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SIMPLER, SMOOTHER,
SMARTER BUSINESS
IN THE DIGITAL DIMENSION
ANNUAL REPORT 2015
RESPONSIBILITY
20
CORPORATE
GOVERNANCE
26
FINANCIAL
STATEMENTS
34
8 IT Services and
14 Case Nordic
10 Consulting
16 Case Loiste
Outsourcing
Services
12 Financial Process
Services
20 Responsibility towards customers
22 Responsibility
Choice Hotels
18 Case Blueprint
Genetics
24 Responsibility
towards society
and partners
towards personnel
26 Corporate
Governance
30 Board of
Directors
BUSINESS
OPERATIONS
08
06 Competence areas
32 Management
RESPONSIBILITY
BUSINESS
OPERATIONS
04 CEO’s review
CORPORATE
GOVERNANCE
Enfo is a Nordic IT service company
offering business solutions, financial
processes and managed IT services.
Our passion is helping customers
transform their business in the digital
dimension. We are constantly thinking
beyond tomorrow while taking
responsibility for today. Enfo’s turnover
is EUR 141 million euros, and the
company employs approximately
900 niched experts.
01
02 Enfo in 2015
FINANCIAL
STATEMENT
ENFO
ENFO 2015
ENFO 2015
ENFO | Annual Report 2015
II
40%
BUSINESS
OPERATIONS
ENFO 2015
ENFO | Annual Report 2015
During the partnership with Enfo, the IT
1 to 4.
CORPORATE
GOVERNANCE
increased from 2.7 to 3.7 on a scale from
FINANCIAL
STATEMENT
by 40%, while user satisfaction has
RESPONSIBILITY
costs incurred by Ambea have decreased
1
According to the Net Promoter Score
(NPS), 91% of our customers would
choose Enfo as their partner again.
ENFON VUOSI 2015
01
03
JANUARY
FOREX Bank selects
Enfo as one of its IT service providers. The value
of the five-year agreement is EUR 5 million,
including workstation,
network, Service Desk,
local support and server
services.
MARCH
Enfo increases the
ESAB digitisation rate
by integrating hardware and data systems
into a single system,
which produces better
information for analysis
purposes.
02
APRIL
Enfo discontinued its
remote reading and
measurement data
management service by
selling the business area
to Voimatel Oy, a provider of power and data
network services.
FEBRUARY
Enfo Zender Oy signs an
outsourcing agreement
with Strålfors Oy on 18
February 2015. According to the agreement, the
functions and personnel
of Enfo's printing service
production are transferred to Strålfors.
04
06
MAY
SAP and Enfo expand
their Nordic service
partnership, dating back
to 2006, to also cover
the retail of the next
generation's SAP business systems.
07
JUNE
Nordic construction
company NCC starts using Windows 10, Microsoft's newest operating
system, assisted by Enfo.
data network services.
08
JULY
Savon Voima decides
to transfer its financial
administration application services to Enfo
and start using Enfo's
standardised financial
administration applications as a cloud service.
09
AUGUST
Enfo releases a survey,
according to which
financial administration
and IT functions will increasingly be purchased
as a service.
10
SEPTEMBER
Enfo's reputation as an
attractive employer is
significantly boosted in
the annual survey conducted by Universum,
identifying the opinions
of young professionals
on their dream employers. Enfo finishes in 74th
place, while it came in
95th the year before.
11
NOVEMBER
Construction group SRV
outsources its functions
associated with purchase invoice handling
and purchase ledger to
Enfo. Through the
transaction, four SRV
employees transfer as
established employees
to Enfo's service centre
in Espoo.
12
DECEMBER
Enfo decides to change
its business structure
by dividing its functions
into five business areas.
The new structure is entered into use from the
beginning of 2016.
BUSINESS
OPERATIONS
RESPONSIBILITY
91
%
CORPORATE
GOVERNANCE
Significant changes are taking place in the IT service market,
which can be seen as polarised demand. While demand for
traditional IT services is decreasing, new IT services that support
digitisation are increasing. As a result, customers are more often
looking for solutions and services to support completely new
business operations, whereas greater focus was previously placed
on improving the efficiency of existing functions. Enfo revised its
strategy and reshaped its organisation to better respond to the
needs of its customers.
FINANCIAL
STATEMENT
CHANGES IN MARKETS
ENFO 2015
ENFO | Annual Report 2015
2
OPERATING PROFIT
7,5
miljoonaa euroa
IN THE DIGITAL
DIMENSION
(9,7)
PERSONNEL
883
883
47%
53%
THE BEST IT
COMPANY
IN FINLAND
Enfo was selected as one
of the best workplaces in
henkilöä vuoden lopussa
Finland in the survey organized by Great Place to Work
Finland. Enfo takes part in
KEY FIGURES
the large-sized businesses
category (500+ employ-
IFRS 2015
IFRS 2014
140,6
145,3
Operating profit (MEUR)
7,5
9,7
Profit for the period (MEUR)
5,4
6,4
Financial expenses, net, (MEUR)
0,8
1,6
Turnover (MEUR)
Return on investment %
8,8
11,3
Return on equity %, (ROE)
10,1
12,4
Equity ratio, %
44,4
42,9
Net gearing, %
50,7
55,1
Interest-bearing net liabilities
27,8
28,7
Balance sheet total (MEUR)
124,1
121,9
140,6
milj. euroa
TURNOVER
by segments
77%
23%
IT-services and outsourcing
Financial pro-
cess services
ees), and came in 4th. The
company is the best among
Finnish IT companies in this
category.
Finland
Sweden
RONGO
STRENGTHENED
ENFO’S
OFFERING
At the end of year 2015
Enfo acquired Rongo Oy,
which specialises in business
intelligence and analytics solutions. The merger strengthened Enfo’s position as a
supplier of analytics solution in the Nordic countries.
1
st
BUSINESS
OPERATIONS
(145,3)
RESPONSIBILITY
miljoonaa euroa
PERSONNEL
at the year end
Through the transaction, 75
experts in information man-
CORPORATE
GOVERNANCE
140,6
SIMPLER,
SMOOTHER,
SMARTER
BUSINESS
agement will transfer to Enfo.
Rongo will offer its high-quality information management
services to the customers
under its own name.
FINANCIAL
STATEMENT
TURNOVER
ENFO 2015
ENFO | Annual Report 2015
3
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENT
Arto Herranen
CEO
Change in the IT services market
gained new momentum during
2015. The demand for traditional
services faded, whereas interest in
new digitalisation-related services
strengthened. There was also
change in the direction of demand,
where customers increasingly
sought solutions to support their
business operations. Enfo revised its
strategy in order to respond to the
future needs of its customers. CEO
Arto Herranen provides us with
insight into the past and the future.
RESPONSIBILITY
BUSINESS
OPERATIONS
ENFO 2015
ENFO | Annual Report 2015
4
We made progress in many areas. The growth
and profitability of consultancy business
significantly improved in Sweden where the
market was also clearly more favourable than in
Finland. The November acquisition of a majority shareholding in Rongo, a company specialising in analytical and BI solutions, increased
the depth of our offering in a growing area of
services. We also concluded new agreements
for outsourcing financial processes with different companies, including Loiste and SRV. I also
consider our strategy revision and the extensive internal change process it sparked off to
be very significant.
WHAT WAS THE BASIS FOR INITIATING
THE STRATEGY WORK?
Customer orientation has always been the most
important cornerstone of our operations. We
achieved better scores than before in the latest
THE BASIS OF YOUR STRATEGY IS CRYSTALLIZED
INTO THE TERM DIGITAL DIMENSION. WHAT DOES
IT MEAN?
Digitalisation and the rapid development of its
associated technologies provide our customers with new business opportunities. Our aim
is to enable digitalisation by providing integrated and holistic business solutions together
with continuous IT services. In addition, we are
creating a model for joint innovation and agile
development in order to test new ideas and to
support our customers’ business objectives. By
combining the diverse talents of Enfo, we can
provide our customer with more added value.
WHAT DOES THE INTERNAL CHANGE
PROCESS ENTAIL?
The change will be significant. We established
two new units, one for concentrating on the
development of new businesses and the other
for serving our major customers. In addition,
we performed an extensive rotation of duties in
the management team.
HOW WILL THE CHANGES BE VISIBLE
TO THE CLIENTELE?
The responsibilities for customer accounts were
previously decentralised to different units in a
way that caused boundaries between units and
countries that hampered our customer work.
Now the customer can obtain all of our services
from a single location. The account manager has
better control of the customer’s overall situation
and can therefore more actively seek solutions.
HOW WILL THE CHANGES AFFECT
ENFO EMPLOYEES?
Putting the strategy into practice will be one of
our key projects for this coming year. Our goal
is to ensure future success, as well as engendering a uniform corporate culture and even closer
internal cooperation. I believe that competence
sharing, our internal efficiency and the quality of
our services will all improve because we now observe best practices in everything we do. These
changes provide Enfo employees with new opportunities for self-development.
WHAT ARE YOUR THOUGHTS FOR THIS YEAR?
We have strong expectations of growth. Rongo will significantly add to our net sales, but
there are also excellent possibilities for organic
growth. We shall continue investing resources
into new businesses even if it keeps taxing our
profitability. Putting the strategy into practice
will be our major internal joint effort. However,
I am confident that the reforms will succeed, as
I am surrounded by a team of competent Enfo
employees. I wish to extend my thanks to all
Enfo employees for their good work during 2015.
I also thank our customers, our shareholders and
partners who have all supported our operations.
We are moving ahead with confidence.
RESPONSIBILITY
WHAT WERE THE HIGHLIGHTS OF THE YEAR?
customer satisfaction survey, but were also
able to pick out areas for development to serve
as the basis of our strategy. There was a clear
change in the need for IT services. The reasons
for this are many, but the change means that
conventional IT services will decrease and new
digitalisation-based services will grow. Consequently, investing in growing services was
our primary focus in the new strategy. Another
need for change, brought up by feedback from
our customers, concerned the fact that sales
and customer service were earlier organised by
business sector, and this did not always serve
the customers in an optimal manner.
CORPORATE
GOVERNANCE
Our net sales decreased by 3% from the previous year to EUR 141 million. When the effect
of divested businesses is taken into account,
net sales remained at the previous year’s level.
Instead, our profit was smaller than expected.
Operating profit decreased by 22 per cent to
EUR 7.5 million. The change was partly due
to intense competition. However, most of the
decrease in operating profit is explained by
investments in new businesses, such as the
IT outsourcing services in Sweden and the
outsourcing services for financial processes
which produced a total loss of over four million
euros. On the other hand, both these functions
enjoyed rapid growth and are now producing
over 10 per cent of Enfo’s net sales.
FINANCIAL
STATEMENT
HOW DOES LAST YEAR LOOK IN FIGURES?
BUSINESS
OPERATIONS
A NEW DIRECTION FORWARDS
ENFO 2015
ENFO | Annual Report 2015
5
ENFO | Annual Report 2015
Kuopio
Stockholm
BUSINESS
OPERATIONS
Skövde
Göteborg
Karlskrona
RESPONSIBILITY
Malmö
CONSULTING
SERVICES
FINANCIAL
PROCESS
SERVICES
CORPORATE
GOVERNANCE
IT SERVICES AND
OUTSOURCING
Espoo
Västerås
FINANCIAL
STATEMENT
ENFO HAS
APPROXIMATELY
900 NICHED
EXPERTS IN 15
COMPETENCE
AREAS.
ENFO 2015
Kajaani
COMPETENCE AREAS
6
ENFO 2015
ENFO | Annual Report 2015
CORPORATE
GOVERNANCE
RESPONSIBILITY
BUSINESS
OPERATIONS
THINKING BEYOND
TOMORROW
WHILE TAKING
RESPONSIBILITY
FOR TODAY
CLOUD
OUTSOURCING
BUSINESS
INTELLIGENCE
& ANALYTICS
WORKLIFE
PROCESS
AUTOMATION
& SELF-SERVICE
SERVICE & ASSET
MANAGEMENT
INFORMATION
LOGISTICS
MOBILITY
APPLICATIONS
PROCESS
INNOVATION
SAP BUSINESS
SUITE
INTEGRATION
INTERNET
OF THINGS
FINANCIAL PROCESSES
& APPLICATIONS
FINANCIAL
STATEMENT
SECURITY
7
BUSINESS
OPERATIONS
RESPONSIBILITY
MOBILITY
APPLICATIONS
CORPORATE
GOVERNANCE
OUTSOURCING
FINANCIAL
STATEMENT
CLOUD
IT SERVICES
AND
OUTSOURCING
ENFO 2015
ENFO | Annual Report 2015
8
ENFO | Annual Report 2015
Better customer service
Enfo developed its organisation and methods
of operation in order to better respond to the
changing market situation. Account responsibilities were centralised so that customers
have a single contact person. The sales process
New agreements
Enfo’s main market area for outsourced IT
services is in Finland and Sweden. In Finland,
outsourcing has been the dominant model
of IT procurement for quite some time now,
but in Sweden, procurement has been more
predominantly based on purchasing consultancy services, whereas the service outsourcing market is only taking its shape. In 2015,
the intense market situation was evidenced by
price pressures in outsourcing IT services and
by challenges in new account sales. In contrast,
cooperation with existing customers continued
at a good level. Net sales and profitability of
operations decreased slightly from 2014 levels.
Enfo maintained its position as the market
leader in Finland as the main outsourcing
partner for large and medium-sized companies
with 300–6,000 employees.
The most significant customer agreements
were concluded with HSY, VVO, the Otava
Group and Oriola. In September, the Helsinki
Region Environmental Services Authority HSY
ordered IT infrastructure services and work
from Enfo. Finland´s largest private-sector
landlord, VVO Group plc, concluded a fouryear continuation agreement covering, among
Slow growth
The IT services market forecasts predict very
moderate growth in Finland for 2016, with stronger demand in Sweden. The advancing digitalisation will speak in favour of IT investments, but
the unit costs of IT usage will at the same time
decrease. As a whole, the market is expected to
continue to be challenging, while certain areas,
such as solutions dominating public cloud services, are enjoying strong growth.
Enfo has an excellent competitive position in both
countries, because as a Nordic company with
extensive references and the right size, it is an attractive partner for potential customers. The new
organisation is also expected to bring growth
with more active sales and better management of
accounts.
BUSINESS
OPERATIONS
other things, customer environment development
services, workstation and device management
services, as well as user support, server and data
network services. The Otava Group expanded
cooperation with Enfo by starting to use Enfo’s
Private Cloud services. In addition, an agreement
was announced in early 2016 whereby Oriola
acquired the workstation, network, local support
and server services for its service business from
Enfo. This transaction is proof of Enfo’s ability to
implement outsourcing services for companies
operating both in Finland and Sweden.
RESPONSIBILITY
was also developed. In addition to customerrelated work, the change supports the development of supply and competence and creates
a uniform method of working with customers.
It also ensures the efficiency of production and
high service quality.
CORPORATE
GOVERNANCE
T
he IT services market is now dominated by the joint effects of several
change trends. In many of Enfo’s
customer sectors, the need arises
from the change in value creation models
and processes. Consequently, the clientele
is partly changing from IT management to
business management. At the same time,
the IT environment is becoming increasingly
complex. The customers want to utilise different solutions, both those they have procured
and those that are produced as public cloud
services. Combining these into a functional
package requires a more extensive range
of expertise. Total solutions can be quickly
implemented, mainly by integrating existing solutions, while the demand for tailored
solutions is decreasing. For Enfo, the market
changes provide an opportunity to offer its
customers more comprehensive and demanding packages.
In 2015, the wave of changes already
clearly impacted the market, which experienced hardly any growth. The customers’
decision-making was also slow in many places,
and agreements were concluded for shorter
terms than before.
FINANCIAL
STATEMENT
MARKET OF MANY CHANGES
ENFO 2015
IT SERVICES AND OUTSOURCING
As of 1 January, 2016, the name of the business unit is
Managed Services.
9
ENFO 2015
ENFO | Annual Report 2015
BUSINESS
OPERATIONS
CONSULTING
SERVICES
PROCESS
INNOVATION
BUSINESS
INTELLIGENCE
SERVICE
& ASSET
MANAGEMENT
WORKLIFE
RESPONSIBILITY
& ANALYTICS
MOBILITY
CORPORATE
GOVERNANCE
INTEGRATION
PROCESS
AUTOMATION &
INTERNET
OF THINGS
FINANCIAL
STATEMENT
SELF-SERVICE
10
ENFO | Annual Report 2015
ENFO 2015
CONSULTING SERVICES
Enfo’s consultancy services increased its net
sales, and there was also a clear improvement
in profitability. The targets were achieved, and
the year was successful as a whole. Framsteg, acquired in 2014, strengthened Enfo’s
market position as a provider of BI management solutions. Framsteg was integrated into
Enfo in line with the plans. In addition to the
50 professionals moving from Framsteg, the
organisation was strengthened by recruiting
new talent.
Towards digital dimensions
The market for consultancy services is still
forecasting a growing demand In Sweden.
Consequently, there are high expectations for
the development of net sales and profits. Enfo
wants to provide its customers with solutions
and services that take them ever deeper into
digital dimensions.
RESPONSIBILITY
Enfo seeks to improve the efficiency of solutions produced for its customers by offering
more service agreements as continuation
of the projects. The cross-selling of service
throughout Enfo will be promoted by offering consultancy services more actively across
country and unit boundaries.
As of 1 January, 2016, the name of the business unit
is Business Solutions.
Enfo’s consultancy services
provide customers with
strong expertise and specialised solutions for the
Swedish market. Its competitiveness is based on concentration on selected areas of
competence and on the solid
expertise of its personnel.
CORPORATE
GOVERNANCE
The targets were achieved
The marketing and sales efforts bore fruit,
and agreements were signed with both existing and new customers. Important orders were
placed by many companies, including mining
and industrial group Sandvik, steel company
Outokumpu, hotel chain Nordic Choice Hotels and Södra Skogsägarna, Sweden’s largest
forest owners’ association. The development
of business towards continuous service agreements also advanced, and new agreements
were signed with Volkswagen Finans, Coop
and Ambea.
The traditional Enfo Evolution Day was
organised in December, providing over 400
participants with an extensive information
package of the trends in the sector and of the
solutions produced by Enfo for its customers.
FINANCIAL
STATEMENT
I
n Sweden, the good general situation in
the economy increased the volume of the
consultancy services market in 2015. Solutions promoting digitalisation particularly
attracted much interest, as did total solutions rather than individual software suites.
Changes in the customers’ needs were also
reflected in the clientele, where the buyers
were heads of business operations more often
than before. The price level was maintained or
even improved slightly, thanks to the healthy
demand.
BUSINESS
OPERATIONS
SOLUTIONS
FOR PROMOTING
DIGITALISATION
11
FINANCIAL
FINANCIAL
PROCESS
SERVICES
ENFO 2015
ENFO | Annual Report 2015
PROCESSES &
BUSINESS
OPERATIONS
APPLICATIONS
INFORMATION
FINANCIAL
STATEMENT
CORPORATE
GOVERNANCE
RESPONSIBILITY
LOGISTICS
12
ENFO | Annual Report 2015
Investments for the future
The net sales of financial process services
decreased slightly, which was also reflected in
operating profit. Profitability was also taxed by
the costs related to organisational restructuring and the development of new services. In
invoice operations, development investments
were made into digitalisation of the service
platform and in financial process outsourcing, into concept development and the cloudbased service platform. Demand for the earlier
launched ZmartScan financial process mapping continued to intensify, and the mapping
process was also developed.
More power through digitalisation
The enhancement of Finland’s competitiveness
still requires clearly more efficient operations
in the public and private sectors alike. Enfo responds to this need by providing its customers
with the services it has developed for utilising
the possibilities offered by digitalisation. Enfo
is also an attractive outsourcing partner due to
its suitable size, flexibility and good reputation
as an employer. The strengthening demand for
outsourcing services provides positive indications for the current year, while the intense competition for customers is expected to continue.
As of 1 January, 2016, the name of the business unit
is Financial Process Services.
BUSINESS
OPERATIONS
Enfo had good success in selling outsourced
financial processes during 2015. Active negotiations on outsourcing were conducted with
several parties, and new agreements with Savon
Voima, energy company Loiste and SRV were
announced. Savon Voima outsourced its financial management application services to Enfo
with an agreement that was signed in August
and entered into force at the beginning of 2016.
Loiste, one of the biggest sellers of electricity in
Finland, outsourced its financial and invoicing
functions to Enfo with a five-year agreement in
November. With the agreement, ten Loiste employees moved to the service centre established
in Kajaani. SRV, a listed construction company,
transferred its functions related to the processing of purchase invoices and accounts payable
to Enfo in November. With the transaction,
four SRV employees transferred as established
employees to Enfo’s service centre in Espoo.
The cooperation for handling the financial management of Pohjolan Voima, initiated in 2014,
progressed as planned.
introduced, allowing many previously-manual
operations to be automated. That way, employees can be allocated to more demanding
duties and their competencies can be actively
developed.
RESPONSIBILITY
The outsourcing of financial processes started
with major companies and is still a rather new
idea for the medium-sized companies in Enfo’s
target group. Consequently, the market is still
at its initial phase, but interest in outsourced
financial processes is increasing all the time.
Outsourcing provides many companies with
a more cost-efficient and high-quality way to
handle their financial processes.
The volumes of e-invoicing kept increasing during 2015, and now approximately half of
all companies and one in four consumers use
e-invoices. In spite of the growing volumes, the
intense price competition in invoice operations
continued.
New significant agreements
Reform of service processes
The benefits of outsourcing provided by Enfo
for its customers are based on reforming and
enhancing the service process by utilising
digitalisation, automation and other process
changes. In the most extensive solution, Enfo
assumes responsibility for the process, the
underlying IT and even the personnel. Once
taken over, the service process is reformed and
more effective standardized data systems are
Enfo offers comprehensive services for improving the efficiency of its customers’ financial
and information logistics processes, their outsourcing and
electronic invoicing in Finland.
FINANCIAL
STATEMENT
Outsourced financial processes
constitute a growing market
CORPORATE
GOVERNANCE
INVESTMENTS FOR THE FUTURE
ENFO 2015
FINANCIAL PROCESS SERVICES
13
RESPONSIBILITY
INTEGRATIONS FOR
FASTER TIME-TO-MARKET
AND BETTER
SERVICE TO
HOTEL GUESTS
BUSINESS
OPERATIONS
CASE
ENFO 2015
ENFO | Annual Report 2015
NORDIC CHOICE HOTELS AS is one of the
leading hotel chains of the Nordic countries
with three distinctive hotel chains and a
number of independent hotels represented
in over a hundred destinations in the Nordic
and Baltic countries. The vision is to “with
energy, courage and enthusiasm, create a
better world.”
CORPORATE
GOVERNANCE
NORDIC CHOICE HOTELS
www.nordicchoicehotels.com
FINANCIAL
STATEMENT
TURNOVER: Over NOK 6.2 billion annually
PERSONNEL: 13,000
14
“In order to attain our goals, we needed a new
integration platform and we needed to set a
new standard for integrations. It should be
possible to integrate all future solutions in the
platform and its standard,” says Folkesson.
In the evaluation Nordic Choice Hotels
compared both suppliers and products. Enfo’s
overall offer with implementation, development,
administration and responsibility for the entire
integration solution was the most attractive.
The integration platform is based on
MuleSoft’s integration platform Mule ESB and
Anypoint API manager, combined with an integration strategy and processes for development,
operation and administration.
“The implementation started in April 2015
and was completed at the start of 2016. Now we
will start benefiting from the solution,” says John
Folkesson.
He is very satisfied with how the implementation has functioned:
“Enfo has taken great responsibility and I
have encountered many people with vast integration expertise who have also influenced us to
improve our internal processes.”
App for better service
In order to create a better world with energy,
courage and enthusiasm, Nordic Choice wants
to use new technology effectively and innovatively.
“We are developing, for example, an app
with very high ambitions to improve the service and customer experience and which will
assist hotels to deliver to customers in a better
manner,” says John Folkesson and summarises:
“Now everything consists of integrated
services and the development will only continue. The competition is tough and success
depends on how quickly we can deliver to
end customers and how quickly we can test
new ideas with minor risk – in order to create
simpler, smoother and smarter services for our
customers.”
“Another issue is how we should handle
APIs and open APIs, that is, identifying which
data may be interesting for others to develop
further. In this context we must ask ourselves
what we can make available, how, why and for
who?”
Dignity and expertise
He only sees opportunities and has high expectations for both MuleSoft and Enfo:
“Enfo is our primary partner and we purchase
both operation and development, such as, for
example, the group project with the app. We
also have some remaining ad hoc integrations
to deal with in order to connect on the bus.”
“For us, having a partner who has both dignity and vast knowledge and expertise within
the integration area feels secure. Of course, the
fact that they have a large organisation behind
them is also an important element of security,”
concludes John Folkesson.
BUSINESS
OPERATIONS
RESPONSIBILITY
Future-proof solution
John Folkesson
Integration Architect
CORPORATE
GOVERNANCE
“We experienced high costs and long delivery chains so we realised that we must take a
stronger hold,” says John Folkesson, Integration Architect at Nordic Choice Hotels.
The preference was a standardised and
service-based platform in order to strengthen
relations with customers and collaboration
partners, lower costs of development and
operation, reduce time-to-market and make it
easier to replace or upgrade solutions.
”For us, having a partner
who has both dignity
and vast knowledge and
expertise within the integration area feels secure.”
FINANCIAL
STATEMENT
A fragmented integration landscape with
point-to-point integrations and many different technical solutions and formats resulted
in that the development within Nordic Choice
Hotels could not maintain the desired pace.
The integration was seen as a brake pad for a
hotel group which wants to deliver first-class
and modern service to its guests.
ENFO 2015
ENFO | Annual Report 2015
15
RESPONSIBILITY
OUTSOURCING
RELEASES
ENERGY
FOR CORE
PROCESSES
BUSINESS
OPERATIONS
CASE
ENFO 2015
ENFO | Annual Report 2015
LOISTE is a Finnish energy company whose
core operations include the production,
distribution and sales of energy (electricity
and district heating). Loiste is renowned for
its good service, and it has almost 200,000
satisfied customers around Finland. Loiste
has offices in Helsinki and Kajaani.
CORPORATE
GOVERNANCE
LOISTE
NET SALES: EUR 149 MILLION
PERSONNEL: 62
FINANCIAL
STATEMENT
www.loiste.fi
16
Concentration on core processes
increases productivity
Financial administration services
become increasingly digital
Loiste’s strategy is based on the aim to concentrate on the company’s core activities,
i.e. the production, distribution and sales of
energy. The company is prepared give up
certain support functions when it finds a suitable partner. In 2015, the service processes of
Loiste’s financial and invoicing functions were
transferred to Enfo with their associated applications. At the same time, Enfo establishes a
new service branch in Kajaani where 10 Loiste
employees moved as existing employees.
“I am glad that our employees can now
have more varied and challenging duties at
Enfo where these services related to financial
administration constitute part of the core business. We are keeping the CFO and the controller function, which can now fully concentrate on
monitoring the finances and related decisions.
In other words, we set our sights forward, not
back,” Ryymin says.
The company estimated that outsourcing will
bring savings of EUR 1.5 million in five years, a
significant enhancement of operations for Loiste. The savings are achieved because Loiste
and Enfo’s other financial services customers
share a common service centre and common
advanced data systems which means that the
service can be produced for all customers
more efficiently and at a lower cost.
Enfo is also assuming the responsibility
for more efficient production of services for
Loiste. With the service, Enfo will enhance the
customer’s invoicing, flow of information and
debt collection and will produce better reports
in support of the management. The aim is to
reform Loiste’s financial management into an
efficient service utilising digital possibilities e.g.
for e-invoicing, automatic connection services
and analytics in support of management. In
the future, productivity of the service centre
will also be enhanced with means of software
robotics.
BUSINESS
OPERATIONS
RESPONSIBILITY
Markku Ryym in
CEO
CORPORATE
GOVERNANCE
From Loiste’s perspective, two issues have become the biggest problems in the energy sector. The first of them is global climate change:
for example in Kainuu where Loiste is based,
the temperature has now been 12% higher than
normal for three years in a row. In turn, the
changes in temperature affect the demand for
energy. Another significant change has taken
place in the production of energy.
“The price has been really low at the Electricity Exchange. It does not cover the production costs, which is why a few condensing
power plants have been shut down. This has
resulted in a lot of debate regarding security
of supply in Finland, because we have to rely
on imported electricity when the temperature
drops well below the freezing point,” says CEO
Markku Ryymin of Loiste.
“When the price of electricity decreases,
price competition naturally intensifies. All
energy companies must exercise strict cost control in the distribution of electricity. Together,
these factors resulted in our starting to actively
seek a change in our methods of operation in
order to improve our competitiveness and cost
efficiency.”
”I am glad that our employees can now have more
varied and challenging duties at Enfo where these
services related to financial
administration constitute
part of the core business.”
FINANCIAL
STATEMENT
As the entire sector is undergoing a profound
change, with pressures for change coming
from both within and outside the sector, the
company has to re-think its strategy. Finnish
energy company Loiste Oy has decided to
seek cost efficiency and improved competitiveness by a bold reform of its methods of
operation. One of the biggest changes was
implemented when Loiste outsourced its
financial and invoicing functions and
transferred the associated applications and
employees to Enfo.
ENFO 2015
ENFO | Annual Report 2015
17
RESPONSIBILITY
GENETIC
INFORMATION
FOR ALL WITH
THE HELP
OF BIG DATA
BUSINESS
OPERATIONS
CASE
ENFO 2015
ENFO | Annual Report 2015
BLUEPRINT GENETICS is a Finnish genetic
diagnostics company established in 2012.
The company aims to reduce the costs of
healthcare and bring high quality genetic
testing into mainstream healthcare. The
company’s DNA sequencing technology
helps perform high-quality genetic analyses
in an efficient and inexpensive manner.
CORPORATE
GOVERNANCE
BLUEPRINT GENETICS
NET SALES IN 2015: 1,8 MILLION
PERSONNEL: 33
FINANCIAL
STATEMENT
www.blueprintgenetics.com
18
to cover 17 new categories, and the number
of different tests increases from 20 to 300 so
that the product range will cover hereditary
diseases in all areas of medical science. In
order to be able to do this in a cost efficient
manner, a scalable system utilising automation
is required.
All relevant data easily available
Blueprint Genetics uses IBM Watson Explorer
which allows efficient processing and analysis of genetic data. This solution was chosen
because of the good experience other fields
of medicine have had of Watson Explorer and
because its ability to process a high volume of
medical literature. The project was implemented by Enfo Rongo.
In addition to Watson Explorer, Blueprint
Genetics uses Enfo Rongo’s 360⁰ product
which provides flexible and quick access to relevant data. Genetic data is extremely complex
and fragmented which makes processing it a
challenge. The 360⁰ view provides a possibility
to develop the system to the exact needs of
Blueprint Genetics.
More time for analysing the results
Thanks to IBM Watson Explorer, manual work
has been reduced by 80%, which shortens the
time for completing the tests and improves
cost efficiency and systematisation. When a
part of the data analysis steps are automated,
geneticists will have more time to analyse the
results and produce their reports. The high
quality reports rapidly produced by the system
and the error-free tests allow the geneticists
to produce comprehensive reports leading to
further actions.
It is an enormous quantum leap to increase
the range of tests over ten-fold to cover hereditary diseases in all fields of medicine. The
system, implemented in cooperation with IBM
and Enfo Rongo, has a pivotal role in the product management of Blueprint Genetics when
the company expands its operations.
BUSINESS
OPERATIONS
RESPONSIBILITY
Tommi Lehtonen
CEO
CORPORATE
GOVERNANCE
Blueprint Genetics aims to decrease the
healthcare costs by bringing clearly less expensive genetic tests to the market without
compromising on their quality. The company’s
DNA sequencing technology helps perform
efficient genetic analyses of high quality.
The company also produces diagnoses that
previously were impossible. The future looks
promising.
“Genetic testing will become much more
popular. There will be an explosion in testing
within five years when healthy people are also
included in its scope and can see their own
genotypes,” says CEO Tommi Lehtonen.
More than 120 hospitals around the world
are using the test method of Blueprint Genetic
for diagnostics of cardiovascular diseases. In
addition to diagnoses, the results can be analysed further.
“We take testing to the end, i.e. provide
patient-specific genetic knowledge in addition to other information and data in a clinical
statements produced by geneticists and clinicians,” Lehtonen explains.
Until now, the company has only operated in one category, cardiovascular disorders.
During 2016, the product portfolio will expand
”There will be an explosion in testing within
five years when healthy
people are also included
in its scope and can see
their own genotypes.”
FINANCIAL
STATEMENT
Blueprint Genetics is a genetic diagnostics
company that intends to revolutionize genetic
testing by making it available to an increasing
share of the population as part of mainstream
healthcare. In order to facilitate this, genetic
testing must be of the highest quality and low
in cost, and the analysis of results must be
available quickly. The company uses Big Data
technology for processing genetic data in
diverse forms. It allows the genetic data to be
efficiently processed and analysed and also
makes possible the partial automation of the
process.
ENFO 2015
ENFO | Annual Report 2015
19
Comprehensive management systems
Enfo operates management systems covering
the environment, quality, information security
and IT service production. The management
More customer-oriented organisation
Enfo revised its business organisation in early
2016 in order to strengthen the prerequisites
for implementing the new strategy and in order
to make its operations more customer-oriented.
Following the change, the Strategic Accounts
business unit was established. Its purpose is
to provide customers with a service covering
the entire range of Enfo more fluently than
before. The other units are Business Solutions
which produces consultancy services, Managed
Services which is responsible for IT outsourcing services, Financial Process Services which
produces outsourcing services for financial administration, and Emerging Businesses which is
responsible for the Group’s new business functions. The business structure also includes the
new Transformation Office function, which is
responsible for developing the Group’s operations and implementing the growth strategy.
BUSINESS
OPERATIONS
systems are based on international standards,
such as the ISO 9001 quality standard, the ISO
14001 environmental standard, the ISO 27001
information security standard and the ISO
20000 IT service production standard. Enfo’s
quality management and information security
management systems are certified, and certification will be applied for the environmental
management system during this year. The
certified management systems guide Enfo and
its employees in their activities and choices towards the right direction, but they also provide
customers with a certainty that operations are
of a high standard. Therefore, the demands for
certification are increasingly originating from
customers.
Enfo obtained certification for its quality
management system in 2009. Early in 2005,
the information security management system
and Data Center services in Kuopio and Karlskrona were granted an ISO 27001 information
security certificate. The certificate shows that
Enfo takes information security risks seriously
and requires the company to continuously
develop its information security to be ready
for evolving threats. In 2015, the environmental
policy was also updated and an environmental
organisation was established. It is composed
of the environmental manager and the persons
appointed responsible for environmental matters in each office. Enfo has always had ample
capabilities for observing the environmental
standard, but the work for unifying methods of
Customer satisfaction is at the core of Enfo’s
operations. That is why Enfo monitors customer satisfaction in annual surveys, both
separately for each business and at Group
level. More than 200 customers in Finland
and Sweden responded to the survey carried out in November 2015. The results were
significantly better than the year before. Enfo
was particularly commended for high levels of
competence, reliability and customer-oriented
operations. The areas for development brought
up in the survey included internal cooperation at Enfo. Work is already progressing for
developing this aspect with the new strategy
and organisation.
RESPONSIBILITY
The customers and their needs facilitate the
long-term maintenance of Enfo’s goodwill
and profitable business. Therefore Enfo is
constantly developing its offering in order to
better meet the customers’ needs both now
and in the future. The progress of digitalisation creates great opportunities for doing so,
while also requiring diverse competencies and
an open-minded attitude. Enfo aims to provide
solutions and services to make its customers’
businesses simpler, smarter and more fluent
with the help of digitalisation.
The digital revolution is rapidly changing
business and earning models. The chance is
continuous, which means that in order to succeed, companies have to be able to foresee the
future and change their methods of operation.
On the other hand, digitalisation offers considerable advantages: it allows many commodities
to be produced and distributed more economically, quickly, safely and in a more environmentally friendly manner than when using conventional methods. Enfo’s objective is to support
its customers in adapting to these changes and
to guarantee future success by producing services according to customer needs in a responsible, competitive and high-quality manner.
Customer satisfaction at a high level
CORPORATE
GOVERNANCE
CUSTOMER-ORIENTED SOLUTIONS
operation in all offices is now also in progress.
The goal is to apply for Group-level environmental certification during 2016.
FINANCIAL
STATEMENT
RESPONSIBILITY - CUSTOMERS
ENFO 2015
ENFO | Annual Report 2015
20
CUSTOMER
SATISFACTION
ENFO 2015
ENFO | Annual Report 2015
IS AT THE CORE
RESPONSIBILITY
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENT
OPERATIONS.
BUSINESS
OPERATIONS
OF ENFO’S
21
ENFO | Annual Report 2015
Development on the agenda
Expanding the range of services and changing the methods of operation will also enhance
Increased visibility
The number of Enfo’s employees had some
organic growth, in addition to which 75 experts moved to Enfo from the BI and analytical solutions company Rongo acquired in the
autumn. Enfo's continuously increasing visibility was evidenced by the interest shown in the
company by potential employees. In Sweden,
competition for skilled professionals in the
industry is more intense than in Finland, but it
was possible to recruit new employees without
any difficulties.
Well-being at work is of high standard
Enfo encourages dialogue with their employees and is an encouraging employer. The wellbeing at work surveys and employee turnover
indicate that people at Enfo enjoy their work
and appreciate their colleagues. Team spirit is
high, and the aim is to recognize and respect
people as individuals. The challenge we sometimes face is that of striking the right work
balance at times when the workload is exceptionally high. Enfo’s managers and employees
participated in a Nordic programme for sustainable worklife during 2015. The programme
consisted of workshops concerning well-being
at work and in personal life and it was called
lifestyle@enfo.
BUSINESS
OPERATIONS
Many surveys also found that Enfo's image
as an employer had improved. In an international survey carried out by Universum, Enfo
climbed significantly and was ranked number
70 in Finland and number 74 in Sweden on
the list of ideal employers for IT professionals.
Compared to 2014 Finland moved up 10 places
and Sweden 21. At the Nordic level, Enfo was
ranked number 25 by IT students. Enfo also
participated in the Great Place to Work survey
both in Finland and in Sweden. In Finland Enfo
came in 4th position and was the best among
Finnish IT companies in the large-sized businesses category. In Sweden the survey results
will be published on March 16th.
RESPONSIBILITY
Enfo has grown through many corporate acquisitions in Finland and Sweden. At the same
time, its service range and customer base have
expanded. Both countries have served their
customers largely using their own resources
and offerings. An extensive project was carried
out in 2015 to enable the customer to reach
the entire scope of Enfo’s expertise via a single
point of contact. The formation of Group-level
teams and operations improve efficiency and
ensure that the strictest quality requirements
are met. Closer cooperation also supports
Enfo’s ability to quickly respond to a changing
operating environment and improve its customer orientation.
competence sharing and strengthen Enfo’s
company culture. Enfo's service range is based
on wide-ranging expertise – from technologies to processes and from information security to customer service. After all, competence development is the starting point for all
business. All employees are encouraged and
supported to develop their professional skills
and to plan their career paths. Various training
channels and methods are being actively used.
In 2015, the Enfo High Potential Ambassadors
programme was introduced as a new form of
training, and 16 participants were selected for
it. The training started in the autumn and will
last for just under one year. It includes a broad
array of topics, from analysing the economy
and international marketing, to presentation
skills and understanding the customer.
CORPORATE
GOVERNANCE
E
nfo is a Nordic IT service company
that employs about 900 professionals.
Enfo has the vision of making its customers’ business processes simpler,
smoother and smarter in the Digital Dimension. To fulfil this vision, Enfo requires strong
and large-scale expertise, continuous service
development and passionate employees. At
the same time, it allows Enfo employees to
develop their own skills working with the best
specialists and experts in the business.
FINANCIAL
STATEMENT
ENCOURAGING WORK
ENVIRONMENT
ENFO 2015
RESPONSIBILITY – PERSONNEL
22
FINANCIAL
STATEMENT
ENFO ENCOURAGES DIALOGUE
WITH THEIR EMPLOYEES AND IS
AN ENCOURAGING EMPLOYER.
CORPORATE
GOVERNANCE
RESPONSIBILITY
BUSINESS
OPERATIONS
ENFO 2015
ENFO | Annual Report 2015
23
ENFO | Annual Report 2015
Centralised procurement
Our extensive and expert partnership network
significantly strengthens Enfo’s ability to develop and produce
services. Enfo’s network includes technology
suppliers, providers of services and products,
as well as companies letting out business
premises. Because Enfo aims to be a reliable
and fair partner, it also carefully selects its own
cooperation partners and suppliers. In 2015,
development work was carried out for supplier management and operating models with
the aim of ensuring the responsible and equal
treatment of all operators and reliable deliveries to Enfo. The updated guidelines and criteria
will be introduced during 2016, and procurement will be controlled at Group level.
Environmental values are also part of Enfo’s
day-to-day business, from responsible recycling
to re-use of equipment. Demonstrating preference for recycled materials and efficient waste
treatment reduce the environmental loads. In
outsourcing services, Enfo assumes responsibility for the entire lifespan of its customers’
equipment. Through the service, all devices and
accessories, such as ink cartridges, are recycled
or reused in compliance with requirements and
in cooperation with reliable operators.
Energy consumption is the most important
factor in terms of environmental impact. In
addition to developing energy efficiency, Enfo
also prefers to use renewable energy sources.
Offices and data centres are the biggest consumers of energy. In addition to functionality,
energy efficiency is always taken into account
when selecting office premises. The premises
in Alberga Business Park in Espoo, for example,
have Breeam environmental classification.
Energy-efficient data centres
The energy efficiency of data centres is significant because their service lives are counted
in tens of years. The measures for reducing
their energy consumption include minimising
the share of cooled premises, using efficient
cooling solutions and utilising waste heat. The
average PUE value (Power Usage Effectiveness) which measures the energy efficiency of
data centres in Kuopio and Karlskrona was 1.29
in 2015 (1.25 in 2013).
Commuting on a bicycle
Enfo strives to minimise the environmental
impacts of travelling, for example by preferring
teleconferences, travelling using methods with
the least environmental impact, and telecommuting. Strict emission limits are imposed
on the selection of company cars, and Enfo
employees are encouraged to commute using
public transport, bicycles, or on foot. In 2015,
Enfo held an internal campaign and competition that resulted in an increased number of
employees commuting by bicycle.
tuki pakolaistyötä lahjoittamalla noin 30 000
euroa SPR:lle ja UNCHR:lle.
Donation to charity
The unstable political situation in Middle East
and the war in Syria brought an unprecedented
flow of refugees to Europe in 2015. Enfo
supported the work for refugees by donating
approximately EUR 30,000 to the Finnish Red
Cross and UNCHR.
BUSINESS
OPERATIONS
Efficient recycling
As a responsible corporate citizen, Enfo seeks
to minimise the environmental loads exerted
by its operations. During 2015, considerable
investments were made regarding environmental aspects when the environmental policy
and environmental management system were
developed with the aim of applying for the
ISO14001 environmental certificate in 2016.
RESPONSIBILITY
Environmental values held high
CORPORATE
GOVERNANCE
E
nfo is a responsible corporate citizen, the operations of which touch
not only its customers and personnel, but also partners, shareholders,
financiers and the entire of society. In a world
where networking is proceeding quickly and
boundaries between economies and societies
are dispersing, the significance of cooperation
increases. Enfo’s success is based on its ability to work closely with various parties. This
increases the wellbeing of all stakeholders.
During 2015, various investments were made
in corporate responsibility, including development work for procurement and environmental policies.
FINANCIAL
STATEMENT
RESPONSIBLE COOPERATION
ENFO 2015
RESPONSIBILITY - SOCIETY AND PARTNERS
24
FINANCIAL
STATEMENT
ENFO STRIVES TO MINIMISE
THE ENVIRONMENTAL
IMPACTS OF TRAVELLING.
CORPORATE
GOVERNANCE
RESPONSIBILITY
BUSINESS
OPERATIONS
ENFO 2015
ENFO | Annual Report 2015
25
RESPONSIBILITY
CORPORATE
GOVERNANCE
Enfo Oyj’s administration and management
complies with the company’s Articles of Association,
the Finnish Companies Act, and the 2010 Corporate
Governance code of Finnish listed companies issued
by the Securities Market Association on 1 October
2010, apart from Recommendations 9 (Insider
administration) and 18 (Establishing a committee).
The code is available on the Securities Market
Association’s website at: www.cgfinland.fi.
FINANCIAL
STATEMENT
CORPORATE
GOVERNANCE
BUSINESS
OPERATIONS
ENFO 2015
ENFO | Annual Report 2015
26
Notice of Annual General Meeting
The Annual General Meeting is the most senior
decision-making body of Enfo Oyj and a forum
through which shareholders can take part in
Managing Director and other
management
As per the Finnish Companies Act, the Managing Director is responsible for the day-to-day
running of the company in compliance with the
principles and guidelines devised by the Board
of Directors. The Managing Director ensures
that the company’s accounts and reporting
practices are in line with the law and other regulations, and that they are dependably organised. The Managing Director is also responsible
for strategic planning, financial administration
and risk management. The Group’s Executive
Management Team assists the Managing Director in his duties.
Arto Herranen, M.Sc.(Eng.), has been Enfo
Oyj’s Managing Director since 1 July 2007. In
2015, Enfo Group paid a total of EUR 279.124 in
salaries and fees to Arto Herranen, the parent
company’s Managing Director, of which the
share of bonuses paid on the basis of the 2014
financial period was EUR 0.
The Managing Director must give three
months’ notice to resign his duties. If the company decides to dismiss the Managing Director,
he is entitled to a lump sum equivalent to 12
months’ pay in addition. The Managing Director is entitled to retire once he has reached the
age of 60, at which point his pension will be
60% of the total pension allowance. The Managing Director of Enfo Oyj is not, and cannot
The Boards of Directors
The Board of Directors of Enfo Oyj is responsible for the company’s management and for the
appropriate organization of its operations. The
Board of Directors steers and supervises the
company’s executive management, decides on
appointing or dismissing the managing director, reviewing and approving the company’s
strategic goals and risk management principles
as well as ensuring the functioning of the integrated management system. Good corporate
governance also means the Board of Directors
ensures the company agrees on the values that
will be followed in its operations.
The task of the Board of Directors is to
promote the benefits of the company and all
of its shareholders. The members of the Board
do not represent the parties who put them
forward for appointment. The majority of the
Board members must be independent of the
company. In addition, at least two of the members of the majority must be independent of
the company’s major shareholders.
In 2015 Enfo Oyj the Board of Directors
consisted of five members until November
25th, after which the Board of Directors continued with four members. In 2015, the Board
of Directors convened 10 times, and the overall
attendance rate of the Board members was
100%.
BUSINESS
OPERATIONS
The Annual General Meeting constitutes Enfo
Oyj’s highest decisionmaking body where
shareholders participate in the management
and supervision of the company. The company
must hold one Annual General Meeting during
a single financial period. An Extraordinary General Meeting will be held if required. Shareholders exercise their speaking and voting rights in
the Annual General Meeting.
The Annual General Meeting is attended
by the Managing Director, the Chairman of the
Board of Directors, and a sufficient number
of members of the Board. The auditor also attends the Annual General Meeting. Those who
are nominated as members of the Board for
the first time must attend the Annual General
Meeting where the election is decided on, unless there is a good reason for being absent.
Enfo Oyj publishes the notice of the Annual
General Meeting, and presents the meeting
agenda and any documents presented to the
AGM on its website at least three weeks prior
to the Annual General Meeting. According to
its discretion, the Board of Directors may also
publish the notice in a national newspaper. After the meeting, Enfo will publish the decisions
made by the Annual General Meeting.
be appointed as, a member or the chairman of
the Board of Directors.
RESPONSIBILITY
Annual General Meeting
steering and supervising the company. The
company must hold one Annual General Meeting per financial year. Extraordinary General
Meetings can be held if necessary. The shareholders can exercise their right to speak and
vote at the General Meetings.
CORPORATE
GOVERNANCE
The application guidelines for good corporate
governance were revised and approved by the
Board of Directors of Enfo Oyj on 26 September 2014.
FINANCIAL
STATEMENT
CORPORATE GOVERNANCE
ENFO 2015
ENFO | Annual Report 2015
27
•
•
•
•
•
In addition to the issues listed in the agenda,
the Board of Directors of Enfo Oyj addresses
and decides on matters that may potentially
have a significant impact on the company’s
finances, business or operating principles.
Evalution of the Board’s performance
The Board of Directors of Enfo Oyj evaluates
its own performance once a year.
Appointing Board members
The shareholders appoint the members of the
Board of Directors at the Annual General Meeting. By appointing the Board of Directors, the
shareholders have a say in the way the company is run and therefore in the company’s business in general. The members of the Board of
Directors are appointed for one year at a time.
Independence of the Board members
The majority of the Board members must be
independent of the company. In addition, at
least two of the members belonging to the
said majority must be independent of all of the
Committees
Taking into account the extent of business operations, it has not been deemed necessary to
establish committees other than the Nomination Committee. Enfo Oyj’s Board of Directors
performs the duties of the Audit Committee.
Nomination Committee
The company has a Nomination Committee
consisting of four people elected by the Annual General Meeting, which also appoints the
chairman of the committee. The majority of
the Nomination Committee members must be
independent of the company. The Managing
Director or another person within the company’s management cannot be a member of the
Nomination Committee.
The Nomination Committee prepares the
election of Board members and the auditor,
as well as reward-related matters for a proposal to be presented to the Annual General
Incentive scheme
Incentive scheme for the management and
key personnel
Enfo Group uses an annual bonus scheme
directed at the Group’s management and key
personnel. The amount of bonus varies individually or is group-specific, and accounts for,
at most, 20–50% of a person’s annual salary.
The company’s Board of Directors makes
the decisions about the incentive scheme for
the management and key personnel. In 2016,
the annual bonus scheme involves about 40
persons. The central determining criteria for
the bonus include the operating profit of the
Group and each business segment.
In addition to the annual bonus scheme,
the Group uses a long-term incentive scheme
directed at the management and key personnel. There is also such an entity ("vinstandelstiftelse") in Sweden that corresponds to
the Finnish personnel fund. The share-based
incentive scheme contains three one-year
earning periods, i.e. calendar years 2014, 2015
and 2016. The company’s Board of Directors
BUSINESS
OPERATIONS
Remuneration of the Board of Directors
The Chairman of the Board of Directors is
entitled to a remuneration of 2,000 euros per
month and each member to 1,000 euros per
month. In addition, each participant receives
a bonus of 600 euros per meeting. The remuneration cannot be claimed in shares.
The Appointments Committee proposes
that the travel expenses of the member of the
Board of Directors be remunerated in accordance with the company’s general travel expenses policy.
Financial reviews
Strategic planning
Shareholder affairs
Management evaluation and remuneration
schemes
Assessment of the Board’s performance
Business reviews
Personnel issues
Customer satisfaction
Risk management
RESPONSIBILITY
•
•
•
•
Meeting. The Nomination Committee reports
regularly to the Board of Directors.
The chairman of the Nomination Committee is elected by the Annual General Meeting.
The Nomination Committee is convened annually by the Chairman of Enfo Oyj’s Board of Directors well in advance of the Annual General
Meeting. Otherwise, the Nomination Committee is convened by its chairman as required.
At Enfo Oyj’s Annual General Meeting on
25 March 2015, Tapio Hakakari, Pekka Kantanen
Esko Torsti and Ossi Saksman (Chairman) were
elected to the Nomination Committee.
In 2015, the Nomination Committee convened once, and the overall attendance rate
was 100%.
CORPORATE
GOVERNANCE
company’s major shareholders. The Board has
assessed the independence of its members
and concluded that all members of the Board
are independent both from the company and
from its major shareholders.
FINANCIAL
STATEMENT
The Boards of Directors’ agenda
Every six months, the Board of Directors produces a written agenda that covers a schedule
for meetings and a plan of issues to be addressed in the meetings, including the following:
ENFO 2015
ENFO | Annual Report 2015
28
Internal supervision and audit
Supervision and control of the company’s
operations and management are based on
regular financial reporting and active work by
the Board of Directors.
The Board of Directors has defined the
key risk management principles. The results
of the annual risk surveys are reported to the
company’s Board of Directors. Issues related
to data security are reported to the Board of
Directors every six months. The Group’s financing decisions are performed centrally within
the parent company following the investment
policy approved by the Board of Directors, and
the Board receives a quarterly report on the
company’s financial standing.
Insider administration
Insider regulations do not apply to the company because the company’s shares are not
traded on the Helsinki Stock Exchange.
Communications
The purpose of communication at Enfo Group
is to provide internal and external target
groups with reliable and up-to-date information about the company’s operations and operating environment so that the target groups
can create a correct and accurate image of the
company’s operations.
Communication from Enfo is based on
openness and reliability, comprising understandable, active and preventive activities. The
objective of Enfo’s communication is to support the fulfillment of the company’s strategy
through the means of communication, and to
improve the visibility and appeal of the company’s operations.
BUSINESS
OPERATIONS
The objective of risk management is to ensure
that the company operates efficiently and
profitably, that information is reliable, and regulations and operating principles are complied
with. The aim is to identify, assess and monitor
any risks related to business operations.
Enfo Oyj has conducted an extensive
survey of the probability of threats and risks
related to business operations, the impact of
the threats and risks actually taking place, and
risk management. The risk management plan
prepared on the basis of the survey is updated
and developed in an active and determined
manner in order to control the risks related to
business operations.
Enfo Oyj’s Board of Directors assesses any
known risks and uncertainties, and issues reports on them regularly in interim reports, the
financial statements bulletin and annual report
published by the company.
RESPONSIBILITY
Risk management
accounting firm, as the company’s auditor until
further notice, and Pekka Loikkanen, Authorised Public Accountant, as the main auditor.
In the period of 1 January–31 December
2015, Enfo Group paid the auditor a total of
EUR 207.487,39 in auditing fees and EUR
101.958,31 in fees not related to auditing.
The auditor has an important position as
an auditing body appointed by the shareholders. Auditing provides the shareholders with an
independent statement on how the company’s
accounting, financial statements and administration have been organized. Enfo Oyj’s Nomination Committee prepares a proposal for an
auditor to the Annual General Meeting.
CORPORATE
GOVERNANCE
Profit-sharing system
Enfo Group’s personnel in Finland, apart from
the upper management, are members of the
personnel fund established in 2006. The bonus
scheme for the entire personnel consists of
profit-sharing items and result-based bonuses
paid to the personnel fund. Enfo Oyj’s Board of
Directors decides upon the criteria for determining the profit-sharing items and resultbased bonuses annually, upon approval of the
budget.
The personnel fund invests 50–75% of the
profit-sharing items in Enfo Oyj shares. The
personnel fund is one of Enfo Oyj’s largest
shareholders.
Internal audits are carried out within different Group units by external service providers
on a rotating basis. Internal auditors report
directly to the Board of Directors.
Auditing
According to Enfo Oyj’s Articles of Association, the company has a minimum of one and
a maximum of two auditors who must work
for an auditing firm approved by the Central
Chamber of Commerce. The 2007 Extraordinary General Meeting elected PricewaterhouseCoopers Oy, an authorised public
FINANCIAL
STATEMENT
decides on the earning criteria for the earning
period and their objectives upon approval of
the budget. Any bonus for the 2015 earning
period is based on the operating profit and
increased turnover of each segment and unit.
The scheme’s target group consists of 49 key
persons.
ENFO 2015
ENFO | Annual Report 2015
29
BOARD OF DIRECTORS
TIMO KÄRKKÄINEN
LAURI KERMAN
SOILI MÄKINEN
FINANCIAL
STATEMENT
CORPORATE
GOVERNANCE
RESPONSIBILITY
BUSINESS
OPERATIONS
TAPIO HAKAKARI
ENFO 2015
ENFO | Annual Report 2015
30
Member of the Board
M.Sc. (Economics) (b. 1963)
Member of the Board
M.Sc. (Economics) (b. 1967)
• Managing Director at Osuuskunta
KPY.Member of the Board of Directors of Enfo Plc, Voimatel Oy, Vetrea
Terveys Oy, Hoivakymppi Oy, ItäSuomen Rahasto Oy and Kiinteistö Oy
Lentokapteeni. Main work experience:
Director of Icecapital Banking, Partner
at Iridium Corporate Finance, Portfolio
Manager at Ilmarinen Mutual Pension
Insurance Company
• Member of Enfo Oyj’s Board of Directors since March 19, 2014. Holds no
shares in Enfo Oyj. Dependent of a
significant shareholder and of the
company.
SOILI MÄKINEN
Member of the Board
M.Sc. (Economics) (b. 1960)
• CIO at Cargotec Oyj. Main work experience: CIO at MacGREGOR Oy (20042006). Since 1993 number of positions
in system and project management at
MacGREGOR Oy´s IT management.
• Member of Enfo Oyj’s Board of Directors since March 21, 2013. Holds no
shares in Enfo Oyj. Independent of the
company and significant shareholders.
CORPORATE
GOVERNANCE
LAURI KERMAN
• Senior Portfolio Manager at Ilmarinen
Mutual Pension Insurance Company.
Member of the Board of Directors of
Tieyhtiö Valtatie 7 Oy. Main work experience: Pension Fund agent, Group
Treasurer and Head of Treasury Operations at Neste Oil Oyj 2005–2010,
Fortum Oyj Treasury Manager, Head
of Treasury Operations 2000–2005.
Finance, electricity pricing and forwarding duties at Imatran Voima Oy
1987–2000.
• Member of Enfo Oyj’s Board of Directors since March 24, 2011. Holds no
shares in Enfo Oyj. Independent of the
company and significant shareholders.
FINANCIAL
STATEMENT
• Managing Director of Webstor Oy.
Deputy Chairman of the Board of Directors of Cargotec Oyj, Chairman of
the Board of Directors of Consti yhtiöt
Oyj and Opteam Oy. Member of the
Board of Directors of Handelsbanken
AB Suomi. Main work experience:
Managing Director of Cargotec Oyj in
10/2012–2/2013, Director at KONE Oyj,
Secretary of the Board of Directors
1998–2006, Administrative Director
at KCI Konecranes Oyj 1994–1998,
and in other positions at KONE Oyj
1983–1994.
• Member of Enfo Oyj’s Board of Directors since June 26, 2007. Holds 1,636
shares in Enfo Oyj. Independent of the
company and significant shareholders.
Board of Directors
since January 1,
2016.
In 2015, Mammu
Kaario was also
part of the Board
of Directors. She
resigned her membership on 25 November when she
was appointed CEO
of Partnera Oy.
BUSINESS
OPERATIONS
TIMO KÄRKKÄINEN
Chairman of the Board
Master of Law (b. 1953)
RESPONSIBILITY
TAPIO HAKAKARI
ENFO 2015
ENFO | Annual Report 2015
31
ENFO GROUP’S MANAGEMENT
CHRISTIAN HOMÉN
TERO KOSUNEN
TERO SAKSMAN
SAMULI SAVO
MALIN UNG
LARS AABOL
ADAM RITZÉN
MATS ELIASSON
FINANCIAL
STATEMENT
CORPORATE
GOVERNANCE
RESPONSIBILITY
BUSINESS
OPERATIONS
ARTO HERRANEN
ENFO 2015
ENFO | Annual Report 2015
32
CHRISTIAN HOMÉN
TERO KOSUNEN
Chairman of the Executive
Management Team, CEO
M.Sc. (Technology) (b. 1963)
CFO
M.Sc. (Economics) (b. 1973)
EVP, Financial Process Services
M.Sc. (Technology) (b. 1978)
MALIN UNG
• Tero Saksman has previously served
as a controller at Kuopion Puhelin Oyj
and Enfo Oyj. In Enfo Oyj’s Information Logistics Services, he has served
as a sales director, sales manager and
service manager.
• Member of the Board at Kasve Oy.
• Member of the Executive Management
Team of Enfo Oyj since January 1, 2011.
Holds 1316 shares in Enfo Oyj.
EVP, Emerging Businesses and
Transformation Office
M.Sc. (Engineering) (b. 1975)
• Samuli Savo has previously worked at
Gartner as Digital Lead EMEA HighTech and Telecoms as well as Consulting Director. Savo has also worked in
several managerial positions at Fujitsu,
including Head of Offerings, Head of
SAP Practice and Director of Services.
• Member of the Executive Management
Team of Enfo Oyj since August 1, 2015.
Holds 407 shares in Enfo Oyj.
LARS AABOL
EVP, Strategic Account and country
manager of Sweden (b. 1965)
• Lars Aabol has previously served as
the Managing Director of Hogia Infra
AB, and as a Sales Manager for Framfab.
• Member of the Executive Management
Team of Enfo Oyj since July 1, 2012.
Holds 946 shares in Enfo Oyj.
ADAM RITZÉN
SVP, Marketing, Enfo Group
Engineer (b. 1964)
• Adam Ritzén has previously served as
Marketing Manager at Enfo Sweden,
Sales and Marketing Manager at Enfo
Zystems. He has served as Sales and
Marketing Director at Aircall AB, and
marketing director at STC AB, and as
CEO at GBL AB.
• Member of the Executive Management
Team of Enfo Oyj since July 1, 2012.
Holds 404 shares in Enfo Oyj.
• Malin Ung has previously acted as
the HR Manager of Enfo Sweden, HR
Manager at Framsteg AB, Senior HR
Consultant at HR Skills Stockholm AB
and as a HR Manager at Wise Group.
• Member of the Executive Management
Team of Enfo Oyj since 1st January
2016. Holds 202 shares in Enfo Oyj.
RESPONSIBILITY
EVP, Business Solutions (b. 1959)
Senior Vice President, HR (b. 1967)
MATS ELIASSON
EVP, Business Solutions (b. 1959)
• Mats Eliasson has previously acted as
SVP, Service and Asset Management
of Enfo Sweden, CEO of Framsteg AB,
Managing Director of MRO Software
AB and as CEO of EBM Business Development AB.
• Member of the Executive Management
Team of Enfo Oyj since 1st January
2016. Holds 404 shares in Enfo Oyj.
CORPORATE
GOVERNANCE
SAMULI SAVO
TERO SAKSMAN
• Tero Kosunen has previously worked
at Oy Danfoss Ab as CFO, business
development director and local manager. In addition, Kosunen has worked
as IT consultant at Tieto Corporation.
• Member of the Executive Management
Team of Enfo Oyj since October 1,
2011. Holds 808 shares in Enfo Oyj.
FINANCIAL
STATEMENT
• Arto Herranen has previously served
as the Managing Director of Kupion
Puhelin Oyj and Savon Voima Oyj, a
Head of Department at Kuopion Puhelin Oyj, an Account Manager at Oracle
Finland Oy, and a Production Director
at P.T.A. Group Oy.
• Chairman of the Executive Management Team of Enfo Oyj since 2007.
Holds 2,712 shares in Enfo Oyj.
• Christian Homén has previously
worked at Microsoft as Director,
Finance & Control. He has also worked
as Director in several financial management positions at Nokia, including
business planning, reporting, business
control and treasury.
• Member of the Executive Management
Team of Enfo Oyj since 1st February,
2015. Holds 808 shares in Enfo Oyj.
Executive management
team since January 1,
2016.
In 2015, Maria Lundell
was also part of the
Executive management
team until 25.11..
BUSINESS
OPERATIONS
ARTO HERRANEN
ENFO 2015
ENFO | Annual Report 2015
33
KEY FIGURES
CONSOLIDATED FINANCIAL STATEMENTS
(IFRS)
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
CONSOLIDATED BALANCE SHEET
CONSOLIDATED CASH FLOW STATEMENT
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
46
46
46
54
56
57
57
58
58
58
58
59
59
60
60
62
62
63
64
64
64
64
65
66
67
67
68
69
NOTES
1. General information about the company
2. Accounting principles for the consolidated financial statements
3. Financial risk management
4. Segment reporting
5. Other operating income
6. Materials and services
7. Salaries and other employment benefits
8. Depreciation and amortisation
9. Other operating expenses
10. Financial income and expenses
11. Income tax
12. Earnings per share
13. Tangible assets
14. Intangible assets
15. Available-for-sale investments
16. Non-current receivables
17. Deferred tax assets and liabilities
18. Inventories
19. Sales receivables and other receivables
20. Cash and cash equivalents
21. Equity
22. Share-based payments
23. Financial liabilities
24. Accounts payable and other payables
25. Information on related parties
26. Information about corporate acquisitions
27. Liabilities
BUSINESS
OPERATIONS
RESPONSIBILITY
BOARD OF DIRECTORS’ REPORT
CORPORATE
GOVERNANCE
35
39
41
41
41
42
43
44
FINANCIAL
STATEMENT
CONSOLIDATED
FINANCIAL STATEMENTS
(IFRS)
ENFO 2015
ENFO | Annual Report 2015
34
Business operations
Enfo is a Nordic IT service company which offers
IT and financial process services to its customers
in Finland, Sweden, Norway and Denmark. Enfo’s
services allow its customers to focus on their key
operations. Enfo has over 50 years of experience
developing proven IT solutions and concepts, along
with the deep expertise of 900 top IT professionals.
Market development
Development in Enfo’s main market areas in Finland
and Sweden continued in different directions.
In Finland, economic growth was close to zero,
whereas general growth accelerated in Sweden.
This development was also reflected in demand for
IT services. In Finland, the depression continued,
the decision-making processes of customers often
took time and price competition was fierce, while
investment activity was higher in Sweden.
Significant changes are taking place in the IT
service market. In addition, the business operations
of our customers require more varied services. As a
result, customers are looking for solutions and ser-
Turnover and result
Turnover of the Enfo Group decreased by 3.2% to
EUR 140.6 million (145.3), but when the divested
businesses are taken into account, the turnover
Development by reporting segment
Enfo’s business operations are divided into two
separately reported lines of business – IT Services,
and Financial Process Services.
The turnover of IT Services grew by 1.1% to
EUR 110.5 million (109.3), while operating profit
BUSINESS
OPERATIONS
remained at the previous year’s level. The turnover
was affected by the decreasing demand for IT outsourcing and the intense competition in invoice
operator services in Finland. On the other hand, the
demand for consulting services in Sweden had a
positive effect on turnover. Operating profit stood
at EUR 7.5 million, showing a decline of 22.3%. The
ratio between the operating profit and turnover
was 5.4%. Most of the decrease in operating profit
is explained by investments in new businesses,
such as IT outsourcing services in Sweden and outsourcing services for financial processes which produced a total loss of more than EUR 4 million. On
the other hand, both of these businesses enjoyed
rapid growth and are now producing over 10% of
Enfo’s turnover.
Profit before taxes was EUR 6.8 million (8.1),
representing 4.8% (5.5%) of turnover. The Group’s
net financing costs were EUR 0.8 million (1.6).
Profit for the period was EUR 5.4 million (6.4) and
3.8% (4.4%) of turnover. Earnings per share were
EUR 7.39 (8.50).
RESPONSIBILITY
Enfo Oyj (Business ID: 2081212-9) is the parent
company of the affiliated Enfo Group. Enfo Oyj’s
parent company is Osuuskunta KPY.
vices to support completely new business operations, whereas greater focus was previously placed
on improving the efficiency of existing functions
using IT. This is why decisions on IT procurement
are increasingly being made by persons responsible for business operations. At the same time,
the IT environment is becoming more complex.
Combining different parts, such as the company’s
own system, third-part systems and public cloud
services, into an efficient package requires increasingly diverse competencies.
The weak economic situation in Finland and
the forecasts of continuing uncertainty are evidenced by the generally modest development
of IT and invoicing operator services and by the
intensifying price competition. In contrast, there is
significant market potential in outsourced financial processes. In Sweden, the economic indicators
are clearly better and the outlook is positive. This
increased the demand for consulting services. The
focus of demand for services also varied by country: Supporting functions were outsourced more in
Finland, while more consulting services were procured in Sweden.
CORPORATE
GOVERNANCE
Financial period
1 January–31 December 2015
FINANCIAL
STATEMENT
REPORT OF
ENFO OYJ’S
BOARD OF DIRECTORS
ENFO 2015
ENFO | Annual Report 2015
35
Personnel
Enfo employed an average of 818 people (775)
during the year, and a total of 883 people (802)
at year-end. Of these, Financial Process Services
employed 97 people, IT Services 744 people and
Group services 42 people. Management made up
5% of Enfo’s entire staff. Of the personnel, 356
employees were working in Finland (367) and 462
in Sweden (408).
In 2015, the Group’s personnel expenses
amounted to EUR 65.1 million (67.2), accounting
for 52% of all expenses in the income statement
(49). During the financial period, Enfo paid its staff
a total of EUR 54.1 million (52.1) in wages and fees.
A total of EUR 0.8 million of result-based bonuses,
including social security expenses, were paid
during 2015. In proportion to the average number
of personnel, the consolidated turnover was EUR
172,000 (188,000), operating profit was EUR 9,200
(13,000), and salary and pension expenses stood at
EUR 79,600 (81,000).
In 2015, Enfo Group recruited 115 permanent employees (95), whereas 87 (74) permanent
BUSINESS
OPERATIONS
Enfo’s net investments during the financial period
totalled EUR 14.3 million (8,9). The investments
made during the year mainly concerned the acquisition of Rongo Oy’s shares and the data centre
equipment acquired through financial leasing
agreements. In addition, investments were made to
enhance the supply of financial process services.
The company’s equity ratio was 44.4% (42.9) at
the end of the period. Interest-bearing net liabilities
at the end of December amounted to EUR 27.8 million (28.7) and net gearing was 50.7% (55.1).
RESPONSIBILITY
Investments and financing
employment relationships ended. At the end of
2015, the average duration of permanent employments with the Group was 7.6 years (7.7). The share
of the Group’s personnel with more than 20 years
of service was 6% (6), those employed for 0–4
years comprised 43% (42), and those employed for
5–10 years made up 32% (30). A clear majority, i.e.
74% (79), of the Group’s personnel were male. The
average age of personnel was 42 years (42).
Apart from top management and the personnel of Enfo Rongo Oy, Enfo Group’s employees in
Finland are members of the personnel fund that
was established in 2006. The incentive bonus
scheme for the entire personnel consists of profitsharing items and result-based bonuses paid to
the personnel fund. Enfo Oyj’s Board of Directors
decides upon the criteria for determining the
profit-sharing items and result-based bonuses
annually, upon approval of the budget. The personnel fund invests 50–75% of the paid profit-sharing
bonus items in Enfo Oyj’s shares. The personnel
fund is Enfo Oyj’s third largest shareholder.
In Sweden, there is a foundation (”vinstandelstiftelse”) that is equivalent to the Finnish personnel fund, established in 2014. Its main rules and
profit-sharing bonus grounds are the same as in
Finland.
Enfo Group uses an annual bonus scheme
directed at the Group management and key persons. The bonus is either personal or groupspecific, and accounts for, at most, 20–50% of a
person’s annual salary. The company’s Board of
Directors makes the decisions about the bonus
scheme for the management and key persons. In
2015, the annual bonus scheme involves about 40
persons. The central determining criteria for the
bonus scheme include the operating profit for each
segment and some other personal objectives.
In addition to the annual bonus scheme, the
Group uses a long-term incentive scheme directed
at the management and key personnel. The share-
CORPORATE
GOVERNANCE
remained good. The operating profit was reduced
by investments in the development of financial process services and the price competition in invoice
operator services.
FINANCIAL
STATEMENT
fell by 13.7% to EUR 6.4 million (5.6). As the IT
service market faced clear changes, the development of the turnover was affected by a number
of factors. In Finland, demand for traditional IT
services decreased. Instead, demand for consulting services strengthened in Sweden, and business operations increased heavily. Framsteg, a
company acquired in autumn 2014, also strengthened Enfo’s position as a provider of consulting
services. Customer agreements were signed for
example with Forex Bank, Otava Group, VVO, HSY
and Savox Communications. The increase in the
turnover was particularly supported by the success
of consulting operations in Sweden. In IT Services,
significant changes in the organisation and operating methods were carried out, with the intention of
strengthening Enfo’s ability to respond to changing
customer needs.
In November 2015, Enfo acquired a majority
shareholding in Rongo Oy, a company specialising in Business Intelligence and analytics solutions.
The business transaction did not have any significant impact on turnover (less than 1%), while it
strengthened Enfo’s position as a provider of consulting services and a Business Intelligence expert.
Through the acquisition, Enfo obtained 75 new professionals.
The turnover of Financial Process Services
decreased by 13.8% to EUR 32.4 million (37.6),
while operating profit fell to EUR 1.2 million (4.1).
Turnover was reduced by the divestment of businesses and intense competition in invoice operator services. The outsourcing of financial processes
has clear growth potential among medium-sized
and large companies, and negotiations over outsourcing were entered into at an accelerating
pace. Enfo signed new significant agreements with
energy company Loiste and construction company
SRV. The impact of these agreements can be seen
as positive development starting from 2016. The
demand for ZmartScan financial process surveys
ENFO 2015
ENFO | Annual Report 2015
36
Environmental issues
Enfo aims towards environmental friendliness and
responsibility in its own operations and in the
development and production of solutions offered
to its customers. Enfo’s operations are guided by
the principles of sustainable development which
is evidenced by its travelling guidelines, material
choices, recycling and waste management. The aim
is to save natural resources with the IT solutions
and services provided, for example through energy
efficiency and by reducing the need for printing.
Energy efficiency is the most important environmental factor in Enfo’s service production.
Efficient data centres built by Enfo have significantly lower environmental load and electricity
consumption than conventional data centres.
Energy consumption is minimised through effective
cooling solutions and by utilising lost heat. Utilising
the industry’s best practices, Enfo’s data centres
have achieved excellent PUE values (Power Usage
Effectiveness) that measure energy efficiency.
The PUE average for 2015 was 1.29 (1.25) at Enfo’s
Board of Directors,
management and auditor
Enfo Oyj’s Chairman of the Board of Directors is
Tapio Hakakari, Managing Director of Webstor Oy.
The other members of the Board of Directors are
Lauri Kerman, CEO of Osuuskunta KPY; Mammu
Kaario, Investment Director at Korona Invest Oy;
Timo Kärkkäinen, Senior Portfolio Manager, Capital
Investments, of Ilmarinen Mutual Pension Insurance
BUSINESS
OPERATIONS
RESPONSIBILITY
No significant research and product development projects were conducted during the financial
period.
Company, and Soili Mäkinen, CIO at Cargotec
Corporation. Mammu Kaario resigned her Board
membership on 25 November when she was
appointed CEO of Partnera Oy.
In 2015, Enfo Group’s Executive Management
Team members were Arto Herranen, Tero Kosunen,
Christian Homén (from 1 February), Maria Lundell,
Samuli Savo (from 1 August) Tero Saksman, Lars
Aabol and Adam Ritzén.
Besides these managers, the extended
Executive Management Team included Nina
Annila (Outsourcing Services), Fredrik Bergman
(Consulting Services), Erik Brügge (Consulting
Services), Åsa Landén Ericsson (Consulting
Services), Matti Seppänen (Outsourcing Services)
and from 1 December also Malin Ung and Mats
Eliasson.
The company’s auditor during the financial
period was the authorised public accounting firm
PricewaterhouseCoopers Oy, with authorised
public accountant Pekka Loikkanen as the
appointed chief auditor.
Shares, owners and
changes in share capital
On 31 December 2015, Enfo Oyj had a total of
600,833 shares. At the end of the period, the company had a total of 117 shareholders. The company
has one series of shares. Enfo held 1,011 treasury
shares at the end of December 2015.
At the end of 2015, the ten largest shareholders in the company were: Osuuskunta KPY,
Ilmarinen Mutual Pension Insurance Company, Enfo
Oyj’s Personnel Fund HR, Rongo Cap Oy, Einari
Vidgrén Oy, Keskisuomalainen Oyj, Pohjois-Savon
Osuuspankki, Hannu Isotalo Oy, Kallax Oy and Arto
Herranen. Osuuskunta KPY’s share of ownership is
84.91%.
Aas part of the acquisition of Rongo Oy, a
directed share issue was carried out for the owners
of Rongo Oy on the basis of the authorisation
CORPORATE
GOVERNANCE
Research and product development
data centres. Enfo has data centres in Kuopio and
Karlskrona.
The efficiency and functionality of Enfo’s
offices are governed by high standards. All Enfo’s
offices in Finland fulfil the Green Office requirements set by WWF (World Wildlife Fund). The
Green Office concept is an environmental system
designed for offices, which makes it possible for
workplaces to reduce their environmental load,
obtain savings and decelerate the climate change.
In addition, the Espoo office is located in Alberga
Business Park which has a BREEM environmental
certificate BRE Environmental Assessment Method)
of very good level, while the Kuopio office has the
LEED Gold environmental certificate (Leadership in
Energy and Environmental Design).
In addition to energy efficiency, waste
recycling is an important element of environmental
responsibility: At Enfo, electronics scrap and other
obsolete materials are recycled to enable their
further use, where possible. All production-related
waste paper and packaging materials are collected
and delivered for further use. All printer supplies,
such as ink, cartridges and spare parts, are recycled.
In 2015, the environmental policy was updated
and an environmental organisation was established.
It is composed of the environmental manager and
the persons appointed responsible for environmental matters in each office. The goal is to apply
for Group-level environmental certification to Enfo
during 2016.
FINANCIAL
STATEMENT
based incentive scheme contains three one-year
earning periods, i.e. calendar years 2014, 2015 and
2016. The company’s Board of Directors decides on
the earning criteria for the earning period and their
objectives upon approval of the budget. Any bonus
for the 2015 earning period is based on the operating profit and increased turnover of each segment
and unit. The scheme’s target group consists of 49
key persons.
At the end of the 2014 financial period, the
Group adopted an incentive scheme for key persons based on the financial results of their respective business units.
ENFO 2015
ENFO | Annual Report 2015
37
The Group’s turnover is expected to increase in
2016. Operating profit is expected to decrease
from the year before due to investments in new
business operations. In addition, non-recurring
costs arising from measures to improve the efficiency of specific business units will reduce this
year’s operating profit.
Risks and uncertainties
Short-term risks and uncertainties are associated
with maintaining competitive prices in all of the
Group’s business areas. In the long term, new operating methods, such as global cloud services, may
significantly change the operating environment of
IT outsourcing services.
Board of Directors’ proposal
on the distribution of profit
On 31 December 2015, the parent company’s distributable funds totalled EUR 35,916,704.45. The
company’s Board of Directors will propose to the
Annual General Meeting that a dividend of EUR
5.90 per share be paid for the 2015 financial period.
The dividend will be paid to shareholders who are
recorded in the company’s list of shareholders
maintained by Euroclear Finland Oy on the record
date for dividend payment, 1 April 2016. The dividend will be paid on 27 May 2016.
BUSINESS
OPERATIONS
Forecast for likely future development
RESPONSIBILITY
Enfo Oyj’s Annual General Meeting held on 25
March 2015 decided, in accordance with the Board
of Directors’ proposal, that a dividend of EUR 5.90
per each issued share be paid on the basis of the
confirmed balance sheet for the financial period
ending on 31 December 2014, i.e., a total of EUR
3,478,162.10. The dividends were paid on 27 May
2015.
Tapio Hakakari, Mammu Kaario, Lauri Kerman,
Timo Kärkkäinen and Soili Mäkinen were re-elected
as members of the Board of Directors. No new
member was elected as replacement for Hannu
Isotalo who resigned the Board membership at
his own request. At the organisation meeting held
after the Annual General Meeting, the Board of
Directors elected Tapio Hakakari as the Chairman
and Mammu Kaario as the Deputy Chairman.
In addition, the AGM decided on authorisations
with the following principal terms and conditions:
• The issuance of at most 175,000 new shares
through a rights issue in one or more instalments. The authorisation remains valid until the
next AGM.
• The issuance or transfer of at most 10,000 new
shares or treasury shares held by the company
through a directed rights issue. The authorisation remains valid until the next AGM.
• The acquisition of at most 10,000 treasury
shares using the company’s unrestricted equity.
The authorisation remains valid until the next
AGM.
Enfo revised its business organisation in early 2016
in order to strengthen the prerequisites for implementing the new strategy and in order to make its
operations more customer-oriented. As a result
of the change, the Group will be divided into five
business areas: Strategic Accounts, which will focus
on key customer accounts; Business Solutions,
which will produce consulting services; Managed
Services, which will offer IT outsourcing services;
Financial Process Services, which will provide outsourcing services for financial administration; and
Emerging Businesses, which will be responsible for
the Group’s new business functions. The business
structure will also include the new Transformation
Office function, which will be responsible for developing the Group’s operations and implementing
the growth strategy. At the same time, the areas
of responsibility and membership of the Executive
Management Team were amended as follows.
The members of the Groups’ new Executive
Management Team are: Arto Herranen, CEO, Lars
Aabol, EVP, Strategic Accounts and Country
Director for Sweden (previous position EVP,
Consulting Services), Mats Eliasson, EVP, Business
Solutions (previous position SVP, Service and Asset
Management, Christian Homén, CFO, Tero Kosunen,
EVP, Financial Process Services (previous position SVP, Business Development), Adam Ritzén,
SVP, Marketing, Tero Saksman, EVP, Managed
Services (previous position EVP, Financial Process
Services), Samuli Savo, EVP, Emerging Businesses
and Transformation Office, (previous position EVP,
IT Outsourcing Services) and Malin Ung, SVP, HR
(previous position HR Manager Enfo Sweden)
In January, Enfo acquired the Swedish company Next Improvement as part of the Group’s
objective to achieve the position of a leading operator in the Nordic market of the Service & Asset
Management sector. Next Improvement provides
total solutions for companies wishing to enhance
their business, reduce costs or ensure the quality of
business operations. Its clientele primarily includes
Nordic industrial companies, both small and large.
The product portfolio of Next Improvement, including the Rejus maintenance system, will together
with other jointly implemented production solutions strengthen and supplement Enfo’s current
product range.
CORPORATE
GOVERNANCE
Decisions by
the Annual General Meeting
Events after the
end of the financial period
FINANCIAL
STATEMENT
given to the Board by the AGM. A total of 8,048
shares were subscribed in the directed issue.
In addition, the company issued a total of 1,952
new shares a part of the key persons’ incentive
scheme.
ENFO 2015
ENFO | Annual Report 2015
38
ENFO | Annual Report 2015
ENFO 2015
KEY FIGURES
IFRS
2015
2014
2013
2015
2014
2013
150.9
Earnings per share, basic
7.39
8.50
10.69
-3.7
4.0
Earnings per share, diluted
7.39
8.50
10.69
Operating profit (EUR million)
7.5
9.7
11.2
Share-specific equity
89.0
85.8
86.5
% of turnover
5.4
6.7
7.5
Share-specific dividend *
5.9
5.9
5.4
79.9
69.8
50.5
Dividend per result, % *
Profit before taxes (EUR million)
6.8
8.1
10.0
% of turnover
4.8
5.5
6.6
Number of shares, 31 Dec
600,833
590,833
590,833
Profit for the period (EUR million)
5.4
6.4
7.6
- excluding own shares
599,822
589,822
590,024
% of turnover
3.8
4.4
5.0
Financial costs, net (EUR million)
0.8
1.6
1.3
% of turnover
0.5
1.1
0.9
Average number of shares adjusted by
share issue
592,096
589,839
584,440
Investments (net, EUR million)
14.6
8.9
5.1
% of turnover
10.4
6.1
3.4
818
775
784
Return on investment, %
8.8
11.3
14.3
Return on equity, % (ROE)
10.1
12.4
15.2
Key figures on the balance sheet
Equity ratio, %
44.4
42.9
46.6
Net gearing, %
50.7
55.1
54.8
Interest-bearing net liabilities (EUR million)
27.8
28.7
28.4
Balance sheet total (EUR million)
124.1
121.9
111.7
Other key figures
Average number of employees
* Calculated according to the Board of Directors’ proposal on the distribution of dividends.
A dividend of EUR 5.9 per share was paid for the 2014 financial period.
RESPONSIBILITY
145.3
-3.2
Change in turnover, %
CORPORATE
GOVERNANCE
140.6
Turnover (EUR million)
FINANCIAL
STATEMENT
Key figures in the income statement
BUSINESS
OPERATIONS
Share-specific key figures
39
CALCULATION
OF THE KEYFIGURES
ENFO 2015
ENFO | Annual Report 2015
=
Return on equity
=
Equity ratio
=
Net gearing
=
Interest-bearing
net financial liabilities
=
Earnings per share (EPS)
=
Profit before taxes + financial costs
Equity + interest-bearing financial liabilities
(average of the beginning and end of the year)
Profit for the period
Equity (average of the beginning and end of the year)
Equity
Balance sheet total - received advance payments
Interest-bearing net financial liabilities
Equity
Interest-bearing financial liabilities - cash, cash equivalents and other
liquid financial assets
RESPONSIBILITY
Return on investment
BUSINESS
OPERATIONS
The key figures have been calculated using the following formulas:
Profit/loss attributable to the owners of the
parent company’s ordinary shares
=
Share-specific dividend
=
Dividend per result (%)
=
Equity attributable to the shareholders of the parent company
Number of undiluted shares, 31 Dec.
Distribution of dividends for the period
Number of undiluted shares , 31 Dec.
Share-specific dividend
Earnings per share
FINANCIAL
STATEMENT
Share-specific equity
CORPORATE
GOVERNANCE
Weighted average of the number of issued ordinary shares
40
Turnover
IFRS, EUR 1,000
NOTE
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
4
140,647
145,333
Other operating income
5
953
124
Materials and services
6
-46,117
-48,545
Salaries and other employment benefits
7
-65,085
-62,642
Depreciation and amortisation
8
-5,020
-4,640
Other operating expenses
9
-17,840
-19,928
Operating profit
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
5,393
6,427
Change in the value of available-for-sale
financial assets
5
-13
Exchange rate differences caused by net
investments in foreign subsidiaries
387
-1,045
Profit for the period
Items possibly recognised through profit
or loss in the future:
Net investment hedging
115
-66
Other translation differences
213
-641
Cash flow hedging
127
31
Taxes associated with other
comprehensive income items
-26
-4
Other comprehensive income items for
the period after taxes
821
-1,737
6,214
4,690
7,537
9,703
10
515
371
Financial costs
10
-1,276
-2,020
Financial costs (net)
10
-761
-1,650
Adjustments from previous periods
recognised in equity
6,777
8,053
-1,384
-1,626
5,393
6,427
Financial income
Profit before taxes
Income tax
11
Profit for the period
Comprehensive income for the period, total
Attributable to
Attributable to
- equity-holders of the parent
company
- to non-controlling equity holders
4,375
5,012
equity-holders of the parent company
1,415
5,170
3,275
1,018
to non-controlling equity holders
1,043
1,415
BUSINESS
OPERATIONS
IFRS, EUR 1,000
RESPONSIBILITY
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
CORPORATE
GOVERNANCE
CONSOLIDATED
INCOME STATEMENT
ENFO 2015
ENFO | Annual Report 2015
undiluted earnings per share (EUR)
12
7.39
8.50
earnings per share adjusted by dilution
(EUR)
12
7.39
8.50
FINANCIAL
STATEMENT
Earnings per share calculated from the
profit attributable to equity-holders of the
parent company:
41
ENFO | Annual Report 2015
ENFO 2015
CONSOLIDATED BALANCE SHEET
IFRS, EUR 1,000
1 Jan–31 Dec
2014
NOTE
ASSETS
EQUITY AND LIABILITIES
Non-current assets
Equity
Property, plant and equipment
13
4,360
5,159
Goodwill
14
71,499
62,265
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
Equity attributable to equity-holders of
the parent company
Other intangible assets
14
9,203
7,058
Share capital
21
265
265
Available-for-sale investments
15
142
136
Share premium account
21
13,316
13,316
Receivables
16
92
155
Treasury shares
21
-87
-82
Deferred tax assets
17
1,361
1,239
Translation differences
21
2,052
1,192
Change in value and other reserves
21
2,875
1,787
Retained earnings
35,064
34,152
Equity attributable to equity holders of
the parent company, total
53,486
50,630
Non-current assets, total
86,656
76,012
Current assets
Inventories
18
177
256
Trade receivables
19
26,365
25,811
Other receivables
19
3,242
3,031
1,971
3,423
1,375
52,005
17
1,094
719
2
2
5,662
13,343
Financial liabilities
23
23,232
26,813
Other liabilities
24
5,005
317
29,331
27,850
Non-current liabilities, total
Current assets, total
37,419
45,866
124,075
121,877
Current liabilities
Total assets
Trade payables
24
9,691
9,390
Other liabilities
24
19,297
16,612
Tax liabilities based on the period's
taxable income
24
676
815
Financial liabilities
23
10,224
15,206
39,888
42,023
Current liabilities, total
Total liabilities
Total equity and liabilities
69,219
69,872
124,075
121,877
CORPORATE
GOVERNANCE
15
20
Deferred tax liabilities
FINANCIAL
STATEMENT
Available-for-sale investments
1,370
54,856
Non-current liabilities
Tax assets based on the period's taxable
income
Cash and cash equivalents
Non-controlling interests
Total equity
BUSINESS
OPERATIONS
1 Jan–31 Dec
2015
RESPONSIBILITY
NOTE
42
ENFO | Annual Report 2015
Cash flow from operations
Profit for the period
5,393
6,427
4,640
Financial items
761
1,650
Profit/loss from disposal of fixed assets
-37
48
1,384
1,626
-567
-164
2,798
2,091
80
53
-367
643
-1,101
-1,094
26
47
Operations not involving payment
transactions
Changes in working capital:
Change in sales and other receivables
Change in inventories
Change in accounts payable and other
payables
Interest paid
Interests and dividends received
Taxes paid
Net cash flow from operations
-1,317
-4,512
12,072
11,455
-3,751
-2,969
Cash flow from investment activities
Acquisition of subsidiaries less financial
assets on the acquisition date
Investments in tangible fixed assets
Investments in intangible fixed assets
Proceeds from tangible fixed assets
Sales gains from business transactions
Net cash flow from investments
Dividends paid
-4,857
-4,447
-1
-16
Withdrawal of loans
11,501
17,989
Transactions related to treasury shares
5,020
Taxes
1 Jan–31 Dec
2014
Cash flow from financial activities
Adjustments:
Depreciation and amortisation
1 Jan–31 Dec
2015
-51
-468
-1,515
-561
80
26
797
-4,440
-,3,972
Repayment of loans
-18,531
-8,879
Repayment of financial leasing liabilities
-3,330
-3,097
Net cash flow from financing
-15,217
1,550
Changes in cash and cash equivalents
-7,585
9,033
-95
95
13,343
4,215
5,662
13,343
Impact of exchange rate changes in cash
and cash equivalents
Cash and cash equivalents at the
beginning of the period
Cash and cash equivalents at the end of
the period
RESPONSIBILITY
1 Jan–31 Dec
2014
CORPORATE
GOVERNANCE
1 Jan–31 Dec
2015
FINANCIAL
STATEMENT
IFRS, EUR 1,000
BUSINESS
OPERATIONS
ENFO 2015
CONSOLIDATED CASH FLOW STATEMENT
43
ENFO | Annual Report 2015
IFRS, EUR 1,000
NOTE
Equity on 1 Jan 2014
Share
capital
Share
premium
Treasury
shares
Currency
translation
differences
265
13,316
-65
2,826
Revaluation and
other
reserves
Retained
earnings
1,772
Profit/loss for the period
Total
Noncontrolling
interest
Total
equity
32,338
50,452
1,296
51,748
5,012
5,012
1,415
6,427
Comprehensive income
BUSINESS
OPERATIONS
ENFO 2015
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
-13
-13
-1,045
-1,045
-1,045
-66
-66
-523
-523
Available-for-sale investments
-13
Exchange rate differences caused by
net investments in foreign subsidiaries
Net investment hedging
Other currency translations differences
-66
-118
-641
Cash flow hedging
31
31
31
Taxes related with other comprehensive
income items
-4
-4
-4
Other comprehensive income items for the
period after taxes
-1,634
15
Comprehensive income
-1,634
15
-118
-1,737
3,393
1,297
4,690
-3,185
-3,185
-1,219
-4,404
Emission
Acquisition of treasury shares
-16
-16
-16
Sale of treasury shares
Redemption obligation
Transactions with owners, total
Equity on 31 Dec. 2014
-16
265
13,316
-82
1,192
1,787
-13
-13
-3,198
-3,214
-1,219
-4,433
-13
34,152
50,630
1,375
52,005
CORPORATE
GOVERNANCE
21
Distributed dividends
FINANCIAL
STATEMENT
Transaction with owners
-1,619
5,012
RESPONSIBILITY
Other comprehensive income items
44
NOTE
Equity on 1 Jan 2015
Share
capital
Share
premium
Treasury
shares
Currency
translation
differences
265
13,316
-82
1,192
Revaluation and
other
reserves
Retained
earnings
1,787
Profit/loss for the period
Total
Noncontrolling
interest
Total
equity
34,152
50,630
1,375
52,005
4,375
6,246
1,018
5,393
Comprehensive income
BUSINESS
OPERATIONS
ENFO 2015
ENFO | Annual Report 2015
5
387
387
387
115
115
Net investment hedging
Other currency translations differences
357
Cash flow hedging
-170
127
Adjustments for the previous periods
recognized in equity
Taxes related with other comprehensive
income items
-26
187
115
26
213
127
127
0
0
-26
-26
Other comprehensive income items for the
period after taxes
860
106
4,205
5,170
1,044
6,214
Comprehensive income
-855
161
6,247
5,553
1,248
6,801
-3,478
-3,478
-1,379
-4,857
Transaction with owners
21
Distributed dividends
Emission
978
Acquisition of treasury shares
-71
Sale of treasury shares
66
3
The amount of non-controlling interest in
the acquired subsidiary
978
-71
-71
69
69
0
Management incentive scheme
167
Transactions with owners, total
-5
265
13,316
-86
2,052
331
167
331
167
19
19
982
-3,292
-2,315
-1,048
-3,363
2,874
35,065
53,486
1,371
54,856
Redemption obligation
Equity on 31 Dec 2015
978
19
FINANCIAL
STATEMENT
5
Exchange rate differences caused by
net investments in foreign subsidiaries
CORPORATE
GOVERNANCE
5
Available-for-sale investments
RESPONSIBILITY
Other comprehensive income items
45
BASIS FOR PREPARATION
These consolidated financial statements have been prepared in accordance with
the International Financial Reporting Standards (IFRS), applying the IAS and
IFRS standards, and SIC and IFRIC interpretations valid on 31 December 2015.
These consolidated financial statements have been prepared on the basis
of the original acquisition cost (deemed cost), apart from the items recognised at fair value as required by the standards, such as available-for-sale
financial assets.
The preparation of financial statements following the IFRS standards
requires the use of such calculation estimates and assumptions from the
Group management that have an effect on the amount of assets and liabilities on the date of preparing the balance sheet, contingent asset and liability
reporting, and the amount of profit and expenses over the reporting period.
The accounting principles that require the management’s consideration and
the uncertainties related to the estimates are discussed in a separate chapter.
The financial statements are presented in thousands of euros. For presentation purposes, individual figures and final amounts have been rounded to
the nearest thousand, causing rounding differences in the sums.
Amendments effective next year
The IFR standards entering into force in 2016 are not expected to have any
material impact on the Group’s financial result for the financial period, on its
financial position or on the way the financial statements are presented.
Amendments effective later
The Group will start using the below standards and interpretations published
by the IASB later than on the financial period starting on 1 January 2016 provided that they are approved by the EU.
IFRS 15: Revenue from contracts with customers (expected to enter into
force on 1 January 2018). The standard includes a five-step model for recording the sales revenues derived from contracts with customers. The basic principle of the new model is that sales revenues are recorded when the control
of the goods or services is passed to the customer – in other words, control is
now the deciding factor instead of the earlier used risks and benefits. In addition, IFRS 15 has extensive requirements regarding enclosed information.
IFRS 9: Financial instruments (expected to enter into force on 1 January
2018). The standard includes revised instructions for the classification and
measurement of financial assets as well as a new model, based on expected
credit losses, for assessing the impairment of financial assets and new
requirements for general hedge accounting.
IFRS 16: Leases (expected to enter into force on 1 January 2019). According
to the draft for the standard, the lessees must record in their balance sheets
a tenancy agreement liability reflecting the rent payable in the future and an
asset item reflecting the right of occupancy for almost all tenancy agreements.
Enfo Oyj is currently evaluating the possible impacts if the standards.
CONSOLIDATION PRINCIPLES
Subsidiaries The consolidated financial statements cover Enfo Oyj and its subsidiaries. Subsidiaries refer to companies where the Group holds the control. The
Group has the control when it owns more than 50% of the voting rights, or it
RESPONSIBILITY
2. Accounting principles for
the consolidated financial statements
Enfo Oyj has applied the standard amendments and interpretations which
entered into force during the financial period and are applicable to Enfo Oyj.
The amendments have not had any material impact on the Group’s financial
result for the financial period, on its financial position or on the way the financial statements are presented.
CORPORATE
GOVERNANCE
Enfo Oyj is a Nordic IT service company which provides companies and
organisations with IT services, regardless of their line of business. Enfo’s
business operations are divided into two separately reported segments: IT
Services, and Financial Process Services. More detailed information about its
segment reporting is presented in Note 4.
The company’s registered office is in Kuopio. Enfo Oyj is part of
Osuuskunta KPY Group, the parent company of which is Osuuskunta KPY,
and its registered office is in Kuopio.
At its meeting on 1 March 2016, Enfo Oyj’s Board of Directors approved
these financial statements for publication. According to the Finnish
Companies Act, shareholders have the right to approve or reject the financial
statements at the Annual General Meeting held after the release of the financial statements. The Annual General Meeting may also decide on revising the
financial statements.
FINANCIAL
STATEMENT
1. General information about the company
BUSINESS
OPERATIONS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ENFO 2015
ENFO | Annual Report 2015
46
ENFO | Annual Report 2015
Figures related to the result and financial position of Group units are measured using the currency of the primary operational environment in which
each unit operates (the ‘functional currency’). The consolidated financial
statements are presented in euros, which is the functional and presentation
currency of the Group’s parent company.
Business transactions denominated in foreign currencies are recognised
in euros following the rate valid on the transaction date. Monetary items
denominated in foreign currencies have been converted into euros according
to the rates on the closing date. Any profits and losses arising from business
transactions denominated in foreign currencies and the conversion of monetary items are recognised in the income statement. Business gains and losses
from exchange rates (sales and purchases) are included in corresponding
items above operating profit. Exchange gains and losses related to financing
are included in financial profits and losses.
Income statements for foreign Group companies have been converted into
the parent company’s currency at average exchange rates and balance sheets
Property, plant and equipment items are recognised at the original acquisition cost less depreciation and amortisation. Subsequent expenses will only
be included in the carrying amount of the tangible fixed asset if it is likely
that the future financial benefit related to the asset will flow to the Group
and the asset’s acquisition cost can be determined reliably. Other repair and
maintenance costs are recognised through profit or loss on the date of occurrence.
Property, plant and equipment items are depreciated using the straightline method over their estimated useful lives. The Group applies the following
estimated useful lives:
• Machinery and equipment
3–5 years
• Other tangible assets
10 years
The residual value and useful life of assets are reviewed regularly in conjunction with each financial statement and interim report and, if required,
adjusted to represent changes in expected financial benefit. Property, plant
and equipment items will be depreciated when an item is ready for use and
depreciation stops when the item is classified as being held for sale according
to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
BUSINESS
OPERATIONS
RESPONSIBILITY
PROPERTY, PLANT AND EQUIPMENT
CORPORATE
GOVERNANCE
FOREIGN CURRENCY ITEMS
at the rates valid on the closing date. Any exchange differences arising from
the conversion, as well as those arising from the conversion of equities of foreign subsidiaries, are recognised in equity. If a foreign subsidiary is sold or dissolved, the accumulated translation differences are recognised in the income
statement as part of sales profits or losses. Translation differences arising from
a monetary item which is part of an organisation’s net investment in a foreign
unit are recognised in the consolidated financial statements in equity and will
be transferred to the result when the investment is assigned.
INTANGIBLE ASSETS
Goodwill
The goodwill generated from combined business operations is recognised
at the amount with which the assigned contribution, the non-controlling
interests and the previously purchased share in total exceed the fair value
of the acquired net assets. Business acquisitions from 1 January 2006 to 31
December 2009 have been recognised according to the previous IFRS 3
standard (2004). The previous goodwill generated from the combined business operations corresponds to the carrying amount pursuant to the previous
FINANCIAL
STATEMENT
otherwise has the right to decide on the company’s financial and operational
principles. The existence of potential voting rights is taken into account in the
assessment of the conditions of control if the instruments justifying potential
voting rights are implementable at the moment of assessment.
Mutual shareholding has been eliminated using the acquisition cost
method. Any conditional additional purchase price has been recognised at
fair value on the acquisition date and classified as liability or equity. Acquired
subsidiaries are consolidated in the consolidated financial statements from
the date on which control and the subsidiaries were transferred to the Group
until the end of that control. Intra-group transactions, receivables, liabilities,
unrealised earnings and internal distribution of profit are eliminated when
preparing the consolidated financial statements. Unrealised losses are not
eliminated if the losses are caused by impairment.
The distribution of profit or loss to equity-holders of the parent company
and equity-holders without control is presented in a separate income statement. The distribution of comprehensive income to equity-holders of the
parent company and equity-holders without control is presented in the statement of comprehensive income.
Subsidiaries follow the same financial period as the parent company, as
well as the consolidated accounting principles described here.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
47
ENFO | Annual Report 2015
Intangible assets arising from combined business operations
Research and development costs are recognised as costs in the income
statement, apart from the development costs that meet the valuation criteria required by IAS 38 Intangible Assets. Development costs are activated
on the balance sheet as intangible assets when the product is technically
viable, commercially usable and expected to produce future financial benefits. Activated development costs include the material, work and testing costs
that are directly attributable to the preparation of the asset for its intended
purpose. The development costs previously recognised as costs will not be
activated in subsequent periods.
Assets are depreciated from the date they are ready for use. The assets
not ready for use are tested annually for any impairment. After the original
recognition, activated development costs are recognised at acquisition cost
less accrued depreciation and impairment. The useful life of activated development costs is 3–5 years, during which activated costs are recognised as
costs through straight-line depreciation.
Other intangible assets
Purchased patents, trademarks, licences and other intangible assets with
a finite useful life are included on the balance sheet and recognised in the
income statement as costs through the straight-line depreciation method
Lease agreements on tangible assets, where the Group holds a significant
part of the risks and benefits of ownership, are classified as financial leasing agreements. They are recognised on the balance sheet at the lower fair
value of the leased asset on the starting date of the lease period or the current value of minimum rents. Assets acquired through financial leasing agreements are depreciated over their useful lives, or over the lease period, should
this be shorter. Leasing obligations are included in financial liabilities. Leasing
rents paid are divided into financial costs and debt amortisation over the
lease period so that an equal interest rate is generated on a financial periodspecific basis for the remaining liability.
Lease agreements where the lessor holds the risks and benefits of ownership are classified as other lease agreements. Rents paid on the basis of other
lease agreements are recognised as costs in the income statement through
fixed instalments over the lease period. Any incentives received are deducted
from the paid rents on the basis of the distribution of benefits over the lease
period.
RESPONSIBILITY
Research and development costs
LEASE AGREEMENTS
The Group as the lessee
CORPORATE
GOVERNANCE
The identifiable intangible assets acquired through combining business operations are recognised separate from goodwill. The combination of business
operations has provided the Group with intangible rights that relate to customer relations and trademarks. Intangible rights are recognised at fair value
on the acquisition date and depreciated over their estimated useful life. Fair
value has been defined on the basis of assessed discounted cash flows.
BUSINESS
OPERATIONS
over their useful lives. The Group estimates that the useful life for software
and other intangible assets is 3–5 years. Intangible assets with an indefinite
useful life are not depreciated but tested annually and, if required, more
frequently for any impairment. Currently, the Group does not have any
intangible assets with an indefinite useful life.
The acquisition cost of intangible assets consists of the purchase price and
all expenses that are directly attributable to the preparation of the asset for
its intended purpose. Profit or loss arising from the assignment of intangible
assets is presented in other operating profits or losses in the income statement.
The Group as the lessor
Assets leased out by the Group, where a significant part of the risks and
benefits of ownership are transferred to the lessee, are classified as financial
leasing agreements and recognised on the balance sheet as receivables
at the current value. Financial income from financial leasing agreements is
recognised during the lease period so that the remaining net investment
produces an equal income rate for every financial period during the lease
period. Currently, the Group does not have any significant financial leasing
agreements as a lessor.
FINANCIAL
STATEMENT
accounting standard, which has been used as the deemed cost following the
IFRS standards.
No depreciation and amortisation is recognised on goodwill but it is
tested annually or, if required, more frequently in the event of any impairment. For this purpose, goodwill is allocated to such units generating cash
flow that correspond to the management’s method of monitoring operations
and related goodwill. Goodwill is recognised at the original acquisition cost
less impairment.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
48
ENFO | Annual Report 2015
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS
On each closing date, the Group assesses whether there are any indications
of impairment for a property item. If there are such indications, the property
item’s recoverable value is estimated. The recoverable amount is the property
item’s fair value less the higher assignment cost or use value.
Goodwill, intangible assets with an indefinite useful life, and unfinished
intangible assets are tested for impairment annually, regardless of the existence of any indications of impairment. Impairment of goodwill is reviewed at
the level of the units generating cash flow.
An impairment loss is recognised when the carrying amount of a property
item is greater than its recoverable amount. The impairment loss is recognised in the income statement. The impairment loss is reversed if there is a
change in the circumstances and the asset’s recoverable amount has changed
since the impairment loss was recognised. However, the impairment loss is
only reversed to a maximum amount equal to the asset’s carrying amount,
excluding the recognition of the impairment loss. An impairment loss recognised in goodwill will never be reversed.
BORROWING COSTS
Other borrowing costs are recognised as expenses in the period in which they
were incurred. Borrowing costs arising from the acquisition or production of
an item which meets the terms are activated as part of the item’s acquisition
cost.
Inventories are recognised at the lower of acquisition cost or net realisation
value. The acquisition cost is determined using the weighted average price
method. The net realisation value is the estimated selling price obtained in
normal business operations less the estimated expenses required for finishing
the product and sales expenses.
PERQUISITES
Pension liabilities
Pension schemes are classified as defined-benefit plans or definedcontribution plans. In defined-contribution plans, the Group pays fixed
premiums to a separate unit. In this case, the Group does not have any
legal or factual obligation to pay supplementary premiums, if the premium
recipient is not capable of paying the pension benefits in question. Other
schemes that do not meet the above conditions are defined-benefit plans.
The Group’s pension security is handled by external pension insurance
companies. Pension liabilities are classified as defined-contribution plans,
which means the payments allocated to pension schemes are recognised in
the income statement over the period in question.
BUSINESS
OPERATIONS
INVENTORIES
RESPONSIBILITY
The Group analyses agreements signed with customers and suppliers
according to the IFRIC 4 interpretation on the basis of the factual content of
the arrangement. If an arrangement includes a lease agreement, the requirements of the IAS 17 Leases standard, standard are applied to the lease agreement component. The relevant regulations of the IFRS standards are applied
to other arrangements or arrangement components.
Government grants obtained for covering the acquisition of property, plant
and equipment items are recognised as deductions of the carrying amounts
of these items when it is relatively certain that they will be received and the
Group meets the terms set out for the grant. The grants are recognised as
income through smaller depreciation items over the asset’s operating life.
Other government grants are recognised as other operating income.
CORPORATE
GOVERNANCE
Arrangements that include a lease agreement
GOVERNMENT GRANTS
Share-based payments
Currently, the Group has an incentive scheme following the IFRS 2 Sharebased Payments standard, providing key persons with the opportunity to
receive the company’s shares as result-based bonuses based on the achievement of objectives. The conditions and fulfilment of the incentive scheme are
determined on the basis of the financial objectives set for the Group. Costs
arising from the incentive scheme are determined through the realisation estimate of the maximum bonus and objectives, and are presented as employee
benefit expenses in the income statement. Bonuses are matched over the
earning period.
FINANCIAL
STATEMENT
Assets leased out through agreements other than financial leasing agreements are included in property, plant and equipment items on the balance
sheet and depreciated over their useful lives. Rental income is recognised in
the income statement as fixed instalments over the lease period.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
49
ENFO | Annual Report 2015
TAXES BASED ON THE PERIOD’S TAXABLE INCOME AND DEFERRED TAXES
Tax expenses in the income statement consist of tax based on taxable
earnings and changes in deferred taxes. Taxes are recognised through profit
or loss, unless they are associated with items recognised directly in equity
or other comprehensive income items. In this case, taxes are recognised in
the items in question. The taxes based on the period’s taxable income are
calculated according to the tax rates valid in each country.
BUSINESS
OPERATIONS
RESPONSIBILITY
Provisions are recognised when the Group has a legal or factual obligation as
a result of a previous transaction, the fulfilment of the payment obligation is
likely and the amount of the obligation can be estimated reliably. If it is possible to receive compensation for part of the obligation from a third party, the
compensation is recognised as a separate property item, when it is practically
certain that the compensation will be received. Provisions are recognised at
the current value of the expenses required to recover the obligation.
A restructuring provision is recognised over the period in which the
Group becomes legally or factually liable to pay. Compensation for the termination of employment will not be recognised until an agreement has been
made with the representatives of the concerned employees, specifying the
reasons for the termination and the number of discharged employees, or the
employees have been notified of the specific terms. Provisions are not recognised for costs related to the Group’s continuous operations.
Provisions will be recognised for agreements resulting in a loss when the
necessary costs required for meeting the obligations exceed the benefits produced by the agreement.
Contingent liabilities refer to conditional obligations arising from earlier
events that become certain when an uncertain event outside the Group’s
control is realised. In addition, an existing obligation which probably does not
require that the payment obligation is met, or the amount of which cannot
be estimated reliably, is considered to be a contingent liability. Contingent
liabilities are presented in the Notes.
Contingent assets are generated when it is possible, but not completely
certain, that the company will gain an economic benefit. Contingent assets
are presented in the Notes.
CORPORATE
GOVERNANCE
PROVISIONS AND CONTINGENCIES
Deferred taxes are calculated on all temporary differences between the
carrying amount and tax value. Temporary differences are created from
the fair value measurement of financial assets, differences between tax and
accounting depreciation on fixed assets, the activation of development costs,
financial leasing recognitions and the activation of intangible rights recognised in connection with business combinations, for example. Deferred taxes
are not recognised for non-deductible impairment of goodwill or retained
subsidiary earnings to the extent that the difference is unlikely to be reversed
in the foreseeable future.
Deferred taxes have been calculated using the tax rates prescribed by the
closing date or tax rates where the content has been approved and issued by
the closing date. Deferred tax assets have been recognised up to the amount
at which it is likely that taxable income will be generated in the future against
which the temporary difference can be utilised. The amount of deferred tax
claims and the probability of utilisation are assessed during the preparation
of each set of financial statements.
Deferred tax claims and liabilities are presented on the balance sheet
as separate items included in non-current assets or liabilities. Deferred tax
claims and liabilities are deducted from each other if the organisation has
a legally executable right to set off the tax claims and liabilities based on
the period’s taxable earnings, and the deferred tax claims and liabilities are
related to income taxes collected by the same tax authority.
Value Added Tax and similar indirect taxes are deducted from sales
income. Any other taxes are included in other operating expenses. The Value
Added Tax and other corresponding indirect taxes paid to the tax authorities are presented as current liabilities in the balance sheet item Other liabilities and the amount received from the tax authorities is presented as current
receivables in the balance sheet item Other receivables.
RECOGNITION PRINCIPLES
Produced services and sold goods
Revenue from services is recognised as income in the financial period during
which the service was performed. Revenue from services is recognised
according to the stage of completion when the business result can be
assessed reliably. The stage of completion is defined in each project as
the share of the costs arising from the work performed by the review date,
in relation to the project’s estimated total costs. For short-term services,
revenue will be recognised when the service has been performed and it is
FINANCIAL
STATEMENT
More information on the company’s share-based schemes can be found in
Note 22, Share-based payments.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
50
ENFO | Annual Report 2015
NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED
OPERATIONS
The Group classifies a non-current property item, or a group of transferable
items, and property items related to discontinued functions as held for sale,
if the amount corresponding to the item’s carrying amount will mainly be
accrued through the sale of the property item. In this case, the property item
will immediately be held for sale in its current condition according to normal
terms, the management will be committed to the plan related to the sale of
the non-current property item, active sales efforts have been started and it is
expected that the sale is very likely to occur within a year.
Property items held for sale and property items associated with a terminated function that have been classified as available for sale are recognised
at the lower of carrying amount or fair value less the expenses arising from
the sale. Depreciation on these property items will be terminated on the classification date.
The Group’s financial assets are categorised into the following groups: loans
and other receivables, financial assets recognised at fair value through profit
or loss, held-to-maturity investments and available-for-sale financial assets.
The classification is based on the purpose of the acquisition of the financial
assets and the assets are classified in connection with the original acquisition.
The Group’s current financial assets are classified as loans and other
receivables, or available-for-sale financial assets.
The Group recognises the purchase and sale of financial assets at fair
value on the basis of the transaction date. Transaction costs are included in
the original carrying amount of the financial assets when the item in question
is not recognised at fair value through profit or loss.
Loans and other receivables
Loans and other receivables include the Group’s sales and other receivables,
and they are measured at amortised acquisition cost using the effective interest
method. Current sales receivables are recognised according to the original
invoiced amount less uncertain receivables. Non-current receivables are recognised by discounting estimated future payments to the present. Receivables are
included on the balance sheet under current or non-current assets. Receivables
are included under non-current assets, if they mature in more than 12 months.
Available-for-sale financial assets
The Group’s other financial assets are classified as available-for-sale financial assets. They consist of shares and interest-bearing investments, and are
recognised at fair value. Any changes in the fair value of available-for-sale
BUSINESS
OPERATIONS
RESPONSIBILITY
Interest, royalty and dividend income is recognised when it is likely that the
financial benefit associated with the business activity will benefit the organisation and the income can be defined reliably. Interest income is recognised
using the effective interest method. Royalty income is recognised on the
basis of accrual pursuant to the factual content of the agreement, and dividends are recognised when the shareholder’s right to receive payment has
been created.
FINANCIAL ASSETS AND LIABILITIES
CORPORATE
GOVERNANCE
Interest, royalties and dividends
Property items available for sale, groups of transferable items, the items
associated with property items available for sale and recognised directly in
equity, and liabilities included in the groups of transferable items are presented separately from other property items on the balance sheet.
A discontinued function refers to a component of the corporation which
has been transferred, or classified as available for sale, and which represents
a significant segment or geographical operating area, is part of a single coordinated transfer plan of a significant segment or geographical region, or is
a subsidiary which has been acquired with the single purpose of resale. The
result of the discontinued function after taxes is presented as a separate item
in the consolidated statement of comprehensive income.
FINANCIAL
STATEMENT
likely that financial benefits can be received from the service. Once services
are performed during a particular period of time, revenue will be recognised
for the period using the straight-line method, unless some other method is a
better indicator for the stage of completion.
Revenue from the sale of goods is recognised when the significant risks
and benefits and the factual control related to the ownership of the goods
have been transferred to the buyer, the revenue and costs allocated to the
transaction can be defined clearly and it is likely that the financial benefit
associated with the transaction will accrue to the company.
Recognised proceeds are determined on the basis of the fair value of the
received or receivable consideration. The amount of revenue to be recognised does not include any amounts collected on behalf of external parties,
such as Value Added Tax.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
51
ENFO | Annual Report 2015
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank deposits withdrawable on demand and other highly liquid short-term investments. Items classified as cash and cash equivalents have a maximum maturity of three months
starting from the acquisition date. Any loan limits used are included in current
interest-bearing liabilities.
A financial asset is only removed from the balance sheet when the contractual right to the cash flow from an item included in financial assets ceases
to exist, or the Group transfers an item included in financial assets to another
party so that the risks and benefits of ownership or control over the item are
transferred to the other party.
Impairment
On each closing date, the Group assesses whether there is any objective indication of impairment on an item included in financial assets. If such indications
exist, the amount of loss is determined according to the difference between
the property item’s carrying amount and its fair value or the current value of
expected future cash flows discounted using the original effective interest
rate. The impairment is recognised in financial items through profit or loss.
The Group recognises an impairment loss on sales receivables when there
is objective evidence (such as unsuccessful debt collection measures) that
the receivable cannot be recovered in full.
The amount of impairment loss recognised in the income statement is
determined as the difference between the receivable’s carrying amount and
BUSINESS
OPERATIONS
Financial liabilities are recognised at fair value on the basis of the original
consideration received. Transaction costs are included in the original carrying
amount of financial liabilities.
After the original measurement, all financial liabilities, apart from
derivative liabilities, are valued at acquisition cost divided using the effective
interest method. The difference between the acquisition cost and the balance
sheet value produced by the effective interest method is recognised through
profit or loss during the liability’s exercise period.
Financial liabilities are presented as non-current and current liabilities
based on their realisation period. Financial liabilities are removed from the
balance sheet once the liability has ceased to exist.
RESPONSIBILITY
The fair value of financial assets is primarily defined using market values. If
they are not available, fair value is defined using the market values for corresponding instruments, or by discounting cash flows.
Financial liabilities
DERIVATIVE INSTRUMENTS AND HEDGING
Derivatives are originally recognised at the fair value valid on the date of
signing the derivative contract, after which they are recognised at fair value.
Profits and losses resulting from the measurement at fair value are handled in
accounting according to the purpose of the derivative agreement. Changes in
the value of the derivative financial instruments to which hedge accounting
is applied and which are efficient hedging instruments are presented in the
income statement in compliance with the hedged item. Changes in fair value
of other derivative financial instruments are recognised in financial items in
the income statement. The Group has interest-rate derivatives in force. The
derivatives are used to hedge the interest rate risk and part of the translation
position denominated in SEK.
When starting hedge accounting, the Group records the relation between
the hedged item and hedging instruments, as well as the Group’s risk
manage­ment objectives and hedging strategy. When starting hedging and at
least on each closing date, the Group records and analyses the efficiency of
hedging relations by reviewing the hedging instrument’s ability to cancel the
hedged item’s fair value or changes in cash flow. The fair values of derivatives
used for hedging are presented in Note 26.
CORPORATE
GOVERNANCE
Definition of fair value
the current value of the estimated future cash flows discounted with the
effective interest rate. If the amount of the impairment loss decreases during
a future financial period and the deduction can be objectively considered to
be related to a transaction taking place after the impairment entry, the recognised loss will be reversed through profit or loss.
FINANCIAL
STATEMENT
financial assets are recognised in other comprehensive income items and presented in the fair value reserve included in the “Other reserves” equity item,
taking the tax impact into account. Changes in fair value are transferred from
equity to the income statement when the investment is sold, or its value has
decreased so that an impairment loss must be recognised on the investment.
The available-for-sale financial assets are included in non-current assets,
unless they are intended to be held for less than 12 months starting from the
closing date, in which case they are included in current assets.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
52
ENFO | Annual Report 2015
Net investment hedging
Net investment hedging in a foreign unit is recognised similarly in accounting
as cash flow hedging. The profit or loss of a hedging instrument, which
results from the efficient proportion of hedging, is recognised in other
comprehensive income items. The profit or loss associated with inefficient
proportion is recognised in the income statement. The profits and losses
accumulated in equity are recognised in the income statement when a foreign
unit is sold in part or in full.
SHARE CAPITAL AND TREASURY SHARES
The Group presents its issued ordinary shares as share capital. Treasury
shares held by the Group are presented as reductions in equity. No profits or
losses are recognised in the income statement for the purchase, sales, issu-
When preparing the financial statements, estimates and assumptions concerning the future must be made, and their results may differ from the estimates and assumptions made. In addition, consideration has to be exercised
in applying the accounting principles.
Consideration related to the selection
and application of accounting principles
The Group management exercises consideration when making decisions on
the selection and application of accounting principles. This applies particularly to cases where the valid IFRS standards include alternative recognition,
measurement or presentation methods. The management has exercised consideration, for instance, in the classification of leasing agreements and financial assets, and in the presentation method of the financial statements.
BUSINESS
OPERATIONS
ACCOUNTING PRINCIPLES THAT REQUIRE THE MANAGEMENT’S
CONSIDERATION AND CENTRAL UNCERTAINTY FACTORS RELATED
TO ESTIMATES
RESPONSIBILITY
ance or cancellation of treasury shares, but the consideration paid or received
is recognised directly in equity.
Uncertainty factors related to estimates
The estimates made when preparing the financial statements are based on
the management’s best knowledge on the closing date. The estimates are
based on previous experience and assumptions concerning the future that,
on the closing date, have been regarded as the most likely and are related
to the expected development in the Group’s financial operating environment, considering sales and cost levels. The Group monitors the realisation of the estimates and assumptions and changes in background factors
regularly together with its business units, using several internal and external
data sources. Any changes in the estimates and assumptions are entered in
accounting in the period during which the estimates and assumptions are
adjusted, as well as in all following periods.
Accounting estimates and management considerations have been applied
to the determination of the realisability of specific property items, the useful life
of tangible and intangible assets, deferred tax receivables (Note 17), the allocation of the acquisition cost related to business combinations and the price of
share repurchase obligations, and to the performance of impairment testing
where the recoverable amounts of cash-generating units have been determined
CORPORATE
GOVERNANCE
The efficient proportion of changes in the fair value of derivatives that meet
the terms and have been defined as cash flow hedging is recognised in comprehensive income items under Cash flow hedging. Profit or loss related to
the inefficient proportion is recognised directly in the Financial income and
expenses item in the income statement.
Amounts accumulated in equity are transferred through profit or loss over
the periods during which a hedging item has an impact on profit or loss. The
profit or loss associated with the effective proportion of interest swap agreements that provide hedging against variable rate loans is presented in the
income statement as financial income or expenses. However, if an item not
included in financial assets is recognised as a result of a hedged and anticipated business activity (e.g. inventories or fixed assets), profits and losses
previously recognised in equity are transferred to the item’s original acquisition cost. In the event of inventories, profits and losses are ultimately included
in expenses corresponding with products and services sold and, in the event
of fixed assets, they are ultimately included in depreciation and amortisation.
When a hedging instrument expires or is sold, or when hedging no longer
meets the requirements set for the application of hedge accounting, profits
or losses included in equity at the moment remain in equity, and they are
only recognised through profit or loss when the anticipated business activity
is entered in the income statement. If the anticipated business activity is not
expected to be realised, the profit or loss presented in equity is transferred
directly to the Financial income and expenses item in the income statement.
FINANCIAL
STATEMENT
Cash flow hedging
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
53
ENFO | Annual Report 2015
MARKET RISKS
Currency risk
The Group operates internationally and, as a result, is exposed to transaction
risks caused by different currency positions and risks that are created when
investments in different currencies are translated into the parent company’s
operating currency.
The biggest currency risks for the Group are caused by fluctuations in the
exchange rate of the Swedish krona. The exchange rate risk is mainly caused
by Enfo having a subsidiary in Sweden. The exchange rate risk is reduced by
the fact that transactions in Sweden occur mainly in the national currency so
that the translation changes in profit and costs are offset against each other.
Because of the operating model, exchange rate differences with an impact
on cash flow are realised to a fairly small extent and the hedging decisions on
these items are made separately for each case.
With regard to subsidiary investments and intra-group financing transactions, changes in exchange rates cause some fluctuation in the Group’s
equity. In addition, currency risk in equity is created through earnings and the
period’s result. At the end of 2015, the currency translation position in equity
stood at EUR 9.0 million (EUR 9.5 million in 2014). The position includes a net
investment in subsidiaries outside the euro states. The position is mainly the
result of SEK-denominated investments. The position includes minor investments denominated in DKK or NOK. Furthermore, the Group has an internal
loan of SEK 203 million (about EUR 22 million) as a net investment in foreign
operations.
2014 SEK
Non-current assets
53,189
52,776
Non-current liabilities
36,103
35,579
Current assets
27,494
26,157
Current liabilities
35,724
33,856
The Group’s external loans are denominated in EUR and SEK and, therefore,
they are partially exposed to changes in exchange rates.
In addition, the parent company has a small number of purchase agreements denominated in USD, GBP and SEK. Because of the nature of the
business operations, the lead time is short and, as a result, the currency risk
remains low.
The Group’s realised exchange rate losses amounted to EUR -235,000 in
2015 (EUR 179,800 in 2014).
Sensitivity analysis for changes in exchange rates
Change rate = average volatility over the previous 12 months
EUR 1,000
Change rate
2015 SEK
2014 SEK
6.93
6.13
+35 / -31
+10 / -9
+655 / -600
+620 / -549
Effect
On profit after taxes
On equity
BUSINESS
OPERATIONS
2015 SEK
RESPONSIBILITY
The Group is exposed to financial risks in its normal business operations. The
management of financing and financial risks within the Group is organised
centrally in the parent company according to the financial policy approved
by the Group’s Board of Directors. The objective of the Group’s financial risk
management is to minimise the unfavourable impact of financial risks on the
Group’s result, equity and capital adequacy. Derivative instruments are used
for against the risks.
EUR 1,000
CORPORATE
GOVERNANCE
3. Financial risk management
The translation position has been hedged through derivative agreements
signed during the period and loans denominated in SEK.
Translated into euros in accordance with the rates of the closing date, the
Group’s foreign-currency assets and liabilities are as follows:
Interest rate risk
The Group’s interest-bearing liabilities and, to a small extent, its short-term
financial market investments expose the Group to a cash flow interest rate
risk.
On 31 December 2015, the Group’s interest-bearing liabilities stood at
EUR 33,456,000 (EUR 42,020,000 in 2014) On the balance sheet date, the
Group’s interest-bearing net liabilities amounted to EUR 27,794,000 (EUR
28,675,000 on 31 December 2014).
FINANCIAL
STATEMENT
using calculations based on the value in use (Note 14). The estimates are based
on the management’s best knowledge at the moment, but it is possible that the
realisations differ from the estimates used in the financial statements.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
54
ENFO | Annual Report 2015
Age distribution of sales receivables on 31 December
Market risk in investment activities
According to the Group’s investment policy, the Group invests only in lowrisk market deposits, bank investment certificates and short interest funds,
and thus the investment risk remains at a low level. Because of its investment
policy, the Group is not exposed to price risk caused by fluctuations in the
market prices for quoted shares.
Capital adequacy
The Group strives to regularly monitor the amount of financing required by
the operations so that the Group has enough liquid assets for financing its
operations and repaying maturing loans. In order to guarantee the availability
and flexibility of Group financing, funding operations have used several financial institutions and financing forms, and paid attention to a balanced maturity distribution of loans and suitable loan periods. The company monitors
compliance with loan covenant terms regularly and reports to financial institutions four times a year. The Group has met all loan covenant terms.
The Group invests money in low-risk and high-liquidity instruments.
On 31 December 2015, the Group’s cash and cash equivalents totalled EUR
5,662,000 (EUR 13,343,000 on 31 December 2014), and its liquid financial
investments totalled EUR 2,000 (EUR 13,000 in 2014). The Group’s capital
adequacy is at a good level on the reporting date.
EUR 1,000
2015
Unexpired
23 429
88,9%
22 938
88,9%
2 259
8,6%
2 217
8,6%
0,7%
1–14 days
2014
15–30 days
173
0,7%
180
31–60 days
243
0,9%
389
1,5%
61–90 days
110
0,4%
63
0,2%
91 days
129
0,5%
24
0,1%
26 343
100,0%
25 811
100,0%
BUSINESS
OPERATIONS
In order to minimise credit risks in financing, the Group enters into agreements only with financial institutions and other parties with a solid financial standing. Customers’ credit ratings are inspected regularly. The Group
does not have any significant accumulations of credit risks from receivables,
because the Group has a broad customer base distributed across various
sectors. The amount of credit losses recognised during the 2015 financial
period was EUR 1,000 (EUR 1.4 million in 2014). The Group’s maximum credit
risk corresponds to the carrying amount of financial assets at the end of the
period.
RESPONSIBILITY
Credit risk
CORPORATE
GOVERNANCE
Maturity information about financial liabilities is presented in Note 23.
The Group’s accounts payable of EUR 9,691,000 and other current noninterest-bearing liabilities of EUR 19,973,000 will fall due for payment during
2016.
CAPITAL MANAGEMENT
The objective of the Group’s capital management is to support business
operations through an optimal capital structure by ensuring normal business
conditions, and to increase shareholder value with the objective of achieving
the best possible return. An optimal capital structure also guarantees smaller
capital costs.
The capital structure can be influenced through the distribution of dividends and by planning the financing of investments. The development of the
Group’s capital structure is monitored continuously through net gearing. Net
gearing and information illustrating the development of interest-bearing net
liabilities are presented in the table of key ratios.
FINANCIAL
STATEMENT
On 31 December 2015, the Group’s loan portfolio consisted of loans from
financial institutions of SEK 123.8 million (EUR 13.4 million), a loan from a financial institution of EUR 5 million), and a bond loan of EUR 9.9 million. Of the
agreed loans, EUR 7.4 million will fall due for payment in 2016. In 2017-2020,
a total of EUR 21 million will fall due for payment. Of the loans from financial
institutions, 8% are fixed-rate loans with interest swap agreements and the
remainder of the loans are variable-rate loans. The bond loan has a fixed rate.
The Group’s other interest-bearing liabilities of EUR 4,915,000 consist of
the payment obligations of financial leasing agreements. The financial leasing agreements are mainly based on fixed instalments and changes in interest
rates do not have a direct impact on the amount of the financial leasing payment.
For primary loan financing, the Group analyses the impact of any interest
changes on the result. In 2015, the Group’s total interest rate was 2.6% (2.7%
in 2014). A 10% increase in the interest rate would have reduced the Group’s
result, and thus its equity. by EUR 57,000.
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
55
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 January 2015–31 December 2015
Enfo Oyj has two reporting segments that are the Group’s strategic business
units. These strategic business units produce different products and services,
and they are managed as separate units, because their operations require the
use of different marketing strategies and distribution channels.
Revenues
108,408
32,238
Service sales
97,884
32,134
Hardware and software sales
10,524
105
2,104
144
110,512
32,382
6,385
1,152
Investments
12,710
1,577
Depreciation and amortisation
3,939
437
IT Services
Financial
Process
Services
Internal turnover
Total turnover
Operating profit
Other information
1 January–31 December 2014
Revenues
External turnover
107,890
37,443
Service sales
95,357
35,977
Hardware and software sales
12,533
1,466
Internal turnover
1,376
190
109,266
37,633
5,613
4,071
Investments
8,289
689
Depreciation and amortisation
4,065
387
Total turnover
Result
Operating profit
RESPONSIBILITY
Result
CORPORATE
GOVERNANCE
IT Services include IT outsourcing, data centre and workstation services,
application services and solutions, consulting, industry-specific IT solutions,
and the sale of hardware, software and related services. IT Services operate in
Finland and Sweden.
Financial Process Services provide solutions and services for the outsourcing of information logistics and invoicing processes which support the
customers’ business operations. Financial Process Services operate mainly in
Finland.
Other functions present the Group services, holding companies and other
minor units, considering the result and financial position.
Pricing between the segments takes place at a fair market price.
Within the Group, the assessment of segment profitability and the decisions on resources allocated to the segments are based on the segments’
result before financial items and taxes. Balance sheet assets and liabilities are
not allocated to segments in internal reporting. The Managing Director, as
the highest operative decision-maker, and the Group’s Management Team are
responsible for the Group’s aforementioned assessments and resourcing decisions. In accordance with internal reporting, administrative costs have been
allocated to the segments inasmuch as they are associated with business
activities. Segment investments include investments in intangible (including
goodwill) and tangible assets.
IT Services
Other information
FINANCIAL
STATEMENT
THE GROUP’S REPORTING SEGMENTS ARE:
External turnover
Financial
Process
Services
BUSINESS
OPERATIONS
4. Segment reporting
ENFO 2015
IFRS, EUR 1,000
56
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
INFORMATION ABOUT GEOGRAPHICAL REGIONS
142,895
146,899
Income of all other segments
0
0
Elimination of internal income
-2,248
-1,566
140,647
145,333
7,537
9,684
0
19
-761
-1,650
6,777
8,053
Total consolidated income
Result
Reporting segments' operating result
Operating result of all other segments
Financial items
Consolidated result before taxes, total
Depreciation and amortisation
Reporting segments' depreciation and
amortisation
Depreciation and amortisation of all other
segments
Total consolidated depreciation and
amortisation
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
Finland
73,140
83,253
Other countries
67,507
62,079
140,657
145,333
Total consolidated income
Non-current assets
Finland
33,284
21,372
Other countries
53,372
54,640
86,656
76,012
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
Consolidated non-current assets
5. Other operating income
4,376
4,453
644
188
5,020
4,640
Reporting segments' investments
14,287
8,689
Investments of all other segments
290
213
14,577
8,902
Investments
Total consolidated investments
Revenues (external)
Sales profits from tangible fixed assets
118
0
Others
835
124
Total
953
124
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
8,633
12,972
6. Materials and services
Purchases during the period
Change in inventory
External services
Total
79
53
37,404
35,519
46,117
48,545
BUSINESS
OPERATIONS
Reporting segments' income
Geographically, the Group operates mainly in Finland and Sweden.
RESPONSIBILITY
1 Jan–31 Dec
2014
CORPORATE
GOVERNANCE
1 Jan–31 Dec
2015
FINANCIAL
STATEMENT
Reconciliation calculations
Revenues
ENFO 2015
IFRS, EUR 1,000
57
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
52,100
0
0
Profit-sharing bonus into the personnel fund
Pension insurance premiums and pensions
defined-contribution plans
7,895
Other indirect employee costs
Total
7,813
3,139
2,728
65,085
62,642
1 Jan–31 Dec
2014
Voluntary personnel expenses
2,570
2,686
Travel expenses
2,012
1,841
Costs of premises
3,641
3,983
Vehicle expenses
1,593
1,629
Hardware and software expenses
2,083
1,421
Other administrative expenses
2,573
3,788
Telephone and data expenses
Note 25, Related-party information, contains information about the management’s perquisites. Note 22 contains more information about the Group’s
share-based payments.
Average number of Group personnel during the period
689
647
Financial Process Services
IT Services
91
104
Other functions
38
24
818
775
Total
Marketing, sales and representation expenses
Other operating expenses
Total
Auditing
Total
1 Jan–31 Dec
2014
Intangible assets
2,773
1,055
Property, plant and equipment
2,465
3,585
Total depreciation and amortisation
5,239
4,640
Depreciation and amortisation by asset category
Decrease of Group reserve
Total depreciation and amortisation
-219
5,020
4,640
1,086
2,057
17,840
19,928
Auditors’ fees
Other services
1 Jan–31 Dec
2015
677
1,845
The Group did not have any significant research and development expenses.
Other operating expenses include rental expenses of EUR 5,574,000
(EUR 5,502,000 in 2014).
Tax guidance
8. Depreciation and amortisation
698
1,584
207
196
18
7
84
82
309
285
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
10. Financial income and expenses
Dividend income
BUSINESS
OPERATIONS
54,051
Salaries, wages and fees
1 Jan–31 Dec
2015
10
14
Interest income
-37
124
Exchange rate gains
542
232
Total financial income
515
371
Interest expenses
843
1,031
Exchange rate losses
229
989
Other financial expenses
204
1
Total financial expenses
1,276
2,020
CORPORATE
GOVERNANCE
1 Jan–31 Dec
2014
RESPONSIBILITY
9. Other operating expenses
1 Jan–31 Dec
2015
FINANCIAL
STATEMENT
7. Salaries and other employment benefits
ENFO 2015
IFRS, EUR 1,000
58
ENFO | Annual Report 2015
1,719
2,540
-5
6
Change in deferred tax liability and assets
-330
-920
Total
1,384
1,626
Comparison of taxes based on the current tax base of 20.0% (20.0% in
Finland in 2014) and taxes presented in the income statement:
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
Profit before taxes
6,777
8,053
Taxes based on the current tax base
1,384
1,626
Divergent tax bases of foreign subsidiaries
Change in deferred taxes
– change in Swedish tax rates
Change in deferred taxes
– change in Finnish tax rates
-36
-15
Expenses non-deductible in taxation
107
Tax-exempt income
Non-recognised deferred tax receivables
from losses
-29
Impact of appropriations
-47
Taxes recognised in previous periods
Taxes in the income statement
128
-48
46
Available-for-sale investments
Exchange rate differences
caused by net investments in
foreign subsidiaries
Before tax
Tax charge
(-)/credit
After tax
5
-1
4
484
-97
387
Net investment hedging
Other currency translations
differences
144
-29
115
213
0
213
Cash flow hedging
Other comprehensive income
items
127
-25
101
973
-152
821
Before tax
Tax charge
(-)/credit
After tax
-13
3
-10
-1 306
261
-1 045
-82
16
-66
-641
0
-641
31
-6
25
-2 011
274
-1 737
2014
Available-for-sale investments
Exchange rate differences
caused by net investments in
foreign subsidiaries
Net investment hedging
Other currency translations
differences
Cash flow hedging
Other comprehensive income
items
-106
5
-6
1,384
1,626
The weighted average of the applied tax rates was 20.4% in 2014.
2015
12. Earnings per share
BUSINESS
OPERATIONS
Taxes from previous periods
1 Jan–31 Dec
2014
RESPONSIBILITY
Tax based on the period's taxable income
Tax expenses (-)/income associated with other comprehensive income items are:
1 Jan–31 Dec
2015
Earnings per share are calculated by dividing the profit for the period attributable to equity-holders of the parent company by the weighted average of
outstanding shares for the period.
1 Jan–31 Dec
2015
1 Jan–31 Dec
2014
4,375
5,012
592
590
Earnings per share, basic (EUR/share)
7.39
8.50
Earnings per share, diluted (EUR/share)
7.39
8.50
Profit for the period attributable to equity-holders
of the parent company (EUR thousand)
Weighted average number of outstanding shares
during the period (thousand shares)
FINANCIAL
STATEMENT
11. Income tax
CORPORATE
GOVERNANCE
IFRS, EUR 1,000
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
59
ENFO | Annual Report 2015
Machinery and equipment
Acquisition cost on 1 Jan.
Increases
Increases from business combinations
Decreases
Transfers between items
Exchange rate differences
Acquisition cost on 31 Dec.
Accumulated depreciation on 1 Jan.
Increases from business combinations
Accumulated depreciation on decreases
Depreciation for the period
Exchange rate differences
Accumulated depreciation on 31 Dec.
Carrying amount on 31 Dec.
2015
2014
18,936
18,834
72
285
321
64
-3,374
-289
-45
109
28
-67
15,938
18,936
18,213
18,019
0
55
-3,365
-103
274
287
19
-44
15,141
18,213
797
722
Other tangible assets
2015
2014
Acquisition cost on 1 Jan.
1,036
1,049
Increases
1,515
503
Decreases
-442
-29
-1,464
-440
Transfers between items
Exchange rate differences
27
-47
Acquisition cost on 31 Dec.
671
1,036
Accumulated depreciation on 1 Jan.
555
431
Depreciation for the period
142
164
0
11
Increases from business combinations
Depreciation on decreases and transfers
-362
-19
9
-33
Accumulated depreciation on 31 Dec.
344
555
Carrying amount on 31 Dec.
325
481
Exchange rate differences
2015
2014
8,542
7,916
Increases
1,404
2,278
Decreases
-1,232
-1,652
Acquisition cost on 31 Dec.
8,714
8,542
4,586
4,074
Accumulated depreciation on 1 Jan.
Transfers between items
Accumulated depreciation on decreases
-1,159
-1,589
Depreciation for the period
2,050
2,101
Accumulated depreciation on 31 Dec.
5,477
4,586
Carrying amount on 1 Jan.
3,956
3,842
Carrying amount on 31 Dec.
3,238
3,956
Total tangible assets
4,360
5,159
14. Intangible assets
The Group’s intangible assets consist mainly of goodwill and acquired software. The Group does not have a significant amount of internally manufactured products. The Group does not have any intangible assets with an indefinite useful life.
Goodwill
Acquisition cost on 1 Jan.
2015
2014
62,265
63,563
Increases
8,159
1,512
Exchange rate differences
1,075
-2,810
71,499
62,265
Carrying amount on 31 Dec.
BUSINESS
OPERATIONS
Acquisition cost on 1 Jan.
RESPONSIBILITY
Financial leasing
CORPORATE
GOVERNANCE
13. Tangible assets
FINANCIAL
STATEMENT
IFRS, EUR 1,000
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
60
ENFO | Annual Report 2015
11,683
10,163
Increases
2,855
2,048
289
-528
14,827
11,683
8,925
8,961
Decreases
Acquisition cost on 31 Dec.
Accumulated depreciation on 1 Jan.
Depreciation and amortisation
748
437
Exchange rate differences
238
-473
Accumulated depreciation on 31 Dec.
9,911
8,925
Carrying amount on 31 Dec.
4,917
2,758
Other intangible assets *
2015
2014
Acquisition cost on 1 Jan.
10,627
9,714
150
561
1
81
Increases
Increases through corporate acquisitions
Decreases
Transfers between items
Exchange rate differences
Acquisition cost on 31 Dec.
Accumulated depreciation on 1 Jan.
Accumulated depreciation on business
acquisitions
Accumulated depreciation on decreases
Depreciation and amortisation
-87
0
1,464
330
-7
-58
12,149
10,627
8,718
8,141
0
15
618
-7
-57
Accumulated depreciation on 31 Dec.
9,443
8,718
Carrying amount on 31 Dec.
2,706
1,910
* Other intangible goods include mainly licences and software.
2014
1,903
Increases
420
2,098
Decreases
-616
-122
3,682
3,879
1,491
580
Acquisition cost on 31 Dec.
Accumulated depreciation on 1 Jan.
Transfers between items
-616
-121
Depreciation for the period
Accumulated depreciation on decreases
1,228
1,032
Accumulated depreciation on 31 Dec.
2,101
1,491
Carrying amount on 1 Jan.
2,388
1,323
1,581
2,388
9,203
7,058
80,702
69,321
Carrying amount on 31 Dec.
Other intangible assets, total
Total intangible assets
Goodwill has been allocated to cash-generating units for impairment testing. The cash-generating units correspond to specific segments, which is the
level at which the management monitors the operations and related goodwill.
The recoverable amount has been defined on the basis of calculations related
to the value in use. The calculations are based on forecasts approved by the
management and cover three years. Estimated cash flows are discounted to
the present.
2015
-18
750
Exchange rate differences
2015
3,879
Acquisition cost on 1 Jan.
Acquisition cost on 1 Jan.
Exchange rate differences
Intangible financial leasing assets
2014
Discount rate
IT Services
Total
7.2%
6.9%
2015
2014
BUSINESS
OPERATIONS
2014
RESPONSIBILITY
2015
Allocated goodwill
71 499
62 265
71 499
62 265
Cash flows after the forecast period have been estimated using a growth
expectation of 2%. The growth expectation used does not exceed the average
long-term growth in the industry.
A goodwill of 8,2 million euros was recognized when combining Rongo
Oy’s business. The amount of goodwill was calculated as part of the acquisition, which realized in November 2015. There were no signs justifying an
impairment recognition by the closing of accounts.
FINANCIAL
STATEMENT
Other intangible assets
Customer relations and trademarks
(business combination)
CORPORATE
GOVERNANCE
IFRS, EUR 1,000
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
61
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Jan.
Changes in fair value
2015
2014
136
149
5
-13
142
136
Impairment
31 Dec.
Current
2015
2014
1 Jan.
2
2
31 Dec.
2
2
RESPONSIBILITY
Available-for-sale investments consisted mainly of fund investments and
minor investments in equities.
16. Non-current receivables
2015
2014
Security deposits
92
155
Total
92
155
CORPORATE
GOVERNANCE
Non-current
BUSINESS
OPERATIONS
15. Available-for-sale investments
FINANCIAL
STATEMENT
The following assumptions have an impact on the realisation of the calculations:
Estimated turnover: The assumptions are based on a view of the general
growth and price development in the market, and an estimate of the Group’s
market share. The assumption values are based on the management’s previous experience in business development, the current market share, previous
development of the market share, and estimates of future outlook issued by
outside parties.
Development of personnel expenses and other expenses: The management’s assumptions are based on previous experience in the development of
personnel costs, known salary increase agreements and the general view of
the development of personnel costs.
Discount rate: The rate used in calculations has been defined according
to the weighted average cost of capital (WACC). The rate used represents the
total cost of equity and liabilities, taking into account the special risks related
to property items. The discount rate has been determined before taxes.
As a result of the impairment tests performed, the company does not
need to recognise impairment. The recoverable amount defined in impairment testing clearly exceeds the carrying amount of the tested units and, as a
result, the management considers that any change in the central assumptions
used in the calculations would not result in impairment.
ENFO 2015
IFRS, EUR 1,000
62
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ENFO 2015
IFRS, EUR 1,000
17. Deferred tax assets and liabilities
Changes in deferred taxes during 2014:
31 Dec 2013
242
-95
Provisions
54
-33
Perquisites
215
-78
Hedge accounting
55
Confirmed losses
Total
Recognised in
equity
Recognised in
comprehensive
income items
Exchange rate
differences
31 Dec 2014
147
22
-10
128
-29
894
-6
49
923
566
719
-6
-39
1 239
120
85
-107
-4
94
BUSINESS
OPERATIONS
Deferred tax assets:
Tangible and intangible assets: different depreciation period in
taxation, activated financial leasing assets
Recognised in
the income
statement
Measurement of financial assets at fair value
20
-3
17
Intangible assets recognised during business acquisitions
265
450
-96
-12
607
Total
404
535
-203
-19
719
31 Dec 2014
Recognised in
the income
statement
Recognised in
equity
Exchange rate
differences
31 Dec 2015
147
-49
Provisions
22
20
Perquisites
128
21
Changes in deferred taxes in 2015
Deferred tax assets:
Tangible and intangible assets: different depreciation period in
taxation, activated financial leasing assets
Hedge accounting
Confirmed losses
Total
Recognised in
comprehensive
income items
98
42
3
152
22
1,046
-25
25
1,361
94
-47
0
48
17
1
49
-25
894
130
1,239
122
23
CORPORATE
GOVERNANCE
Different depreciation period in taxation for tangible assets
RESPONSIBILITY
Deferred tax liabilities:
Deferred tax liabilities:
Measurement of financial assets at fair value
18
Intangible assets recognised during business acquisitions
607
571
-162
11
1,028
Total
719
571
-208
12
1,094
Of deferred tax receivables, EUR 426,000 is expected to materialise in the next 12 months.
About EUR 291,000 of deferred tax liabilities (EUR 132,000 in 2014) is expected to materialise in the next 12 months.
FINANCIAL
STATEMENT
Different depreciation period in taxation for tangible assets
63
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. Equity
177
256
Total
177
256
31 December 2013
Issued shares
Treasury shares
Outstanding
shares
590,833
809
590,024
Acquisition of treasury shares
19. Sales receivables and other receivables
Trade receivables
31 December 2014
2015
2014
26,365
25,811
Income tax receivables
1,971
3,423
31 December 2014
Other accrued income
3,150
3,008
Acquisition of treasury shares
92
23
31,578
32,265
Other receivables
Total sales and other receivables
The fair values of sales and other receivables correspond to their carrying amount.
Share issue
202
590,833
1,011
589,822
Issued shares
Treasury shares
Outstanding
shares
1,011
589,822
590,833
808
10,000
Sale of treasury shares
31 December 2015
-808
600,833
1,011
599,822
Enfo Oyj has a single series of shares, with each share entitling to a single
vote. The company’s shares are part of the book-entry system.
20. Cash and cash equivalents
2015
2014
Cash in hand and at bank
5,662
13,343
Total
5,662
13,343
Cash and cash equivalents on the balance sheet correspond to the cash and
cash equivalents presented in the cash flow statement. The fair value of cash
and cash equivalents does not differ from the carrying amount.
BUSINESS
OPERATIONS
Materials and supplies
Share capital
Changes in the number of shares are presented in the table below:
Treasury shares
Treasury shares are presented as reductions in equity on the balance sheet. In
2015, Enfo Oyj acquired and sold 808 treasury shares. On the balance sheet
date, the company held 1,011 treasury shares. The treasury shares held by the
company comprise 0.2% of all shares and voting rights.
Descriptions of equity reserves are presented below.
RESPONSIBILITY
2014
CORPORATE
GOVERNANCE
2015
Share premium account
The consolidated balance sheet presents restricted equity in a share premium
account which is not included in the registered share capital.
Translation differences
The Group’s equity includes translation differences caused by the translation
of equities in foreign subsidiaries and loan receivables corresponding to internal net investments into the rate on the closing date.
FINANCIAL
STATEMENT
18. Inventories
ENFO 2015
IFRS, EUR 1,000
64
ENFO | Annual Report 2015
Deferred tax
-13
3
Hedging instrument reserve
31
Deferred tax
-6
31 December 2014
1,787
1 January 2015
1,787
Change in the fair value of available-for-sale investments
5
Deferred tax
-1
Share issue regarding invested non-restricted equity
Sale of treasury shares regarding invested non-restricted equity
978
3
Hedging instrument reserve
127
Deferred tax
-25
31 December 2015
2,875
Major shareholders, 31 December 2015
shares
Osuuskunta KPY
510,174
Ilmarinen Mutual Pension Insurance Company
11,202
Enfo Oyj's Personnel Fund HR
10,510
Rongo Cap Oy
6,086
Einari Vidgren Oy
4,768
Keskisuomalainen Oyj
4,515
Pohjois-Savon Osuuspankki
3,283
Hannu Isotalo Oy
2,979
Kallax Oy
2,848
Arto Herranen
Others
Total
2,712
41,756
600,833
22. Share-based rewards
TERMS OF THE RESULT-BASED BONUS SYSTEM:
The result-based bonus system is a long-term incentive scheme for the Group’s
key persons. Each year before the beginning of a new financial period, the
Board of Directors decides upon the target group employees and their goals,
and sets objectives for the system’s criteria. The objectives of the incentive
scheme and their achievement are defined on the basis of the financial results
of the Group and its business units as well as other indicators (including customer satisfaction). The maximum bonus to be paid is specified in cash. The
annual bonus based on the scheme is paid after the end of the financial period
by the end of April in shares and/or cash. The number of shares to be assigned
is determined according to the share-specific equity used as the share price.
However, the Board of Directors may decide to pay bonuses fully in cash.
At the end of the 2013 financial period, the Group adopted an incentive
scheme for key persons, using a recognition practice that conforms to the IFRS
2 standard. The target group of the incentive scheme consists of key persons
determined by the Board of Directors. Participation in the incentive scheme
requires that the key person is in a permanent employment relationship with
the company at the start of the earning period and that the key person holds
the company’s shares as decided upon by the Board when the bonus is paid.
The company’s Board of Directors decides on the earning criteria for the
earning period and their objectives upon the approval of the budget. The
share-based incentive scheme contains three one-year earning periods, i.e.
calendar years 2014, 2015 and 2016. The scheme awards a maximum of 27,870
shares in bonuses. The bonus for the earning period of 2014 was based on the
turnover and profitability targets set for Enfo Group and its units. Part of the
targets were met, and 1,952 shares were issued from the system in 2015.
The liability associated with the redemption obligation associated with
the key persons’ incentive schemes expired in 2013 and earlier is presented in
other non-interest-bearing non-current liabilities.
BUSINESS
OPERATIONS
Change in the fair value of available-for-sale investments
1,773
RESPONSIBILITY
1 January 2014
Dividends
In 2014, EUR 5.9 per share, or a total of EUR 3,478,000, was paid in dividends.
The company’s Board of Directors proposes to the Annual General Meeting
that a dividend of EUR 5.90 per share be paid for the 2015 financial period.
CORPORATE
GOVERNANCE
Change in value and other reserves
The fair value reserve includes unrealised changes in the fair value of available-for-sale investments less the tax effect, and the reserve for invested nonrestricted equity.
FINANCIAL
STATEMENT
IFRS, EUR 1,000
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
65
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Total
2015
2014
Within 12 months
2,813
3,142
2,246
3,435
11,121
11,037
13,487
13,109
Within 1–5 years
9,924
9,373
9,902
9,202
In more than 5 years
2,186
2,185
3,424
3,429
Total
23,231
22,625
26,813
25,740
Future financial costs
6,744
181
305
4,914
6,440
12,123
3,021
Within 12 months
2,729
3,015
Within 1–5 years
2,151
3,282
34
143
4,914
6,440
6,889
8,833
466
3,171
7,356
6,961
11,919
Financial leasing liabilities
2,729
2,729
3,015
139
139
271
271
10,224
9,829
15,205
15,415
Total
167
5,095
Current value of financial leasing liabilities
The current value of financial leasing liabilities expires as
follows:
Current
Loans from financial
institutions
Derivative liabilities
37
In more than 5 years
Total
The Group’s financial liabilities as of 31 December 2015 consist of loans from
financial institutions, a bond loan and a financial leasing liability. The fair value
of long-term loans has been calculated by discounting future cash flows to
the present using the interest rate that would be available to the Group’s
similar loans on the closing date.
Rated values and fair values of derivative financial instruments are presented in Note 27.
Financial leasing agreements are generally made for 36–48 months with
fixed instalments denominated in euro covering the agreement period.
The Group’s other interest-bearing liabilities will expire
as follows:
BUSINESS
OPERATIONS
Financial leasing liabilities
2014
Fair value
Expiry of financial leasing liabilities
The gross amount of financial leasing liabilities – minimum rents by expiry
RESPONSIBILITY
Bond loan
2015
Fair value
2014
Carrying
amount
Bank loans
1-6 months
6-12 months
1–5 years
Total
11,121
13,402
18,477
25,504
Bond loans
1-6 months
CORPORATE
GOVERNANCE
Non-current
Loans from financial
institutions
2015
Carrying
amount
6-12 months
1–5 years
9,924
9,902
Total
9,924
9,902
Derivative liabilities
1-6 months
6-12 months
1–5 years
139
271
Total
139
271
FINANCIAL
STATEMENT
23. Financial liabilities
ENFO 2015
IFRS, EUR 1,000
66
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Bond loan
3,2
3,0
Financial leasing liabilities
3,5
3,7
Other non-current non-interest-bearing liabilities
2015
2014
5,005
1,036
9,390
Income tax liability
676
1,286
Advances received
510
815
Accrued liabilities
10,289
9,619
Other accrued liabilities
1,437
1,119
Total accrued liabilities
11,726
10,738
Other liabilities
Current non-interest-bearing liabilities, total
Accounts payable and other non-interest-bearing
payables, total
Group
share of
votes, %
Kuopio
100%
100%
Enfo Holdings Oy
Kuopio
100%
100%
Enfo Zender Oy
Kuopio
100%
100%
Espoo
51%
51%
Espoo
51%
51%
Tukholma
100%
100%
Enfo Sweden AB
Göteborg
100%
100%
Enfo Forward AB
Göteborg
100%
100%
Enfo Zystems AB
Göteborg
100%
100%
Enfo Zipper AB
Göteborg
100%
100%
Enfo Zingle AB
Göteborg
100%
100%
Kuopio
100%
100%
Enfo Oyj’s subsidiaries:
Rongo Oy
9,691
Personnel-related liabilities
Group share
of share
capital, %
Parent company: Enfo Oyj
Current
Trade payables
Registered
office
Company name
24. Accounts payable and other payables
Other non-current liabilities
Group structure
On 31 December 2015, the Group’s parent company and subsidiary relationships were as follows:
7,061
5,143
29,664
26,817
34,669
27,853
The carrying amount of trade and other payables corresponds to their fair
value.
Rongo Ohjelmistot Oy
Enfo Holdings AB
Zuite by Enfo Oy
Zuite Business Consulting AB
Göteborg
30%
30%
Enfo Zuite AB
Göteborg
100%
100%
Enfo Pointer AB
Tukholma
100%
100%
Enfo EnjoyIT Intergration AB
Göteborg
100%
100%
Enfo Framsteg AB
Tukholma
100%
100%
Bröndby
100%
100%
Lillestöm
100%
100%
Framsteg Denmark ApS
Enfo Norway Holdings AS
At Zuite Business Consulting AB, control is determined on the basis of shareholder agreements. The non-controlling interests (70%) have been presented on
a separate row in the consolidated income statement and the Group’s equity.
Other Group insiders
The Group’s other insiders include Enfo Oyj’s parent company Osuuskunta
KPY and subsidiaries, and the Group’s management, including the Group’s
Board of Directors, Managing Director and Management Team, and their
spouses and relatives living in the same household.
BUSINESS
OPERATIONS
2,4
RESPONSIBILITY
2014
2,6
CORPORATE
GOVERNANCE
2015
FINANCIAL
STATEMENT
25. Information on related parties
On 31 December, the weighted averages of effective interest rates for interestbearing liabilities were as follows:
Bank loans
ENFO 2015
IFRS, EUR 1,000
67
ENFO | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Management’s perquisites
2015
2014
26. Information about corporate acquisitions
Salaries and other current employment benefits
1,906
1,749
On 2 November 2015, Enfo Oyj acquired 51% of the capital stock of Rongo
Oy. Rongo Oy is a Finnish expert company specialising in information
management. Rongo Oy is the parent company of the Rongo Group
and owns 100% of Rongo Ohjelmistot Oy, a Group company. The Rongo
sub-group was included in the consolidated financial statements from 2
November 2015. The company’s two-month turnover was EUR 1.3 million and
operating profit EUR -0.2 million. The business of the Rongo sub-group is
included in the IT Services segment.
2015
2014
641
389
550
183
27
183
22
8
0
0
Sales of goods and services
Parent and subsidiaries
Other operating income
Parent and subsidiaries
Purchases of goods and services
Parent and subsidiaries
Sales and other receivables
Parent and subsidiaries
Accounts payable and other payables
Parent and subsidiaries
The Group has signed an eight-year lease agreement with Osuuskunta
KPY starting from 1 January 2012, concerning computer rooms located
in Kiinteistö Oy Siilinjärven Lentokapteeni. The rent liability is included
in the liability statement. The Group does not have any other significant
transactions, receivables, liabilities or guarantees with related parties.
Consideration paid for the acquisition
Paid in cash and by a directed share issue
Additional purchase price
5,268
Contingent consideration
4,782
Total consideration
10,900
The values of the acquired assets and liabilities were as follows on the
acquisition date:
Acquired company’s assets and liabilities
Customer relationships
Fair value
1,957
Product brands
438
Technology
460
Other intangible assets
Tangible assets
On 1 April 2015, Enfo sold its unit concentrating on metering services to
Voimatel, a Finnish producer of electrical and data network services. Voimatel
Oy is a wholly-owned subsidiary of Osuuskunta KPY, the biggest shareholder
of Enfo Oyj. In the transfer of business, nine Enfo employees were transferred
to Voimatel Oy as established employees. The divested metering services
included remote reading and control services for meters, life cycle management services for meters, balance reports and reporting of energy data. The
Enfo Group started the remote reading service for energy meters, or the
metering service business, in 2007.
850
Sales and other receivables
1
321
2,255
Cash and cash equivalents
539
Deferred tax liabilities
-571
Other liabilities
Trade payables and other current liabilities
Acquired identifiable net assets
-456
-1,765
3,179
Less non-controlling interests
-439
Plus goodwill
8,159
Acquired net assets
RESPONSIBILITY
Other transactions with related parties
and outstanding balances
CORPORATE
GOVERNANCE
5 in the parent company’s financial statements.
10,900
FINANCIAL
STATEMENT
Information about the parent company’s CEO and Board of Directors is presented in Note
BUSINESS
OPERATIONS
ENFO 2015
IFRS, EUR 1,000
68
ENFO | Annual Report 2015
Loans from financial institutions
2015
2014
18,477
25,407
Business mortgage
Subsidiary shares
0
11,396
0
16,395
During the financial period, the Group signed a new Creditors Agreement with financial
institutions. The agreement replaced mortgage and share pledges.
Derivative contracts
Rated value SEK (SEK 13,074,320)
Rated value EUR
Payable later
2,500
3,535
Total
6,137
6,971
Other rental liabilities
7,315
6,668
Other contingent liabilities
45
118
208
330
Total
7,568
7,116
Total
13,705
14,086
Bank guarantees
2015
Expiry of rental and leasing liabilities
Other leasing agreements
– total amount of minimum rents
2014
-115
-243
1,423
4,176
5,850
6,750
2015
2014
13,452
13,638
Within 12 months
6,393
6,074
Within more than a year and less than five years
7,058
7,564
13,451
13,638
BUSINESS
OPERATIONS
3,436
Within more than 5 years
Total
Interest swaps
Fair value
2014
3,637
The Group’s leasing agreement obligations relate to rented premises, cars
and other rented assets.
The Group has the following contingent liabilities:
Debts and their securities
2015
Payable during the current financial period
The agreements do not include any significant sublease relationships or
contingent leases.
CORPORATE
GOVERNANCE
27. Liabilities
Leasing liabilities
FINANCIAL
STATEMENT
The goodwill is created by the expected synergies between the Enfo Group
and Rongo Oy as well as by the personnel of the acquired company.
The acquisition-related costs of EUR 143,000 are included in other
expenses in the income statement and in cash flows from business operations
in the cash flow statement.
The Group’s turnover in 2015 would have been EUR 147.5 million and
operating profit EUR 8.3 million if the above acquisition of Rongo Oy had
been consolidated in the consolidated financial statements starting from the
beginning of the 2015 financial period.
RESPONSIBILITY
IFRS, EUR 1,000
ENFO 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
69
INCOME STATEMENT
BALANCE SHEET
NOTES TO THE FINANCIAL STATEMENTS
DATE AND SIGNATURES OF
THE FINANCIAL STATEMENTS
AUDITOR’S NOTE
BUSINESS
OPERATIONS
CORPORATE
GOVERNANCE
CASH FLOW STATEMENT
AUDITOR’S REPORT FOR ENFO OYJ’S
ANNUAL GENERAL MEETING
FINANCIAL
STATEMENT
71
72
73
74
82
82
84
RESPONSIBILITY
THE PARENT COMPANY’S
FINANCIAL STATEMENTS,
31 DECEMBER 2015
(FAS)
ENFO 2015
ENFO | Annual Report 2015
70
1 Jan–31 Dec
2014
Turnover
2
45,912
49,254
Other operating income
3
4,917
3,674
Materials and services
4
-20,394
-21,125
Personnel expenses
5
-16,730
-18,261
Depreciation and amortisation
6
-647
-676
Other operating expenses
7
-8,715
-9,236
4,342
3,631
8
1,787
-871
6,129
2,761
9
1,000
3,850
7,129
6,611
-1,426
-1,383
5,703
5,228
Operating profit
Financial income and expenses
Profit/loss before extraordinary items
Extraordinary items
Profit/loss before appropriations and
taxes
Income tax
Profit/loss for the period
10
BUSINESS
OPERATIONS
1 Jan–31 Dec
2015
RESPONSIBILITY
NOTE
CORPORATE
GOVERNANCE
FAS, EUR 1,000
FINANCIAL
STATEMENT
THE PARENT COMPANY’S INCOME STATEMENT (FAS)
ENFO 2015
ENFO | Annual Report 2015
71
THE PARENT COMPANY’S BALANCE SHEET (FAS)
FAS, EUR 1,000
NOTE
31 Dec 2015
31 Dec 2014
1,556
160
136
13
30,541
19,606
13
45
44
31,779
21,342
Investments
Total non-current assets
Current assets
Inventories
14
165
183
Non-current receivables
15
35,768
35,111
Current receivables
16
30,018
32,666
Marketable securities
17
2
2
Cash in hand and at bank
18
4,860
12,709
70,813
80,670
102,592
102,012
Share capital
19
265
265
Share premium account
Reserve for invested non-restricted
equity
19
13,316
13,316
19
2,893
1,912
Other reserves
19
11,576
11,562
Profit/loss from previous periods
15,743
13,912
Profit/loss for the period
5,703
5,228
49,498
46,194
95
105
20
25,769
23,487
21
27,230
32,225
52,999
55,712
102,592
102,012
Total equity
Obligatory provisions
Liabilities
Non-current
Current
Total liabilities
TOTAL EQUITY AND LIABILITIES
BUSINESS
OPERATIONS
1,033
TOTAL ASSETS
31 Dec 2014
RESPONSIBILITY
11
12
Total current assets
31 Dec 2015
CORPORATE
GOVERNANCE
Intangible assets
Other shares and participations
NOTE
Equity
Tangible assets
Holdings in Group companies
EQUITY AND LIABILITIES
FINANCIAL
STATEMENT
ASSETS
Non-current assets
ENFO 2015
ENFO | Annual Report 2015
72
THE PARENT COMPANY’S CASH FLOW STATEMENT
FAS, EUR 1,000
1 Jan–31 Dec 2014
5,703
5,228
647
Loss from assignment for fixed assets
Obligatory provisions
Extraordinary items
Taxes
Change in working capital
Change in inventories, increase (-),
decrease (+)
Change in current and non-interest-bearing
receivables, increase (-), decrease (+)
Change in current and non-interestbearing liabilities, increase (+), decrease (-)
48
-1,787
871
-11
-53
-1,000
-3,850
1,426
1,383
Dividends received
Interest received and other financial
income
Taxes paid
Change in Group receivables/liabilities
Total cash flow from operations
-364
-23
Assignment of tangible assets
Acquisition of subsidiaries
25
-4,458
Decrease in non-current receivables
Changes in other investments
Total cash flow from investments
4,185
0
-4,607
3,824
-3,478
-,3,185
-1
-16
11,501
20,048
Cash flow from financing
Payment of dividends
18
550
-18
1,663
-73
-351
-1,056
-,1,276
10
14
Acquisition/sale of treasury shares
Share issue
Withdrawal of loans
Withdrawal of a bond loan
Repayment of current loans
Interest paid and other financial costs
-149
332
806
-1,290
-2,156
-51
-3,471
3,417
-486
10,000
-18,531
Increase in loan receivables
Group contribution
-12,292
-11,443
3,850
4,100
Total cash flow from financing
-6,659
7,211
Change in cash and cash equivalents
-7,849
10,549
Cash and cash equivalents on 1 Jan.
12,709
2,160
Cash and cash equivalents on 31 Dec.
4,860
12,709
RESPONSIBILITY
Financial items
676
Purchases of intangible assets
CORPORATE
GOVERNANCE
Depreciation and amortisation
1 Jan–31 Dec 2014
FINANCIAL
STATEMENT
Profit for the period
Adjustments to operating profit
1 Jan–31 Dec 2015
Cash flow from investment activities
Purchases of property, plant and
equipment
BUSINESS
OPERATIONS
1 Jan–31 Dec 2015
Cash flow from operating activities
ENFO 2015
ENFO | Annual Report 2015
73
NOTES TO THE FINANCIAL STATEMENTS
Research and product development costs
Valuation of inventories
Notes to the income statement
Inventories are presented at the lower weighted average acquisition
price or the redemption price or probable sales price.
1. ACCOUNTING PRINCIPLES
Measurement of liquid assets
The parent company’s financial statements have been prepared in accordance with the Finnish Accounting Standards (FAS).
The consolidated financial statements have been prepared in accordance
with the International Financial Reporting Standards (IFRS) and the
accounting principles are described in Note 2 to the consolidated financial
statements.
Securities are valued at the lower acquisition cost or the market price.
Measurement principles
MEASUREMENT OF NON-CURRENT ASSETS
Pensions
Tangible and intangible assets are recognised on the balance sheet at the
direct acquisition cost less planned depreciation. Planned depreciation has
been calculated using the straight-line method on the basis of the expected
useful life of fixed assets.
The company’s pension security is handled by external pension insurance companies. Pension expenses are recognised as costs in the year
in which they are accumulated.
Deferred tax assets
Intangible assets
3–5 years
Other machinery and equipment
3–5 years
10 years
FINANCIAL
STATEMENT
Other tangible assets
Deferred tax assets caused by matching differences are included on
the balance sheet. The deferred tax assets are included on the balance
sheet on the basis of the management’s estimate of business development and resulting plan on the utilisation of deferred tax assets.
RESPONSIBILITY
Recognition of income
Revenue from services is recognised as income in the financial period
during which the service was performed. Once services are performed
during a particular period of time, revenue will be recognised for the
period using the straight-line method, unless some other method is a
better indicator for the stage of completion.
The depreciation periods are:
BUSINESS
OPERATIONS
Research and product development costs are mainly recognised as
annual expenses in the year in which they were generated.
CORPORATE
GOVERNANCE
Enfo Oyj is part of Osuuskunta KPY Group, the parent company of which
is Osuuskunta KPY, and its registered office is in Kuopio. Osuuskunta KPY’s
financial statements are available from address: Kauppakatu 18, 70100
Kuopio, Finland.
ENFO 2015
ENFO | Annual Report 2015
74
ENFO | Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
2. Geographic distribution of turnover
6. Depreciation and amortisation
1 Jan–31 Dec 2015
1 Jan–31 Dec 2014
Geographically
45,745
4,116
3,481
11
29
45,912
49,254
3. Other operating income
Goodwill
1 Jan–31 Dec 2014
0
0
Others
4,914
Total
4,917
Other machinery and equipment
Total
External services
Total
Other indirect employee costs
Total
1,207
3,674
Travel expenses
636
624
3,674
Costs of premises
1,897
2,027
620
676
1,866
1,442
Other administrative expenses
1,116
1,329
Telephone and data expenses
Marketing, sales and representation
expenses
256
298
781
1,025
Other operating expenses
606
608
8,715
9,236
1 Jan–31 Dec 2015
1 Jan–31 Dec 2014
94
79
Hardware and software expenses
1 Jan–31 Dec 2015
1 Jan–31 Dec 2014
4,877
7,156
18
-18
15,500
13,987
20,394
21,125
Total
7.2 Auditors’ fee
1 Jan–31 Dec 2015
1 Jan–31 Dec 2014
13,520
14,840
Auditing
Tax guidance
2,490
2,693
719
728
16,730
18,261
253
263
365
372
Number of employees
Average
Salaries, wages and fees for the
management
Managing Director, Deputy Managing
Director and Board of Directors
164
676
1 Jan–31 Dec 2014
Indirect employee costs
Pension costs
94
647
937
5. Personnel expenses
Salaries, wages and fees
0
1 Jan–31 Dec 2015
4. Materials and services
Change in inventories
512
0
Other personnel expenses
Vehicle expenses
Purchases during the period
553
7.1 Other operating expenses
1 Jan–31 Dec 2015
Capital gains from fixed assets
Intangible assets
Other services
Total
11
2
33
71
138
152
BUSINESS
OPERATIONS
41,785
RESPONSIBILITY
Total
1 Jan–31 Dec 2014
CORPORATE
GOVERNANCE
Other countries
1 Jan–31 Dec 2015
Depreciation according to plan
FINANCIAL
STATEMENT
Finland
EU countries
ENFO 2015
FAS, EUR 1,000
75
ENFO | Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
1 Jan–31 Dec 2014
From Group companies
From others
Total
9
14
1
0
10
14
From others
Total
1,799
2,218
39
29
1,838
2,247
Total
Total financial income
1,270
819
1,270
819
3,117
3,080
5
Reversal of impairment
-1
Total impairment
-1
5
1 Jan–31 Dec 2014
1,412
1,300
Taxes from previous periods
-10
-2
Change in deferred tax assets
24
84
1,426
1,383
Total
and by a statutory provision. The deferred tax asset regarding the interest rate swap
associated with cash flow hedging is recorded in equity. The amount of deferred tax
assets is presented in Note 15.
11. Intangible assets
Intangible rights
31 Dec 2015
31 Dec 2014
797
797
797
797
-745
-702
-40
-42
-785
-745
Carrying amount on 1 Jan.
53
95
Carrying amount on 31 Dec.
12
53
Acquisition cost on 1 Jan.
Increases
Interest expenses and other financial costs
To Group companies
134
200
To others
869
804
Exchange rate losses
1 Jan–31 Dec 2015
10. Income tax
NOTES TO THE BALANCE SHEET
Impairment of commodities in permanent
receivables
Total
3,850
Deferred tax assets are caused by a negative depreciation difference of EUR 277,514.59
Other financial income
Exchange rate gains
1 Jan–31 Dec 2014
1,000
Income taxes on ordinary activities
Interest income
From Group companies
1 Jan–31 Dec 2015
Group contribution
329
2,942
1,331
3,946
BUSINESS
OPERATIONS
1 Jan–31 Dec 2015
Dividend income
RESPONSIBILITY
9. Extraordinary items
Decreases
Acquisition cost on 31 Dec.
Accumulated depreciation and impairment
on 1 Jan.
CORPORATE
GOVERNANCE
8. Financial income and expenses
ENFO 2015
FAS, EUR 1,000
Total financial expenses
1,330
3,951
The financial income and expenses include
Exchange rate losses/gains (net)
Total financial income and expenses
941
-2,123
1,787
-871
Depreciation for the period
Accumulated depreciation and impairment
on 31 Dec.
FINANCIAL
STATEMENT
Depreciation on decreases and transfers
76
ENFO | Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
9,788
9,788
Machinery and equipment
Accumulated depreciation and impairment
on 1 Jan.
Depreciation for the period
Accumulated depreciation and impairment
on 31 Dec.
-9,788
-9,788
0
0
-9,788
-9,788
Carrying amount on 1 Jan.
0
0
Carrying amount on 31 Dec.
0
0
31 Dec 2015
31 Dec 2014
6,119
5,546
24
364
6
210
Other long-term expenses
Acquisition cost on 1 Jan.
Increases
Transfers between items
Decreases
Acquisition cost on 31 Dec.
Accumulated depreciation and impairment
on 1 Jan.
Depreciation on decreases and transfers
Depreciation for the period
Accumulated depreciation and impairment
on 31 Dec.
Carrying amount on 1 Jan.
Carrying amount on 31 Dec.
Total intangible assets
0
0
6,149
6,119
Acquisition cost on 1 Jan.
31 Dec 2015
31 Dec 2014
6,894
7,018
Increases
0
23
Decreases
0
-146
6,894
6,894
-6,770
-6,679
Acquisition cost on 31 Dec.
Accumulated depreciation and impairment
on 1 Jan.
Depreciation on decreases and transfers
0
73
-94
-164
-6,864
-6,770
Carrying amount on 1 Jan.
124
339
Carrying amount on 31 Dec.
30
124
Depreciation for the period
Accumulated depreciation and impairment
on 31 Dec.
Other tangible assets
31 Dec 2015
31 Dec 2014
Acquisition cost on 1 Jan.
5
5
Acquisition cost on 31 Dec.
5
5
Carrying amount on 1 Jan.
5
5
Carrying amount on 31 Dec.
5
5
31 Dec 2015
31 Dec 2014
6
216
-4,615
-4,145
0
0
-513
-470
-5,128
-4,615
Advance payments and purchases in
progress
1,504
1,400
Acquisition cost on 1 Jan.
1,021
1,504
Increase
1,033
1,556
Carrying amount on 31 Dec.
125
6
Total tangible assets
160
136
Decrease/transfer
125
0
-6
-210
BUSINESS
OPERATIONS
Acquisition cost on 31 Dec.
RESPONSIBILITY
12. Tangible assets
9,788
CORPORATE
GOVERNANCE
31 Dec 2014
9,788
FINANCIAL
STATEMENT
31 Dec 2015
Acquisition cost on 1 Jan.
Goodwill
ENFO 2015
FAS, EUR 1,000
77
ENFO | Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
13. Investments
15. Non-current receivables
31 Dec 2015
31 Dec 2015
31 Dec 2014
Carrying amount on 31 Dec.
30,541
19,606
Loan receivables
35,624
34,846
Total
35,624
34,846
98
147
19,606
Deferred tax assets
Other non-current receivables
Group companies have been presented in the notes to the IFRS financial
statements.
31 Dec 2015
Total
31 Dec 2014
Other shares and participations
44
Decreases
Carrying amount on 31 Dec.
Total investments
49
-5
1
45
30,586
44
19,650
31 Dec 2015
31 Dec 2014
Materials and supplies on 1 Jan.
183
165
Change in inventory
-18
18
165
183
Total
118
35,111
31 Dec 2015
31 Dec 2014
16. Current receivables
Receivables from Group companies
Trade receivables
Loan receivables
Group account receivables
Other accrued income
Total
Trade receivables
14. Inventories
45
35,768
BUSINESS
OPERATIONS
10,934
310
384
3,779
3,696
10,469
11,443
8,111
9,054
22,670
24,577
5,900
6,841
Prepayments and accrued income
Pension insurance premiums
276
52
Income tax receivables
192
304
Purchase invoice periods
858
780
Other accrued income
104
90
1,430
1,227
18
21
30,018
32,666
Total
Other receivables
Total current receivables
RESPONSIBILITY
19,606
CORPORATE
GOVERNANCE
Carrying amount on 1 Jan.
Increase
Refund of depreciation
31 Dec 2014
Receivables from Group companies
FINANCIAL
STATEMENT
Holdings in Group companies
Carrying amount on 1 Jan.
ENFO 2015
FAS, EUR 1,000
78
ENFO | Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
ENFO 2015
FAS, EUR 1,000
17. Marketable securities
31 Dec 2014
Shares and participations
Retained earnings on 1 Jan.
19,140
17,113
Carrying amount on 1 Jan.
2
Distributed dividends
-3,478
-3,185
Revision
0
-5
-16
Financial securities (carrying amount) on 31 Dec.
2
15,657
13,912
Change in treasury reserve
Profit/loss for the period
18. Cash in hand and at bank
31 Dec 2015
31 Dec 2014
Cash in bank accounts
4,860
12,709
Total
4,860
12,709
19. Equity
31 Dec 2015
31 Dec 2014
Share capital on 1 Jan.
265
265
Share capital on 31 Dec.
265
265
Share premium account on 1 Jan.
13,316
13,316
Share premium account on 31 Dec.
13,316
13,316
1,912
1,912
Reserve for invested non-restricted equity
on 1 Jan.
Capital gain from treasury shares
3
Share issue
Reserve for invested non-restricted equity
on 31 Dec.
2,893
1,912
Other reserves on 1 Jan.
11,562
11,536
Change in hedging reserves
Other reserves on 31 Dec.
Retained earnings on 31 Dec.
978
101
25
11,663
11,562
5,703
5,228
49,498
46,194
Retained earnings
15,657
13,912
Other reserves
11,663
11,562
Reserve for invested non-restricted equity
2,893
1,912
Profit for the period
5,703
5,228
35,917
32,613
Total equity on 31 Dec.
Statement of distributable equity on 31 Dec.
Total
RESPONSIBILITY
2
Treasury shares and major shareholders are presented in Note 21 to the consolidated financial statements.
CORPORATE
GOVERNANCE
2
BUSINESS
OPERATIONS
31 Dec 2015
31 Dec 2014
FINANCIAL
STATEMENT
31 Dec 2015
79
ENFO | Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
21. Current liabilities
13,487
Bond loan 2014/2019, 1.85%
10,000
10,000
Other non-current liabilities
4,648
Non-current liabilities, total
25,769
23,487
7,356
11,919
Total loans
7,356
11,919
Liabilities to Group companies
Trade payables
80
105
Other liabilities
11,191
12,089
Total
11,272
12,194
Trade payables
2,842
2,678
510
559
2,652
2,971
Advances received
Accrued liabilities
Personnel-related liabilities
Expense provisions
Total
153
221
2,805
3,192
BUSINESS
OPERATIONS
11,121
31 Dec 2014
Loans to financial institutions
RESPONSIBILITY
Loans to financial institutions
31 Dec 2015
31 Dec 2014
Other liabilities
Valuation debt of derivatives
Other liabilities
Total
Total current liabilities
139
271
2,307
1,411
2,446
1,683
27,230
32,225
CORPORATE
GOVERNANCE
31 Dec 2015
Liabilities expiring in less than 5 years
FINANCIAL
STATEMENT
20. Non-current liabilities
ENFO 2015
FAS, EUR 1,000
80
22. Commitments, contingent liabilities and other liabilities
31 Dec 2015
31 Dec 2014
Loans from financial institutions
18,477
25,407
Total loans
18,477
25,407
ENFO 2015
ENFO | Annual Report 2015
Commitments given
Business mortgage
0
11,396
Subsidiary shares
0
16,396
BUSINESS
OPERATIONS
Debts and their securities
institutions. The agreement replaced mortgage and share pledges.
Contingent liabilities and other liabilities
31 Dec 2015
31 Dec 2014
6,019
6,127
Leasing liabilities
RESPONSIBILITY
During the financial period, the company signed a new Creditors Agreement with financial
Total
Other contingent liabilities
Deposits as rental security on the balance
sheet
5,311
7,165
11,330
13,291
45
118
Bank guarantees
208
330
Leasing liabilities
6,532
5,437
152
170
Share redemption commitments
FINANCIAL
STATEMENT
Paid during the current financial period
Payable later
CORPORATE
GOVERNANCE
Amounts paid for leasing agreements
81
SIGNATURES TO THE FINANCIAL STATEMENTS
AND THE BOARD OF DIRECTORS’ REPORT
ENFO 2015
ENFO | Annual Report 2015
Timo Kärkkäinen
Soili Mäkinen
Arto Herranen
CEO
AUDITOR’S NOTE
A report has been issued today on the audit performed.
RESPONSIBILITY
Lauri Kerman
CORPORATE
GOVERNANCE
Tapio Hakakari
BUSINESS
OPERATIONS
Kuopio, 1 March 2016
PricewaterhouseCoopers Oy
Authorised Public Accountants
FINANCIAL
STATEMENT
Kuopio, 1 March 2016
Pekka Loikkanen
Authorised Public Accountant
82
Responsibility of the Board of Directors and the CEO
The Board of Directors and the CEO are responsible for preparing the financial
statements and the Report of Board of Directors, and conveying a true and fair view
in the consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS) as approved for use in the European Union, as well
as for giving a true and fair view in the financial statements and the Report of the
Board of Directors in accordance with the laws and regulations governing the preparation of the financial statements and the Report of Board of Directors in Finland.
The Board of Directors is responsible for the appropriate arrangement of the
control of the company’s accounts and asset management, and the CEO shall see
to it that the company’s accounts are in compliance with the law and that its asset
management has been arranged in a reliable manner.
Auditor’s responsibility
Our duty is to give an opinion on the financial statements, the consolidated financial statements and the Report of the Board of Directors on the basis of our audit.
The Finnish Auditing Act requires us to comply with the principles of professional
ethics. We have conducted our audit in accordance with the generally accepted
auditing standards valid in Finland. The generally accepted auditing standards
require us to plan and perform the audit in order to obtain reasonable assurance
about whether the financial statements and the Report of the Board of Directors
are free from material misstatement, and whether the members of the Board of
Directors of the parent company or the CEO are guilty of an act or negligence
which may result in liability for damages towards the company, or have violated
the Limited Liability Companies Act or the company’s Articles of Association.
An audit includes procedures to obtain audit evidence about the figures and
other disclosures in the financial statements and the Board of Directors’ report.
The procedures selected depend on the auditor’s judgement, including the assess-
Statement on the consolidated financial statements
In our opinion, the consolidated financial statements give a true and fair view
of the Group’s financial position, financial performance, and its cash flows from operating activities in accordance with the IFRS as adopted by the European Union.
Statement on the financial statements
and the Report of the Board of Directors
In our opinion, the financial statements and the Report of the Board of Directors
give a true and fair view of both the Group’s and the parent company’s financial
performance and financial position in accordance with the laws and regulations
governing the preparation of the financial statements and the Report of the Board
of Directors’ report valid in Finland. The information in the Report of the Board of
Directors is consistent with the information in the financial statements.
Kuopio, 1 March 2016
PricewaterhouseCoopers Oy
Authorised Public Accounting Firm
Pekka Loikkanen
Authorised Public Accountant
BUSINESS
OPERATIONS
ment of the risks of material misstatement, whether due to malpractice or error. In
making those risk assessments, the auditor considers internal control relevant to the
company’s preparation of the financial statements and the Report of the Board of
Directors that give a true and fair view.
The auditor assesses internal control to be able to design audit procedures that
are appropriate in the circumstances, but not for the purpose of giving an opinion on the effectiveness of the company’s internal control. An audit also includes
evaluating the appropriateness of the accounting principles applied to the financial
statements and the reasonableness of the accounting estimates made by the company’s operational management, as well as evaluating the overall presentation of
the financial statements and the Report of the Board of Directors.
In our opinion, the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
RESPONSIBILITY
We have audited the accounting records, the financial statements, annual report
and the administration of Enfo Oyj for the financial period of 1 January–31 December 2015. The financial statements consist of the consolidated balance sheet,
income statement, statement of comprehensive income, statement of changes in
equity, cash flow statement and notes to the consolidated financial statements, as
well as the parent company’s balance sheet, income statement, cash flow statement and notes to the financial statements.
CORPORATE
GOVERNANCE
(translated from the Finnish original)
FINANCIAL
STATEMENT
AUDITOR’S REPORT TO ENFO OYJ´S
ANNUAL GENERAL MEETING
ENFO 2015
ENFO | Annual Report 2015
83
CORPORATE
GOVERNANCE
IN THE DIGITAL DIMENSION
FINANCIAL
STATEMENT
SIMPLER, SMOOTHER,
SMARTER BUSINESS
RESPONSIBILITY
BUSINESS
OPERATIONS
ENFO 2015
ENFO | Annual Report 2015
84
ENFO OYJ
FINLAND
Head Office
Viestikatu 7
70600 Kuopio, Finland
www.enfo.fi
ENFO SWEDEN AB
SWEDEN
Lindholmspiren 3B
40276 Göteborg, Sweden
www.enfo.se