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