- Consolidated Notes
- General Information
- Accounting and Valuation Principles
- 5. In general
- 6. Reporting currency
- 7. Currency translation
- 8. Intangible assets
- 9. Tangible assets
- 10. Accounting for leases
- 11. Borrowing costs
- 12. Impairment of non-financial assets
- 13. Financial investments and other financial assets
- 14. Short-term financial assets
- 15. Other short-term assets
- 16. Cash and cash equivalents
- 17. Taxes
- 18. Provisions
- 19. Liabilities
- 20. Revenue and cost recognition
- 21. Contingent liabilities and contingent receivables
- 22. Management discretion and the main sources of forecasting uncertainty
- Notes to the Consolidated Balance Sheet
- 23. Liquid funds (cash and cash equivalents)
- 24. Trade receivables
- 25. Income tax claims
- 26. Prepaid expenses and other short-term assets
- 27. Intangible assets
- 28. Tangible assets
- 29. Development of the long-term assets
- 30. Deferred taxes
- 31. Other long-term assets
- 32. Research and development
- 33. Short-term Liabilities
- 34. Income tax liabilities and provisions
- 35. Deferred income and other liabilities
- 36. Long-term Liabilities
- 37. Subscribed capital
- 38. Reserves
- 39. Equity capital difference based on currency conversion
- Notes to the Consolidated Statement of Comprehensive Income
- Notes to the Consolidated Cash Flow Statement
- Other Information
- 48. Miscellaneous financial obligations
- 49. Financial assets and liabilities
- 50. Capital risk management
- 51. Finance risk management
- 52. Market risks
- 53. Transactions between related parties
- 54. Events after the balance sheet closing date
- 55. Number of employees
- 56. Information on the Company’s governing bodies
- 57. Information on the fees of the Company auditors
- 58. Information on segment reporting
- 59. Proposal for the Appropriation of Profit
- 60. Statement under § 161 of the German Stock Corporation Act
- 61. Responsibility statement by the Executive Board
to the Consolidated Financial Statements of InVision AG as of 31 December 2016 in accordance with IFRS and § 315a of the German Commercial Code
1. 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 for optimising workforce management, increasing the productivity, improving the quality of work, and reducing costs, 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.
The IFRS consolidated financial statements are expected to be approved by the Supervisory Board of InVision AG on 20 March 2017 and then cleared for publication on 22 March 2017.
2. Basis of the accounting
Because it is listed on a regulated market, InVision AG prepares its consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS). The consolidated financial statements as of 31 December 2016 were prepared in accordance with the IFRS, which were promulgated by the International Accounting Standards Board (IASB), in force on the balance sheet closing date, and applicable in the European Union. The designation “IFRS” also encompasses the still valid International Accounting Standards (IAS), as well as the interpretations of the Standing Interpretations Committee (SIC) and of the International Financial Reporting Interpretations Committee (IFRIC). The requirements prescribed under § 315a of the German Commercial Code (HGB) must also be observed.
All provisions of the IFRS, IAS, IFRIC and SIC, which are valid for fiscal year ending 31 December 2016, have been applied in the consolidated financial statements.
In fiscal year 2016, the following provisions under the IAS/IFRS/IFRIC were endorsed by the EU for adoption into EU law and/or must be applied for the first time. Most of them have little or no effect on the consolidated financial statements of InVision AG.
|Amendments in line with Annual Improvements, Cycle 2010-2012||None|
|Amendements to IAS 19 Defined Benefit Plans: Employee Contributions||None|
|Amendments to IFRS 11 Joint Arrangements (Accounting for purchases of shares in a joint arrangement)||None|
|IFRS 14 Regulatory Deferral Accounts (Optional simplification for first-time adopters regarding regulatory deferral account balances)||None|
|Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets (Acceptable methods of depreciation and amortisation)||None|
|Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture (Bearer plants)||None|
|Amendments to IAS 27 Equity Method in Separate Financial Statements||None|
|Amendments in line with Annual Improvements, Cycle 2012-2014||None|
|Amendments to IAS 1 Presentation of Financial Statements (Disclosure initiative)||None|
|Amendments to IFRS 10, IFRS 12 and IAS 28 Consolidation Exception for Investment Entities||None|
The following amendments of the IASB were not adopted early in the existing consolidated financial statements. Where amendments affect InVision AG, the future effects on the consolidated financial statements are examined. In most of these cases, the EU has also not yet endorsed the amendments.
|IFRS 15 Revenue from Contracts with Customers||None|
|IFRS 9 Financial Instruments: Recognition and measurement of financial assets||None|
|Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures (Sale or contribution of assets)||None|
|Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses||None|
|Amendments to IAS 7 Statement of Cash Flows relating to liabilities arising from financing activities||None|
|IFRS 16 Leases||None|
|Amendments to IFRS 2 Classification and measurement of share based payment transactions||None|
|Amendments in line with Annual Improvements, Cycle 2014-2016||None|
|Amendments to IAS 40 Transfers of investment property||None|
|IFRIC 22 Foreign currency transactions and advance consideration||None|
|Amendments to IFRS 4 Insurance contracts through IFRS 9||None|
3. Group of consolidated companies
The consolidated financial statements cover InVision AG as well as the following subsidiaries:
- InVision Software Ltd. (previously injixo Ltd.), London, United Kingdom
- InVision Software SAS, Paris, France
- injixo AG, Cham, Switzerland
- injixo Inc., Naperville, IL, United States
- InVision Software, OÜ, Tallinn, Estonia
- InVision Software Systems S.L., Madrid, Spain
InVision AG holds a direct 100% ownership interest in each of the consolidated subsidiaries.
On 17 November 2016, the shares in WFM Software AB, Solna, Sweden, were sold. By resolution of 27 June 2016, injixo B.V., Arnhem, the Netherlands, was liquidated. Deletion from the commercial register took place on 30 June 2016. Since then, both companies no longer belong to the group of consolidated companies.
4. Consolidation principles
The consolidated financial statements comprise the annual financial statements of InVision AG and its subsidiaries as of 31 December of each fiscal year. The annual financial statements of the subsidiaries are prepared while applying the uniform accounting and valuation methods as of the same balance sheet closing date as the annual financial statements of the parent company.
The balance sheet closing date of all subsidiaries integrated into the consolidated financial statements is 31 December of the applicable fiscal year in question.
All account balances, transactions, income, expenses, profits and losses from intra-group transactions, which are included in the book value of assets, are eliminated in full.
Subsidiaries are fully consolidated as of the date of their formation or acquisition (i.e., as of the date on which the Group acquires control over them), provided that they are not of minor importance for the Group’s net assets, financial position and results of operations. The inclusion of these subsidiaries in the consolidated accounts ends as soon as the parent company’s control no longer exists.
Newly-formed subsidiaries are consolidated using the acquisition method pursuant to IFRS 3. Under that method, acquisition costs of the business combination are apportioned to the identifiable assets, which are acquired, and to the identifiable liabilities, which are assumed, based on their fair values as of the date of acquisition. The expenses and income, which have accrued since the acquisition, are included in consolidated accounts.
Accounting and Valuation Principles
5. In general
The consolidated financial statements were prepared on the basis of historical acquisition or production costs (costs). Historical costs are based in general on the fair value of the consideration paid in exchange for the asset.
The consolidated balance sheet was structured according to short-term and long-term assets and liabilities. The consolidated statement of comprehensive income is prepared using the cost of production method.
6. Reporting currency
The consolidated financial statements are prepared in euro because the majority of the Group transactions are based on that currency. Unless otherwise indicated, all figures herein have been rounded up or down to the nearest thousand (TEUR, T€) in accordance with standard commercial practices. The figures are shown in euro (EUR, €), in thousand euro (TEUR, T€) or in million euro (MEUR, m€).
7. Currency translation
Each company within the Group stipulates its own functional currency. The items reported in the financial statements of each company are valued using that functional currency. Foreign currency transactions are initially converted into the functional currency at the currency spot rate applicable on the date of the transaction.
Monetary assets and liabilities denominated in a foreign currency will be converted into the functional currency at the exchange rate applicable on each relevant reporting date and recognised in the income statement. This treatment does not apply to any exchange rate differences arising from foreign currency transactions, if they are used to hedge a net investment of a foreign operation. These differences are recognised directly in equity capital until the net investment is sold, and recognised in the period results only after such sale. Any deferred taxes resulting from the currency differences of such foreign currency credits will also be recognised directly in equity capital. Non-monetary items, which are valued at historical costs in a foreign currency, are converted at the exchange rate applicable on the date of the transaction. Non-monetary items, which are reported at fair value in a foreign currency, are converted at the exchange rate applicable on the date the fair value was calculated.
Assets and liabilities of foreign operations are converted into euro as of the balance sheet (reporting) date. The conversion of income and expenses shall be made at the average exchange rate for the fiscal year. Any differences resulting from these currency conversions will be booked as a separate component of the equity capital account.
Any goodwill acquired with the purchase of a foreign operation and any adjustments in the book value of the assets and liabilities, which resulted from that transaction in order to accord with fair value, will be converted at the exchange rate applicable on the reporting date.
The following exchange rates were used (per EUR 1.00):
|Currency||Exchange rate on reporting date 2016||Exchange rate on reporting date 2015||Average annual exchange rate 2016||Average annual exchange rate 2015|
8. Intangible assets
Acquired intangible assets are valued at the time of their receipt according to their cost of acquisition or cost of production.
Internally produced intangible assets are recognised when they are identified and when it is likely that the group will receive a future economic benefit from the asset and the asset’s acquisition and production costs can be reliably determined. For subsequent valuations, the value of the intangible assets is recognised at the acquisition or production costs of those assets, less the accumulated amortisation and less the accumulated impairment costs (shown under the amortisation item). Intangible assets are amortised on a straight-line basis over their estimated usable life (3 to 15 years). The amortisation period and amortisation method are reviewed at the end of each fiscal year.
When producing new software and further developing existing software, the InVision Group cannot clearly and unequivocally delineate the relevant software because the knowledge and improvements gained from producing new software and from the continued development of existing software are incorporated into other InVision Group products. Since not all criteria were met by 31 December of the fiscal year, no development costs were capitalised.
9. Tangible assets
Tangible assets (land and buildings as well as computer hardware, tenant installations, furnishings and equipment) are recognised at the cost of acquisition or production less the accumulated depreciation. These assets are depreciated on a straight-line basis over the estimated useful life of the individual asset. The useful life for buildings is 9 to 33 years, for computer hardware 3 to 5 years, and for furnishings and equipment, 5 to 13 years. Tenant installations are depreciated over the term of the lease or over their useful life, if that period is shorter.
Subsequent expenditures made for a tangible asset are recognised at the costs of acquisition, if it is likely that the Group will receive a future economic benefit from it, and the costs for the asset can be reliably determined. Costs for repairs and maintenance, which do not increase the estimated useful life of the tangible asset, are recognised in the period in which they are incurred and are reported on the income statement.
10. Accounting for leases
The determination of whether a contract is or contains a lease is made on the basis of the economic content of the contract, and requires an assessment about whether the fulfilment of the contract depends on the use of a specific asset or assets and whether the contract grants a right to use the asset.
The Group acts as lessee only.
Any asset under a finance lease, according to which virtually all property-related risks and opportunities relating to the transferred asset are transferred to the Group, is recognised as an asset at the commencement of the lease term and valued at the lower of the then-current fair market value of the asset or the present cash value of the minimum lease payments to be made thereunder. These assets are subject to scheduled depreciation over the shorter of the two aforementioned time periods: i.e., the term of the lease or the economic useful life of the leased property. Lease payments are separated into their components of either financing costs and amortisation of the lease obligation in such a manner that the remaining residual book value of the lease will incur a constant rate of interest. The remaining leasing obligations as of the balance sheet closing date are itemised in the balance sheet according to their remaining terms to maturity.
Lease payments under operating leases are booked in the income statement as expenses arising over the term of the lease.
11. Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred, unless the borrowing costs were incurred for the purchase, construction or production of qualified assets. In that case, the borrowing costs will be added to the production costs for such assets. During the fiscal year, the InVision Group had neither acquired nor produced qualified assets.
12. Impairment of non-financial assets
Non-financial assets are tested for impairment if facts or changes in circumstances suggest that the book value of an asset might no longer be recoverable. For the impairment test, the recoverable amount of the asset or the cash-generating unit must be determined. The recoverable amount is either the fair value less the costs to sell or the value in use, whichever value is higher. The fair value less the costs to sell is defined as the price which two informed, contractually-willing and independent business partners could achieve (less the cost to sell) when selling an asset or a cash-generating unit. The value in use of an asset or a cash-generating unit is calculated by determining the present cash value of the estimated future cash flow based on the current use of the asset or unit. If the recoverable value is less than the book value, then the difference will be immediately written off and entered in the income statement.
The impairment of a particular asset (except for goodwill), which had been previously recognised to profit and loss, will be reversed, if there is evidence that the impairment no longer exists or that the amount of the impairment has declined. The recoverable amount will be recognised as income in the income statement. The recoverable amount (or the reduction in the amount of the impairment) of an asset will be recognised, however, only to the extent that it does not exceed the book value, which would have resulted had no impairment been previously recognised (including the effects from amortisation or depreciation).
13. Financial investments and other financial assets
Financial assets within the meaning of IAS39 are either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. Financial assets will be measured at fair value the first time they are recognised.
The classification of the financial assets into the measurement categories depends on their nature and their purpose of use, and will be made upon their initial recognition. To the extent it permissible and required, reclassifications are made at the end of the fiscal year.
All standard market purchases and sales of financial assets are recognised on the trade date; in other words, on the day on which the Group has entered into the obligation to purchase or sell the asset. Standard market purchases and sales are purchases and sales of financial assets, which prescribe the delivery of assets within a period of time that is set by market rules or market conventions.
Extended loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. These assets are measured at amortised costs using the effective interest method. Any gains or losses are recognised in the results for the period, if the loans and receivables have been derecognised or impaired or it has been done in connection with amortisation.
Financial assets are tested for impairment as of each balance sheet date. If it is likely that with respect to financial assets recognised at their amortised costs, the Company will be unable to collect all of the amounts, which are owed under loans, receivables or held-to-maturity investments pursuant to applicable contract terms and conditions, an impairment or write-down of the receivables will be recognised on the income statement. The impairment loss is defined as the difference between the asset’s book value and the present cash value of the anticipated future cash flows calculated using the effective interest method. The book value of the asset is reduced using a value adjustment account. The impairment loss will be recognised on the income statement. An impairment previously recognised as a cost will be reversed into income on the income statement, if some of the value subsequently recovered (or a reduction in the impairment amount) can be objectively attributed to the set of facts that transpired following the original impairment. Any recovered value will be recognised, however, only to the extent that it does not exceed the amount of the amortised cost which would have resulted had the impairment not occurred. The financial asset will be derecognised, if it is classified as non-recoverable.
As in the previous year, the book values of the assets and liabilities for the most part match their fair values.
14. Short-term financial assets
Short-term financial assets comprise accounts receivable and other receivables. A bad debt allowances for accounts receivable will be made if it is likely that the total amount of the original invoice cannot be collected. The amount of the bad debt allowances will be the face value of the account less the realisable amount that equals the present cash value of the anticipated cash flows.
15. Other short-term assets
Assets are recognised at their face or nominal value, but will be separately discounted in value if they are subject to identifiable risks.
16. Cash and cash equivalents
Cash and cash equivalents consist of credit balances held with financial institutions as well as securities which may be redeemed for cash on short notice. These credit balances held with financial institutions are measured at face or nominal value.
The actual tax refund claims and tax debts for the current period and for earlier periods must be valued at the amount at which a refund is expected from the tax authorities or a payment must be made to the tax authorities.
Deferred taxes are recognised under the liabilities method for all temporary differences between the tax basis of the assets / liabilities and their respective book values in the IFRS financial statements. In addition, any deferred taxes based on losses carried forward are entered on the balance sheet.
Deferred taxes are valued according to the tax rates (and tax regulations), which are effective as of the balance sheet closing date or which have for the most part been enacted into law, and which are expected to be valid and binding on the date the deferred tax receivable is realised and/or the deferred tax liability is settled.
Deferred tax receivables are recognised in an amount at which it is likely that taxable income will be available for crediting against the temporary differences.
The valuation of deferred tax assets for loss carry-forwards and for deductible temporary differences depends on the future taxable earnings of the InVision Group companies. The estimate regarding such taxable earnings is made as of the balance sheet date taking into account the respective business perspectives. For purposes of capitalising deferred taxes based on the losses carried forward, only those tax loss carry-forwards will be recognised, which are very likely to be applied.
A provision is shown only if the Company has a present, statutory or de facto obligation (liability) based a past event, if it is likely that the fulfilment of the obligation will lead to an outflow of funds representing an economic benefit, and if a reliable estimate of the amount of the obligation can be made. If no provision could be created because one of the criteria mentioned was not fulfilled, then the liabilities in question will be reported as contingent liabilities.
Provisions are examined on each balance sheet closing date and adjusted to accord with the best estimate as of that date. If there is an expectation that the expenditures, which are required to satisfy a deferred liability, will be reimbursed either in whole or in part by another party, then the reimbursement will be recognised only when it is nearly certain that the Group will receive the reimbursement.
Liabilities comprise long-term liabilities to financial institutions, trade payables, tax liabilities, interest owed, liabilities owed to employees, and other liabilities. When such items are recognised for the first time, they are booked at their cost of acquisition, which corresponds to the fair value of the consideration received. All liabilities are measured in subsequent years at the adjusted cost of acquisition under the effective interest method. The liability is derecognised when it has been settled, cancelled or expired.
20. Revenue and cost recognition
The InVision Group’s revenues are generated primarily by providing the following services:
- Temporary use of software-based services and content (subscriptions and single use)
- Projects comprising the perpetual (duration unrestricted) transfer of rights to use software products (licences) as well as related services
The revenues are reported less any early payment discounts, customer bonuses and rebates. Agreements with several components (e.g. subscriptions and services) are internally allocated to their individual components, and revenues are recognised on the basis of those individual components.
Revenues are generally recognised when the sales price is determined or determinable, no significant duties exist and the collection of the receivables is likely. Income from subscriptions is recognised on a straight-line basis pro rata temporis throughout the period of time for which they were calculated. Income from single use is recognised at the time of the granting of the possibility of use. Income from the perpetual transfer of rights of use is generally recognised as soon as the relevant licence key is delivered. Income from projects are recognised as soon as the service is provided.
Costs are recognised when the good or service is used or at the time they were generated. Interest is recognised as either an expense and/or income according to the period in which it arose under the effective interest method. Rental payment costs under operating leases are likewise recognised on a straight-line basis over the entire term of the lease, irrespective of the payment arrangements made under such leases.
21. Contingent liabilities and contingent receivables
Contingent liabilities are either potential obligations, which could result in an outflow of resources but the existence of which must be confirmed through the occurrence or non-occurrence of one or more future events, or current obligations, which do not satisfy the recognition criteria of the liability. These items are listed separately in the notes, unless the possibility that resources with economic benefits will be lost is unlikely. There were no contingent liabilities in the fiscal year.
In connection with business combinations, contingent liabilities are recorded as liabilities on the balance sheet pursuant to IFRS3.37, if the fair value can be reliably calculated.
Contingent receivables are not recognised in the financial statements. They are, however, listed in the notes, if the receipt of economic benefits is likely.
22. Management discretion and the main sources of forecasting uncertainty
When preparing the consolidated financial statements, some assumptions and estimates must be made, which have an effect on the amount and reporting of the recognised assets and liabilities, the income and expenses, and the contingent liabilities for the reporting period. These assumptions relate primarily to the assessment of the carrying value of assets, the assessment of deferred tax assets, uniform group determination of the economic useful lives of tangible assets, and the recognition and measurement of provisions. The assumptions and estimates are based on premises delivered from available information at the time in question. The basis for the anticipated future business development is the circumstances present at the time the consolidated financial statements are prepared in a realistic scenario of the future development of the overall environment. If these overall conditions deviate from the assumptions made and cannot be influenced by management, then the resulting figures could deviate from the originally anticipated estimates.
Notes to the Consolidated Balance Sheet
23. Liquid funds (cash and cash equivalents)
Liquid funds contain only those payment instruments, which have a term to maturity of less than six months calculated from the date of purchase. As in the previous year, cash and cash equivalents consist solely of credit balances held with financial institutions.
24. Trade receivables
Trade receivables (net) have a term to maturity of up to one year, they are adjusted when needed and consist of the following items:
|31 Dec 2016||31 Dec 2015|
|Bad debt allowances||-40||-63|
25. Income tax claims
The income tax claims include refund claims of various subsidiaries.
26. Prepaid expenses and other short-term assets
|31 Dec 2016||31 Dec 2015|
|Prepaid and deferred items||164||168|
|Other miscellaneous assets||154||4|
27. Intangible assets
Intangible assets consist primarily of software and industrial property rights acquired in exchange for consideration. These assets are valued at their historical cost of acquisition, less the scheduled amortisation. With respect to scheduled amortisation, the software acquired in exchange for consideration and the industrial property rights were amortised over their expected useful lives (3 to 15 years).
28. Tangible assets
The breakdown of tangible assets is as follows:
|31 Dec 2016||31 Dec 2015|
|Land and property / Buildings||7,881||7,638|
|Other miscellaneous assets||1,585||1,171|
Tangible assets are recognised at their historical costs of acquisition, less any scheduled depreciation if the assets are subject to wear and tear. Tangible assets are depreciated on a straight-line basis over their useful lives (3 to 33 years). The carrying value of the tangible assets is subject to impairment testing. None of the assets have been subject to non-scheduled depreciation.
29. Development of the long-term assets
|Fiscal year 2016||01 Jan 2016||Additions||Disposals||Currency differences||31 Dec 2016|
|Concessions, industrial property rights and similar rights and assets as well as licences to such rights and assets|
|Other equipment, furnishings and office equipment|
|Total long-term assets|
|Fiscal year 2015||01 Jan 2015||Additions||Disposals||Currency differences||31 Dec 2015|
|Concessions, industrial property rights and similar rights and assets as well as licences to such rights and assets|
|Other equipment, furnishings and office equipment|
|Total long-term assets|
30. Deferred taxes
The following table sets forth the status of the deferred tax assets according to the balance sheet items:
|31 Dec 2016||31 Dec 2015|
|Deferred taxes based on temporary differences from licence valuations||59||94|
|Deferred taxes based on losses carried forward||95||293|
The tax loss carry-forwards for the Group totalled TEUR 9,080 (previous year: TEUR 10,122). Of this amount, TEUR 285 was valued (previous year: TEUR 1,278), and thereupon TEUR 95 (previous year: TEUR 293) was recognised as deferred taxes. For the TEUR 8,795 in other losses carried forward (previous year: TEUR 8,843), no deferred taxes were recognised.
31. Other long-term assets
Other long-term assets consist only of security deposits paid for leased office space.
32. Research and development
The expenses for research and development came to TEUR 5,459 (previous year: TEUR 5,560) in the fiscal year.
33. Short-term Liabilities
The short-term liabilities are allocated as follows:
|Income tax liabilities||922||21|
The deferred income items involve previously recognised invoiced amounts for subscription services for the respective next year.
34. Income tax liabilities and provisions
Income tax liabilities and provisions developed as follows:
|01 Jan 2016||Utilisation||Reversal||Allocation||Currency Difference||31 Dec 2016|
|Income tax liabilities||21||19||2||922||0||922|
|- Personnel expenses||50||50||0||40||0||40|
|- Annual accounts costs||97||94||1||82||-2||82|
|- Outstanding invoices||48||45||0||16||-3||16|
|- Trade associations||14||12||2||13||0||13|
Income tax liabilities include TEUR 689 in corporation tax due to a dividend payment from InVision Software OÜ, Tallin, Estonia, to InVision AG.
The provisions for personnel expenses related primarily to holiday entitlements.
35. Deferred income and other liabilities
Deferred income and other liabilities are short-term and are allocated as follows:
|Value added tax||79||234|
|Social security charges||49||40|
36. Long-term Liabilities
The bank loan in the amount of TEUR 4,000 that was raised in fiscal year 2014 to finance a commercial property for own use was reduced by scheduled repayments to TEUR 2,250 as of 31 December 2016. It is secured by mortgages.
37. Subscribed capital
The registered share capital of InVision AG is reported as the subscribed capital. The subscribed capital is divided into 2,235,000 no-par value shares (Stückaktie), each such share representing a notional amount of EUR 1.00 of the Company’s registered share capital. At the end of the reporting period, the Company holds no treasury shares.
The Executive Board is authorised, with the consent of the Supervisory Board, to increase the registered share capital one or more times by up to EUR 1,117,500 (Authorised Capital Account 2015) on or before 17 May 2020.
Pursuant to the shareholder resolution adopted on 18 May 2015, the registered share capital was conditionally increased by up to EUR 1,117,500 (Conditional Capital Account 2015). Pursuant to a shareholder resolution also adopted on 18 May 2015, the Company was authorised to buy-back its own shares in a quantity representing up to 10 percent of the registered share capital as it existed at the time the resolution was adopted. The authorisation will remain in effect until 17 May 2020.
The reserves include net proceeds, IPO costs (while factoring in tax effects), purchase and sale of the Company’s own treasury shares and capital increases from company funds.
39. Equity capital difference based on currency conversion
The equity difference from currency conversion is a result of converting on the basis of the modified closing date method for the conversion of other assets and liabilities, on the other hand.
Notes to the Consolidated Statement of Comprehensive Income
Revenues are categorised as follows:
|By Business Activities||2016||2015|
|InVision WFM subscriptions||7,961||8,012|
|The Call Center School||599||436|
There is an integrated sales and marketing organisation for all products and services of the Group. Thus, a categorisation of revenues by regions was not carried out.
41. Other operating income
Other operating income is broken down as follows:
|Reduction of bad debt allowances||41||4|
|Income attributable to other periods||20||28|
|Income from property||4||55|
|Other miscellaneous income||68||43|
42. Cost of materials
The costs of materials incurred are project-specific goods and services supplied by independent enterprises.
43. Personnel expenses
Personnel expenses consisted of the following:
|Wages and salaries||5,183||5,379|
|Social charges and other pension provisions||922||943|
|- of which for pensions (direct insurance)||55||54|
The direct insurance policies are classified as a defined contribution plan.
44. Depreciation and amortisation of tangible and intangible assets
No tangible or intangible assets were subject to impairment. Thus, only scheduled amortisation and depreciation is shown under this item.
45. Other operating expenses
Other operating expenses are itemised as follows:
|Office space expenses||557||854|
|Marketing and advertising costs||305||307|
|Receivable write-offs and bad debt allowances||31||76|
|Leasing and maintenance costs||22||20|
46. Financial result
The financial result is divided into the following:
|Interest and similar income||0||18|
|Interest and similar expenses||-40||-58|
Debt capital costs are recognised as an expense in the period in which they are incurred.
47. Income taxes
Income taxes are divided as follows:
Detailed information about the deferred tax assets and liabilities, which must be set aside, can be found in note 30 above. The basis, upon which the deferred taxes were set aside, is an income tax rate of 30 percent for the domestic corporation and the future local tax rate for the foreign subsidiaries. It is also assumed that on the basis of the current tax legislation, any existing tax loss carry-forwards may continue to be used indefinitely into the future. The deferred tax assets will be reduced in the future by the recognised tax loss carry-forwards to the extent that the Company generates profits.
The actual tax rate is computed as follows:
|Consolidated net income before taxes||3,483||2,668|
|Actual tax rate||33%||20%|
The difference between the theoretical income tax expense (when applying the tax rate applicable to the InVision Group) and the reported income tax expense may be attributed to the following causes:
|Result before income tax||3,483||2,668|
|Theoretical income tax expense based on the tax rate of the parent company||1,045||800|
|Effects of losses carried forward||136||655|
|International tax rate differences||-582||-714|
|Other tax effects||556||-204|
The other tax effects include the one-off charge against dividend distribution of TEUR 668 for InVision Software OÜ, Tallin, Estonia.
Notes to the Consolidated Cash Flow Statement
The cash flow statement shows changes in the cash position of the InVision Group in the fiscal year due to incoming and outgoing cash payments. Under IAS7, cash flow is distinguished between cash flow from operating activities, cash flow from investing activities and cash flow from financing activities.
The net financial position, as reflected in the cash flow statement, consists of all liquid funds, which are reported on the balance sheet (i.e., cash on hand and credit balances at financial institutions) and which can be reduced to cash within three months (calculated from the date acquired) without causing any significant fluctuation in value, less any short-term financial liabilities. The cash flows from investing and financing activities are computed directly (i.e., on a cash basis). In contrast, cash flow from operating activities is derived indirectly from the results for the period. Cash flow from operating activities includes the following incoming and outgoing payments:
|Income taxes received||82||110|
|Income taxes paid||-16||-47|
The net financial position shown in the cash flow statement represents total liquid funds as reported in the consolidated cash flow statement.
48. Miscellaneous financial obligations
As of the balance sheet closing date, other financial obligations arised from rental and lease agreements, mostly related to tangible assets and office space, for the following amounts:
|< 1 year||1 to 5 years||Total|
|Rental and lease obligations||194||223||417|
49. Financial assets and liabilities
The financial liabilities existing in the Group are a bank loan for financing a commercial property for own use and short-term liabilities arising from accounts payable. The significant financial assets of the Group consist of cash and cash equivalents and accounts receivable. The book value of these positions, represents the maximum default risk and totals TEUR 5,424 (previous year: TEUR 4,160). Business relationships are established with creditworthy contracting parties (counter-parties) only. In order to evaluate the creditworthiness of counter-parties (above all, large customers), the Group relies on available financial information and on its own internal trading records. The Group holds trade receivables against a number of customers from a wide range of industries and regions. Credit assessments regarding the financial strength of the receivables are constantly performed. The typical terms of payment granted (with no discounts or deductions) are 30 days. With respect to all trade receivables, which were overdue by more than 45 days as of the balance sheet date and involve a default risk, bad debt allowances were created.
Neither in 2016 nor in 2015 did the Company hold any assets for trading purposes and any financial liabilities, which were recognised in the income statement at their fair value. The Group also did not execute any derivatives or hedging transactions. Reclassifications were not made either in 2016 or in 2015.
There were no significant differences between the book value of the financial assets and liabilities reported and the fair values.
50. Capital risk management
The Group manages its capital (equity capital plus debt capital less cash and cash equivalents) with the goal of using financial flexibility to achieve its growth targets while at the same time optimising its financing costs. The overall capital management strategy has remained the same as in the previous year.
Management reviews the capital structure at least once each half-year. The review covers the costs of capital, the security and collateral provided, and the open credit lines and credit opportunities.
During the reporting year, the capital structure may be shown as follows:
|31 Dec 2016||31 Dec 2015|
|- as a percentage of total capital||68%||59%|
|- as a percentage of total capital||32%||41%|
|- as a percentage of total capital||18%||18%|
(*) calculated as the ratio of liabilities (less any cash and cash equivalents) to equity capital
The Group’s equity ratio target is 50 percent.
51. Finance risk management
The monitoring of finance risk is handled by management on a centralised basis. Individual financial risks are generally reviewed at least once each quarter.
The Group’s primary risks resulting from financial instruments involve liquidity and credit risks. As a rule, business transactions are executed only with creditworthy contracting parties. Moreover, the amounts of any receivables are constantly monitored in order to avoid exposing the InVision Group to any significant credit risk. The maximum default risk is limited to the book value of the asset as reported in the balance sheet.
The Group manages liquidity risks by holding adequate reserves, monitoring and maintaining credit agreements, and planning and coordinating incoming and outgoing payments.
52. Market risks
Market risks can arise from changes in exchange rates (currency risk) or interest rates (interest risk). Given the limited relevance these risks have for the Group, the Group has not heretofore hedged such risks using derivative financial instruments. These risks are managed through constant monitoring. Currency risks are largely avoided by virtue of the fact that the Group invoices primarily in euro or in the local currency. As of the balance sheet date, the receivables denominated in foreign currencies equalled TEUR 296 (previous year: TEUR 175) and the payables denominated in foreign currencies equalled TEUR 47 (previous year: TEUR 49). Had the euro appreciated by 10 percent compared to other currencies relevant to the Group as of 31 December 2016, then the pre-tax result would have been TEUR 25 (previous year: TEUR 21) lower.
53. Transactions between related parties
There were no transactions involving goods and services between closely related enterprises and persons, neither in the reporting period or the previous year.
54. Events after the balance sheet closing date
After the close of the fiscal year, no further specific transactions occurred, which would be of material importance for the consolidated financial statements.
55. Number of employees
In fiscal year 2016, the Company employed on average 93 employees (previous year: 91), not including the Executive Board.
56. Information on the Company’s governing bodies
The following persons were members of the Executive Board in the fiscal year:
- Peter Bollenbeck (Chairman), Düsseldorf
- Armand Zohari, Bochum
In the fiscal year, the Executive Board members received the following remuneration benefits:
|of which fixed salary||180,000||180,000|
|of which other benefits||27,822||27,744|
|of which fixed salary||180,000||180,000|
|of which other benefits||27,926||27,828|
|Total remuneration Executive Board||415,748||415,572|
The Executive Board holds, either directly or indirectly, 56.3 percent of the Company’s registered share capital.
The Supervisory Board consists of:
- Dr. Thomas Hermes (Chairman), Attorney at Law and Notary, Essen
- Matthias Schroer (Deputy Chairman), Entrepreneur, Rosenheim
- Prof. Dr. Wilhelm Mülder, University Professor, Essen
Dr. Thomas Hermes is the supervisory board chairman of the registered housing association known as Wohnungsgenossenschaft Essen-Nord e.G., Essen. Matthias Schroer and Prof. Dr. Wilhelm Mülder do not sit on any other supervisory boards.
The remuneration benefits paid to the Supervisory Board in the fiscal year consist of the following:
|Dr. Thomas Hermes||12,000||12,000|
|of which fixed compensation||10,000||10,000|
|of which meeting fees and expenditures||2,000||2,000|
|of which fixed compensation||7,500||7,500|
|of which meeting fees and expenditures||2,000||2,000|
|Prof. Dr. Wilhelm Mülder||7,000||7,000|
|of which fixed compensation||5,000||5.000|
|of which meeting fees and expenditures||2,000||2,000|
|Total compensation Supervisory Board||28,500||28,500|
Otherwise in the fiscal year, the Supervisory Board members were not granted any loans or provided any advances for future payments, and no contingent liabilities were incurred for the benefit of such persons.
57. Information on the fees of the Company auditors
The fee for the Company’s annual accounts auditor, which was recognised for fiscal year 2016, consists of the following:
|Auditing service for the annual accounts||50||50|
|Tax advisory services||18||5|
58. Information on segment reporting
Since the internal and external business processes for all products and services are to the largest extent identical, they collectively represent a single operating segment within the meaning of IFRS8.
59. Proposal for the Appropriation of Profit
The Executive Board and the Supervisory Board propose to distribute an amount of EUR 0.50 per dividend-bearing share from the net profit and to carry forward the remaining amount to new account.
60. Statement under § 161 of the German Stock Corporation Act
On 27 January 2017, the Executive Board and Supervisory Board issued a statement under § 161 of the German Stock Corporation Act regarding the extent to which it has elected to comply with the recommendations of the “Government Commission of the German Corporate Governance Code” and published this statement on the Internet at (/investors/compliance-statement/).
61. 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 financial statements give a true and fair view of the Group’s assets, liabilities, financial position and results of operation, and the 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, 13 March 2017