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Consolidated Notes

to the Consolidated Interim Financial Statements of InVision AG as of 30 June 2019 (condensed/unaudited)

General Information

General information about the Company

InVision Aktiengesellschaft, Düsseldorf (hereinafter also referred to as “InVision AG” or the “Company”), together with its subsidiaries (hereinafter also referred to as the “InVision Group” or the “Group”), develops and markets products and services in the field of workforce management and education, and is mainly active in Europe and the United States.

The Company’s registered offices are located at Speditionstraße 5, 40221 Düsseldorf, Germany. It is recorded in the Commercial Register of the Local Court of Düsseldorf under registration number HRB 44338. InVision AG has been listed in the prime standard segment of the Frankfurt Stock Exchange under securities identification number 585969 since 18 June 2007.

Basis of the accounting

The condensed consolidated interim financial report for the reporting period was prepared in accordance with IAS 34 “Interim Financial Reporting”. The condensed consolidated interim financial report does not contain all explanations and information that are required for the financial statements of the full fiscal year and should be read in conjunction with the consolidated financial statements as of 31 December of the previous fiscal year.

Effects of New IFRS

In January 2016, the IASB published the new standard IFRS 16 “Leases”, which in particular replaces the previous leasing standard IAS 17 and the related interpretations. The new standard introduces a uniform lease accounting model for lessees, under which rights of use and liabilities for all lease agreements with a term of more than twelve months are to be accounted for, unless they are immaterial. A distinction is no longer made for lessees between operating leases, in which assets and liabilities are not recognized, and finance leases.

The InVision Group applied IFRS 16 for the first time at the beginning of the 2019 fiscal year. As part of the transition, the InVision Group decided to apply the modified retrospective approach. As a result, the previous year’s figures do not have to be adjusted. Instead, the cumulative effect of the first-time application of the standard has to be recognised by adjusting retained earnings. Since the first-time application of IFRS 16 primarily relates to a new lease agreement concluded at the beginning of fiscal year 2019 for the office facilities in Leipzig, the retained earnings were not adjusted for materiality reasons.

Instead of the rental obligations for office space previously reported under other financial obligations, the application of IFRS 16 leads to an increase in non-current assets due to the recognition of rights of use. The rights of use are depreciated on a straight-line basis over the shorter of the useful life and the lease term. Financial liabilities also increase due to the recognition of corresponding lease liabilities. These liabilities are measured at the discounted value of the remaining lease payments at the lessee’s marginal borrowing rate as of January 1, 2019. The weighted average borrowing rate of the InVision Group, which was applied to the lease liabilities as of 1 January 2019, is 1.42%. Each lease payment is divided into repayment and financing expenses. Finance expenses are recognised in the income statement over the term of the lease so that there is a constant periodic interest rate on the remaining amount of the liability for each period.

Under otherwise identical conditions, the increase in the balance sheet total leads to a reduction in the equity ratio of the InVision Group.

The following tables show the main effects of the new IFRS 16 accounting standards for the classification and measurement of rights of use and for the recognition of current and non-current lease liabilities for the first half-year of fiscal year 2019.

Effects of the first-time application of IFRS 16 on the consolidated balance sheet

IFRS, in Euro

  Carrying amount in
accordance with IAS 17
Application of IFRS 16 Carrying amount in
accordance with IFRS 16
Assets 30 Jun 2019   30 Jun 2019
A. Short-term assets      
1. Liquid funds 4,149,929   4,149,929
2. Trade receivables 939,014   939,014
3. Income tax claims 83,091   83,091
4. Prepaid expenses and other short-term assets 226,748   226,748
Total short-term assets 5,398,782   5,398,782
B. Long-term assets      
1. Intangible assets 315,274 1,613,408 1,928,682
2. Tangible assets 9,139,569   9,139,569
3. Deferred taxes 9,828   9,828
4. Other long-term assets 17,183   17,183
Total long-term assets 9,481,854 1,613,408 11,095,262
Total assets 14,880,636 1,613,408 16,494,044
  Carrying amount in
accordance with IAS 17
Application of IFRS 16 Carrying amount in
accordance with IFRS 16
Equity and liabilities 30 Jun 2019   30 Jun 2019
A. Short-term liabilities      
1. Financial Liabilities 0 175,828 175,828
2. Trade payables 148,107   148,107
3. Provisions 383,644   383,644
4. Income tax liabilities 113,516   113,516
5. Short-term share of deferred income and other short-term liabilities 2,842,136   2,842,136
Total short-term liabilities 3,487,403 175,828 3,663,231
B. Long-term liabilities      
Financial Liabilities 1,000,000 1,447,521 2,447,521
Total long-term liabilities 1,000,000 1,447,521 2,447,521
C. Equity      
1. Subscribed capital 2,235,000   2,235,000
2. Reserves 1,191,184   1,191,184
3. Equity capital difference from currency translation -396,525   -396,525
4. Group/consolidated result 7,363,574 -9,941 7,353,633
Total equity 10,393,233 -9,941 10,383,292
Total equity and liabilities 14,880,636 1,613,408 16,494,044

With regard to the statement of comprehensive income, instead of the previous rents/operating leases, the depreciation of rights of use and the interest expenses for liabilities will in future be reported under other operating expenses under IFRS 16. This will have a positive impact on operating expenses and consequently on the operating result (EBIT) and finance expenses will increase as a result of additional interest expenses. Overall, only insignificant effects on profit before taxes, profit after taxes and earnings per share are expected.

Effects of the first-time application of IFRS 16 on the consolidated statement of comprehensive income

IFRS, in Euro

  Carrying amount in
accordance with IAS 17
Application of IFRS 16 Carrying amount in
accordance with IFRS 16
  1 Jan - 30 Jun 2019   1 Jan - 30 Jun 2019
1. Revenues 6,394,602   6,394,602
2. Other operating income 77,819   77,819
3. Cost of materials/cost of goods and services purchased 0   0
4. Personnel expenses -4,129,489   -4,129,489
5. Amortisation/depreciation of intangible and tangible assets -299,152 -96,381 -395,533
6. Other operating expenses -1,681,175 98,325 -1,582,850
7. Operating result (EBIT) 362,605 1,944 364,549
8. Financial result -43,932 -11,885 -55,817
9. Currency losses/gains -421   -421
10. Result before taxes (EBT) 308,311   308,311
11. Income tax -127,714   -127,714
12. Consolidated net profit 190,538 -9,941 180,597
13. Exchange rate differences from converting foreign financial statements 22,764   22,764
14. Consolidated result 213,302 -9,941 203,361

Financial Liabilities

InVision AG has raised a bank loan of TEUR 6,000, secured by a land charge, to refinance investments and to carry out further investments. In the first half-year of the current fiscal year, the Company called TEUR 1,000 of this amount.

Cost of Materials

Expenses for support services provided by external employees, which were previously recorded under cost of materials, will in future be reported under other operating expenses. The previous year’s figures have been adjusted accordingly: For the first half-year of 2018, 38 TEUR was reclassified from cost of materials to other operating expenses.

Group of consolidated companies

The group of consolidated companies has not changed since 31 December of the previous fiscal year.

Treasury shares

The Company has no treasury shares.

Revenues

Revenues are categorised as follows:

By Business Activities (in TEUR) 6M 2019 6M 2018
Workforce Management 6,211 6,099
Education 184 243
Total 6,395 6,342
By Regions (in TEUR) 6M 2019 6M 2018
Germany 1,912 1,865
Foreign countries 4,483 4,477
Total 6,395 6,342

The breakdown of revenues by region is based on the location of the company recording the revenues.

Events after the balance sheet closing date

After the end of the reporting period, there were no specific events which were of significant importance for the interim financial report.

Executive Board

The Executive Board is composed of the following members:

  • Peter Bollenbeck, Düsseldorf

Earnings per share

Earnings per share were calculated by dividing the periodic result, which is attributable to InVision AG’s shareholders, by the average weighted number of shares issued and outstanding during the reporting period. InVision AG has issued only ordinary shares. In the first six months of 2019, there was an average of 2,235,000 shares issued and outstanding. Therefore, earnings per share for this period were EUR 0.09, compared to EUR -0.01 in the previous year, based on 2,235,000 shares issued.

Responsibility statement by the Executive Board

To the best of our knowledge and in accordance with the applicable reporting principles for financial reporting, the consolidated interim financial statements give a true and fair view of the Group’s assets, liabilities, financial position and results of operation, and the interim Group’s management report includes a fair review of the development and performance of the business, together with a description of the principal opportunities and risks related to the anticipated development of the Group for the remainder of the fiscal year.

Düsseldorf, 18 July 2019

The Executive Board

Peter Bollenbeck