-current debt (-) Increase in short -term financing (+) Decrease in short-term financing (-) Net financial cash flow, continuing operations
-30,028
-24
5,159
-472
-16,413
-30,500
-11,278
Net financial cash flow, discontinued operations
-1,030
-30,500
-12,309
Net financial cash flow
Change in cash and cash equivalents Cash and cash equivalents at beginning of financial year Effect of exhange rate changes Cash and cash equivalents at end of financial year
9/68
7,259
27,399
53,732
26,324
86
9
61,077
53,732
Consolidated statement of changes in equity
Equity attributable to equity holders of the parent company Hedge instrument Share capital fund
EUR 1,000 Equity 1 Jan 2011
17,000
Invested unrestricted equity fund
124
Translation Retained differences earnings
56,430
-69
Other comprehensive income
Result for the period
Other comprehensive items:
Translation differences
Cash flow hedges
Actuarial profit or loss from benefit-based arrangements
Comprehensive profit and loss for the financial year, total
Equity total 31 Dec 2011
-1,297 17,000
-1,173
56,430
Hedge instrument Share capital fund
7
-65
Equity 1 Jan 2012
17,000
Invested unrestricted equity fund
-1,173
56,430
702
702
-12,292
-13,584
-12,810
-65
Result for the period
Other comprehensive items:
Translation differences
Cash flow hedges
Actuarial profit or loss from benefit-based arrangements
Comprehensive profit and loss for the financial year, total
Equity total 31 Dec 2012
-88
-88 17,000
10/68
-1,261
56,430
12 -1,297
59,382
Translation Retained differences earnings
Other comprehensive income
-13,001
5
72,967
-13,001
Equity attributable to equity holders of the parent company
EUR 1,000
5
-1,297
Total
-518
Total
-12,810
59,382
10,809
10,809
67
67
-88 -757
-757
67
10,052
10,031
2
-2,758
69,413
Subsidies that have been received as payments against already realised costs are recognised through profit or loss in the period in which the subsidy is realised. Subsidies are presented in other operating income.
Intangible assets Goodwill
Goodwill is recognised at the amount by which the transferred consideration exceeds the Group’s share of identifiable fair value net assets for an acquired company on the date it is acquired. Goodwill arising from the merger of business operations prior to 2010 is equivalent to the book value according to the earlier norms for the financial statements, which is used as the default acquisition cost under IFRS 1. No deprecation is recognised for goodwill (or any other unlimited-life intangible assets), but it is tested annually for potential impairment. For this purpose, goodwill is allocated to units producing money flow. Goodwill is measured at the original acquisition price less impairment. Research and development expenditure
Research expenditure is recognised through profit or loss. Development expenditure incurred from the planning of new or more advanced procedures and concepts is capitalised as intangible assets in the balance sheet from the time when they are technically feasible, can be commercially exploited and can be expected to produce future economic benefit. Capitalised development costs include the material, labour and testing costs which are directly incurred when preparing the commodity for its intended purpose. Previously amortised development costs are no longer recognised at a later date. Amortisation begins when the asset is ready to be used. Incomplete assets are tested annually for impairment. After initial recognition, capitalised development costs are valued at the original acquisition cost less amortisation and impairment. At the time the financial statements were prepared the Group had no capitalised development expenditure. Other intangible assets
An intangible asset is entered in the balance sheet at the original acquisition cost, where it can be determined reliably and where the Group is likely to expect to benefit financially from the asset in the future. Intangible assets with a restricted useful life are amortised on a straight-line basis through profit or loss within their known or estimated useful life. The depreciation periods for other intangible assets are: Computer software: 5 years Other intangible rights: 5 years
Inventories Inventories are measured at the acquisition cost or net realisation value, whichever is the lower. The acquisition cost is determined using the average weighted share price method. The acquisition cost of finished good and intermediate inventories consists of the raw materials, the expenses incurred from direct work, other direct expenses, an appropriate share of the variable general costs of manufacture and fixed general costs at a normal level of activity. The net realisable value is the estimated selling price in the ordinary course of business less the estimated necessary costs of completion of the inventories and the estimated costs necessary to realise yield.
Rental agreements The Group as lessee
Rental agreements relating to fixed tangible assets, which expose the Group to significant risks and rewards inherent in holding such assets, are classified as finance lease agreements. An asset acquired through a finance lease agreement is entered in the balance sheet at the inception of the lease at the fair value of the leased commodity or the present value of the minimum lease payments, whichever is lower. An asset acquired through a finance lease agreement is depreciated over its useful life or within the lease term, whichever is shorter. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability so that the finance charge is allocated to each period during the lease term to produce a constant periodic rate of interest on the remaining balance of the liability. Rental obligations are included in financial liabilities. Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as other rental agreements. Payments made under operating leases expenses are charged to the income statement on a straight-line basis over the period of the lease. The Group as lessor
Assets let by the Group are included in tangible fixed assets in the balance sheet. They are depreciated during their useful life in the same way as equivalent tangible fixed assets in the Group’s use. Revenue from rental agreements is charged to the income statement on a straight-line basis over the period of the lease.
Impairment of tangible and intangible assets At each date the reporting period ends, the Group assesses whether there are suggestions that an asset is impaired. If there are such signs, an estimate is made of the amount that is recoverable on the asset in question. In addition, an estimate is made each year of the following: goodwill, unlimited-life intangible assets and intangible assets in progress. 13/68
The need to record impairment is examined at the level of units producing money flow, i.e. at the lowest unit level, which is mainly independent of the other units and whose money flows can be distinguished from the money flows of equivalent units and are virtually independent of them. The recoverable amount is the fair value of the asset less expenditure incurred from its sale or its utility value, whichever is the greater. The utility value is the present value of future net money flows expected to be derived from an asset or cash-generating unit. The discount rate is the pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised when the book value of an asset is greater than its recoverable amount. An impairment loss is recognised directly through profit or loss. If the impairment loss is allocated to a unit producing a money stream, it is first applied to reduce the goodwill for that unit, and then to reduce the value of other assets of the unit uniformly. W hen an impairment loss is being entered, the useful life of the asset being depreciated is re-assessed. An impairment loss for an asset other than goodwill is reversed if there has been a change in the values used to determine the recoverable amount on the asset. However, impairment losses cannot be reversed to exceed the asset’s book value as it would be, had no impairment loss been recognised. In no circumstances can impairment losses recognised for goodwill be reversed.
Employee benefits Pension obligations
Pension schemes are classified as defined benefit or defined contribution plans. W ith the latter, the Group pays fixed premiums into a separate unit. The Group has no legal or constructive obligation to increase premiums if the organisation in receipt of the premiums is unable to pay the relevant pension benefits. All schemes that do not fulfil these conditions are defined benefit plans. Payments made into defined contribution plans are recognised through profit or loss in the financial year in which the obligation arises. The Group’s obligations regarding defined benefit plans are calculated separately for each scheme, using the projected unit credit method. Pension expenditure is recognised as costs on the basis of authorised actuarial calculations for the length of service of personnel. W hen the current value of a pension obligation is being calculated, the discount rate used is the yield on high-quality bonds issued by companies, and if that is not available, the interest on state debentures. Owing to the non-recurring payment of pension contributions, the pay rise percentage used in the calculations is 0. The maturity of bonds and debentures corresponds essentially to the maturity of the pension obligation being calculated. From the current value of a pension obligation in a balance sheet is subtracted the assets included in the pension scheme measured at fair value on the last day of the reporting period and the unvested past service costs. All actuarial gains and losses that accumulated by 1 January 2010, the date of the switchover to IFRS standards, were recognised under equity in the opening IFRS balance sheet, in accordance with IFRS 1 standard. Actuarial gains and losses thereafter are recognised in other comprehensive income in the period in which they are made. Past service costs are recognised on the straight-line basis through profit or loss for the period in which they are vested. If the benefits are vested directly, they are recognised as direct costs.
Provisions and contingent liabilities Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are stated at the present value of the obligation. The discount rate is determined to reflect current market assessments of the time value of money and the risks specific to the obligation. If the Group expects a provision to be reimbursed, for example, by a third party, the reimbursement is recognised as a separate asset if the reimbursement is virtually certain. A quality reservation (provision) is recognised when a project covered under a guarantee clause is delivered. The amount of the quality reservation (provision) is based on the experience-based estimate of the guarantee costs to be incurred. The Group recognises a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting obligations. A reorganisation provision is recognised when the Group has drawn up a detailed reorganisation plan, begun on its execution and reported the matter. A provision associated with environmental obligations is recognised when the Group has an obligation based on environmental legislation and the Group’s principles of environmental responsibility and which relates to the decommissioning of a production plant, landscaping responsibilities, repairing environmental damage or moving equipment from one place to another. A contingent liability is a potential obligation arising as a result of past events, whose existence is only confirmed when an uncertain event takes place which is beyond the Group’s control. Contingent liabilities may also be regarded as existing obligations that are unlikely to require fulfilment of a payment obligation, or a reliable estimate of the amount cannot be made. A contingent liability is presented in the Notes to the Financial Statements. Taxes based on taxable income for the period and deferred taxes
Tax expenses comprise tax based on taxable income for the period and deferred tax. Income tax is recognised through profit or loss, except for taxes related to items recognised directly to the shareholders’ equity or the comprehensive income statement. W ith these, tax is recognised in the relevant items. Tax based on taxable income for the period is calculated using the corporate income tax rate effective in each country. Deferred taxes are calculated on all temporary differences between the book value and taxable 14/68
value. However, no deferred tax liability is recognised if it is due to the initial recognition of an asset or liability where there is no matter of a merger or the commercial transaction at the time does not affect the business results or taxable income. Deferred taxation is recognised for investments in subsidiaries, except where the Group is able to specify a date on which the temporary difference dissolves and the temporary difference will probably not dissolve in the foreseeable future. The largest temporary differences arise from the depreciation of tangible fixed assets, the valuation of derivative contracts at fair value, defined benefit pension plans and unused taxable losses. Deferred taxes are calculated using the statutory tax rates by the last day of the reporting period or the tax rates which have been approved in practice by the closing date. Deferred tax assets are recognised to the extent that it is probable that taxable income, against which the temporary difference can be applied, will materialise in the future. Revenue recognition
Sales (Turnover) are/is presented in such a way that the revenue from the sales of goods and products at fair value are recognised and adjusted to allow for indirect taxes, discounts and exchange rate differences for sales in foreign currencies. Long-term projects
The revenue and costs of long-term projects are recognised as such with reference to the stage of completion, when the final financial result for the project can be reliably estimated. The stage of completion is determined for each project as the share of the costs incurred from the work carried out by the review date compared with the total costs estimated for the project. Expenditure that relates to a project still not entered as income is recognised as long-term projects in progress under inventories. If the expenditure incurred and recognised gains exceed the amount invoiced for the project, the difference is shown under trade and other receivables in the balance sheet. If the expenditure incurred and recognised gains are less than what is invoiced for the project, the difference is shown under trade payables and other debt. W hen the end financial result of a long-term project cannot be reliably assessed, the project expenditure is recognised in the same period in which it is incurred, and the revenue from the project is only recognised up to the amount where a sum of money equivalent to the expenditure incurred is available. If it is probable that the overall expenditure incurred in completing the project will exceed total income from it, the expected loss is entered as a direct cost. Sold goods and services
Revenue from the sale of goods is recognised when the significant risks, rewards and effective control associated with the ownership of the goods have transferred to the purchaser. As a general rule, this is when delivery under the terms of the contract relating to the products takes place. Revenue from services is entered as income in the financial year in which the service is delivered. Interest and dividends
Interest received is recognised using the effective interest rate method, and dividend income when entitlement to a dividend arises.
Non-current assets held for sale and discontinued operations Non-current assets (or a disposal group) and assets and liabilities relating to discontinued operations are classified as held for sale, if their book value will be recovered principally through the sale of the assets rather than through continuing use. For this to be the case, the sale must be highly probable, the asset (or disposal group) must be available for immediate sale in its present condition, subject only to terms that are usual and customary, the management must be committed to selling and the sale should go ahead within one year from the date of classification. Immediately prior to classification, the assets held as for sale or assets and liabilities of a disposable group are measured in accordance with the IFRS standards to be applied. From the time of the classification, assets held for sale (or a disposable group) are measured at book value or at fair value less the expenditure incurred from their sale, whichever is the lower. Depreciation of these assets ends at the time of classification. Assets included in a disposable group - and not included in the scope of the IFRS 5 valuation rules - and liabilities (in a disposable group) are measured in accordance with the IFRS standards even after the classification date. A discontinued operation is a part of the Group which has been disposed of or which has been classified as held for sale, and which meets the following conditions: it is a significant separate business unit or unit representing a geographical area, part of one coordinated plan relating to disposal of a separate key business area or geographical territory, or a subsidiary that was acquired exclusively for the purpose of selling it on. The financial result for discontinued operations is recognised as its own item in the Group’s comprehensive income statement. Assets held for sale, disposable groups, items recognised in other comprehensive income relating to assets held for sale, and liabilities included in a disposable group are presented in the balance sheet separately from other items.
Financial assets and liabilities Financial assets
The Group classifies financial assets in the following categories: financial assets at fair value through profit or loss, investments held till maturity, loans and other receivables and available-for-sale financial assets. The classification depends on the purpose of the acquisition of the financial assets, and they are classified when they are originally purchased. Transaction costs are included in the original book value for financial assets, where it concerns an item that is not measured at fair value through profit or loss. All purchases and sales of financial assets are recognised on the date of trading, which is the date on 15/68
which the Group undertakes to buy or sell the financial instrument. The balance sheet depreciation of financial assets takes place when the Group has lost its agreed entitlement to money flows, or when it has transferred risks and revenue outside the Group to a significant extent. Included in financial assets at fair value through profit or loss are items included in financial assets acquired to be held for trading, or which are classified at fair value at initial recognition through profit or loss (use of the fair value option). The classification may only be altered in rare circumstances. The latter group includes financial assets that are managed based on fair value or an item included in financial assets associated with one or more embedded derivatives that changes contractual money flows substantially, where the entire compound instrument is measured at fair value. Financial assets held for trading are mainly acquired to control changes in short-term market prices. Derivatives that are not contracts of guarantee or do not meet the conditions of hedge accounting are classified as held for trading. Derivatives that are held for trading and financial assets maturing within 12 months are included in current assets. Group items are measured at fair value, based on the quoted market price on the last day of the reporting period. The fair values of interest rate swaps are determined as the current value of future money flows and foreign exchange forwards are measured at the rates in force for them on the last day of the reporting period. W hen measuring derivatives and other financial instruments that are not to be traded, the Group usually uses approved valuation methods and discounted values for future money streams. Both unrealised and realised gains and losses from changes in fair value are recognised through profit or loss in the financial year in which they are made. Loans and other receivables are non-derivative assets with fixed or measurable payments. They are not quoted in active markets and the Group does not hold them for trading or classify them as available-for-sale at initial recognition. They are valued at amortised cost using the effective interest rate method. Loans and other receivables are presented as current or non-current financial assets depending on their nature, the latter if they mature after 12 months have passed. Available-for-sale financial assets are non-derivative assets specifically included in this classification or not included in any other. They are included in non-current assets, except if they are to be held for under 12 months from the last day of the reporting period, in which case they are included in current assets. Available-for-sale financial assets may consist of shares and interest-bearing investments. They are measured at fair value or, when fair value cannot be reliably determined, at acquisition cost. The fair value of an investment is determined with reference to its buying rate. If there are no quoted rates for available-for-sale financial assets, the Group applies various valuation methods to value them. They include, for example, references to recent trades between independent bodies, discounted money flows or valuations for other similar instruments. For this, information obtained from the markets is generally used as opposed to contributing factors that the Group has itself decided, which are used as little as possible. Changes to the fair value of available-for-sale financial assets are recognised in other comprehensive income, and are presented in the fair value fund, with consideration being given to their implications for tax. Accumulated fair value adjustments are transferred from equity through profit or loss when an investment is sold or its value is impaired so that an impairment loss on the investment should be recognised. Interest on available-for-sale debt instruments is recognised in finance income using the effective interest rate method. Cash and cash equivalents
Cash and cash equivalents include cash balances, short-term deposits with banks and other short-term liquid investments with maturity up to three months at the time of acquisition. They are easily exchangeable for an amount of cash known beforehand and the risk of changes to their value is minimal. Impairment of financial assets
The Group assesses on the last day of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired. If the fair value of investments has fallen significantly below the acquisition cost and period determined by the Group, this is an indication of an impairment of available-for-sale share. If any such evidence exists, the amount recognised in the shareholders’ fair value reserve is unrecognised and recognised in the income statement. Impairment loss on available-for-sale financial assets categorised as equity instruments are not reversed through profit or loss. A later reversal of impairment loss on interest rate instruments is, however, recognised through profit or loss. The Group recognises an impairment loss on trade receivables, when there is objective evidence that a receivable is not fully collectible. The borrower’s significant financial difficulties, probability of a bankruptcy or non-payment exceeding 90 days are evidence of impairment loss on a trade receivable. Financial liabilities
Financial liabilities are initially recognised in accounting at fair value. Transaction costs are included in the initial book value of the financial liabilities measured at acquisition cost. Later, financial liabilities, except for derivatives that are liabilities, are measured at amortised acquisition cost using the effective interest rate method. Financial liabilities are included in non-current and current liabilities, being classed as current unless the Group has an unconditional right to defer payment of the debt within at least 12 months from the last day of the reporting period. Expenses under liabilities are recognised as costs in the period in which they are incurred. Commissions associated with loan commitments are recognised as transaction costs to the extent that it is probable that the entire loan commitment or part of it will be taken up. In such a case, the commission is entered in the balance sheet until the loan is taken up. W hen it is, the commission associated with loan commitments is recognised as part of the transaction costs. If the loan commitment is unlikely to be taken up, the commission is recognised as an advance payment for a liquidity service and is amortised as a cost for the period of the loan commitment. 16/68
The principles for determining the fair value of all financial assets and liabilities are set out in the Notes to the Financial Statements under Fair values for financial assets and liabilities. Derivative financial instruments and hedge accounting
Derivatives are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured at their fair value. Gains and losses resulting from measurement at fair value are treated in the accounts in the way specified for the purpose of use of the derivative instrument. The profit and loss effects of the changes to the values of derivative instruments where hedge accounting is applied, and which are effective hedging instruments, are presented uniformly with the hedged item. W hen entered into, derivative financial instruments are treated as fair value hedges of receivables, liabilities or fixed commitments, or, in the case of currency exchange risk, as money flow hedges, money flow hedges for an anticipated and highly likely commercial transaction, as hedges of net investments in a foreign unit, or as derivative financial instruments that do not meet the hedge accounting criteria. W hen a hedging arrangement is entered into, the relationship between the item being hedged and the hedging instrument, as well as the objectives of the Group’s risk management and the hedging strategy are documented. W hen starting out, and at least every time the financial accounts are being prepared, the Group documents the effectiveness of qualifying derivatives by examining their ability to offset changes to the fair value of the hedged item or money streams. Money flow hedging
The change in the fair value of the effective portion of derivative instruments qualifying for hedge cash flow is recognised in other comprehensive income and presented in the hedge fund under equity (in Other funds). The gains and losses accumulated in equity from hedging instruments are transferred to the statement of income when the hedged item impacts on profit or loss. Gains and losses from derivatives hedging an anticipated sale in a foreign currency are recognised as sales adjustments when the sale goes ahead. The ineffective portion of a derivative instrument is recognised in other operating income and expenses. If a hedged, anticipated commercial transaction leads to the recognition of an asset not included in financial assets, such as a tangible fixed asset, the gains and losses accumulated in equity are reclassified as an adjustment to the acquisition cost of that asset. W hen a derivative financial instrument acquired for money flow hedging matures or is sold, or when the conditions of hedge accounting are no longer met, the gain or loss from the derivative instrument remains under equity until such time as the anticipated commercial transaction takes place. However, if that is no longer expected to happen, the gain or loss under equity is directly recognised through profit or loss. Other hedging instruments where hedge accounting does not apply
Even if certain hedging relationships meet the requirements of effective hedging set for the Group’s risk management, hedge accounting may not apply to them. Such instruments include derivatives hedging a commodity risk in connection with operations and some derivatives hedging currency risks. Changes to their fair value are recognised in other business revenue and costs in accordance with the Group’s established practice. In the balance sheet, these commodity risk and foreign currency trade receivable/account payable derivatives are presented in current receivables or liabilities. The fair values for hedging instruments are presented in Notes to the Financial Statements under Fair values for financial assets and liabilities. Changes to the hedge fund are presented in Notes to the Financial Statements under Equity, in the section Other funds. Share capital
Ordinary shares are presented as share capital. Expenditure relating to the issue or acquisition of own equity instruments are presented as an allowance account under equity. Operating profit
IAS 1 standard (Presentation of Financial Statements) does not define operating profit. The Group has defined it as follows: operating profit is the net sum obtained after adding other operating income to revenues and then deducting purchasing costs adjusted by the change in stocks of finished products and work in progress, the costs incurred for own-use manufacture, costs from employee benefits, depreciation, amortisation and any impairment losses, and other operating expenses. All other income statement items are presented under operating profit. Exchange rate differences and changes in the fair value of derivatives are included in operating profit if they arise from items connected with business operations; otherwise they are entered in financing items. In its tables and texts, the Group uses both the term ‘operating result’ and ‘operating profit’. Accounting policies requiring discretion on the part of the management and the main factors of uncertainty connected with the estimates made
Estimates and assumptions regarding the future have to be made during preparation of the financial statements, but the final outcome may be otherwise. Furthermore, the application of accounting policies requires discretion. Discretion on the part of management regarding choice and application of accounting policies
Group management makes considered decisions regarding the selection and application of accounting policies. This applies in particular to those cases in which the IFRS standards in effect provide the opportunity to choose between various accounting, valuation or presentation methods. The main area where management has exercised its discretion in this way relates to the exemptions allowed and utilised by the Group in IFRS 1 in the adoption of IFRS standards, such as the treatment of acquisitions prior to the switchover date in accordance with the rules applied at that time. Factors of uncertainty connected with estimates
The estimates made in connection with preparing the financial statements reflect the best judgement of the management on the last day of the reporting period. These estimates are affected by past experience and assumptions regarding future developments, which are regarded as well-founded at the time of closing of the accounts, and which relate, for example, to expected trends in the 17/68
Group’s economic operating environment in terms of revenue and costs. The Group regularly monitors the realisation of these estimates and assumptions and any changes to background factors with the business units through internal and external information sources. Any changes in estimates and assumptions are recognised in the financial statements of the period during which such corrections are made. The key assumptions regarding the future and the main factors of uncertainty connected with the estimates made on the last day of the reporting period, which pose a significant risk of change to the book values of the Group’s assets and liabilities basically during the following year, are given below. Group management regards these particular areas of the financial statements as crucial. Application of accounting policy as it affects them mostly requires the utilisation of significant estimates and assumptions. Impairment testing
The Group carries out annual impairment testing of goodwill, intangible assets in progress and intangible assets having an indefinite useful life. Suggestions of impairment are evaluated in the way described above in the accounting policies. The recoverable amounts of cash-generating units have been defined on the basis of value in use calculations. These calculations call for the use of estimates. Recognition as income and expenses
As described in the revenue recognition policies, the revenue and costs of a long-term project are recognised as income and expenses on the basis of the stage of completion, once the outcome of the project can be reliably estimated. Recognition associated with the stage of completion is based on estimates of expected income and expenses of the project and reliable measurement of project progress. If estimates of the project's outcome change, the recognised income and profit/loss are amended in the period in which the change is first known about and can be estimated for the first time. Any loss expected from a project is directly recognised as an expense. More information on long-term projects is given in Notes to the Financial Statements under Turnover. Tax
W hen tax is recognised in the accounts, management’s most essential estimate applies to the criteria for recording deferred tax receivables. W hen a tax-deductible temporary difference dissolves, it results in smaller quantities of taxable income in subsequent financial years. The most common deductible temporary difference between taxation and accounts is a loss verified in taxation. Management has to estimate whether in the future sufficient taxable income will accumulate against which unused tax losses can be used. A deferred tax receivable is only recognised on losses to the extent that there is an estimated income to be generated in subsequent financial years, against which the company can probably reduce its tax losses. Employee benefits
The factors used to calculate employee benefit obligations that require the management’s assessment are connected, for example, to an estimate of the expected return on funds in defined benefit pension plans, determining the discount rate used to calculate the pension cost and obligation for the financial year, forecasting future trends in pay, the assumed rise in pension costs, assumed lengths of service of personnel, and inflation trends. Provisions
W hen recognising provisions, the management has to assess whether there is a legal or actual obligation in which there is a probable liability to pay a debt. In addition, they have to assess the extent of the obligation and estimate the time when it is realised. If all this can be done reliably, the obligation is recognised as a provision in the financial statements.
Application of new and amended IFRS standards The IASB has published the following new or amended standards and interpretations, which the Group has not as yet applied. The Group will adopt them from the date on which they come into effect, or if that date is other than the first day of the financial year, from the start of the subsequent financial year. The Group does not consider that the other standards or interpretations published by the IASB, and not listed here, are relevant to the Group’s future financial statements. The amended or new standards listed below are not yet approved for application in the EU. Change to IAS 1 Presentation of Financial Statements (in effect on1 July 2012 or in financial years commencing thereafter). The main change is the requirement to group items in other comprehensive income according to whether they can be reclassified into profit or loss at a later date if certain conditions are met. The change will not affect the method of presentation of the comprehensive income statement used by the Group. Change to IAS 19 Employee Benefits (in effect on 1 January 2013 or in financial years commencing thereafter). The main change is that all actuarial gains and losses must in future be recognised directly in other items in the comprehensive income statement, i.e. abolition of the ‘corridor’ method, with financial expenditure being determined on the basis of net reserves. The change will not affect the Group, as Destia enters actuarial profit and loss in ‘Other comprehensive profit and loss items’, as permitted by IAS 19. IFRS 10 Consolidated Financial Statements (in effect on 1 January 2013 or in financial years commencing thereafter). The standard determines the key factor for control in accordance with existing principles, where it is decided whether the organisation should be consolidated. The standard also gives additional guidance on defining control when it is difficult to judge. In the view of the Group, the standard will not significantly affect the Group’s financial statements. The Group will apply the standard from 1 January 2014. IFRS 11 Joint Arrangements (in effect on 1 January 2013 or in financial years commencing thereafter).The core principle of this standard joint arrangements focuses on the resulting rights and obligations in accounting for joint arrangements rather than their legal form. Joint arrangements are of two types: joint operations and joint ventures. The standard furthermore requires one method, the equity method, to be used in reports on joint ventures, the earlier proportionate consolidation option no longer being permitted. 18/68
In the view of the Group, the standard will not significantly affect the Group’s financial statements. The Group will apply the standard from 1 January 2014. IFRS 12 Disclosure of interest in other entities (in effect on 1 January 2013 or in financial years commencing thereafter). This standard contains requirements in the notes to financial statements concerning interests in other entities, including associates, joint arrangements, companies set up for a specific purpose, and other off-balance sheet entities. The Group will apply the standard from 1 January 2014. IAS 27 (amended 2011) Consolidated and Separate Financial Statements(in effect on 1 January 2013 or in financial years commencing thereafter). This amended standard contains the requirements for separate financial statements remaining since the sections on control have been incorporated in the new IFRS 10. In the view of the Group, the standard will not significantly affect the Group’s financial statements. The Group will apply the standard from 1 January 2014. IAS 28 (amended 2011) Investments in Associates and Joint Ventures (in effect on 1 January 2013 or in financial years commencing thereafter). This amended standard contains the requirements for treating associates and joint ventures using the equity method resulting from the publication of IFRS 11. The Group will assess the possible impact of the new standards for consolidated financial statements mentioned above on its financial statement in the forthcoming financial year. The Group will apply the standard from 1 January 2014. IFRS 13 Fair Value Measurement(in effect on 1 January 2013 or in financial years commencing thereafter). The standard’s purpose is to increase level of conformity and reduce complexity, as it gives a precise definition of fair value and unites in the same standard requirements for defining fair value and the necessary notes to the financial statements. The Group does not consider that the standard will have any major impact on its financial statements. In the view of the Group, the standard will not significantly affect the Group’s financial statements. IFRS 9 Financial Instruments(in effect on 1 January 2015 or in financial years commencing thereafter). IFRS 9 is the first phase of a larger project aimed at replacing IAS 39 with a new standard. The various valuation methods are retained, but are simplified. Financial assets are divided into two main groups based on valuation: those measured at amortised acquisition cost and those measured at fair value. The classification depends on the company’s business model and the characteristics of agreed money streams. The Group will assess the possible impact of the standard on its financial statements in subsequent financial years. The standard has not yet been approved for application in the EU.
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2 Business operations sold In 2012, no businesses were divested. In the reference year, 2011, Destia outsourced its worksite facilities and some of its small construction machines and the related operations to Ramirent Finland Oy. The sale of surfacing operations between Destia and NCC Roads was carried out in November. Destia’s surfacing business was sold in its entirety, with the exception of an asphalt plant located in the metropolitan region, which was sold separately to Ykkösasfaltti Oy in 2012.
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3 Revenue EUR 1,000
2012
2011
Revenue, materials
20,829
Revenue,services
89,365
16,175 89,489
Revenue, recorded for long-term projects
397,078
386,847
Revenue, total
507,272
492,511
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4 Long-term projects EUR 1,000
2012
Accrued expenses realised and profits recorded (less losses) Advance payments received for unfinished projects
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2011
669,750
678,756
25,334
30,716
5 Material and services EUR 1,000
2012
Purchases during financial year
107,397
Change in inventories
2011 93,544
891
-1,001
External services
247,356
246,600
Materials and services, total
355,644
339,142
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6 Other operating income and expenses EUR 1,000
2012
2011
Sales profits from tangible and intangible assets and relinquishing operations
3,178
Rental and other income
2,098
2,634
Other operating income, total
5,277
10,697
Losses from sale of tangible and intangible assets Rents Voluntary personnel expenses Other fixed expenses Other operating expenses, total
8,063
180
346
7,000
8,096
1,869
1,808
33,554
36,681
42,604
Auditing expenses
46,930
Actual auditing
124
74
Tax consulting
11
3
135
79
Other services
Auditing expenses, total
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3
7 Depreciations EUR 1,000
2012
Depreciations of tangible assets
2011
Buildings and structures
692
Buildings and structures, financial leasing
255
290
11,657
15,592
649
644
Machinery and equipment Machinery and equipment, financial leasing
Other tangible assets
740
0
Depreciations of intangible assets Intangible rights Depreciations, total
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619
651
13,871
17,917
8 Impairments In 2012, no impairments were made for machinery and equipment (2011: EUR 1,160 thousand). Goodwill impairments are covered in Notes 16 and 17.
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9 Employee benefits EUR 1,000
2012
2011
Wages and salaries
71,893
74,151
Pension expenses, payment-based arrangements
10,326
9,490
Pension expenses, benefit-based arrangements Other personnel-related expenses Employee benefit expenses, total
-88
-273
4,338
4,759
86,470
88,127
Information about employee benefits to the management is provided in Note 32, Insiders. Information about benefit-based pension arrangements is provided in Note 27, Pension obligations.
Average personnel
2012
2011
Waged employees
672
Clerical employees
919
945
1,591
1,813
Average personnel, total Personnel at end of financial year
868
1,502
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1,602
10 Research and development expenses The expenses of the Group's research and development activities in 2012 totalled MEUR 2.9 (2011: MEUR 1.1). The Group has not activated its research and development expenses in the balance sheet.
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11 Financial income and expenses EUR 1,000
2012
Financial income
Interest income from loans and other receivables
2011
333
Other financial income Total
Fiinancial expenses
Interest expenses from financing liabilities recognised at atmortised cost Changes in value of financial assets and liabilities recognised at fair value through profit and loss Interest expenses for financial leasing contracts Other financial expenses Total
723
2
2
335
725
1,736
2,457
102
262
43
48
1,545
1,523
3,426
Financial income and expenses, total
4,290
-3,091
-3,566
Information about financing is provided in Note 29.
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12 Income taxes EUR 1,000
2012
2011
Tax based on taxable income for the period
10
Taxes from previous periods
10
15
-203
1,231
-183
1,272
Deferred taxes Total
25
Comprehensive income items include EUR 29 thousand of deferred tax income resulting from cash flow hedging (2011: 421 thousand of tax expenses) and from benefit-based pension arrangements EUR 245 thousand (2011: EUR 249 thousand of tax expenses).
Reconciliation statement between tax expense and taxes calculated using the Group's domestic tax rate (24,5%)
Result before taxes
10,869
Taxes calculated using domestic tax rate
4,790
2,663
1,245
Different tax rates for foreign subsidiaries
11
-24
Tax effect of tax-free items
-1
-2,292
-2,866
-1,401
Tax effect of non-deductible items and confirmed losses Ettect of tax rate change
352
Unrecorded deferred tax assets for tax losses
3,462
Taxes from previous financial year Income taxes, total
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10
-70
-183
1,272
13 Discontinued operations EUR 1,000
2012
2011
Income
1,480
3,437
Expenses
1,723
20,008
-243
-16,571
-243
-16,519
Result before taxes Income tax
-52
Result for the period of discontinued operations
Cash flow of Alpha Veg AS
EUR 1,000
Net operating cash flow
-3,143
1,343
Net investment cash flow
-43
Net financial cash flow
-1,030
Net cash flow, total
-3,143
270
Alpha Veg AS´s effect on the Group´s financial state
EUR 1,000
2 March 2012
Tangible assets
2,786
Receivables
1,746
Inventories
175
Cash and cash equivalents
1,082
Financial liabilities
-4,631
Accounts payable and other liabilities
-2,457
Assets and liabilities, total
-1,299
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14 Earning per share EUR 1,000
2012
Result for financial year attributable to the parent company´s shareholders, continuing operations (EUR 1,000) Result for financial year attributable to the parent company´s shareholders, discontinued operations (EUR 1,000)
2011
11,052
3,518
-243
-16,519
Weighted average number of shares during the financial year (1,000)
680
680
Undiluted earnings per share, continuing operations (EUR/share)
16,25
5,17
Undiluted earnings per share, discontinued operations (EUR/share)
-0,36
-24,29
The Group has no diluting instruments that would convert to ordinary shares.
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15 Tangible assets EUR 1,000
11,548
32
221
131
-474
-1,785
-821
Acquisition cost on 31 Dec 2012 Accumulated depreciation on 1 Jan 2012
10,187
1,560
-53
-3,519
-1,182
1,299
Depreciation
Acquisition cost on 1 Jan 2011 Translation differences Decreases Transfers between items Acquisition cost on 31 Dec 2011 Accumulated depreciation on 1 Jan 2011
145,603
1,252
14,129
-4,257
27,640 -2,023
-108
1,019
139,091
-5,744
-73,779
15,228
-692
-255
-11,707
-128
-649
-13,430
-2,963
-616
-62,200
-6,392
-72,225
Land and water areas
Buildings and structures
3,040
14,122
5
18
33,957
Buildings and structures, Machinery financial and leasing equipment
Manchinery and equipment, financial leasing
Other tangible assets
Advance payments and construction in progress
Total
4,011
19,617
458
164,797
237
4,658
121,527 14
24
3,675 -21,088
53
556
-19
2,251
104,683
4,035
-53
-3,505
-892
-54,307
-957
-910
Impairments
-560 -1,182
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145,604
-11
11,566
-644
-18,800
-1,719
-5,744
-73,779
-2,023
43,426
25
-4
-1,061
-61,258
1,068
20,091
-23,895
-64,814
-1,160
8,029
-15,895
-609
-5,099
10,111 -290
-3,519
-7
43 -61
11,548
494
2,970
Depreciation
229
1,455
66,866
2,022
1,019
-2,651
21,247
6
2,917
-20,940 -258
96,156
407
2,262
944
-53
7,549
10,846
Book value on 31 Dec 2011
25
821
Accrued depreciation for decreases and transfers
20,091
-244
Translation differences (+/-)
Accumulated depreciation on 31 Dec 2011
Total
4,035
7,224
-74
Advance payments and construction in progress
-112
Other tangible assets
-61,258
-82
2,475
Increases
223
-13,603
-50
-53
Manchinery and equipment, financial leasing
4,944
2,528
Accrued depreciation for decreases and transfers
Book value on 31 Dec 2012
104,683 132
151
Translation differences (+/-)
Accumulated depreciation on 31 Dec 2012
2,251
52
Buildings and structures, Machinery financial and leasing equipment
2,970
Decreases
Land and water areas
Increases Transfers between items
Buildings and structures
Acquisition cost on 1 Jan 2012 Translation differences
2,012
14,347
25
71,825
16 Goodwill EUR 1,000
Goodwill
Acquisition cost 1 Jan 2012
20,192
Translation differences (+/-)
89
Acquisition cost 31 Dec 2012
20,281
Accrued depreciation on 1 Jan 2012
-3,207
Translation differences (+/-)
-89
Acquisition cost 31 Dec 2012
-3,296
Book value on 31 Dec 2012
16,985
Goodwill
Acquisition cost 1 Jan 2011
20,182
Translation differences (+/-)
10
Acquisition cost 31 Dec 2011
20,192
Translation differences (+/-)
2
Impairments
-3,208
Acquisition cost 31 Dec 2011
-3,207
Book value on 31 Dec 2011
16,985
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17 Impairment tests Impairment test are annually performed on goodwill, comparing the book value of goodwill with the accruable amounts of its cash-flow-producing units. In addition, impairment testing is performed whenever there are signs of impairment. An impairment loss is recorded if the book value of net assets allocated to cash-flow-producing units (including goodwill) is greater than the accruable amount of cash-flow-producing unit.
In 2012, among Destia´s business groups goodwill was included in the Cap of the North regional business unit and in the Railways operational business unit. Goodwill was allocated to cash-flow-producing units as follows:
31.12.2012
31.12.2011
MEUR
MEUR
11.2
5.7
16.9
Cap of the North
11.2
Railways
Cap of the North
5.7
Railways
16.9
Goodwill, total
Goodwill, total
The accruable amounts of cash-flow-producing units that have goodwill are based on calculated working values. The working value is determined by discounting the future cash flows produced by cash-flow-producing units in the continuous use of assets to present value.
In late 2012, tests were performed on cash-flow-producing units, Cap of the North and Railways. On the basis of the tests no impairment losses were recorded.
The calculation of working values is based on the following key assumptions: The cash flows used in the calculations are based on earlier experience and on the Board-approved 2013 budget an three-year business plan. The cash flows of later financial years were extrapolated using a terminal growth rate of 2.4% ( 2.2-2.5% in 2011), depending on the cash-flow-producing unit, which reflects both the expected average growth rate and the effect on inflation. Cash flows were discounted using the discounting interest rate specified after taxes. The discounting interest rate is based on the weighted average cost of capital (WACC).
The discounting interest rates (after taxes) used are shown below:
2012
2011
Finland
8.34%
7.28%
Norway
6.58%
The WACC has been determined on the following bases: Risk-free interest rate: The 10-year Finnish government bond, 28 December 2012/31 December 2011 The liability profit requirement (before taxes) and country-specific market risk premium from a public source The control group’s market-based beta (the beta coefficient reflects the change sensitivity of the value in relation to value changes in the industry)
Sensitivity analyses for impairment testing: The accruable amount for Cap of the North exceeds the book value by MEUR 3.9. For Railways, the accruable amount exceeds the book value by MEUR 8.8. The key assumptions used in the sensitivity analysis are related to the earnings after interest, taxes, depreciation and amortisation (EBITDA), the discounting interest rate and the working capital. For Cap of the North, the accruable amount is sensitive to the weakening of the EBITDA and, to some extent, to changes in the discounting interest rate and the working capital. If the other assumptions remain unchanged, an unfavourable change of 1 percentage points in the EBITDA would cause a need to record goodwill impairment, as would a discount interest rate increase of more than 2 percentage points. For Railways, the accruable amount is in some extend sensitive to the weakening of the EBITDA. When other assumptions are unchanged 1,5 percentage unfavourable change in EBITDA would cause a need to record goodwill impairment.
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18 Other intaglible assets EUR 1,000
Intangible rights
Advance payments
Total
4,142
106
4,249
Acquisition cost on 1 Jan 2012 Increases
87
2
89
Decreases
-12
-35
-46
Transfer between items Acquisition cost on 31 Dec 2012 Accumulated depreciation on 1 Jan 2012 Accumulated depreciation for decreases and transfers Depreciation Accumulated depreciation on 31 Dec 2012
-72
108
2
4,399
-1,504
-1,504
10
10
-619
-619
-2,113
-2,113
2,285
2
Book value on 31 Dec 2012
179 4,397
2,287
Intangible rights
Advance payments
Total
3,711
43
3,754 494
Acquisition cost on 1 Jan 2011 Increases
147
347
Transfer between items
284
-284
-0
4,142
106
4,249
Acquisition cost on 31 Dec 2011 Accumulated depreciation on 1 Jan 2011 Depreciation Accumulated depreciation on 31 Dec 2011
-853
0
-853
-651
0
-651
-1,504
0
-1,504
Book value on 31 Dec 2011
2,638
36/68
106
2,744
19 Available receivables and other receivables EUR 1,000
Shares and stakes, unquoted
Acquisition cost on 1 Jan 2012
1,659
Increases
4
Decreases
-2
Acquisition cost on 1 Jan 2012
1,661
Book value on 31 Dec 2012
1,661
Shares and stakes, unquoted
Acquisition cost on 1 Jan 2011
2,182
Increases
51
Decreases
-574
Acquisition cost on 1 Jan 2011
1,659
Book value on 31 Dec 2011
1,659
37/68
20 Inventories EUR 1,000 Materials and supplies
2012
2011
23,088
24,711
Unfinished projects
1,249
678
Inventories, total
24,336
25,389
38/68
21 Account receivables and other receivables EUR 1,000
2012
2011
30,610
62,619
1,336
1,190
Accounts receivable Other receivables Income tax receivables
815
Accrued income
12,741
19,686
Accounts and other receivables, total
45,501
83,496
Age distribution of accounts receivable and items recorded as impairment losses EUR 1,000 Not due Due
Impairment losses
2012
Net 2012
26,940
Less than 30 days
Impairment losses
2011
26,940
Net 2011
51,489
51,489
3,274
3,274
10,523
10,523
30-60 days
208
208
472
472
61-90 days
59
59
49
More than 90 days Accounts receivable, total
49
-102
-231
130
1,284
1,197
87
30,379
-231
30,610
63,816
1,197
62,619
The Group has recorded impairment losses of EUR -231 thousand for accounts receivable (2011: EUR 1,197 thousand). No significant credit risk concentrations are related to accounts receivable. The balance sheet values of accounts receivable best correspond to the maximum amount of credit risk related to them. Other risks related to accounts receivable are described in Note 29. The fair values of receivables correspond to the book value. The most significant accrued income items consist of percentage-of-completion receivables and sales allocations EUR 8,815 thousand (2011: EUR 16,070 thousand), and other items EUR 3,927 thousand (2011: EUR 3,615 thousand).
39/68
22 Cash and cash equivalents EUR 1,000
2012
Cash in hand and at banks
61,077
Cash and cash equivalents, total
61,077
2011 53,732 53,732
Cash and cash equivalents in the cash flow statement correspond to those in the balance sheet. The balance sheet values of cash and cash equivalents best correspond to the maximum amount of credit risk related to them.
40/68
23 Deferred tax assets and liabilities EUR 1,000
Itemisation of deferred tax assets 2012
In income statement
1 Jan 2012
Confirmed losses
1,050
Pension benefits
Other allocation differences
-291
759
-215
5,089
29
406
29
4,612
Confirmed losses for which deferred tax assets have not been recorded
3,447
-506
-63
377
Total
31 Dec 2012
3,662
Hedge instrument fund
In other comprehensive income
1,608
No deferred tax assets have been recorded for Destia Sverige AB. Destia Sverige AB´s losses will not expire.
Itemisation of deferred tax liabilities 2012
In income statement
1 Jan 2012
Depreciation differences and voluntary provisions
In other comprehensive income
1,563
316
-37
Other allocation differences
529
-61
Total
-611
Pension benefits
2,408
Discontinued operations
31 Dec 2012
952
-246
-709
32 -34
-246
433
-34
1,417
Itemisation of deferred tax assets 2011
In income statement
1 Jan 2011
Confirmed losses
3,894
Pension benefits
In other comprehensive income
-2,844 -63
3,317
345
7,274
-2,499
377
377
314
5,089
Confirmed losses for which deferred tax assets have not been recorded
3,662
Hedge instrument fund Total
1,050
63
Other allocation differences
31 Dec 2011
13,313
No deferred tax assets have been recorded for Destia Kalusto Oy, Destia Norge AS and Destia Sverige AB. Destia Kalusto´s confirmed losses will expire in 2018, at the earliest, whereas Destia Norge AS and Destia Sverige AB´s losses will no expire.
Itemisation of deferred tax liabilities 2011
Depreciation differences and voluntary provisions
In income statement
1 Jan 2011
2,810
Hedge instrument fund Total
31 Dec 2011
-1,247
Pension benefits Other allocation differences
In other comprehensive income
67 582
1,563 249
-53
44 -1,233
41/68
316 529
-44
3,436
205
2,407
24 Equity EUR 1,000
1 Jan 2012
Other items
Number of shares
Share capital
Invested unrestriced equity fund
Translation differences
Hedge instrument fund -1.173
680.000
17.000
56.430
-65
Translation differences
67
Cash flow hedges
-88
31 Dec 2012
680.000
17.000
56.430
2
1.261
1 Jan 2011
Other items
Number of shares
Share capital
Invested unrestriced equity fund
Translation differences
Hedge nstrument fund 124
680.000
17.000
56.430
-69
Translation differences
4
Cash flow hedges
-1.297
31 Dec 2011
680.000
Information on shares and share capital
17.000
56.430
-65
-1.173
Destia Ltd has one share type. The maximum number of shares is 680 thousand (2011: 680 thousand). The nominal value is EUR 25 per share, and the maximum share capital of Destia Ltd is MEUR 17 (2011: MEUR 17).
Descriptions of equity funds are provided below:
Invested unrestricted equity fund
The invested unrestricted equity fund includes equity-like investments and the share subscription price to the extent to which it is not recorded in the share capital by explicit decision.
Other items
Translation differences
The translation differences fun includes the differences resulting from the translation of foreign subsidiaries..
Hedge instrument fund
Hedge instrument fund include the effective portions of the changes in fair value of derivative instruments used in cash flow hedging.
42/68
25 Financial liabilities EUR 1,000
2012
Loans from financial institutions Financial leasing liabilities Financial liabilities recognised at fair value through profit and loss Non-current financial liabilities, total Loans from financial institutions
2011
30,177
60,286
779
2,978
1,670
32,626
63,263
98
649
Financial leasing liabilities
208
220
Financial liabilities recognised at fair value through profit and loss
102
2,139
Current financial liabilities, total
409
3,008
Financial leasing liabilities - total amount of minimun leases
Maturing within one year
257
289
Maturing within more than one year and less than five years
770
3,020
Maturing within more than five years
47
128
1,074
3,437
Financial leasing liabilities - present value of minimum leases
Maturing within one year
208
220
Maturing within more than one year and less than five years
732
2,853
Total
Maturing within more than five years Total Financial expenses accrued in the future Total amount of financial leasing liabilities
43/68
46
125
987
3,198
-87
-240
987
3,198
26 Account payable and other liabilities EUR 1,000
2012
Accounts payable Other non-interest-bearing liabilities
2011
29,135
40,219
8,366
11,653
Accrued expenses
27,565
24,596
Accounts payable and other non-interest-bearing liabilities,total
65,066
76,468
The most significant items in accrued expenses are personnel expenses allocations EUR 17,484 thousand (2011: EUR 16,385 thousand), purchase allocations EUR 7,389 thousand (2011: EUR 3,074 thousand), and other allocations EUR 2,691 thousand (2011: EUR 5,137 thousand).
44/68
27 Pension obligations EUR 1,000 The following items have entered in the balance sheet
2012
2011
10,485
11,320
-10,617
-12,367
-132
-1,047
Present value on funded obligations Fair value of assets included in the arrangement Present value of pension obligation
Unrecorded expenses based on retrospective work performance
Fulfilling an obligation
Unrecorded actuarial profit (+) /loss (-)
Net liability (+)/asset (-)
-132
In the balance sheet
Liability for benefit-based pension benefits
Asset for benefit-based pension benefits Net obligation
Liability for payment-based pension benefits
Pension obligations in balance sheet, total (net)
-1,047 240
-132
-1,047
-132
-1,047
-132
In comprehensive income statement
-1,047
Expenses based on work performance during the period
132
Interest expenses
566
607
-566
-546
132
197
Expected profit from assets included in the arrangement Benefit-based arrangements, total
Expenses for payment-based pension benefits
Pension expenses in comprehensive income statement, total
136
132
Changes in present value of pension obligation
Obligation at the start of the period
197
11,319
12,145
Expenses based on work performance during the period
132
136
Interest expenses
566
607
Actuarial loss (+) /profit (-)
998
-1,569
Reduction of arrangements
-2,530
Obligation at the end of the financial year
10,485
Changes in the fair value of assets included in the arrangement
Assets at the start of the period
11,319
12,367
11,905
Expected profit from assets included in the arrangement
566
546
Payments made by the employer
220
470
-5
-554
Actuarial loss (+) /profit (-) Reduction of arrangements
-2,530
Assets at the end of the financial year
10,618
Realised profit from pension arrangements
561
Realised profit from assets in pension arrangements
561
Actuarial assumptions
12,367 -8 -8
Discounting interest rate
3.5%
5.0%
Expected profit from assets included in the arrangement
4.3%
4.5%
Inflation
2.0%
2.0%
Future pay rises
0.0%
0.0%
Future pension rises
2.1%
2.1%
The Group expects to pay EUR 180 thousand for benefit-based pension arrangements in 2013. Present value of benefit-based obligations Fair value of assets included in the arrangement Deficit/surplus
10,485
11,320
-10,617
-12,367
-132
Experience adjustments - liabilities in arrangements Experience adjustments - assets in arrangements 45/68
-1,047
-1,310
-345
-5
-554
28 Provisions EUR 1,000
Guarantee provisions
Environmental provisions
Other provisions
Total
1 Jan 2012
4,423
3,829
17,838
26,090
Provisions additions
2,224
6,861
Expensed provisions Reversals of unused provisions Effect of discounting
13,905
-8,148
-8,789
-1,428
-1,656
-3,084
12,854
28,465
202
31 Dec 2012
4,820
-641 141
4,780
1 Jan 2011 Provisions additions
10,831
Environmental provisions
Other provisions
Total
5,087
3,864
7,922
16,873
12,778
13,947
-2,623
-4,008
-239
-1,204
17,838
26,090
-1,159
Reversals of unused provisions
-226
-965
Effect of discounting
291
31 Dec 2011
191
4,423
3,829
EUR 1,000
Guarantee provisions 1,169
Expensed provisions
343
482
2012
2011
Non-current provisions
15,303
7,601
Current provisions
13,162
18,489
Total
28,465
26,090
Guarantee provisions
Guarantee provisions have been made to cover any obligations during the warranty period of contractual agreements. They are based on experiences from previous years. Environmental provisions
The Group has land areas that it is obliged to restore to their original condition. The present value of estimated landscaping costs has been activated to the acquisiton cost of the areas and presented as a provision. The discounting factor used in determining the present value is 1,52% ( 2011: 5%). In addition, the Group has a provision for cleaning a contaminated land area, made for cleaning the asphalt plant in the capital region.
Other provisions
Other provisions include reorganisation provisions of MEUR 1.1 (2011: MEUR 1.5), dispute and litigation provisions of MEUR 0.8 miljoonaa (2011: MEUR 0.9 ), project loss provisions of MEUR 7.4 (2011: MEUR 12.8 ), discontinued operations provisions of MEUR 3.0 (2011: -) and other provisions of MEUR 0.5 (2011: MEUR 1.7). Other provisions included in 2011 disability pension provisions of MEUR 0.9.
46/68
30 Other lease agreement Group as lessee
Other lease agreements include, for example, leases for premisies and equipment. The average terms of the lease agreements are 1 -7 years. Minimun leases paid on the basis of non-cancellable lease agreements:
EUR 1,000
2012
2011
Within one year
2,877
3,966
Within more than one year and less than five years
4,520
5,595
Within more than five years Total
113
208
7,510
9,769
In 2012, lease expenses of EUR 3,009 thousand (2011: 4,717 thousand) for other lease agreements were recognised though income statement.
50/68
31 Conditional liabilities and assets EUR 1,000
2012
2011
Guarantees and contingent liabilities
Liabilities with mortgages as collateral
Loans from financial institutions
93
Mortgages pledged
350
84,440
97,846
Bank guarantees Disputes and litigation
The Group has unfinished disputes related to projects, which have been prepared for with cost provisions to the extent that the Group deems the disputes substantial and the claims justified.
51/68
32 Insiders The Group´s insiders include the parent company and the subsidiaries. In addition, the insiders include the members of the Board and Management Team, including the President & CEO and Executive Vice President. The Group´s parent company and subsidiary relations were as follows:
Company
City
Destia Ltd, parent company
Country
Group´s share of Parent company´s ownership share of ownership and and votes% votes%
Vantaa
Finland
Destia Eesti AS
Estonia
100
100
Turgel Grupp AS
Estonia
100
100
Destia Sverige AB
Sweden
100
100
Destia Kalusto Oy
Kuopio
Finland
100
100
Destia International Oy
Helsinki
Finland
100
100
Finnroad Oy
Helsinki
Finland
100
100
Kaivujyrä Oy
Kouvola
Finland
100
100
During the financial year, a company owned by a member of the Board was paid consulting fee totalling EUR 5,3 thousand (2011: EUR 3,7 thousand) and during the 2011 financial year a company owned by a member of the Management Team was paid rents with totalling EUR 253,7 thousand both under usual term and conditions.
Management´s emplyee benefits EUR 1,000
2012
2011
2,247
1,642
Benefits paid on termination of employment contract
0
Benefits after end of employment
0
Other long-term employee benefits
0
2,247
1,642
Salaries and other short-term emplyee benefits
Total
Salaries and remuneration:
President & CEO(s)
415
Members of the Board of Directors
170
613 164
It has been agreed that the retirement age of the President a & CEO is 63.
52/68
33 Events after the end of the reporting period Nothing to report.
53/68
Parent company income statement (FAS) EUR 1,000 INCOME STATEMENT (FAS)
1 Jan-31 Dec 2012
REVENUE
1 Jan-31 Dec 2011
481,126
Other operating income
467,711
3,473
9,113
MATERIAS AND SERVICES
MATERIALS AND CONSUMABLES
Purchase during the financial year
-103,878
Increase/decrease in inventories
-88,970
-885
1,001
External services
-248,379
-253,513
Materials and services
-353,142
-341,482
PERSONNEL EXPENSES
Salaries and fees
-62,958
-63,763
Pension expenses
-8,844
-7,740
Other personnel expenses
-3,785
-4,094
-75,587
-75,597
Personnel expenses
DEPRECIATION
Depreciation according to plan
-5,183
Other operating expenses
-5,474
-37,719
OPERATING RESULT
-41,199
12,967
FINANCIAL INCOME AND EXPENSES
Income from non-current assets Other interest income from Group companies Other interest and financial income Reduction in value of investments held as non-current assets Interest expenses to Group companies Interest expenses to others Other financial expenses to Group companies
13,072
2
2
1,881
3,446
324
694
-333
-2,808
-67
-16
-1,717
-2,417
-37
-12,179
Other financial expenses
-1,765
-663
Financial income and expenses
-1,712
-13,941
PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS
11,255
EXTRAORDINARY ITEMS
Extraordinary income
-869
200
97
Extraordinary expenses
-20,096
Extraordinary items
-19,896
97
PROFIT/LOSS BEFORE APPROPRIATIONS AND TAXES
-8,641
Change in cumulative accelerate depreciation
-153
-560
Income tax and deferred tax
-772
-267
PROFIT/LOSS FOR THE FINANCIAL YEAR
54/68
-321
-9,061
-1,652
Parent company cash flow statement (FAS) EUR 1,000
1 Jan - 31 Dec 2012
Cash flow from business operations
Payments received from customers Payments to supplier of goods/service and to personnel Cash flow from business operations before financial items and taxes
1 Jan - 31 Dec 2011
519,040
468,314
-478,635
-445,109
40,405
Interest paid on business operations
23,205
-1,758
Dividend income received from business operations Interest received from business operations Other financial items from business operations Taxes paid on business operations Cash flow before extraordinary items
-2,396
2
2
523
1,617
-1,765
-671
-823
-38
36,583
21,718
Cash flow from extraordinary items
-1,800
Cash flow from business operations
34,783
Cash flow from investiment activities
Investments in tangible and intangible assets Proceeds from the sale of tangible and intangible assets Acquired and diversted shares in subsidiaries Other investments
21,718
-1,780
2,038
2,300
-180
-118
-4
Proceeds from the sale of the other investments
-50
216
Repayment of loan receivables
4,702
Cash flow from investment activities
4,221
15,176 15,744
Cash flow from financial activities
Repayment of short-term loans
-1,816
Withdrawals of long-term loans
Cash flow from financial activities
Change in liquid assets
-7,613
7,189
97 -31,816
-7,710
-30,000
Group contributions received
-2,335
29,849
Liquid assets on balance sheet on 31 Dec
55,956
48,767
Liquid assets on balance sheet on 1 Jan
48,767
18,918
7,189
29,849
57/68
Parent company accounting principles (FAS) Accounting principles Destia Ltd’s financial statements for the financial year 1 January−31 December 2012 have been prepared in accordance with the Finnish Accounting Act (FAS). The Group has adopted the reporting principles of the International Financial Reporting Standards (IFRS) on 31 December 2011.
Foreign-currency items Foreign-currency receivables and liabilities have been translated into euro at the average rate of the closing date. The exchange differences generated in valuing receivables and liabilities have been entered in the income statement in the profits and expenses corresponding to the balance sheet item in question. The realised and unrealised profits and losses of derivatives used to hedge against the foreign exchange rate risk of foreign-currency receivables and liabilities have been entered in the income statement in the profits and expenses corresponding to the balance sheet item in question.
Valuing fixed assets Fixed assets have been valued at acquisition cost. The variable expenses from acquisition and manufacturing have been included in the acquisition cost. The planned depreciation calculated based on the economic lifetime has been deducted from the acquisition cost. Depreciation for soils in other tangible goods has been calculated as use-based depreciation.
Valuing current assets Inventories have been valued at acquisition price, or at transfer price or replacement price lower than the acquisition price. The variable expenses from acquisition and manufacturing have been included in the acquisition cost.
Financial assets Financial assets have been valued at acquisition cost, or at a likely transfer price which is lower than the acquisition cost.
Derivative instruments To hedge the receivables and liabilities in the balance sheet, the fair value of derivative contracts has been entered in the balance sheet and the changes in fair value in the income statement. The fair value of derivative contracts prepared to hedge cash flows to be generated in future financial years has been processed as an off-balance-sheet liability.
Provisions During the financial year, compulsory provisions have been released in the amount of the sum incurred by meeting all obligations or in the amount of the change foreseen in the provision. Warranty provisions for work concluded during the financial year have been increased, and the amount of the landscaping provision of soil areas has been revised to meet future obligations.
Recognition of sales Income from work that requires a long production period is recognised using the percentage of completion method. Projects are considered to require a long production period if they extend over two financial periods and have a value of more than EUR 50,000. The percentage of completion of long-term projects is determined by the actual accumulated variable costs in proportion to the estimated total variable costs of the project. The risks related to the completion of long-term projects are taken into account by applying the prudence principle to their recognition. Predicted losses are expensed in full.
Leasing In the financial statements, leasing payments have been entered as annual expenses in line with the Finnish Accounting Act.
Pensions Personnel pensions have been ensured by means of insurances at an external pension insurance company. Pension expenses have been entered as expenses during the year when they were incurred.
Research and development expenses Research and development expenses have been entered as expense during the year when they were incurred.
Taxes Income tax has been entered as required by the Finnish tax legislation.
58/68
Parent company notes concerning assets in the balance sheet (FAS) EUR 1,000
2012
2011
Intangible assets
Intangible rights
Acquisition cost 1 Jan (+)
4,068
3,636
Increase (investments) (+)
87
147
Decrease (-)
-12
Transfers between items (+/–) Acquisition cost at the end of the period Accumulated depreciation and write-downs 1 Jan (–) Accumulated depreciation on decrease (+)
179
284
4,322
4,068
-1,475
-838
10
Depreciation (–) Accumulated depreciation and write-downs at the end of the period (–) Intangible rights, book value on 31 Dec
-605
-637
-2,070
-1,475
2,253
Goodwill
2,592
Acquisition cost 1 Jan (+)
13,890
13,890
Acquisition cost at the end of the period
13,890
13,890
Accumulated depreciation and write-downs 1 Jan (–)
-3,952
-2,362
Depreciation (–)
-1,588
-1,590
Accumulated depreciation and write-downs at the end of the period (–)
-5,540
-3,952
Goodwill, book value on 31 Dec
8,349
Other long-term expenditure
9,938
Acquisition cost 1 Jan (+)
155
155
Acquisition cost at the end of the period
155
155
Accumulated depreciation and write-downs 1 Jan (–)
-76
-48
Depreciation (–)
-28
-28
-103
-76
Accumulated depreciation and write-downs at the end of the period (–) Other long-term expenditure, book value on 31 Dec
52
Advance payments on intangible assets
79
Acquisition cost 1 Jan (+)
106
43
Increase (investments) (+)
2
347
Decrease (-)
-35
Transfers between items (+/–)
-72
Advance payments on intangible assets, 31 Dec
-284
2
106
Tangible assets
Land and water areas
Acquisition cost 1 Jan (+)
2,970
Increase (investments) (+)
32
5
-474
-74
Decrease (-) Acquisition cost at the end of the period
3,040
2,529
2,970
Accumulated depreciation and write-downs 1 Jan (–)
-53
-53
Accumulated depreciation and write-downs at the end of the period (–)
-53
-53
2,475
2,917
Land and water areas, book value on 31 Dec
Buildings and structures
Acquisition cost 1 Jan (+)
10,442
Increase (investments) (+)
212
15
-789
-289
Decrease (-) Transfers between items (+/–)
10,664
151
53
Acquisition cost at the end of the period
10,015
10,442
Accumulated depreciation and write-downs 1 Jan (–)
-2,478
-1,919
Accumulated depreciation on decrease (+) Depreciation (–) Accumulated depreciation and write-downs at the end of the period (–) Buildings and structures, book value 31 Dec 61/68
334
128
-685
-687
-2,829
-2,478
7,186
7,964
Parent company notes concerning equity and liabilities in the balance sheet (FAS) EUR 1,000
Increases and decreases in equity items:
Restricted equity
Share capital at 1 Jan
17,000
17,000
Share capital at 31 Dec
17,000
17,000
Restricted equity, total
17,000
Non-restricted equity
Other reserves
Fund for invested non-restricted equity 1 Jan
56,430
Fund for invested non-restricted equity 31 Dec
56,430
Profit/loss from previous financial years 1 Jan
-3,408
Profit/loss from previous financial years 31 Dec
-3,408
Profit/loss for the period
-9,061
-1,652
Non-restricted equity, total
43,961
53,022
Equity, total
Distributable non-restricted equity
Retained earnings
-3,408
Profit/loss for the period
-9,061
-1,652
Fund for invested non-restricted equity
56,430
56,430
Total
Shares and shareholders
Registered Shareholder No of shares
EUR/share %
4 Jan 2008 State of Finland 680 000
25
100 1 vote/share
Breakdown of provisions
Other provisions
Provisions for long-term projects
7,423
6,253
Guarantee provisions for other than long-term projects
1,010
1,064
Provision for landscaping
3,030
2,789
Provisions for contaminated soil treatment
1,087
1,087
Provisions for disability pension
0
915
Restructuring provision
1,139
1,450
Other provisions
4,294
2,695
Total
17,983
16,253
Breakdown of deferred taxes
Deferred tax assets
From revaluations and temporary differences
Non-current liabilities
Loans from financial institutions
Current liabilities
Liabilities to Group companies
Accounts payable
1,425
2,168
Short-term loans
431
2,247
Advances received
0
46
Accrued expenses and deferred income
12,132
16
13,988
4,477
Main items relating to accrued expenses and deferred income
Personnel-related
17,244
Other
6,890
7,632
Total
24,134
21,171
64/68
Voting right
2012
2011
17,000
56,430 56,430
-1,756 -1,756
60,961
70,022 -1,756
43,961
53,022
Share capital EUR 17,000,000
2,476
2,723
30,000
60,000
13,539
Parent company contingent liabilities EUR 1,000
2012
2011
Contigent liabilities
4,895
8,905
Guarantees given on behalf of Group companies Bank guarantees Leasing liabilities
83,425
94,891
Payable in the next financial year
756
Payable in later financial years
527
770
Future payments for long-term rental agreements
360
5,833
7,048
Derivative contracts
Currency derivatives
Nominal value
852
Fair value
-43
Interest derivatives
30,000
Fair value
-1,670
Fair value
60,000 -2,140
Nominal value
-18
Nominal value
Commodity derivatives
3,002
1,323
918
-60
18
Nominal values and fair values are presented as net amounts. Fair value is an estimate of the gains and losses that would have been realise, if the derivative contracts had been terminated at the balance sheet date.
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Group´s key figures
IFRS
IFRS
MEUR
2012
2011
Revenue, continuing operations
492.5
3.0
-6.2
14.0
8.4
2.8
1.7
2.9
11.1
3.5
13.6 2.6
% revenue Result for period
507.3
% of revenue Result for the period
2010
Change from previous year, % Operating profit for the period, continuing operations
IFRS
525.0 15.4
2.2
0.7
10.8
-13.0
9.5
7.3
5.2
12.0
Gross investments % of revenue
1.4
1.1
2.3
223.5
262.0
262.3
Equity
69.4
59.4
73.0
Equity ratio, % 1)
35.2
25.7
31.5
Net gearing, % 2)
-40.5
17.5
68.7
32.9
64.1
76.4
Current Ratio 3)
1.3
1.3
1.1
Quick Ratio 4)
1.3
1.3
1.2
Return on equity, % 5)
16.8
-19.6
13.8
Return on investment, % 6)
12.5
-5.4
8.4
16
-19
14
102
87
107
Average personnel
1,591
1,813
Comparable order book
600.8
745.1 *)
Balance sheet total
Interest-bearing liabilities
Earnings per share, EUR Equity per share, EUR
Research and development expenses
2.9
1.1
% of other operating expenses
6.9
2.3
2,096 646.5 0.6 1.2
*) The order book from 2011 has been changed to comparable, it is decreased by about MEUR 60.
Formulas:
1) (Equity / (balance sheet total - advances received))*100 2) ((Interest-bearing liabilities - cash, bank deposits and short-term investments) / (Equity)*100 3) (inventories + lliquid assets) / current liabilities 4) Financial assets without receivables from uncompleted contracts /current liabilities without advance payments 5) (Result for the period / (average equity)*100 (opening and closing balance) 6) (Result before taxes + interest costs and other financial expenses) / (invested capital average)*100 (balance sheet total - non-interest bearing liabilities - provisions, opening and closing balance)
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Board of Director's proposal of the disposal of profit The parent company’s loss for the accounting period was EUR 9,061,351.36, and it is proposed that this be entered in the profit and loss account. Destia Ltd’s distributable unrestricted equity consists only of an invested unrestricted equity fund, as a result of which Destia Ltd’s Board of Directors proposes to the Annual General meeting that no dividends be paid for the accounting period ending 31 December 2012. Vantaa, 14 February 2013 DESTIA LTD Karri Kaitue Member of the Board and Chairman Kalevi Alestalo Member of the Board Elina Engman Member of the Board Solveig Törnroos-Huhtamäki Member of the Board Matti Mantere Member of the Board Hannu Leinonen President and CEO
The Auditor´s Note Our auditor´s report has been issued today. Vantaa, 14 February 2013 Deloitte & Touche Oy Authorized Public Audit Firm Tapani Vuopala Authorized Public Accountant
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Auditor's report To the Annual General Meeting of Destia Ltd W e have audited the accounting records, the financial statements, the Review by the Board of Directors and the administration of Destia Ltd for the financial period 1.1.-31.12.2012. The financial statements comprise of the consolidated income statement, statement of comprehensive income, balance sheet, cash flow statement, statement of changes in shareholders´ equity and notes to the consolidated financial statements, as well as the parent company's income statement, balance sheet, cash flow statement and notes to the financial statements.
The responsibility of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the Review by the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the Review by the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company’s accounts and finances and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Auditor’s responsibility Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the Review by the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. W e conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the Review by the Board of Directors are free from material misstatement and whether the members of the Board of Directors of the parent company and the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the Review by the Board of Directors. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements and the Review by the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the Review by the Board of Directors. W e believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion on the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Opinion on the company’s financial statements and the Review by the Board of Directors In our opinion, the financial statements and the Review by the Board of Directors give a true and fair view of both the consolidated and the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the Review by the Board of Directors in Finland. The information in the Review by the Board of Directors is consistent with the information in the financial statements.
Other opinions W e support that the financial statements should be adopted. The proposal by the Board of Directors regarding the treatment of distributable funds is in compliance with the Limited Liability Companies Act. W e support that the Board of Directors of the parent company and the Managing Director should be discharged from liability for the financial period audited by us. Vantaa, 14 February 2013 Deloitte & Touche Oy Authorized Public Audit Firm Tapani Vuopala Authorized Public Accountant
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