Attendo AB (publ) Combined financial statements. January 1 December 31, 2012, 2013, Contents

Transcription

1 Combined financial statements Attendo AB (publ) Combined financial statements January 1 December 31, 2012, 2013, 2014 Contents Combined income statement 2 Combined statement of comprehensive income 2 Combined statement of financial position 3 Combined statement of cash flows 4 Combined statement of changes in equity 5 Notes to the combined financial statements 6 1

2 Combined financial statements Combined income statement January December, SEKm Note OPERATING INCOME Net sales 3 9,045 8,465 7,891 Other operating income Total revenue 9,059 8,513 7,915 OPERATING COSTS Personnel costs 5 6,199 5,898 5,600 Other external costs 6, 7, 8 1,900 1,714 1,473 Depreciation and amortisation of tangible and intangible assets Operating profit FINANCIAL ITEMS Financial income Financial expenses Net financial items Profit before tax Taxes PROFIT FOR THE YEAR Profit for the year attributable to equity holders of the parent company Earnings per share before and after dilution*, SEK Number of shares before and after dilution*, thousands , , ,000 Combined statement of comprehensive income January December, SEKm Note Items that will not be reclassified to profit or loss Remeasurements of defined benefit pension plans, net of tax 11, Items that may be reclassified to profit or loss Cash flow hedges, net of tax Exchange rate differences on translating foreign operations Other comprehensive income for the year, net of tax Profit for the year Total comprehensive income for the year Comprehensive income for the year attributable to the parent company shareholders * the number of shares refers to the estimated number of shares at the time of the listing and is based on the Board of Directors best assessment at the time of signing the report. The number of shares Attendo AB (publ) will have at this time may differ from this assessment. 2

3 Combined financial statements Combined statement of financial position 31 december, SEKm Note ASSETS Non-current assets Goodwill 13 6,549 6,385 6,208 Other intangible assets Property, plant and equipment Deferred tax assets Other non-current assets Total non-current assets 7,314 7,059 6,936 Current assets Trade receivables Current tax receivables Other current receivables Cash and cash equivalents 1, Total current assets 2,442 2,071 2,004 TOTAL ASSETS 9,756 9,130 8,940 EQUITY AND LIABILITIES Equity 18 Share capital Other contributed capital 3,113 3,113 4,067 Retained earnings 807 1,168 1,270 Profit for the year Total equity 2,569 2,308 2,956 Non-current liabilities Liabilities to credit institutions 19 5,012 4,977 3,794 Deferred tax liabilities Provisions for post-employment benefits Other provisions Other non-current liabilities Total non-current liabilities 5,408 5,316 4,077 Current liabilities Liabilities to credit institutions Short-term provisions Trade payables Current tax liabilities Other current liabilities 24 1,292 1,226 1,129 Total current liabilities 1,779 1,506 1,907 TOTAL EQUITY AND LIABILITIES 9,756 9,130 8,940 Pledged assets 27 6,572 5,869 6,242 Contingent liabilities 28 3

4 Combined financial statements Combined statement of cash flows January December, SEKm Note Operating activities Profit before tax Adjustments for non-cash items Paid tax Cash flow from operating activities before changes in working capital Cash flow from changes in working capital Changes in current receivables Changes in current liabilities Cash flow from operating activities Investing activities Investments in subsidiaries (net of acquired cash) Divestments of subsidiaries 183 Investments in intangible assets Investments in property, plant and equipment Disposals of intangible assets and property, plant and equipment 13, Cash flow from investing activities Financing activities Redemption of shares 956 Changes in non-current liabilities and related derivatives New long term loans 19, 23 3,228 Repayment of loans 19, , Cash flow from financing activities CASH FLOW FOR THE YEAR Cash and cash equivalents at beginning of year Exchange rate differences in cash and cash equivalents Cash and cash equivalents at end of year 1, For information of received/paid interest, please refer to Note 25, Cash Flow Statement. 4

5 Combined financial statements Combined statement of changes in equity SEKm Share capital Additional paid in capital Cash flow hedges Retained earnings Acc 1) exchange rate differences Other 1) retained earnings Total equity Opening balance at January 1, , Profit/loss Profit for the year Other comprehensive income Remeasurements of defined benefit pension plans, net of tax Exchange rate differences on translating foreign operations Cash flow hedges, net of tax Total other comprehensive income Total comprehensive income Transactions with shareholders Issue in kind 3, ,396 Total transactions with shareholders 3, ,396 Closing balance at December 31, , ,093 2,956 Opening balance at January 1, , ,093 2,956 Profit/loss Profit for the year Other comprehensive income Remeasurements of defined benefit pension plans, net of tax Exchange rate differences on translating foreign operations Cash flow hedges, net of tax 4 4 Total other comprehensive income Total comprehensive income Transactions with shareholders Redemption of shares Total transactions with shareholders Closing balance at December 31, , ,308 Opening balance at January 1, , ,308 Results Profit for the year Other comprehensive income Remeasurements of defined benefit pension plans, net of tax Exchange rate differences on translating foreign operations Cash flow hedges, net of tax 5 5 Total other comprehensive income Total comprehensive income Transactions with shareholders Revaluation of option liabilities Total transactions with shareholders Closing balance at December 31, , ,569 1 Reclassification from accumulated exchange rate differences to other retained earnings has been carried out since January 1,

6 Notes to the combined financial statements 1 SIGNIFICANT ACCOUNTING POLICIES Attendo AB (publ) 1), corporate identification number , with registered office in Danderyd, is the parent company in a group with the subsidiary Attendo International AB (publ). Attendo International AB (publ) in turn owns companies whose operations consist of owning companies and managing shares in companies whose primary operations consist of providing care and health care services in the Nordics. The address of the head office is Vendevägen 85 B, Danderyd. BASIS OF PREPARATION FOR THE REPORTS All entities included in these combined financial statements are under common control, since they are all ultimately controlled by Attendo AB (publ). The Attendo AB (publ) group, as presented in these combined financial statements, consists of the entities listed in Note 31 and has subsequently not constituted a legal group for the periods presented in these combined financial statements. These combined financial statements are consequently an aggregation of the historical financial information for these entities. The combined financial statements combine the results and assets and liabilities for each of the entities constituting Attendo by applying the principles underlying the consolidation procedures of IFRS 10 Consolidated Financial Statements for the three years ending on December 31, 2014, 2013 and Thereby, these combined financial statements presents Attendo s financial position as of December 31, 2014, 2013 and 2012 and results and cash flows for these three years. The combined financial information has been prepared in accordance with the requirements that follow from the Commission Regulation (EC) No 809/2004, the Nasdaq Stockholm s Rule Book for Issuers, and in accordance with this basis of preparation. The combined financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and the interpretations from IFRIC, as adopted by the European Union, and with RFR 1 Supplementary Accounting Rules for Groups, associated interpretations issued by the Swedish Financial Reporting Board (Sw. Rådet för finansiell rapportering) and the Swedish Annual Accounts Act. The combined financial statements are presented in Swedish Krona (SEK) million. The combined financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, such as derivatives, financial instruments held for trading and plan assets related to defined benefit pension plans, which are stated at fair value. The combined financial statements comprise the entities that constitute Attendo and have been prepared for the same reporting periods, and with consistently applied accounting policies. All intra-group balances, transactions, income and expenses and profits and losses have been eliminated. Attendo AB (publ) is a company without prior operations and thus lack historical balance sheets and income statements for the periods which are comprised within these combined financial statements. Consequently, the future consolidated financial statements of the group will be prepared as a continuation of the current group, since the incorporation of Attendo AB (publ) as a new parent company merely is a reorganisation where Augustus International S.à r.l is the parent company both before and after the reorganisation. The new group will be established through the principal owner Augustus International S.à r.l initially acquiring Attendo AB (publ). Subsequently, Attendo AB (publ) will acquire the former group through an issue in kind by Attendo International AB (publ) on October 23, Directly after the issue in kind, Attendo AB (publ) becomes the owner of approximately 78 percent of the shares in Attendo International AB (publ). This issue in kind is made at a value of SEK 3,080m for the issued shares, corresponding to book value in the Attendo International AB (publ) group after conversion of the share options which previously have been issued to shareholders with non-controlling interests in Attendo Finland Oy. The 22 percent remaining shares, which are owned by, among others, the management, will be transferred through share swaps in such a way that ordinary and preference shares in Attendo International AB (publ) will be transferred to ordinary share in Attendo AB (publ). The transfer of the share are planned to occur on December 4, The issue in kind will be carried out at a value corresponding to the listing price. Since shareholder agreements stipulate that all shareholders are to be treated equally, it is assured that this share swap will be carried out whereby no non-controlling interests are recognised. The future consolidated financial statements of the group will in all material aspects correspond to these combined financial statements. The most significant accounting policies that have been applied when the combined financial statements were prepared are stated below. Amendments in the accounting policies and disclosures As of January 1, 2014, the group applies the following news or amendments of IFRS: IFRS 10, Consolidated Financial Statements is based on already existing policies since it recognises control as the decisive factor in determining whether a company should be included in the combined financial statements. The standard gives further guidance in aiding the determination of control when it is difficult to assess. This standard has not had any effect on Attendo s combined financial statements. IFRS 12 Disclosure of Interests in Other Entities comprises requirements for disclosure of information for all types of holdings in other companies, such as subsidiaries, joint arrangements, associated and un-consolidated structured companies. This standard has not had any effect on these combined financial statements. None of the other new or amended standards, (IFRS 11, IAS 27, IAS 28, IAS 32 and IAS 39) and their interpretations have had any significant influence on the combined financial statements financial results or position. More information on new standards and interpretations which have not yet been enacted can be found at the end of this note. ESSENTIAL ESTIMATES AND ASSESSMENTS Preparing reports in accordance with IFRS requires the use of certain essential estimates for accounting purposes. Furthermore, the management is required to make certain assessments when applying the group s accounting policies. The areas which involve extensive assessments, which are complex or such areas where assumptions and estimates are of material importance to the combined accounts are stated in Note 2, Essential Estimates and Assessments for Accounting Purposes. ACCOUNTING POLICIES FOR COMBINED ACCOUNTS The combined financial statements include all the entities which are mentioned in Note 31 in these combined financial statements 1) The change in company name was implemented on the extraordinary General Meeting on October 23, 2015 to Attendo AB (publ) from Goldcup AB. As at the delivery of this report, the registration of the new company name is not yet completed but the company is referred to as Attendo AB (publ) in these combined financial statements. 6

7 and over which the group has controlling interest. The group controls an entity when it is exposed to or is entitled to a variable yield from its holdings in the entity and has the opportunity to affect the yield through its holdings in the entity. Subsidiaries are included in the combined financial statements from the date when the controlling influence is transferred to the group. They are excluded from the combined financial statements as of the date when the controlling influence ceases to exist. All transactions with shareholders in subsidiaries are recognised based on the substance of these transactions. Shares attributable to shareholders that are active participants in subsidiaries which they own, are not deemed to meet the definition of non-controlling interests but are recognised as personnel costs, and in the group s statement of financial position, these shareholders share of the net assets in the group are recognised as personnel related liabilities. The purchase method Attendo applies the purchase method when recognising business combinations. This implies that an acquisition of a subsidiary is considered a transaction when the group indirectly acquires the subsidiary s assets and assumes its liabilities. The value of the acquisition for the group is determined by the subsidiary s assets and liabilities at fair value on the acquisition date. The valuation also includes an assessment of any contingent purchase considerations or option liabilities as of the point of time of the acquisition. Subsequent revaluation of the contingent purchase consideration and the option liability is stated at fair value through profit or loss and within equity, respectively. According to IFRS, transactions with non-controlling interests are recognised as a transaction within equity. There is, however, a lack of specific rules concerning revaluation of option liabilities for these holdings. Revaluations of option liabilities for non-controlling interests are recognised in the combined financial statements as transactions within equity. The accounting is thereby made similarly to other transactions with non-controlling interests. It is decided for each acquisition whether all non-controlling interests in the acquired company are stated at fair value or to the holding s proportionate share of the net assets of the acquired business. Acquisition related expenses are deducted when they arise. If the total purchase consideration exceeds the fair value of the acquired net assets, the exceeding amount is recognised as goodwill. If the fair value of the acquired net assets exceeds the total purchase consideration, the difference is recognised directly in the income statement. All intra-group transactions and balance sheet items as well as intra-group gains and losses when selling fixed assets are eliminated in the combined financial statements. REVALUATION AND TRANSLATION OF FOREIGN CURRENCY All subsidiaries accounting are made in local currency, i.e. the currency that is used in the economic environment where the respective subsidiary mainly conducts its operations ( functional currency ). The combined financial statements are presented in Swedish Krona (SEK), which is the parent company s functional currency and accounting currency. Transactions in foreign currencies have been translated according to the exchange rates that applied at the respective transaction dates. Exchange rate profits and exchange rate losses, arising from payments of such transactions and by translation of monetary assets and liabilities in foreign currencies at the exchange rate of the balance sheet date, are recognised in profit or loss. An exemption is made when hedge transactions meet the requirements for hedge accounting for cash flows or net investments, then profits/ losses are recognised in other comprehensive income. Translation of foreign subsidiaries The results and financial position of all group companies that have another functional currency than the reporting currency, are translated to the group s reporting currency in the following manner: Assets and liabilities in every recognised balance sheet are translated to the exchange rate of the balance sheet date. Earnings and expenses in each recognised income statement are translated to the average exchange rate. Exchange rate differences that arise are recognised in other comprehensive income. Goodwill and adjustments of fair value that arise in an acquisition of foreign operations are recognised as assets and liabilities in this business and are translated to the exchange rate of the balance sheet date. Exchange rate differences are recognised in other comprehensive income. CASH FLOW STATEMENT The cash flow statement is prepared in accordance with the indirect method s changes in business assets and liabilities have been adjusted for effects of the exchange rate fluctuations. Acquisitions and/or sales of subsidiaries are included, net of acquired/sold liquid assets, in the cash flows from investing activities. The assets and liabilities that the acquired and divested companies had at the acquisition date are neither included in the statement of working capital changes nor in changes of balance sheet items recognised within investing and financing activities. REVENUE RECOGNITION Care and health care services are to a large extent provided in accordance with multi-year operating agreements with monthly invoicing. Compensations are connected to the number of clients, number of care days, number of beds, number of home care visits and similar services that the group provides. Revenue is recognised when the underlying services have been provided under an agreement and when the amounts of revenue can be measured in an accurate manner and when it is probable that the economic benefits associated with the transaction will flow to the group. Enumeration of prices is usually done through an agreed upon indexation. Allowance for bad or doubtful debts are recognised immediately if the total expenses are expected to exceed the total revenue for the contracting period. SEGMENT REPORTING Operating segments should according to IFRS 8 be recognised in a manner that is in accordance with internal reporting that is made to the chief operating decision maker. The chief operating decision maker is the function that is responsible for distribution of resources and the assessment of the results of the operating segments. Within the Attendo group the CEO has been recognized as the chief operating decision maker. Attendo has defined five operating segments which on a regular basis are monitored by the chief operating decision maker, who decides on the allocation of resources, budget goals and a financial plan. In order to consolidate operating segment to one reportable segment, the standard states that the segments should have similar economic characteristics and also be similar with regard to the character of the products or services, the character of the production process, the customer category that use the product or service, how the products are distributed or services provided, and, if appliattendo ab (publ) 7

8 1 SIGNIFICANT ACCOUNTING POLICIES cont. cable, to what extent the operations are affected by various regulations and risks. Attendo is a care company where the character of the services provided and the customers that utilise the services are comparable. The provided services and the regulations which apply for these services are comparable, as are Attendo s processes and routines to provide the services. As a result, the operating segments are combined to one reportable segment. The segment is recognised according to the same accounting policies as the group. SUPPORT AND GRANTS Attendo is, like other employers, entitled to various state and municipality funded personnel related support and grants. These supports could relate to education, employment, reduction of working hours etc. All the supports and grants are recognised in profit or loss as cost reductions in the same period that corresponds to the underlying cost. FINANCIAL ASSETS Financial assets are recognised when the group enters into the agreed terms of the instrument. Financial assets are removed from the balance sheet when the entitlement to receive cash flows from the instrument has expired or been transferred and the group has transferred all significant risks and benefits associated with the ownership rights. The group s financial assets primarily consist of cash and cash equivalents as well as trade receivables and are classified in accordance with IAS 39 Financial Instruments: Accounting and Valuation. The group classifies its financial assets in the following categories: Financial assets at fair value through profit or loss and Loans and receivables. The classification is based on the group s purpose with the holding of the financial instruments. The classification of the financial assets is determined at initial recognition. Financial assets are initially stated at fair value with the addition of transaction costs. An exception is made for financial assets measured at fair value through profit or loss, which is initially recognised at fair value less transaction costs. The fair value of listed financial assets corresponds to the asset s listed price on the balance sheet date. Fair value of unlisted financial assets is determined through discounting of estimated future cash flows according to current interest rates. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if the primary purpose is to sell the asset within the near future. Derivatives are classified in this category if they are not defined as hedges. Assets in this category are classified as current assets. Gains or losses arising from changes in fair values for this category, are recognised in the income statement for the period in which they arise and are included in the net financial items. Loans and receivables Loans and receivables are financial assets with determined or determinable payments and that are not listed on an active market. Loans and receivables are initially stated at fair value and subsequently measured at amortised cost, applying the effective interest rate method. Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Expected and confirmed trade losses are recognised as operating costs. Financial liabilities primarily consist of trade payables and loan payables. The financial liabilities that are not included in hedge accounting are measured at amortised cost, applying the effective interest rate method. Direct costs associated with loans raised are included in the amortised cost. Financial liabilities in foreign currencies are translated at the exchange rate of the balance sheet date. Borrowings are initially stated at fair value, net of transaction costs. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds net of transaction costs and the amount due on settlement or redemption of borrowings is recognised over the term of the borrowing. See also Note 19, Liabilities to Credit Institutions. Trade payables Trade payables are initially stated at fair value and subsequently at amortised cost applying the effective interest rate method. Share option liabilities Share option liabilities are stated at fair value. See also Note 23, Financial Risk Management and Financial Instruments. DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING The group s derivative instruments in the form of interest rate swaps and currency swaps have been acquired to hedge against exchange rate and interest rate market exposure that the group is exposed to. For more information see Note 23, Financial risk management and financial instruments. Derivatives at fair value through profit or loss Derivative instruments are recognised in the balance sheet on the trade date. They are at fair value through profit or loss under the condition that they are not used as hedging instruments according to the regulation on hedge accounting. For more information on derivative instruments used as hedging instruments, see below under section Cash Flow Hedges. Cash flow hedges The effective part of the change in fair value on derivatives that are identified as cash flow hedges and meets the requirements for hedge accounting, is recognised in other comprehensive income. The profit or loss which is attributable to the ineffective part is immediately recognised in the income statement as a financial income or expense. Accumulated amounts in equity are redirected to the income statement in the periods where the hedged item affects the result (e.g. when the projected hedged sale takes place). The profit or loss that is attributable to the effective part of an interest rate swap that hedges borrowing to a non-fixed interest rate, is recognised in the income statement as a financial income or expense. When a hedging instrument matures or is sold or when the hedging no longer meets the criteria for hedge accounting and accumulated profits or losses relating to the hedging are recognised in equity, these profits/losses remain in equity and are recognised, at the same time as the projected transaction is finally recognised in the income statement. When a projected transaction is no longer expected to carry through, the accumulated profit or loss that is stated in equity is immediately transferred to the income statement as a financial income or expense. LEASES Leases are classified as either finance leases or operating leases in the combined accounts. Finance leases: Lease agreements that entail that risks and benefits associated with the ownership in all material aspects are transferred to the group, are classified as finance leases. When a leased asset is initially recognised it is valued at the lowest of either the fair value or the present value of the minimum lease payments. Subsequently the asset is recognised in accordance with the applicable accounting policies of the asset. The depreciation period must not, however, be longer than the leasing period. 8

9 1 SIGNIFICANT ACCOUNTING POLICIES cont. Operating leases: Leases where a significant part of the risks and benefits related to the ownership are maintained by the lessor, are classified as operating leases, which means that the leased asset is not recognised in the balance sheet. Expenses attributable to operating leases are recognised in the income statement on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis over the lease term. INTANGIBLE ASSETS Goodwill Goodwill arise from business combinations and is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer s previously held equity interest (if any) in the entity over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill from business combinations is allocated to the cashgenerating unit expected to benefit from the synergies of the combination. Goodwill is tested for impairment annually or more often if there are indications that a unit may be impaired. An impairment loss is recognized if the carrying amount exceeds the recoverable amount, which is the higher of the value in use and the fair value less costs to sell. An impairment loss is immediately recognised as an expense in the income statement and must not bereversed. More information concerning goodwill impairment can be found in Note 2, Critical accounting estimates and judgments, and also Note 13, Intangible Assets. Customer Relations Customer relations are recognised in connections with business combinations when the customer base is a significant part of the combination. Customer relations are deemed to have a limited utilisation period. These assets are stated at fair value at the acquisition date and subsequently stated at initially recognized amounts less accumulated amortisation and any impairment. Made according to the straight line method over the customer relations estimated useful lives. The value of a deferred tax liability is estimated based on the local tax rate of the difference between the book value and the tax value of the intangible asset. The deferred tax liability is to be dissolved over the same period as the intangible asset is amortised, which results in that the effect of the amortisation of the intangible asset is neutralised regarding the full tax rate concerning profit after tax. The estimated utilisation periods are: Asset Number of years Customer relations 2 5 The test for impairment and the recognition of impairments for customer relations, are conducted in the same manner as for goodwill. Other intangible assets These assets primarily consist of acquired customer contracts, but also other acquired intangible assets such as licenses or trademarks. Other acquired intangible assets are initially recognised at fair value at the acquisition date and subsequently reported at cost less accumulated amortisation and any impairment losses. Amortisation is made according to the straight-line method over the estimated useful lives and charged to administrative expenses on the following basis: Asset Number of years Customer contracts 6 10 Other intangible assets 3 5 The impairment testing as well as the recognition of impairment of other intangible assets, is conducted in the same manner as for goodwill. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost, less accumulated depreciation and any recognised impairments loss. Depreciation is recognised using the straight-line method over the estimated useful life of each component of an item of property, plant and equipment, including buildings, on the following basis: Asset Number of years Buildings Equipment 3 10 Vehicles 5 The impairment testing as well as the recognition of impairment is conducted in the same manner as for intangible assets. The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss. INCOME TAXES The tax expenses comprise current and deferred tax. Taxes are recognised in the income statement, unless the underlying item is reported in other comprehensive income or directly in equity. For those items the related income tax is also reported in other comprehensive income or equity. Deferred tax is recognised as temporary differences between the book values of assets and liabilities and their tax value and for tax loss carry forwards. Deferred tax receivables are recognised only if it is probable that they will be utilisable against future taxable profits. Deferred tax liabilities are, however, not recognised if they arise as a result of the initial recognition of goodwill. Nor are deferred taxes recognised if they arise as a result of a transaction that constitutes the initial recognition of an asset or liability that is not a business combination and is, at the transaction date, neither affecting the recognised nor the tax result. PROVISIONS A provision is a liability that is uncertain regarding maturation or amount. A provision is recognised when the group has an existing legal or informal obligation as a result of an incurred event and it is probable that an outflow of resources will be necessary to finalise the obligation and in addition that a reliable estimation of the amount can be made. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. Onerous contracts A provision for onerous contracts is recognised when the expected benefits that the group is expecting to receive from a customer contract, are lower than the unavoidable costs to meet the obligations of the contract. 9

10 1 SIGNIFICANT ACCOUNTING POLICIES cont. Restructuring A provision for restructuring is recognised when the group has a determined and explicit restructuring plan, which has either been initiated or publicly announced. REMUNERATION FOR EMPLOYEES Post-employment benefits The group companies have various pension plans which are classified as either defined contribution pension plans or defined benefit pension plans. Defined contribution pension plans A defined contribution pension plan is a pension plan where the group s obligations are limited to pay a fixed amount to a separate legal entity. The group has no obligation to pay further contributions if the pension fund does not hold sufficient assets to pay all employee benefits. Fees attributable to defined contribution pension plans are recognised as personnel costs in the income statement as they mature. Defined benefit pension plans A defined benefit pension plan is a pension plan that is not defined by contributions. What differentiates defined benefit pensionplans is that they stipulate the amount for the pension benefit that an employee will receive after retirement, usually based on one or several factors such as age, period of service and salary. The liability recognised in the balance sheet in respect of the defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date, minus the fair value of plan assets and unaccounted service costs for previous periods. The defined benefit pension plan is defined using the projected unit credit method. The discount rate applied to calculate the present value of post-employment benefit obligations is determined by the market yields of first rate corporate bonds issued in the same currency as in which the obligation will be payable with corresponding maturity to the post-employment benefit obligation. The discount rate is reviewed quarterly, which affects net debt. Other assumptions such as retirement age, mortality and fluctuations of personnel, are reviewed annually. Actuarial gains and losses as a result of experience-based adjustments and amendments in the current assumptions, are recognised in other comprehensive income in the period which they arise. The Group s net obligation concerning the defined benefit pension plans in Norway are calculated separately for each plan through an assessment of the future benefits that the employees have earned in their employment in both current and previous periods. Obligations for retirement pensions and family pensions for civil servants in Sweden is secured under an insurance scheme with Alecta. According to a statement from the Financial Reporting Council, UFR 3, this is a defined benefit pension plan that covers several employers. The Group has, like other Swedish companies, not had access to such information that would make it possible to recognise this plan as a defined benefit pension plan. The pension plan under ITP, which is secured under an insurance scheme with Alecta, is therefore recognised as a defined contribution pension plan. compensation. The group recognises such compensation at the termination of employment when it is proven that it is obligated to terminate the employment according to a detailed formal plan without the possibility of withdrawal. In case the company has left an offer to encourage a voluntary dismissal, the calculation of severance pay is based on the number of employees that are estimated to accept the offer. Benefits that mature more than 12 months after the end of the reporting period are discounted to the present value. NEW OR AMENDED IFRS-STANDARDS THAT HAS NOT YET BEEN IMPLEMENTED A number of new standards and amendments of interpretations and current standards comes into force in the financial year that starts after January 1, 2015 and have not been applied in the preparation of the combined financial statements. None of these are expected to have a significant impact on the combined financial statements with the exceptions presented below: IFRS 9 Financial Instruments handles classification, valuation and accounting of financial assets and liabilities. The complete version of IFRS 9 was issued in July It replaces the parts of IAS 39 that handles classification and valuation of financial instruments. IFRS 9 maintains a mixed valuation approach, but simplifies this approach in certain regards. There will be 3 valuation categories for financial assets, amontised cost, fair value through other comprehensive income and fair value through profit and loss. The basis of classification depends on the company s business model and the instruments characteristics. Investments in equity instruments are required to be measured at fair value through profit or loss with their revocable option at inception to present changes in fair value in other comprehensive income. IFRS 9 also introduces a new model for expected credit losses. IFRS 9 reduces the requirements for applying hedge accounting through replacing the criteria with requirements for a financial relation between hedging instruments and hedged objects, and a hedged quote should be the same as is used in risk management. The hedging documentation is also amended to some extent compared with the one that is presented under IAS 39. The standard is effective as for the financial year starting January 1, The Company has not finalized the evaluation of any impact on financial result or position. IFRS 15 Revenue from Contracts with Customers regulates the recognition of revenue. The core principles of IFRS 15 are that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognised when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. This standard is effective as from January 1, 2017, and replaces IAS 18 Income and IAS 11 Outsourcing, as well as the attributable SIC and IFRIC. The EU has not yet endorsed IFRS 15, Revenue from Contracts with Customers. The Company has not yet finalized the evaluation of any impact on financial result or position. None of the new standards, which have not yet been adopted, is expected to have any significant impact on the group. Termination benefits Termination benefits are payable when an employment is terminated by the group before the ordinary retirement date or when an employee voluntarily accepts termination in exchange for such 10

11 2 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The combined financial statements are prepared in accordance with IFRS. This means that the preparation of financial reports and the application of accounting policies often are based on the management s judgments and estimates and assumptions that are considered reasonable and balanced at the point of time when the judgment is made. The result could, however, turn out differently using other judgments, assumptions and estimates, and events may occur that may require a significant adjustment to the recognised value of the asset or liability in question. Listed below are the significant areas where judgments and assumptions have been made and which are considered to have the largest impact on the combined financial reports. IMPAIRMENT TESTS OF GOODWILL The group annually tests whether there is a need for impairment with regards to goodwill, in accordance with the accounting policies described in Note 1, Significant Accounting Policies. In connection with the test for impairment, calculations are made based on judgments and estimates. The most essential assumptions that these estimates are based upon include growth rate, profit margin, need for investments and discount rate. The recent political and media debate in Sweden concerning welfare and the position of alternative providers within the welfare sector has brought an increased political risk for Attendo which reflects the judgments made. Political decisions, which leads to amendments in the legislation, may have a significant impact on Attendo s operations. The Swedish government and The Left Party reached an agreement in 2014 to evaluate the possibilities of restricting quality, freedom of choice and distribution of profits in schools, health care and care. This agreement creates uncertainty concerning the conditions for investments in Swedish welfare. This entails that essential issues such as quality development, innovation and long term provision of competence within Swedish welfare do not receive sufficient attention. This is particularly unfortunate given the challenges which Sweden stands before with the increasing demand for care and health care, while citizens raises increasingly higher demands for plurality, freedom of choice and availability. The inquiry was appointed in March 2015 and is to present its proposals on November 1, 2016 at the latest. It is currently difficult to assess which conclusions an inquiry will reach, to which, if any, propositions the inquiry will result in and which parliamentary support these propositions would receive in the Parliament. Other judgments than those made by the management may result in a completely different result and another future financial position. More information can be found in Note 13, Intangible Assets. VALUATIONS RELATED TO ACQUISITIONS When acquiring subsidiaries or operations, identifiable assets and liabilities are valued at fair value in connection with the allocation of the purchase consideration. Usually there are no listed prices for the assets and liabilities that are valued, whereby different valuation techniques must be applied. These valuation techniques are based on various assumptions such as, for example, assumptions regarding the discount rate. Other judgments than those made by the management may result in a different future financial position, since a larger share of goodwill constitutes an asset item, which is not subject to ongoing depreciation and whose value is to be tested annually. This could mean increased vulnerability if the valuation of the operation should decrease. For more information on acquisitions see Note 26, Business Combinations. Option liabilities and contingent purchase considerations are recognised at the amount that the future acquisition is estimated to cost, and is subsequently revalued within equity in each financial report. Ordinarily there are a number of variables which affect the future acquisition price, e.g. the profitability of the company. If the assumptions that provide the support for the valuation should not reflect the future acquisition price of the outstanding shares, the acquisition price may exceed or fall below the recognised amount. Option liabilities, which amounted to SEK 210m as of December 31, 2014 (SEK 177m in 2013, SEK 179m in 2012), are thereby targeted by critical estimates and assessments. For more information concerning option liabilities see Note 22, Other Non-Current Liabilities. PROVISIONS FOR ONEROUS CONTRACTS The net sales of the group mainly derives from customer contracts. The management estimates, among other things, the presence of contract losses, to determine which income and expenses shall be recognised in each period. The presence of any onerous contracts is assessed individually from the estimated results, including index adjustments, during the contract s whole assessed contract period. Should an onerous contract be deemed to exist, a provision based on the estimated loss is immediately recognised. As of December 31, 2014, the total provisions for onerous contracts were SEK 48m (SEK 29m in 2013 and SEK 0m in 2012) of which SEK 7m (SEK 16m in 2013 and SEK 0m in 2012) is recognised as non-current provisions. TAXES The recognition of income tax, value added tax and other taxes is based on current regulations, including practice, directions and legislation in the countries where the group conducts its operations. Due to the overall complexity of these issues, the application is, and thereby also the accounting, in some cases based on interpretations and estimates and assessments of possible outcomes. In complex issues the group solicits advice from external experts to assess possible outcomes from the current practice and interpretations of the current regulations. In 2014, the group recognised expenses for income tax of SEK -148m (SEK -119m in 2013 and SEK -87m in 2012). Deferred tax receivables and liabilities are recognised for temporary differences and unused tax loss carry forwards. The valuation of tax loss carry forwards is based on the management s estimates of future taxable incomes in respective tax areas. The value of the deferred tax receivables amounted to SEK 30m in December 31, 2014 (SEK 92m in 2013 and SEK 134m in 2012). More detailed information on taxes can be found in Note 11, Taxes. PENSIONS The group has pension obligations for defined benefit pension plans whose present value is based on current estimates. These calculations assume that significant estimates concerning, for example, discount rate, expected inflation, future salary increase and expected return on assets. Assumptions for discount rate are based on, under current accounting standards, market interest rates for first rate corporate bonds with maturities as similar as possible to the group s maturities. As of December 31, 2014 the defined benefit obligations for pensions amounted to SEK 196m (SEK 174m in 2013 and SEK 148m in 2012). The development of pension expenses depends largely on current agreements such as collective agreements as well as laws and regulations and may thereby increase or decrease depending on future events that are presently unknown and that thereby cannot be included in the current calculation. For more information on pensions see Note 20, Provisions for Pensions. 11

12 3 INFORMATION ON SEGMENTS OPERATING SEGMENTS Attendo has defined five operating segments which are regularly reviewed by the chief operating decision maker on allocation of resources, budget goals and a financial plan. Attendo primarily uses the operating profits when deciding on allocation of resources and for performance analysis of Attendo s five operating segments. The five operational segments consist of an aggregation of regions. The operating segments have a manager who is part of the Executive management and all operating segments provide care and health care services. Attendo has in accordance with IFRS 8, paragraph 12 recognised these segments at an aggregate level to one reportable segment, since the operating segments have similar economical properties and in addition they are similar as regards customers, the nature of the services and the way in which they are provided, the nature of the production process and regarding to what extent the operations are affected by different regulations and risks. For this reason, no information on segments will be recognised because the combined income statement and balance sheet refers to the reportable segment. CUSTOMERS Attendo has no customers for which revenue exceed ten percent of the company s total revenue for the year 2014, 2013 and Customers consist essentially of municipalities in the Nordics. INFORMATION FOR EACH GEOGRAPHICAL AREA Net sales from external customers by geographical areas Sweden 4,875 4,760 4,686 Finland 3,737 3,332 2,824 Norway Denmark Total 9,045 8,465 7,891 Fixed assets by geographical areas 1) Sweden 4,443 4,418 4,377 Finland 2,817 2,528 2,403 Norway Denmark Total 7,284 6,964 6,802 1) Fixed assets do not include financial instruments, deferred tax receivables and post-employment benefits. The net sales from external customers refer to care and health care services. The information on fixed assets is based on geographical areas grouped by the location of the assets. 4 OTHER OPERATING INCOME Other operating income Gains from divestments of fixed assets Gains from divestments of subsidiaries 30 Other items Total SALARIES, OTHER REMUNERATIONS AND SOCIAL COSTS REMUNERATION TO THE BOARD OF DIRECTORS The parent company s Board of Directors consists of nine ordinary Board Members, including three women. On the Annual General Meeting 2014 it was resolved that the Chairman of the board was entitled to a board remuneration of SEK 500,000. Ordinary Board Members elected by the Annual General Meeting were entitled to a remuneration of SEK 250,000 each. The Deputy Board Member elected by the Annual General Meeting was entitled to a remuneration of SEK 100,000. No board remuneration is given to Board Members employed by Attendo. In addition to these figures, the Annual General Meeting of 2014 resolved on a remuneration of a total of SEK 300,000 to Members of the Audit Committee (of which SEK 150,000 to the Chairman) and a total of SEK 200,000 to Members of the Compensation Committee (of which SEK 100,000 to the Chairman). No other remunerations have been paid to Board Members. Board remuneration is decided by the Annual General Meeting, but the board remuneration is deducted and paid out each calendar year, which is why the amount stated below does not represent the company s costs for remuneration to the Board of Directors. Board remuneration approved by the Annual General Meeting 2014, SEKt Chairman of the Board of Directors Board Remuneration for remuneration committees Total remuneration Erik Lautmann 2) Members of the Board of Directors Henrik Borelius Mona Boström 1) Jan Frykhammar 1) Ulf Lundahl 1)3) Christopher Masek Arja Pohjamäki 4) Anssi Soila Helena Stjernholm Deputy members of the Board of Directors Christoffer Zilliacus Marie Jonsson 4) Elizabeth Paller 4) Total 2, ,600 1) Elected at the Annual General Meeting of ) Chairman of the Compensation Committee. 3) Chairman of the Audit Committee. 4) Employee representatives. Marie Jonsson resigned as deputy employee representative on May 1, At the same time Elizabeth Paller was elected as deputy employee representative. 12

13 5 SALARIES, OTHER REMUNERATIONS AND SOCIAL COSTS cont. In cases where Board Members invoice the amount for board remuneration through a company, social costs may be added to the invoice if the amount does not exceed the amount the group would otherwise have to pay as employer s contributions. The table above refers to remuneration excluding social costs. REMUNERATIONS TO THE CEO AND THE GROUP S EXECUTIVE MANAGEMENT The company s costs for remunerations to the Executive Management are recognised in the income statement. Costs recognised during a financial year are not always paid in full by the company at the end of the financial year, because the costs could comprise a variable compensation, disbursed the year after the vesting period. The table below refers to the group s costs for remuneration to the Executive Management during the financial year. Costs for remunerations to the CEO and other Members of the group s Executive Management SEKt CEO 2014 CEO 2013 CEO 2012 Ex.Man 2014 Ex.Man 2013 Ex.Man 2012 Total 2014 Total 2013 Total 2012 Salaries and other remunerations 5,115 5,176 4,703 16,570 13,467 12,647 21,685 18,643 17,350 Pension costs 1,621 1,406 1,481 4,216 3,119 2,705 5,837 4,525 4,186 Social costs and tax 2,031 1,994 1,863 5,404 4,067 4,056 7,435 6,061 5,919 Total 8,767 8,576 8,047 26,190 20,653 19,408 34,957 29,229 27,455 The group s Executive Management consists of eight (seven) people, including three (two) women, which comprise the CEO and seven other Members of the Executive Management: the CFO, the business development director and the five managers for the operating segments. Questions concerning remuneration to the Members of the Executive Management are handled by the Compensation Committee. The CEO is entitled to a premium based pension solution of his choice corresponding to 30 percent of the salary. Attendo has no other obligations regarding pension towards the CEO. Salaries and other remunerations include costs for variable remuneration which, regarding the CEO, amounted to SEK 1.6m (SEK 1.6m for 2013 and SEK 1.3m for 2012). Upon dismissal of the CEO by the company, the CEO is entitled to a twelve months notice period and a severance pay corresponding to twelve monthly salaries. Other Members of the Executive Management have a mutual notice period of six months. Upon dismissal by the company, the other Members of the Executive Management are entitled to a severance pay corresponding to six monthly salaries. The CEO is during any period of notice bound by a non-competition clause, unless the dismissal is due to a gross breach of the contract by Attendo. The other Members of the Executive Management are subject to non-competition clauses for up to one year after termination of the employment. NUMBER OF EMPLOYEES, SALARIES AND OTHER REMUNERATIONS Average number of employees Women Men Total Women Men Total Women Men Total Sweden 7,079 1,492 8,571 7,086 1,426 8,512 6,932 1,412 8,344 Finland 3,872 1,105 4,977 3,621 1,142 4,763 2,967 1,059 4,026 Norway Denmark Total 11,522 2,692 14,214 11,183 2,649 13,832 10,340 2,550 12,890 The basis for calculating the average number of employees has partly been revised. This has resulted in the group adjusting the average number of employees for the years above. Remuneration to employees Salaries and other remunerations 4,770 4,484 4,270 Social costs Pension costs Total 6,167 5,857 5,590 Other remunerations A part of certain employees remuneration is variable. For the variable remuneration to be payable, certain targets must be achieved. The targets are linked to parameters such as quality, customer satisfaction, employee satisfaction and economy. 6 OTHER EXTERNAL COSTS Other external costs Hired care and health care personnel Consumables Operating leases Other property costs External services Other Total 1,900 1,714 1,473 13

14 7 OPERATING LEASES During the period, lease payments amounted to SEK 544m (SEK 464m for 2013 and SEK 442m for 2012). Of the lease payments, SEK 510m (SEK 432m in 2013 and SEK 403m in 2012) relate to rent for premises. Other lease payments relate to assets of less value. The nominal value of contractual future lease payments is distributed as follows: Remaining maturities as of December 31 Due within 1 year Between 1 5 years 1,852 1,426 1,114 Later than 5 years 2,300 1, AUDIT AND NON-AUDIT FEES Audit and non-audit fees PwC Audit fees Other audit assignments Tax advice Other services Total Audit fees refer to fees for the statutory auditing, i.e. such work necessary to issue the Auditor s Report, as well as a so-called audit advice provided in connection with the audit assignment. 9 DEPRECIATION AND AMORTISATION Depreciation and amortisation Customer relations 13 0 Customer contracts Other intangible assets Buildings Equipment and vehicles Total Financial income FINANCIAL INCOME AND EXPENSES Interest income and similar items Changes in the fair value of currency swaps Exchange rate gains Total Financial expenses Interest expenses and similar items Write-down of financing costs 5 Amortisation of financing costs Interest expenses regarding finance leases Interest expenses regarding post-employment benefits Exchange rate losses 92 Other financial expenses Total Net financial items Exchange rates December 31 / Jan Dec Closing exchange rate Average exchange rate Closing exchange rate Average exchange rate Closing exchange rate Average exchange rate Euro 9,4746 9,0964 8,943 8,649 8,617 8,705 Norwegian Krona 1,0516 1,0894 1,058 1,110 1,167 1,164 Danish Krona 1,2781 1,2203 1,199 1,160 1,155 1, TAXES Income taxes recognised in the income statement Current tax Deferred tax Total A reconciliation between this year s recognised tax expenses, and the tax expenses that would arise if Swedish tax rate, 22 percent (26.3 percent for 2012), had been calculated on the result prior to taxation, is presented below. Reconciliation of effective tax Tax according to the Swedish tax rate Tax effect on non-deductible items Tax effect on non-taxable income Tax effect of changes in tax rates 19 Tax relating to previous year Revaluation of tax loss carry forwards 56 Effects of foreign tax rates Other Tax expense

15 11 INCOME TAXES cont. DEFERRED TAX RECEIVABLES AND TAX LIABILITIES Tax effect of temporary differences, including unutilised tax-loss carry forwards, has resulted in deferred tax receivables and deferred tax liabilities as follows below: Deferred tax receivables Tax loss carry forwards Provisions for post-employment benefits Interest-rate swaps 4 3 Other Total Changes in deferred tax receivables Opening balance January Tax loss carry forwards Provisions for post-employment benefits Interest-rate swaps 1 3 Provisions 1 3 Exchange rate differences 0 1 Other Closing balance December Deferred tax liabilities Intangible assets Property, plant and equipment Other Total Deferred tax liabilities consist of tax on customer relations of SEK 27m, customer contracts of SEK 1m, trademarks of SEK 6m and a number of smaller deferred tax liabilities of in total SEK 2m. Changes in deferred tax liabilities Opening balance January Dissolution of un-taxed reserves Customer contracts Costumer relations 24 3 Other Closing balance December DEFERRED TAX OTHER COMPREHENSIVE INCOME Tax items attributable to other comprehensive income Deferred tax on revaluation of provisions for post-employment benefits Deferred tax on cash flow hedges Deferred tax on other comprehensive result TAX LOSS CARRY FORWARDS Sweden Finland Norway Denmark The loss carry forwards in Sweden will not be used, whereby deferred tax receivables related to the loss carry forwards are returned in full. The recognised value of the tax loss carry forwards amounts to SEK 5m as of December 31, 2014 (SEK 58m 2013 and SEK 114m 2012). 12 EARNINGS PER SHARE Earnings per share (SEK) basic and diluted Earnings per share Basic and diluted The calculation of the numerators and denominators used in the calculation of earnings per share above is presented below. Basic and diluted Basic and diluted earnings per share are calculated by dividing the result attributable to the equity holders of the parent company with the amount of outstanding ordinary shares during the period, excluding treasury shares. The number of shares is considered to be the same for the entire historical period The number of shares refers to the estimated number of shares at the time of the listing and is based on the Board of Directors best estimate at the time of signing the report. The number of shares that Attendo AB (publ) will have at the listing date may differ from this estimate. Basic and diluted Profit attributable to the parent company's ordinary shareholders Number of outstanding ordinary shares during the year, basic and diluted, thousands 150, , , INTANGIBLE ASSETS Intangible assets 2014 Costumer Customer Other SEKm Goodwill relations contracts assets Total Opening balance 6, ,475 Acquisitions Investments Divestments and disposals 4 4 Reclassifications 9 9 Amortisation Exchange rate differences Closing balance 6, ,787 15

16 13 INTANGIBLE ASSETS 2014 cont. Intangible assets 2013 SEKm Goodwill Costumer relations Customer contracts Other assets Total Opening balance 6, ,317 Acquisitions Investments 5 5 Amortisation Exchange rate differences Closing balance 6, ,475 Intangible assets 2012 SEKm Goodwill Costumer relations Customer contracts Other assets Total Opening balance 6, ,424 Acquisitions Investments Reclassifications Amortisation Exchange rate differences Closingbalance 6, ,317 IMPAIRMENT TEST OF GOODWILL Attendo annually tests whether there is a need for impairment regarding goodwill by calculating the value-in-use for cash-generating entities which the goodwill item is allocated to. There are five operating segments within Attendo. Since Attendo s legal organisation is not based on the five operating segments, Attendo has in accordance with IAS 36, paragraph 82 chosen to conduct the impairment test on the basis of three cash-generating entities, since these reflect how Attendo conducts its operations. In addition, these three cash-generating entities correspond to the lowest level of monitoring of financial position. The three cash-generating entities are called Attendo Scandinavia Care for Older people (ASO), Attendo Scandinavia Care (ASC) and Attendo Finland (AF). The key assumptions in the impairment test for the current year relates to growth rate, profit margins, investment needs and discount rates. The discount rate is set with respect to current interest rates and the specific risk in the cash-generating entity and is calculated before tax. The differences in discount rates between the cash-generating entities are primarily linked to the increased political risk primarily affecting the Swedish operations, ASO and ASC. For more information on the political risk, see Note 2, Critical Accounting estimates and Judgments. Assumption for the impairment test 2014 ASO ASC AF WACC before tax 10.4% 10.4% 9.8% The growth rate in the budget and the five-year forecast is based on sector-data, expected changes in the market and the management s experience from similar markets and Attendo s strategy. Attendo calculates future cash flows based on the board of director s and the management s latest approved budget for the upcoming financial year, and thereafter detailed forecasts covering a five-year period. For the period since, a long-term growth rate of 2 percent (2 percent for 2013 and 2 percent for 2012) has been adopted. It does not exceed average long-term growth rates for the sector as a whole and is based on sector-data, expected changes in the market and the management s experience from similar markets. The Board of Directors and the management have established assumptions based on historical results and their expectations on the market development. The weighted average growth rate used corresponds with given forecasts in sector reports. The discount rates used are set before tax and reflects the specific risk for the identified cash-generating entity. A test for impairment needs relating to goodwill shows that there is no need for impairment. Sensitivity analyses of the calculation of the value-in-use in connection with the impairment assessment have been conducted, where the organic sales growth was lowered by 1.5 percentage points in the forecast period, the operating margin was lowered by 1.5 percentage points, the discount rate was increased by 0.5 percentage points, the growth rate after the forecast period was lowered by 0.5 percentage points. The sensitivity analyses showed that none of the adjustments individually generated any impairment. The recoverable amount for the cash-generating entities ASC and AF exceed the recognised value by a substantial margin. The cash-generating entity ASO s recovery value is closer to its recognised value, which is why a change in the assumptions could lead to the recovery value falling below the recognised value and thereby become subject to impairment needs. The assumption, where a not unreasonable change, can lead to impairment needs is the discount rate for the cash-generating entity ASO, while other cash-generating entities would not be affected by a reasonable change to the discount rate. The applied discount rate to ASO reflects its risk and has in connection with the impairment needs estimation 2014 increased in comparison to earlier years. An increase of the discount rate in the sensitivity analysis for ASO by 1.0 percentage point would result in an impairment for ASO of SEK 248 million. Distribution of goodwill in the group SEKm ASO ASC AF Totalt Goodwill as of December 31, , ,445 6, PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment 2014 Property Equipment SEKm and plant and vehicles Total Opening balance Acquisitions 8 8 Investments Disposals and divestments Reclassifications 9 9 Depreciations Exchange rate differences 9 9 Closing balance

17 14 PROPERTY, PLANT AND EQUIPMENT cont. Property, plant and equipment 2013 SEKm Property Equipment and plant and vehicles Total Opening balance Acquisitions Investments Disposals and divestments Reclassifications Depreciations Exchange rate differences Closing balance Property, plant and equipment 2012 SEKm Property Equipment and plant and vehicles Total Opening balance Acquisitions Investments Disposals and divestments Reclassifications Depreciations Exchange rate differences Closing balance In the item Equipment and vehicles, financial leasing objects are included with the following amount: Financial leasing objects Acquisition costs Accumulated depreciations Recognised value The item in its entirety consists of financial leasing agreements relating to vehicles. 15 OTHER NON-CURRENT RECEIVABLES Other non-current receivables Deposit, rent for premises Lending in connection with new construction under own operations Cross Currency swap 27 Other Total Trade receivables TRADE RECEIVABLES Trade receivables Allowance for doubtful debts Trade receivables net Maturity structure Not past due Past due 1 30 days Past due days Past due 61 0 days Past due over 90 days Trade receivables net Trade receivables refer in all material respects to municipalities in the Nordics, which are deemed to have a good credit rating. Changes in allowance for doubtful debts Opening balance The year's provisions for doubtful debts Confirmed trade losses Recovered doubtful debts Closing balance Recognised amounts, per currency, for the group s trade receivables. Trade receivables in each currency respectively SEK EUR NOK DKK OTHER CURRENT RECEIVEABLES Other current receivables Cross currency swap 125 Other receivables Prepaid rent Accrued income Accrued interest income Other prepaid expenses and accrued income Total

18 18 EQUITY SHARE CAPITAL Attendo AB (publ) became parent company on October 23, 2015, why on share capital is presented for the period The quota value amounts to SEK 1 and all shares have the same voting rights. ADDITIONAL PAID IN CAPITAL Relates to payments made by shareholders. This includes share premiums paid in connection with new share issues. RETAINED EARNINGS Retained earnings, including profit or loss for the year, comprise of the profits earned in the parent company and its group companies. Retained earnings also include the following: Remeasurements of defined benefit pension plans. Actuarial gains and losses on defined benefit pension plans. Cash flow hedges Cash flow hedges comprise of the effective part of the accumulated net change in fair value of cash flow hedging instruments attributable to hedged transactions that have not yet occurred. Exchange rate differences on translating foreign operations Exchange rate differences arising from translation of financial reports from foreign subsidiaries, changes relating to the translation of surplus values in local currency, and revaluation of liabilities hedging the net investment in a foreign subsidiary. Revaluation of option liabilities Revaluation of option liabilities are valued based on the value of the Attendo group according to the valuation principles set by the European Venture Capital Association (EVCA). For further information see Note 22, Other non-current liabilities. 19 LIABILITIES TO CREDIT INSTITUTIONS Liabilities to credit institutions Liability to credit institution 5,250 5,063 4,195 Liabilities as regards financial leasing Deducting capitalised financing costs Total 5,265 5,041 4,349 Changes in liabilities to credit institutions Opening balance 5,041 4,349 4,665 Borrowings and acquired loans 16 3,425 Repayment of loans 127 2, Capitalised interest Exchange rate differences Changes of liability regarding financial leasing Changes of capitalised financing costs Closing balance 5,265 5,041 4,349 The carrying amount is in all material respects deemed to correspond to the fair value. Loans to credit institutions December 31, 2014 are distributed among the following currencies: Local currency SEK m EUR 442 4,192 SEK 1,228 1,228 Effective interest rate on the balance sheet day Bank loan 6.3% 6.5% 5.9% Overdraft facility 3.8% 4.8% 1.9% The liabilities to credit institutions are subject to binding financial promises (covenants) that the group has committed to in credit agreements to the lenders. Attendo continuously monitors these covenants and reports them to the lenders on a quarterly basis. The debt promises comprise an interest cover covenant, an EBITDA/net debt covenant, a cash flow covenant and a capital expenditure covenants. None of these covenants have been breached during 2012, 2013 or PROVISIONS FOR POST-EMPLOYMENT BENEFITS SWEDEN Employees employed under collective agreements are covered by the SAF/LO plan which is a defined contribution pension plan based on collective agreements and comprises several employers within several different sectors. Civil servants are covered by the ITP-plan, which is also based on collective agreements and comprises several employers within several different sectors. According to a statement from the Financial Reporting Council (UFR 3), the ITP plan is a defined benefit plan which comprises several employers. Alecta, which insures the ITP plan, has not been able to provide Attendo or other Swedish companies with sufficient information to be able to determine Attendo s share of the ITP plan s total assets and liabilities. The ITP-plan is therefore recognised as a defined contribution plan. The cost for the ITP2-plan 2014 amounts to SEK 119m (SEK 127m in 2013 and SEK 125m in 2012). Expected costs for the ITP2-plan 2015 amounts to SEK 122m. Attendo s share of Alecta s total premium income 18

19 20 PROVISIONS FOR POST-EMPLOYMENT BENEFITS cont. amounts to approximately 0.6 percent. The surplus in Alecta can be allocated to the insured employer and/or the insured employees. alecta s level of consolidation was 143 percent as of December 31, 2014 (148 percent in 2013 and 129 percent in 2012). The level of consolidation is stated at fair value of plan assets as a percentage of the obligations calculated based on Alecta s actuarial assumptions. NORWAY The group s employees in Norway were as of 2012 primarily covered by defined contribution pension plans, where the group s obligation is limited to the amount the companies has accepted to contribute with, which leads to the employee carrying the actuarial risk and the investment risk. During 2014 the costs of all operations amounted to SEK 6m (SEK 4m in 2013 and SEK 6m in 2012). Defined benefit pension plans also exist in Norway which, after plan changes in 2012, primarily covers professions stated by law. The defined benefit pension plans mean that the Norwegian companies have an obligation to leave the agreed remuneration to current and former employees and that the group, in all material respects, carries the actuarial risk and the investment risk. The defined benefit pension plans are partly secured by the Norwegian companies membership in mutual pension scheme. Employees in Norway are also covered by an AFP plan. The AFP plan is a funded plan comprising several employers. As Attendo does not have the opportunity to determine its share of the AFP plan s total assets and liabilities, the AFP plan is recognised as a defined contribution plan. OTHER COUNTRIES Pension plans in Finland and Denmark are classified as defined contribution plans. PENSION COSTS Costs for defined contribution pension plans 2014 amounted to a total of SEK 467m (SEK 446m in 2013 and SEK 417m in 2012). Since the group solely recognises defined benefit pension plans in Norway, all information refers to the group s operations in Norway. The table below presents the total cost for Attendo s defined benefit pension plans. The actual return on the plan assets for all operations in 2014 amounted to SEK 5m (SEK 11m for 2013 and SEK 1m for 2012). Recognised in the combined income statement Service costs for the current year Interest expenses for pension obligations Expected returns on plan assets Management costs Effects of curtailments and settlements/plan amendments Costs for defined benefit pension plans Recognised in the combined statement of comprehensive income Actuarial gain (+) / loss ( ) pension obligations Actuarial gain (+) / loss ( ) plan assets Deferred tax Total Recognised in the combined balance sheet Present value of funded obligations Total present value of defined benefits obligations Fair value plan assets Net provisions in the balance sheet Significant actuarial assumptions Average discount rate (%) Long-term inflation assumption (%) Long-term salary increase assumption (%) Increase in income base (%) Adjustment upwards of pensions (%) Average remaining years of employment SENSITIVITY ANALYSIS Assumptions Change Increased obligations Decreased obligations Discount rate (%) Salary increases, income base and adjustment upwards of pensions (%) Assumptions of long-term salary increase, the income base amount and adjustment upwards of pensions are according to the pension scheme dependent on each other. Changes in these assumptions are therefore recognised in collectively. A change in these assumptions entails the same effect as a change in the discount rate. Assumption on life expectancy Increase with 1 year Decrease with 1 year Obligation increases (+)/decreases ( ) by, (%)

20 20 PROVISIONS FOR POST-EMPLOYMENT BENEFITS cont. The sensitivity analysis above is based on a change in one assumption and the other assumptions remaining constant. It is unlikely that this would occur in practice and changes in some assumptions may be correlated. When estimating the sensitivity of the pension obligations, of the changes in significant assumptions, the same method has been used to estimate the pension obligation as was used for the recognised pension obligation. The method is described in more detail in Note 1, Significant Accounting Policies. Through defined benefit pension plans, the group is exposed to a number of risks. The most significant risks are described below. Asset volatility: The pension obligation is estimated using a discount rate based on corporate bonds. If the plan assets generate a lower return than the discount rate, a deficit will occur. Changes in bond interest rates: If corporate bond interest rates decrease, the pension obligation will increase. This will, however, be offset since the value of the bonds included in the plan assets will increase. Inflation risk: The pension obligations are linked to inflation. Higher inflation rates will lead to an increase in the pension obligations. The plan assets are not affected by inflation to any significant extent, which means that an increase in inflation rates would entail an increased deficit in the pension plans. Life expectancy: The pension obligations mean that the employees covered by the plan will receive benefits for the rest of their lives, which entails increased pension obligations as a result from higher life expectancy. Changes in defined benefit obligations Present value of the obligation at the beginning of the year Service costs for the current year Interest expense for pension obligations Paid benefits Reversal attributable to previous periods 1 Curtailments and settlements/ plan amendments Actuarial gains ( )/losses (+) Exchange rate differences Present value of pension obligations at the end of the year Actuarial gains ( )/losses (+) Amendments to demographic assumptions 16 Amendments to financial assumptions Actuarial gain ( )/loss (+) NEW GUIDELINES AND LEGISLATION There has been an update in the calculation of the pension obligation for the year according to the guidelines from the Norwegian Accounting Board (No. Norsk Regnskabsstiftelse) regarding life expectancy for people born 1954 or later. New Norwegian legislation concerning premature retirement has also affected the calculation of the pension obligation for the year. The above effects are recognised in the income statement as curtailments and settlements/plan amendments. Amendments in plan assets Present value of plan assets at the beginning of the year Expected return on plan assets Management costs Payments to pension scheme Indemnification Reductions and settlements/ plan amendments 6 Actuarial gains (+)/ losses ( ) Exchange rate differences Present value of plan assets at the end of the year Return on plan assets Expected return on plan assets Management costs Actuarial gains (+) / losses ( ) Total ALLOCATION OF PLAN ASSETS The plan assets assigned to meet the estimated obligations are distributed as follows: Plan assets SEKm 2014 Of which unlisted (%) 2013 Of which unlisted (%) 2012 Of which unlisted (%) Shares Real Estate Bonds Monetary market Other Total