ETTEPLAN OYJ’S CHANGEOVER TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
Stock exchange release – Published: 22.04.2005 14:30:20
ETTEPLAN OYJ'S CHANGEOVER TO INTERNATIONAL
FINANCIAL REPORTING STANDARDS (IFRS)
The Etteplan Group will publish its first financial statements
in line with International Financial Reporting Standards (IFRS)
for the financial year ending on 31 December 2005. The interim
reports for 2005 will be drafted in accordance with IFRS
recognition and measurement policies. This bulletin presents
the preliminary comparative information for 2004 in accordance
with the IFRS recognition and measurement policies in force
in March 2005 as well as the reconciliation calculation for
the consolidated result and shareholders' equity as at
31 December 2004. The Etteplan Group's opening balance sheet
dated 1 January 2004 was presented in an earlier bulletin on
25 February 2005.
The figures in the income statement and balance sheet which
have been drafted in line with Finnish Accounting Standards
(FAS) have been regrouped to correspond to IFRS.
The IFRS figures have not been audited.
PRINCIPAL IMPACTS OF THE TRANSITION TO IFRS ON THE ACCOUNTING
POLICIES APPLIED IN THE CONSOLIDATED FINANCIAL STATEMENTS
The principal changes in the accounting policies and figures
are due to the standards concerning construction contracts,
business combinations, employee benefits and leases.
Under FAS, the balance sheet total was EUR 28,073 thousand
at the end of 2004. The adoption of IFRS increased the
balance sheet total by EUR 22 thousand to EUR 28,095 thousand.
The transition to IFRS increased shareholders' equity by
EUR 635 thousand at the end of 2004, primarily due to the
discontinuation of goodwill amortization and the adoption of
percentage of completion recognition in construction contracts.
Under FAS, the net profit in 2004 was EUR 2,574 thousand. The
IFRS adjustments amounted to EUR 637 thousand; in other words,
the net profit in accordance with IFRS was EUR 3,211 thousand.
The effect of IFRS on the earnings per share reported for 2004
is EUR 0.15.
1. Treatment of acquisitions
The acquisition cost calculations of subsidiaries acquired
prior to 1 January 2004 have not been recalculated in
accordance with IFRS 3, but have been left unchanged as per
the exemption permitted under IFRS 1. In the IFRS financial
statements, goodwill on consolidation will no longer be
amortized, but will be subjected to an impairment test.
Cash-generating units have been tested for impairment as
at 1 January 2004 and 30 September 2004 and there were no
grounds for recognizing impairment. Amortization of goodwill
of EUR 454 thousand for 2004 under FAS has been reversed.
2. Intangible assets
The decrease in intangible assets is due to the transfer of
capitalized basic improvement expenses of rented properties
into tangible assets in the opening IFRS balance sheet.
3. Leases (IAS 17)
Assets leased with agreements that are classified as finance
lease agreements have been capitalized in property, plant
and equipment in the balance sheet at the fair value of the
rented asset or the present value of the minimum rents,
whichever is lower. Rental obligations arising from finance
lease agreements are presented in interest-bearing non-
current and current liabilities. Finance leasing leads to
depreciation and interest expenses on assets capitalized
during the financial periods. Assets acquired by means of
a finance lease agreement are depreciated over their economic
lifetime. If the Group does not assume ownership of the asset
at the end of the lease period, depreciation is recorded over
the lease period or the economic lifetime, whichever is shorter.
4. Construction Contracts (IAS 11)
Under FAS, revenue from contract work has been recognized as
income when the recipient of the project has approved the work
performed under the contract agreement. Incomplete construction
contracts are recognized under work in progress in inventories
in the balance sheet. In IFRS reporting, contracts whose outcome
can be assessed reliably are recognized as income and expenses
on the basis of the percentage of completion on the reporting
date. The percentage of completion of a contract is evaluated
on the basis of project progress and the proportion of working
hours completed to the total number of hours required to
complete the contract. In the case of contracts whose outcome
cannot be assessed reliably, the amount of revenue recognized
does not exceed the expenses. The total loss on a contract that
will probably turn a loss is expensed immediately.
5. Employee Benefits (IAS 19)
Pension insurance policies handled through insurance companies
are primarily defined contribution plans. The exception to this
comprises defined-benefit occupational pension arrangements
under the Finnish Employees' Pension Act (TEL), which are
booked as current liabilities on the basis of actuarial
calculations. Revisions to the accounting policy applied to
occupational disability pension commitments will come into
force on 1 January 2006 in the TEL system, and as a result, the
TEL disability element will be treated as a defined-contribution
scheme in the IFRS financial statements. Consequently, the bulk
of the occupational disability pension commitments are recognized
in the last quarter of 2004.
6. Income Taxes (IAS 12)
In the IFRS balance sheet, deferred taxes have been recognized
on all the temporary differences between accounting and taxation.
The major differences compared with the previous practice are
due to the deferred tax asset recorded on pension commitments
and the deferred tax liability recorded on the basis of the
percentage of completion recognition of construction contracts.
The tax base in force at the time of calculation is used to
determine the deferred taxes.
Segment reporting
The Etteplan Group's primary segment reporting is based on
business areas. The segments are Product Development and
Delivery Design. Secondary segment reporting is based on
geographical segments: Finland, Sweden, Germany and Other.
The revenue and results of the primary segments are
published in the interim reports.
Cash flow statements
It is estimated that there are no material differences
between the cash flow statements drafted in line with
IFRS and FAS.
The note numbers in the quarterly information refer to
the IFRS accounting policies presented above.
Hollola, 22 April, 2005
Etteplan Oyj
Board of Directors
For additional information, contact: CFO Pia Björk,
tel. +358 3 872 9012, GSM +358 400 241 815.
DISTRIBUTION: Helsinki Exchanges
Principal media
www.etteplan.com
CUMULATIVE IFRS 2004 COMPARATIVE INFORMATION BY QUARTER
CONSOLIDATED BALANCE SHEET 31.3.2004
(EUR 1 000) Reference FAS Change IFRS
ASSETS
Non-current assets
Intangible assets 1,2 4 140 -150 3 990
Property, plant and equipment 2,3 3 666 332 3 998
Investments available for sales 45 0 45
Non-current assets, total 7 851 182 8 033
Current assets
Inventories 4 1 095 -1 095 0
Trade receivables and other
receivables 4 11 189 454 11 643
Investments available for sales 0 253 253
Cash and cash equivalents 7 068 0 7 068
Current assets, total 19 352 -388 18 964
ASSETS TOTAL 27 203 -206 26 997
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 427 0 427
Share premium account 5 058 0 5 058
Own shares 0 0 0
Translation difference 0 48 48
Retained earnings 4 520 18 4 538
Net profit or loss for the period 378 141 519
Shareholders' equity, total 10 383 206 10 590
Minority interest 1 879 0 1 879
Non-current liabilities
Non-current interest-bearing
liabilities 3 734 29 763
Non-current liabilities, total 734 29 763
Current liabilities
Deferred tax liability 6 197 8 205
Pension liability 5 0 134 134
Instalment of non-current
liabilities 154 0 154
Current interest-bearing
liabilities 3 0 13 13
Trade and other payables 4 13 856 -596 13 260
Current liabilities, total 14 207 -441 13 766
Liabilities, total 14 941 -412 14 529
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 27 203 -206 26 997
CONSOLIDATED PROFIT AND LOSS ACCOUNT 1-3/2004
(EUR 1 000) Reference FAS Change IFRS
Revenues 4 14 259 314 14 573
Other operating income 8 0 8
Changes in work in progress 4 253 -252 1
Materials and services -264 0 -264
Staff costs -10 771 0 -10 771
Other operating expenses 3 -2 138 4 -2 135
Depreciation and amortization
expenses 1,3 -491 93 -398
Operating profit 856 159 1 015
Net financial expenses 3 -2 0 -2
Profit before taxes and
minority interest 854 159 1 012
Income taxes 6 -330 -18 -348
Minority interest -146 0 -146
Net profit for the financial
period 378 141 519
KEY FIGURES 1-3/2004
FAS IFRS
Operating profit, % 6,0 7,0
Return on investment, -% 24,0 28,1
Return on equity, % 15,6 19,7
Equity ratio, % 46,2 46,2
Earnings per share 0,09 0,12
Equity per share 2,43 2,48
CONSOLIDATED BALANCE SHEET 30.6.2004
(EUR 1 000) Reference FAS Change IFRS
ASSETS
Non-current assets
Intangible assets 1,2 4 449 -65 4 384
Property, plant and equipment 2,3 3 560 311 3 871
Investments available for sales 45 0 45
Non-current assets, total 8 054 246 8 300
Current assets
Inventories 4 1 251 -1 251 0
Trade receivables and other
receivables 4 11 940 598 12 538
Investments available for sales 0 253 253
Cash and cash equivalents 3 450 0 3 450
Current assets, total 16 641 -400 16 241
ASSETS TOTAL 24 695 -154 24 541
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 427 0 427
Share premium account 5 058 0 5 058
Own shares 0 0 0
Translation difference 0 18 18
Retained earnings 4 528 19 4 547
Net profit or loss for the period 942 251 1 193
Shareholders' equity, total 10 955 288 11 243
Minority interest 1 376 0 1 376
Non-current liabilities
Non-current interest-bearing
liabilities 3 926 24 950
Non-current liabilities, total 926 24 950
Current liabilities
Deferred tax liability 6 198 7 205
Pension liability 5 0 134 134
Instalment of non-current
liabilites 93 0 93
Current interest-bearing
liabilities 3 0 13 13
Trade and other payables 4 11 147 -620 10 527
Current liabilities, total 11 438 -466 10 972
Liabilities, total 12 364 442 11 922
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 24 695 -154 24 541
CONSOLIDATED PROFIT AND LOSS ACCOUNT 1-6/2004
(EUR 1 000) Reference FAS Change IFRS
Revenues 4 29 387 489 29 876
Other operating income 32 0 32
Changes in work in progress 4 397 -408 -11
Materials and services -775 0 -775
Staff costs -21 744 0 -21 744
Other operating expenses 3 -4 254 7 -4 247
Depreciation and amortization
expenses 1,3 -980 186 -794
Operating profit 2 063 274 2 337
Net financial expenses 3 -3 0 -3
Profit before taxes and
minority interest 2 060 274 2 334
Income taxes 6 -740 -23 -763
Minority interest -378 0 -378
Net profit for the financial
period 942 251 1 193
KEY FIGURES 1-6/2004
FAS IFRS
Operating profit, % 7,0 7,8
Return on investment, % 28,6 32,1
Return on equity, % 19,6 23,8
Equity ratio, % 51,4 51,5
Earnings per share 0,22 0,28
Equity per share 2,56 2,63
CONSOLIDATED BALANCE SHEET 30.9.2004
(EUR 1 000) Reference FAS Change IFRS
ASSETS
Non-current assets
Goodwill 10 0 10
Intangible asset 1,2 4 621 53 4 674
Property, plant and equipment 2,3 3 538 288 3 826
Investments available for sales 52 0 52
Non-current assets, total 8 221 341 8 562
Current assets
Inventories 4 1 493 -1 493 0
Trade receivables and other
receivables 4 11 913 728 12 641
Investments available for sales 0 229 229
Cash and cash equivalents 4 004 0 4 004
Current assets, total 17 410 -536 16 874
ASSETS TOTAL 25 631 -195 25 436
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 434 0 434
Share premium account 5 434 0 5 434
Own shares 0 0 0
Translation difference 0 -8 -8
Retained earnings 4 519 19 4 538
Net profit or loss for the period 1 581 481 2 062
Shareholders' equity, total 11 968 492 12 460
Minority interest 1 418 0 1 418
Non-current liabilities
Non-current interest-bearing
liabilities 3 1 102 21 1 123
Non-current liabilities, total 1 102 21 1 123
Current liabilities
Deferred tax liability 6 198 8 206
Pension liability 5 0 134 134
Instalment of non-current
liabilities 93 0 93
Current interest-bearing
liabilities 3 0 13 13
Trade and other payables 4 10 852 -863 9 989
Current liabilities, total 11 143 -708 10 435
Liabilities, total 12 245 -687 11 558
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 25 631 -195 25 436
CONSOLIDATED PROFIT AND LOSS ACCOUNT 1-9/2004
(EUR 1 000) Reference FAS Change IFRS
Revenues 4 43 063 880 43 943
Other operating income 50 0 50
Changes in work in progress 4 591 -649 -58
Materials and services -1 225 0 -1 225
Staff costs -31 799 0 -31 799
Other operating expenses 3 -6 165 11 -6 154
Depreciation and amortization
expenses 1,3 -1 499 307 -1 192
Operating profit 3 016 549 3 565
Net financial expenses 3 -19 0 -19
Profit before taxes and
minority interest 2 997 549 3 546
Income taxes 6 -1 119 -67 -1 186
Minority interest -298 0 -298
Net profit for the financial
period 1 580 482 2 062
KEY FIGURES 1-9/2004
FAS IFRS
Operating profit, % 7,0 8,1
Return on investment, % 26,8 31,0
Return on equity, % 17,9 22,1
Equity ratio, % 54,3 54,7
Earning per share 0,37 0,48
Equity per share 2,76 2,87
CONSOLIDATED BALANCE SHEET 31.12.2004
(EUR 1 000) Reference FAS Change IFRS
ASSETS
Non-current assets
Goodwill 8 0 8
Intangible assets 1,2 4 851 201 5 052
Property, plant and equipment 2,3 3 599 305 3 904
Investments available for sales 95 0 95
Non-current assets, total 8 553 506 9 059
Current assets
Inventories 4 1 134 -1 134 0
Trade receivables and other
receivables 4 11 784 417 12 201
Investments available for sales 0 234 234
Cash and cash equivalent 6 601 0 6 601
Current assets, total 19 519 -484 19 035
ASSETS TOTAL 28 073 22 28 095
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 434 0 434
Share premium account 5 434 0 5 434
Own shares 0 0 0
Translation difference 0 -19 -19
Retained earnings 4 514 18 4 532
Net profit or loss for the period 2 574 637 3 211
Shareholders' equity, total 12 956 636 13 592
Minority interest 1 208 0 1 208
Non-current liabilities
Non-current interest-bearing
liabilities 3 1 295 47 1 342
Non-current liabilities, total 1 295 47 1 342
Current liabilities
Deferred tax liability 6 159 7 166
Pension liability 5 0 13 13
Instalment of non-current
liabilities 28 0 28
Current interest-bearing
liabilities 3 0 28 28
Trade and other payables 4 12 426 -708 11 718
Current liabilities, total 12 613 -661 11 952
Liabilities, total 13 908 -613 13 295
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 28 073 22 28 095
CONSOLIDATED PROFIT AND LOSS ACCOUNT 1-12/2004
(EUR 1 000) Reference FAS Change IFRS
Revenues 4 61 551 416 61 967
Other operating income 121 0 121
Changes in work in progress 4 222 -291 -69
Materials and services -1 857 0 -1 857
Staff costs 5 -44 157 121 -44 036
Other operating expenses 3 -9 072 19 -9 053
Depreciation and amortisation
expenses 1,3 -2 066 436 -1 630
Operating profit 4 742 701 5 443
Net financial expenses 3 43 -1 42
Profit before taxes and
minority interest 4 785 700 5 485
Income taxes 6 -1 623 -63 -1 686
Minority interest -588 0 -588
Net profit for the financial
period 2 574 637 3 211
KEY FIGURES 1-12/2004
FAS IFRS
Operating profit, % 7,7 8,8
Return on investment, % 31,0 34,7
Return on equity, % 22,0 25,9
Equity ratio, % 52,1 52,9
Earnings per share 0,60 0,75
Equity per share 2,98 3,13
Evaluation of the impacts of IFRS recognition and measurement
policies to shareholders' equity in 2004, EUR 1 000.
1.1. 31.3. 30.6. 30.9. 31.12.
Shareholders' equity
according to FAS 12 372 10 383 10 956 11 969 12 957
IAS 11 Construction
contracts 163 225 244 393 288
IAS 12 Deferred tax re-
ceivables and liabilities -8 -26 -31 -74 -71
IAS 17 Leases -3 -4 -4 -4 -4
IAS 19 Employee benefits -134 -134 -134 -134 -13
IAS 36 Other non-current
assets, value decrease -20 0 0 0 0
IFRS 3 Business
combinations 0 97 194 319 454
Translation difference 48 18 -8 -19
Other IFRS-impacts -1
IFRS-impact, total -3 206 287 492 635
Shareholders' equity
according to IFRS 12 369 10 590 11 243 12 460 13 592
Evaluation of the impacts of IFRS recognition and measurement
policies to cumulative interim and financial year result,
EUR 1 000.
1-3/04 1-6/04 1-9/04 1-12/04
Profit for the period
according to FAS 378 942 1 581 2 574
IAS 11 Construction contracts 62 81 230 125
IAS 12 Income taxes -18 -24 -67 -63
IAS 19 Employee benefits 0 0 0 121
IFRS 3 Business combinations 97 194 319 454
IFRS-impact, total 141 251 482 637
Profit for the period
according to IFRS 519 1 193 2 062 3 211
