Egmont annual report 2011 by Egmont

THE EGMONT FOUNDATION Annual Report 2011 CVR No.: 11456111

The Egmont Foundation Vognmagergade 11 1148 Copenhagen K Telephone: +45 3330 5550 Fax: +45 3332 4508 www.egmont.dk egmont@egmont.com Registered office: Copenhagen

Contents Management’s Review............................................................................................................................... 4 - Consolidated Financial Highlights........................................................................................................ 4 - Profit Improvement in 2011................................................................................................................ 5 - Egmont Magazines............................................................................................................................. 6 - Egmont Kids Media ............................................................................................................................ 8 - Egmont Books.................................................................................................................................... 10 - Egmont Nordisk Film........................................................................................................................... 11 - TV 2, Norway...................................................................................................................................... 13 - The Charitable Activities..................................................................................................................... 15 - Profit for the Egmont Foundation........................................................................................................ 17 - Organisation...................................................................................................................................... 17 - Corporate Governance....................................................................................................................... 17 - Corporate Social Responsibility........................................................................................................... 17 - Special Risks....................................................................................................................................... 18 - Outlook for 2012................................................................................................................................ 18 - Subsequent events............................................................................................................................. 18 Statement by the Board of Trustees and Management Board...................................................................... 19 Independent Auditor’s Report.................................................................................................................... 20 Income Statement of the Group................................................................................................................. 22 Statement of Comprehensive Income of the Group.................................................................................... 23 Balance Sheet of the Group........................................................................................................................ 24 Cash Flow Statement of the Group............................................................................................................. 26 Statement of Changes in Equity of the Group............................................................................................. 27 List of Notes to the Consolidated Financial Statements................................................................................ 31 Notes to the Consolidated Financial Statements......................................................................................... 32 Income Statement of the Egmont Foundation............................................................................................ 76 Balance Sheet of the Egmont Foundation................................................................................................... 77 Notes of the Egmont Foundation................................................................................................................ 78 The Board of Trustees and Management Board…....................................................................................... 81

Management’s review CONSOLIDATED FINANCIAL HIGHLIGHTS 2011 2010 2009

2008 (FSA)

2007 (FSA)

Key figures (EUR million) Revenue Profit before net financials, depreciation, amortisation and impairment losses (EBITDA) Operating profit (EBIT) Profit/(loss) on net financials

1,386.3

1,423.1

1,443.1

1,564.8

1,492.0

150.4

166.2

152.5

100.4

120.4

87.5

82.4

65.6

20.6

68.8

6.2

(7.0)

(1.6)

(5.6)

(3.9)

- of which profit/(loss) from investments in associates

8.3 (3.7) (8.8) (5.6) (3.7)

- of which financial income and expenses, net

(2.1)

(3.3)

7.2

0.0

(0.2)

Profit before tax (EBT)

93.7

75.3

64.0

15.1

64.9

Net profit for the year

73.6

49.6

66.2

2.6

52.0

1,294.8

1,267.0

1,192.4

1,111.9

1,122.6

Investments in intangible assets

43.6

41.6

40.6

57.7

7.9

Investments in property, plant and equipment

18.8

23.3

19.6

27.5

38.1

Net interest-bearing debt/(net balance)

(104.7)

(76.7)

31.2

145.2

49.0

Equity

505.9

461.1

421.5

382.1

435.7

Cash generated from operations

107.4

196.9

178.3

84.6

118.7

Balance sheet total

Financial ratios ( %) Operating margin

6.3

5.8

4.5

1.3

4.6

Equity ratio

39.1

36.4

35.4

34.4

38.8

Return on equity

15.2

11.0

16.2

0.2

13.0

4,161

4,312

4,754

5,134

4,399

Average number of employees

The key figures and financial ratios for 2011, 2010 and 2009 have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU. The key figures and financial ratios for 2008 and 2007 have not been adapted to IFRS and have been prepared in accordance with the Danish Financial Statements Act (FSA). The financial ratios have been calculated in accordance with the Danish Society of Financial Analysts’ ‘Recommendations and Financial Ratios 2010’. Please see the definitions and terms used in the accounting policies.

Management’s review

Egmont is a leading media group in the Nordic region. Our media world spans magazines, books, films, cinemas, interactive games and TV. Egmont publishes media in more than 30 countries and has 6,400 dedicated employees. Our vision is to be the most attractive media group for our employees and business partners as well as consumers. Egmont is a commercial foundation that donates a portionof its profits to help improve the lives of vulnerable children and young people. PROFIT IMPROVEMENT IN 2011 Revenue Egmont’s total revenue in 2011 amounted to EUR 1,386.3 million, 2.6 % lower than in 2010. Magazines and TV 2 generated higher advertising revenue, and TV 2 boosted income generated from distributors and user-paid services. The Nordisk Film distribution business experienced a decrease after a solid year in 2010. The divestment of book clubs and the music business contributed to lower revenue. 83 % of Egmont’s revenue is generated in the Nordic region. Earnings The profit before net financials, depreciation, amortisation and impairment losses (EBITDA) amounted to EUR 150.4 million in 2011, equivalent to a 10.8 % EBITDA margin. EBITDA was reduced by EUR 15.8 million compared with the previous year, primarily as a result of a lower activity level at Nordisk Film. Operating profit (EBIT) rose to EUR 87.5 million in 2011 compared with EUR 82.4 million in 2010. Magazines, Kids Media and TV 2 improved their performance, while Books and Nordisk Film recorded lower earnings than in 2010. The lower earnings in Books are primarily attributable to the adjustment of the Danish book business, while the lower level of activity in the distributionbusiness caused the earnings drop for Nordisk Film.

Net financials (excl. profit/(loss) from investments in associates) amounted to EUR (2.1) million against EUR (3.3) million in 2010. The Group recorded a pre-tax profit of EUR 93.7 million in 2011, against EUR 75.3 million in 2010, corresponding to a 24 % increase. This is Egmont’s best pre-tax profit ever. Tax on net profit for the year was EUR 20.1 million, equivalent to a tax rate of 21.4 %. The net profit for 2011 was EUR 73.6 million against EUR 49.6 million the year before. Balance sheet The balance sheet total increased by EUR 27.8 million to EUR 1,294.8 million. The Group’s net balance in the form of cash, cash equivalents and securities after the deduction of net interest-bearing debt rose from EUR 76.7 million in 2010 to EUR 104.7 million in 2011. The improvement results from the positive operating profit. Egmont’s equity at end-2011 amounted to EUR 505.9 million, an increase of EUR 44.8 million compared with 2010. Return on equity was 15.2 % compared with 11.0 % the year before. The equity ratio at end-2011 was 39.1 %, compared with 36.4 % in 2010. Cash generated from operations was EUR 107.4 million, down from EUR 196.9 million in 2010. The decline is due to the reduction in cash generated from working capital, provisions and increases in prepayments. CHANGES IN ACCOUNTING POLICIES In 2011 Egmont decided to present its consolidated financial statements according to the International Financial Reporting Standards (IFRS). The transition date was 1 January 2009. The effect of the transition to IFRS is explained in note 28 to the consolidated financial statements.

Management’s review

Egmont Magazines Revenue 2011: EUR 296 million (2010: EUR 284 million) Operating profit 2011: EUR 33 million (2010: EUR 25 million) Employees 2011: 1,044 (2010: 1,026)

With more than 100 titles in Denmark, Norway, Sweden and Finland, Egmont Magazines is among the Scandinavian market’s largest publishers of weeklies and magazines. Catering primarily for the consumer market, the magazines provide a vehicle for advertisers to reach attractive target groups. Egmont Magazines’ product portfolio includes family magazines, women’s and men’s magazines, illustrated weeklies, a broad selection of monthly and special interest magazines as well as a number of digital services and activities related to the division’s most popular brands. Egmont Magazines generated revenue of EUR 296 million in 2011, an increase of 4.2 % over the previous year. This improvement can be partly ascribed to an upturn in advertising income. Despite the economic recession during the second half of the year, advertising income from both print and digital publications rose in Denmark, Sweden and Norway. As a result, Egmont Magazines reinforced its market position in 2011. Operating profit increased, amounting to EUR 33 million in 2011, against EUR 25 million in 2010. The increase in earnings can chiefly be attributed to improvements in the Swedish business. Lastly, the various efficiency-enhancing initiatives implemented had a positive impact. However, the continuing decline in sale to non-subscribers of weeklies is having the reverse

Management’s review

effect, although Sweden is faring somewhat better than Denmark and Norway. The division’s overall share of the magazine market increased in 2011. Investments in digital activities were stepped up in 2011, and the division’s digital revenue increased more than the rest of the market. Furthermore various minor acquisitions were implemented to further strengthen digital activities. FAMILY MAGAZINES Egmont’s family magazines in Scandinavia – Hjemmet, Hemmets Journal, Norsk Ukeblad, Hendes Verden and Familien – had a total weekly circulation of 718,000, a decrease of 3.6 %. Despite this continued decline, family magazines remain a highly attractive part of the magazine portfolio. They have consistently generated earnings throughout the financial recession and are among the market bestsellers. In Norway Hjemmet, which celebrated its centenary in 2011, is a clear contender for the title of biggest weekly family magazine. In Sweden Hemmets Journal celebrated 90 years of publication. WOMEN’S MAGAZINES With its attractive advertising potential, the women’s magazine market remains highly competitive. Egmont Magazines commands a leading position in Denmark with ALT for damerne, the most powerful advertising medium in the Danish market for magazines and weeklies, and Eurowoman, the leading advertising medium in the women’s monthly magazine market. In Norway

stable growth in circulation enabled Camille to consolidate its position as Norway’s largest women’s magazine. Furthermore, in 2011 ALT for damerne was launched in Norway, where it is vying with other women’s magazine titles for market shares in a segment under intense pressure. MEN’S MAGAZINES Egmont Magazines commands a strong position in the market for men’s magazines. In Denmark, Euroman’s advertising sales have climbed steeply, and the magazine is now regularly published for iPad. In Norway Vi Menn is clearly the largest magazine for men, supplemented by the publication of Mann. Egmont Magazines has also acquired the rights to ALFA. In Sweden Egmont Magazines’ fashion magazine King has similarly boosted advertising sales and increased its circulation figures.

Rum both improved their performances despite keener competition. In 2010 Blossom was launched in Sweden, where weak sales prompted its closure in 2011. Living in Norway and Sirene in Denmark suffered the same fate. INTERACTIVE MEDIA Egmont Magazines continuously invests in digital media, both throughout the division and in each of the countries. Various digital platforms reinforce the division’s brands, and the digital channel is a key vehicle for subscription sales. The division also operates an array of websites, including the klikk.no portal in Norway, which once again generated strong traffic growth in 2011 and now ranks as Norway’s 15th largest internet universe. In 2011 Egmont Magazines also rolled out three new websites in Denmark, Norway and Sweden under the Hjemmet/Hemmets Journal brand. The venture is Egmont Magazines’ first joint Nordic digital project.

ILLUSTRATED WEEKLIES In Denmark and Norway Egmont Magazines leads the market in the segment for lower-priced illustrated weeklies, publishing HER&NU and Her & Nå, respectively. The total weekly circulation is 199,000 copies. In Denmark, HER&NU’s editorial makeover has put the magazine in better stead than the rest of the market. SPECIAL INTEREST MAGAZINES With more than 80 titles, Egmont Magazines commands a solid position in the Nordic market for special interest magazines and leads several country markets in the house-and-home, motor, boating, parenting, leisure, travel, health and hobby segments. In Norway Egmont Magazines, which now publishes five magazines in the house-and-home segment, bolstered its position in this market. The newest title, BoligDrøm, has gained a solid foothold in the market. In Denmark Gastro and

Management’s review

Egmont Kids Media Revenue 2011: EUR 395 million (2010: EUR 415 million) Operating profit 2011: EUR 25 million (2010: EUR 21 million) Employees 2011: 1,237 (2010: 1,248)

Egmont Kids Media is a leading provider of early reading experiences for children in 30 countries the world over. The division creates and sells magazines, books, digital media, games and merchandise for children and young people. In 2011 the division generated revenue of EUR 395 million, EUR 20 million less than the previous year. The European crisis hit the Central and Eastern European markets, lowering consumers’ incentive to buy. However, many companies in the division made adjustments and successfully launched new products, thus enabling them to compensate for the toughening conditions in many markets. The division thus recorded an operating profit of EUR 25 million, an improvement of EUR 4 million on the 2010 profit. The profit includes non-recurring costs related to personnel adjustments and impairment losses. Egmont Kids Media’s strategy is to revitalise its core business and strengthen market positions through effective portfolio management and new title launches. The division is also focusing on making the transition from print-only publisher to multiplatform publisher by investing in digital initiatives like e-publications, learn-and-play apps, edutainment platforms for pre-schoolers and e-commerce. NORDIC REGION Building on the good results achieved in 2010, the companies in the Nordic region exceeded financial expectations. In 2011 the Nordic organisation was consolidated under a single management body, a move that paves the

Management’s review

way for developing a more effective publishing house that can benefit from business synergies while retaining local expertise in editorial material, marketing and distribution. Norway and Sweden enjoyed resounding success with the publication of a book series containing the collected works of Donald Duck illustrator, Don Rosa. Other successful launches in the region included a Lego magazine and new editions of the local Julia/Olivia and Goal brands repackaged for younger children. Numerous activities celebrating the 60th anniversary of the Petzi brand also attracted massive consumer interest. CENTRAL AND EASTERN EUROPE All Egmont Kids Media’s activities in Central and Eastern Europe were integrated under a single management structure. The division consolidated its key partnerships with licence holders by acquiring rights to Disney’s Marvel universe as well as new rights from Hasbro (Transformers) and Cartoon Network (Generator Rex) and by extending an agreement regarding the popular Hello Kitty brand. A new partnership secured the rights to the Maya the Bee brand in the region. Finally, Egmont Kids Media continued to develop its strong portfolio of fiction titles for children and young people, riding the wave of good results recorded in Turkey and Bulgaria. GERMAN-SPEAKING COUNTRIES Egmont Ehapa maintained its market-leading position in the region by focusing strongly on its core business: the Mickey Mouse and Wendy magazines, which avoided

the general market decline in circulation, like the Disney Pocket Books, which recorded a 10 % sales increase. The launch of 20 new titles and a 45 % increase in internet sales also contributed to the favourable results. The German company VGS re-profiled its publication portfolio, which resulted in a new imprint for young people, INK, and the closure of a non-fiction label. With 1.6 million books sold, the publisher Lyx soared to a number two ranking in its genre and added a new sub-category focusing on crime fiction. ENGLISH-SPEAKING COUNTRIES In the UK Egmont Kids Media renewed a number of major licences, including the rights to Thomas the Tank Engine, and launched an all-new music magazine for teenagers, We Love Pop, with great success. Egmont USA continued to grow in its second publishing year, and one of Egmont’s local authors, Walter Dean Myers, received the prestigious title of US National Ambassador for Young People’s Literature. Despite the closure of The Red Group, Australia’s largest bookstore chain, Hardie Grant Egmont recorded growth rates driven in part by such hit new series as Billie B Brown. Finally, the bestselling cartoon series Tintin and the popular novel War Horse enjoyed an upsurge in interest following the 2011 premieres of Steven Spielberg blockbusters based on these brands.

publications. The successful publication of an array of children’s bestsellers by well-known local authors helped to reinforce the company’s second-place market position in an increasingly competitive market. The worst floods in Thailand for 50 years brought all business in the region to a standstill in the fourth quarter of 2011, which affected the results for the year recorded by the Egmont Kids Media joint venture with The Nation Group. DIGITAL MEDIA In 2011 Egmont Kids Media established a new digital organisation and strategy. Combining stories, games and film in a successful entertainment platform for pre-school children and their parents, the Nordic online universe of Petzi’s World has ranked number one on the iTunes Nordic children’s list every weekend since its introduction in April 2011. The division also invested in a 24.42 % stake of the edutainment universe abcity.dk, where children can learn the alphabet and improve their reading skills. The Nordic Donald Duck magazine went online in an app version, and in Eastern Europe the edutainment portal Pluszaki for pre-schoolers was launched in the fourth quarter of 2011.

ASIA Egmont Kids Media continued its good performance in China in 2011 despite a tough macro-economic climate. A number of factors underpinned the revenue increase from Children’s Fun Publishing: the company recorded healthy results in the book business and rising numbers of magazine subscribers; it added new science, education and parenting categories to the book range; and it embraced new media platforms, including digital

Management’s review

Egmont Books Revenue 2011: EUR 146 million (2010: EUR 156 million) Operating profit 2011: EUR 0 million (2010: EUR 3 million) Employees 2011: 503 (2010: 512)

Egmont Books develops and produces literary fiction, non-fiction, children’s books, audio books, e-books and educational media that entertain readers and give them insight and knowledge. Egmont Books comprises Norway’s leading book publishing house Cappelen Damm and the Danish publisher Lindhardt og Ringhof. Egmont’s non-Scandinavian book publishing activities are part of Egmont Kids Media. CAPPELEN DAMM Cappelen Damm is Norway’s largest book publisher with activities spanning general literature, education, book clubs, e-commerce, the bookstore chain Tanum, which has 17 book dealers in the Oslo area, and the distribution business Sentraldistribusjon. The publishing house is coowned equally by Egmont and Bonnier. Cappelen Damm consolidated its market position in 2011 and is a clear leader in the market for general literature – children’s books, literary fiction, non-fiction and documentaries. Cappelen Damm is also a market leader in the market for books for upper secondary schools and commands a strong second position in books for primary and lower secondary schools. Cappelen Damm delivered its best-ever performance in 2011, reflecting ongoing improvement despite the drop in revenue due to the decline in the primary and lower secondary school market as a whole and a weaker bookclub market. Several publications attracted great interest in 2011. Cappelen Damm’s authors won three of a possible five Brage awards at the annual awards ceremony in November. The Norwegian flagship and café bookstore, Tanum Karl Johan in Oslo, re-opened in September after extensive renovation. In early 2012 Cappelen Damm acquired educational materials and textbook publisher Høyskoleforlaget in Kristiansand.

Management’s review

The acquisition was part of a strategic plan to strengthen the company’s market position in academic literature. LINDHARDT OG RINGHOF The division’s Danish activities are concentratedin Denmark’s second-largest publisher, Lindhardt og Ringhof, which includes its subsidiaries Alinea, Akademisk Forlag, L&R Business and Carlsen. A change in company management was effected in April 2011. In addition, employee numbers were reduced and the book clubs sold to Gyldendal. A wide range of adjustments costs were also conducted. As a consequence, the financial results are unsatisfactory. Despite the radical changes, Lindhardt og Ringhof has not only retained its most important authors, but also attracted big names such as Johannes Møllehave, who is making a comeback. The company enhanced its literary fiction profile, while the non-fiction department further cemented its lead in cookbooks, lifestyle, history, society and culture. The publishing house established a digital editorial department and now offers a selection of over 1,000 e-books for sale, available on iBooks. The ‘e-book of the month’ concept launched in association with SAXO. com has been a success. During the year Lindhardt og Ringhof published approximately 580 new titles. The bestsellers included Leif Davidsen’s short story collection Utahs Bjerge, Jens Andersen’s royal biography M – 40 år på tronen and Claus Meyer’s cookbook Kager. Carlsen’s Pixi Alfabetet was another topseller. In 2011 the educational publishers focused on developing and investing significantly in digital learning media in preparation for the transition primary and lower secondary schools will make from analogue to digital materials in the coming four years. Alinea was Denmark’s largest supplier of digital learning media at end-2011.

Egmont Nordisk Film Revenue 2011: EUR 334 million (2010: EUR 390 million) Operating profit 2011: EUR 11 million (2010: EUR 18 million) Employees 2011: 798 (2010: 946)

Egmont Nordisk Film is the leading developer, producer and distributor of creative content in the Nordic region. The division creates and tells stories through the media of film, TV and interactive games. Revenue amounted to EUR 334 million in 2011 against EUR 390 million in the previous year. Whereas 2010 was a good year, revenue in 2011 decreased because the film distribution business distributed fewer games and films and the music business were divested. Operating profit amounted to EUR 11 million, against EUR 18 million in 2010. The decline is attributable to the lower level of activity in 2011 compared with the previous year. FILM Egmont Nordisk Film produces and distributes feature films, animations and TV series, both as in-house productions and in association with Nordic and other international partners. The critically acclaimed feature film R collected eight Danish ‘Robert’ awards and three ‘Bodil’ statues and was a highly popular rental title in 2011. Klassefesten sold 517,000 cinema tickets, thus becoming the most-viewed Danish film, while Dirch, co-produced by Nordisk Film, sold 485,000 tickets. Both titles helped improve the performance of Film Production, which also distinguished itself in 2011 by re-releasing Qivitoq on DVD and, in the television medium, by producing a documentary series about the Danish royal jewels, De kongelige juveler, and co-producing the Swedish TV series Arne Dahl.

The joint-venture company Zentropa implemented a a business restructuring and delivered significantly better results. In 2011 Susanne Bier’s In a Better World won an Oscar and a Golden Globe, and both In a Better World and Lars von Trier’s Melancholia received European Film Awards. Egmont sold 0.3 % of the shares in Zentropa, which means that as of 1 October 2011 it is recognised as an associate with an ownership share of 49.7 % rather than as a jointly controlled company. Nordisk Film Distribution released 58 cinema titles produced either in-house or by other production companies across the Nordic region. In 2011 Nordisk Film distributed roughly one in every six cinema films shown in the Nordic countries. The Twilight Saga: Breaking Dawn Part 1 sold 1,350,000 tickets, and expectations for Part 2, slated for release in November 2012, are high. The independent title The Fighter was nominated for seven Oscar awards and won two. Furthermore the TV mini-series Millennium, based on the successful trilogy by Stieg Larsson, was awarded an Emmy. Once again Egmont Nordisk Film was behind some of the biggest locally produced Scandinavian film titles in 2011. In its home country 560,000 cinema guests saw the Norwegian action thriller Headhunters, which sold 217,000 tickets in Denmark. The film was also Norway’s

Management’s review

bestselling Norwegian DVD title, with over 300,000 copies sold. In Sweden Beyond sold 380,000 cinema tickets and also collected three Guldbagge awards.

all ticket sales in Denmark. Like the cinema commercials company Dansk Reklame Film, the company fared well in a media market under pressure.

In 2011 growth rates for VideoOnDemand distribution repeated their upward rise in step with consumers’ expanding options for watching films through a variety of different media and platforms.

INTERACTIVE GAMES 2011 was a good year for PlayStation, which recorded sales exceeding 300,000 PS3 consoles in the Nordic region and captured a market share of over 45 %. Reducing the console price in September enabled PlayStation to gain a firm hold on a new group of consumers, a development underpinned by the continued success of the motion controller MOVE. MOVE has been particularly popular with families and others wishing to use PlayStation as a social experience, and a broad spectrum of new social and active entertainment titles were released in 2011.

In 2011 the Nordisk Film Shortcut post-production companies continued to gear their activities to the digital future. A new digital company was established in Sweden, and in Denmark activities in the analogue film laboratory were substantially reduced. CINEMAS Nordisk Film Cinemas sold 5.4 million cinema tickets in Denmark and 354,000 in Norway. The Danish cinema market fell by 4.5 % compared to 2010. The numerous discounted tickets sold and the relatively small number of higher-priced tickets for extra-length features and 3D films brought a drop in average ticket prices for the first time in many years. The first sod was turned for the construction of a new cinema in Næstved, due to open in March 2012. Finally, Nordisk Film Cinemas started the process of digitalising the cinema chain, planned to be completed by early summer 2012. Kino.dk runs Denmark’s leading film website, handling ticket transactions that represent approximately 70 % of

Management’s review

2011 also brought a wide range of major titles targeted more specifically at traditional PlayStation audiences. Uncharted 3, released on 1 November, was the year’s unchallenged success, selling over 100,000 copies, while other sequels to major, well-known series such as Killzone, Little Big Planet, Resistance and Ratchet & Clank maintained their popularity throughout the year. Sales of accessories, in particular extra controllers, exceeded expectations, reflecting the fact that PlayStation has become a predominantly social experience.

TV 2, Norway Measured by daily use, TV 2 is Norway’s largest commercial media house. Seven out of ten Norwegians use one or more TV 2 products every day, and TV 2 is among Norway’s unequivocally strongest brands. TV 2 is a leading supplier of news, sports and entertainment through television, the internet, mobile phones and tablet computers. In 2011 TV 2 was 50/50 co-owned by Egmont and A-pressen. In February 2012 Egmont acquired A-pressen’s stake at a price of NOK 2.1 billion, thus making it a wholly owned Egmont company. In 2011 TV 2 generated revenue of NOK 3,197 million against NOK 2,704 million in 2010. TV 2’s operating profit was NOK 485 million compared with NOK 335 million in 2010. Like the profit from the previous year, this year’s profit represents TV 2’s best to date. For the first time, TV 2 has also generated revenue exceeding NOK 3 billion. The profit is ascribable to a combination of a more favourable advertising market and growth in pay-per-transaction income from more recently added business areas such as pay-TV and internet services. TV 2 contributed EUR 210 million to the Egmont Group’s revenue and EUR 27 million to operating profit. TV 2’s total share of viewers was unchanged in 2011. In January 2012 TV 2 acquired Telenor’s 45 % shareholding in TV 2 Zebra AS, thus becoming the sole proprietor. TV 2 Zebra runs the TV channels TV 2 Zebra and TV 2 SPORT. TV 2 (MAIN CHANNEL) TV 2 commanded a market share of 19.3 % in 2011, down from 20.5 % in 2010. Fierce competition in the TV

market and the continued introduction of niche channels largely account for the main channel’s decline. On 18 December 2011 TV 2 set a new viewing record when 1,611,000 viewers tuned in to the world cup handball final for women between Norway and France. The final of Idol, watched by 1,475,000 Norwegians in 2005, held the former record. Norway was struck by a terrorist attack on 22 July 2011. For the first few days all coverage was transferred to the main channel, which broadcast news non-stop for 56 hours 11 minutes. TV 2 ZEBRA In 2011 TV 2 Zebra held a market share of 2.7 %, down from 3.0 % in 2010. TV 2 Zebra’s content consists largely of entertainment and sport. TV 2 BLISS Launched in October 2010 TV 2 Bliss is an entertainment channel catering specially for young women. In 2011 it had a market share of 1.4 %. The launch of TV 2 Bliss is a key reason that TV 2’s share of the total market remained stable in 2011. TV 2 NYHETSKANALEN TV 2 Nyhetskanalen celebrated its fifth anniversary on 15 January 2012. The channel has consistently increased its market share, which has climbed from 0.5 % in 2007 to 2.2 % in 2011. The channel has intensified competition among current affairs programmes in Norway and evolved into one of Norwegians’ chief sources of news – particularly for major events.

Management’s review

TV 2 FILMKANALEN TV 2 Filmkanalen airs films 24 hours a day. The channel was given a face-lift in 2011 and now has a market share of 0.7 %, a percentage that has remained stable since the channel launch in 2007. TV 2 SPORT Norwegian Tippeliga football matches constitute the primary content of TV 2 SPORT. TV 2 PREMIER LEAGUE TV 2 broadcasts Premier League programmes on three HD TV channels: TV 2 PL HD 1, TV 2 PL HD 2 and TV 2 PL HD 3. The channels broadcast nearly all games from the best English division in HD. The studio is located in Bergen. TV 2 took over the rights to broadcast Barclays Premier League games starting with the 2009/2010 season. TV 2 SUMO TV 2 Sumo is the largest commercial internet-based TV supplier in the Nordic region. Subscribers to TV 2 Sumo have access to all TV 2’s TV channels, an extensive programme library and an interactive live centre based on sport that invites viewers to share a social viewing experience. In 2011 TV 2 Sumo was launched for iPad, and many content elements became available on iPhone. In time TV 2 Sumo will also be accessible on other mobile platforms. In 2011 the number of subscribers increased by 50 %.

Management’s review

TV 2.NO In 2011 TV 2 once again enjoyed strong growth on the internet and mobile platforms. During the year tv2.no recorded a 37 % increase in traffic after a 31 % growth rate in 2010. In 2011 tv2.no thus ascended from 11th to 7th place on the list of largest Norwegian websites. PURCHASE OF TV RIGHTS TO THE OLYMPIC GAMES In June 2011 TV 2 announced its acquisition of the TV broadcasting rights to the 2014 Winter Olympics in Sotsji, Russia, and the 2016 Summer Olympics in Rio de Janeiro, Brazil. TV 2 has acquired all rights to all platforms, from TV to the internet and mobile platforms. SUBSIDIARIES TV 2 Mediehuset owns the subsidiaries OB-Team, TV 2 Torget, Vimond and Mosart Medialab, and holds ownership shares in RiksTV (33.33 %) and Norges televisjon (33.33 %).

The Charitable Activities Since 1920 the Egmont Foundation has donated approximately EUR 250 million to support social and cultural initiatives. In 2011 Egmont’s financial support amounted to EUR 6.4 million, EUR 470,000 of which was donated via the Nordisk Film Foundation. The Egmont Foundation is a commercial foundation that re-invests its profit in the media business and charitable activities. The Foundation’s charitable vision is to help give children and young people a good life by supporting their active and committed participation in society.

2011 showed that times of crisis pose a special challenge to those in need of protection and support. The Egmont Foundation is therefore looking forward to raising its level of grants by 20 % in 2012 and intensifying its efforts to help Danish children and young people lead the best lives possible.

The Foundation supports projects that incorporate a learning perspective or help children and young people to handle life crises. In addition, the Foundation provides direct financial support to vulnerable families in need of help for special purposes like holidays, Christmas or recreational activities for children or for re-establishing a home after a stay in a crisis centre. Lastly, the Nordisk Film Foundation, also part of the Egmont Foundation, grants support to the Danish film industry every year.

FROM THE PERSPECTIVE OF VULNERABLE CHILDREN Throughout its almost century-long history, the Egmont Foundation has provided support to the most vulnerable children and families in Danish society. These are families who are often subjected to several life crises at once, e.g. experiencing violence, abuse and divorce close at hand. The children in such families need special care and support, for which reason the Foundation focused its efforts on this group in 2011. To this end, the Foundation increased its direct financial support to vulnerable families and implemented effective projects such as Mødrehjælpen’s counselling service for women and children exposed to domestic violence.

SIGNS OF CRISIS IN SOCIETY In 2011 Danish families felt the true impact of the European debt crisis and the general economic recession. The Egmont Foundation’s charitable work in 2011 also reflected the crisis. For example, Christmas aid applications alone rose by 139 % compared with 2010. The Foundation also received many requests for support from public institutions and private organisations that work with the most vulnerable groups in society.

The Foundation always makes fostering the well-being and education of vulnerable children and youth a top priority. Support must be offered in cases of urgent need, but these children and young people also benefit from self-help assistance. This approach instils a sense of dignity, the best foundation for a good life. Ensuring that vulnerable children and young people get a good education is one of the best ways to help them help themselves. In 2011 the Egmont Foundation therefore

Management’s review

took the initiative for an upcoming signature project to provide compassionate teaching and learning for children and young people in care. NORDISK FILM FOUNDATION 2011 Since 1992, as Denmark’s largest private media foundation and part of the Egmont Foundation, the Nordisk Film Foundation has granted support to the Danish film industry. In 2011 the Foundation donated EUR 470,000. Approximately 60 % of the Foundation’s support funds go towards developing creative talent and skills, about 30 % towards supporting industry development and internationalisation, and about 10 % towards upholding film culture throughout Danish society. The following are examples of notable donations: • In 2011 the Nordisk Film Foundation awarded a total of EUR 94,146 to help about 29 young, gifted filmmakers study at international media schools. • The National Film School of Denmark and the Super16 film school received support for study trips, graduation films, etc, totalling EUR 12,198.

Management’s review

• Nordisk Film donated EUR 26,899 for the development of a European cross-media programme in Copenhagen. • In 2011 the Nordisk Film Pris talent award went to scriptwriter Anders August, while the Ballings Rejselegat travel grant was awarded to film director Martin Zandvliet. • A number of conferences and festivals with an international slant received EUR 81,000 during the year. Finally, the Foundation donated EUR 43,000 to the Danish Film Institute (DFI) for a project to digitalise old film reels.

Management’s review PROFIT FOR THE EGMONT FOUNDATION The profit of the Egmont Foundation, the parent entity of the Egmont Group, excluding dividends from equity investments in subsidiaries, was EUR 3.3 million. The Foundation’s Commercial Activities primarily comprise royalty income from the Foundation’s publishing rights and management of the Foundation’s assets. In 2011 the Egmont Foundation changed its accounting policies such that investments in subsidiaries are recognised at cost. The impact was a EUR 135.5 million reduction of equity as at 1 January 2010; see note 1 to the financial statements of the Foundation. ORGANISATION In January 2011, an election was held in the Group to select employee representatives for the Board of Trustees of the Egmont Foundation. Peder Høgild and Anna von Lowzow were re-elected, while Marianne Oehlenschlæger was elected as a new board member. The changes took effect following the Annual Meeting in March 2011. CORPORATE GOVERNANCE Based on the most recent recommendations from the Committee on Corporate Governance, the Board of Trustees and Management Board have updated the description of the framework for Corporate Governance at Egmont. This framework is described in full on Egmont’s website (www.egmont.com). Egmont meets the above-mentioned Corporate Governance recommendations, with the exception of recommendations that are irrelevant because the parent entity, the Egmont Foundation, is a commercial foundation.

CORPORATE SOCIAL RESPONSIBILITY Egmont is committed to meeting current international standards for human rights, the environment, working conditions, business ethics and consumer matters. In 2005 Egmont formulated a Code of Conduct, a defined set of standards concerning human rights, the environment and working conditions that Egmont requires its companies and suppliers to meet. Egmont’s Code of Conduct can be read in its entirety on the Egmont website (www.egmont.com). Egmont’s Social Compliance Programme and other initiatives have since focused on the issue of enforcing these requirements. In 2011 new managers at Egmont attended courses that included Egmont’s Code of Conduct as a fixed element on the agenda. In 2011 Egmont Sourcing (HK) Ltd, whose main task is to purchase and quality-assure cover mounts, made another round of inspection visits, primarily to Egmont’s Asian suppliers. As some of these inspection visits are carried out as part of Egmont’s Social Compliance Programme, the focus is on social audits. The factory’s procedures and quality control systems are also reviewed. The inspection visits have resulted in the specific training of our suppliers, particularly as regards the legal requirements concerning chemicals (REACH) as well as in recommendations to our suppliers regarding human rights, working conditions and the environment. Towards the end of 2011 a centralised purchasing organisation was established for cover mounts, Egmont Kids Media Sourcing. The objective of the organisation is to ensure that Egmont’s cover-mount purchasers use effective purchasing processes. In cooperation

Management’s review

with Egmont Social Compliance and Egmont Hong Kong’s QA/QC team, the organisation also ensures that Egmont’s purchasers provide better control and focus on product safety. Recommendations for process improvements will be available in 2012. In 2005 Egmont UK established the Egmont Grading System, a paper standard to ensure that trees from endangered rain forests are not used for paper production. The Egmont Grading System has since become an industry standard in the UK under the title ‘Publishers Database for Responsible Environmental Paper Sourcing’ (PREPS). In 2011 Egmont companies in the UK, Germany and Norway used the system, and efforts will be made in 2012 to extend its use to other Egmont companies. More information about these initiatives will be available in the course of 2012 at www.egmont.com. SPECIAL RISKS Part of the Egmont Group’s business is based on stable, long-standing relations with some of the world’s leading rights holders. Egmont’s strength and geographic breadth underpin its constant efforts to sustain and expand these partnerships.

Management’s review

Furthermore, by virtue of its activities the Egmont Group is exposed to various financial risks. Please refer to note 23, Financial risks and financial instruments. OUTLOOK FOR 2012 Egmont will carry on developing media platforms, continuously adapting its media products to changing consumer needs, profitability programmes and efficiency-enhancing measures. The greatest uncertainty is associated with advertising revenue, which is sensitive to economic fluctuations. SUBSEQUENT EVENTS In February 2012 Egmont acquired the remaining 50 % shareholding in TV 2, Norway. TV 2, Norway, will be recognised in full in Egmont’s consolidated financial statements as of 1 February 2012, which will positively impact Egmont’s total revenue and profit for 2012, as these items were formerly recognised at 50 %. Egmont additionally acquired all shares in Venuepoint Holding ApS (Billetlugen) on 9 March 2012. Please refer to note 26, Subsequent events.

Statement by the Board of Trustees and Management Board The Board of Trustees and Management Board have today discussed and approved the annual report of the Egmont Foundation for the financial year 1 January - 31 December 2011. The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional Danish disclosure requirements according to the Danish Financial Statements Act. The financial statements of the Egmont Foundation have been prepared in accordance with the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter.

the Foundation’s financial statements give a true and fair view of the Group’s and the Foundation’s assets, liabilities, and financial position at 31 December 2011, and of the results of the Group’s and the Foundation’s operations and the consolidated cash flows for the financial year 1 January - 31 December 2011. Furthermore, in our opinion, the Management’s review gives a fair review of the development in the Group’s and the Foundation’s activities and financial matters, the net profit of the year and the Group’s and the Foundation’s financial position. Copenhagen, 26 March 2012

In our opinion, the consolidated financial statements and

MANAGEMENT BOARD:

Steffen Kragh President and CEO

Hans J. Carstensen

BOARD OF TRUSTEES:

Mikael Olufsen Chairman

Steen Riisgaard Vice Chairman

Ulrik Bülow

Peder Høgild

Lars-Johan Jarnheimer

Anna von Lowzow

Jeppe Skadhauge

Torben Ballegaard Sørensen

Marianne Oehlenschlæger

Statement by the Board of Trustees and Management Board

Independent Auditor’s Report TO THE BOARD OF TRUSTEES OF THE EGMONT FOUNDATION AUDITOR’S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FOUNDATION’S FINANCIAL STATEMENTS We have audited the consolidated financial statements and the Foundation’s financial statements for the financial year 1 January – 31 December 2011. The consolidated financial statements and the Foundation’s financial statements comprise the income statement, balance sheet and notes, including accounting policies for both the Group and the Foundation, as well as the statement of comprehensive income, statement of changes in equity and cash flow statement for the Group.

in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional disclosure requirements according to the Danish Financial Statements Act (the consolidated financial statements), as well as the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter (the Foundation’s financial statements). Moreover, the Management is responsible for the internal control considered necessary by them to prepare consolidated financial statements and financial statements for the Foundation that are free from material misstatement, whether due to fraud or error.

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional disclosure requirements according to the Danish Financial Statements Act. The Foundation’s financial statements are prepared in accordance with the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter.

AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on the consolidated financial statements and the Foundation’s financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish Audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and the Foundation’s financial statements are free from material misstatement.

MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FOUNDATION’S FINANCIAL STATEMENTS The Management is responsible for the preparation of consolidated financial statements and financial statements for the Foundation that give a true and fair view

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and the Foundation’s financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated

Independent Auditor’s Report

financial statements and the Foundation’s financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Foundation’s preparation of consolidated financial statements and the Foundation’s financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as the overall presentation of the consolidated financial statements and the Foundation’s financial statements We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

according to the Danish Financial Statements Act in respect of the consolidated financial statements, and in accordance with the Danish Financial Statements Act and the financial reporting requirements of the Foundation’s Charter in respect of the Foundation’s financial statements. STATEMENT ON THE MANAGEMENT’S REVIEW Pursuant to the Danish Financial Statements Act, we have read the Management’s review. We have not performed any other procedures in addition to the audit of the consolidated financial statements and the Foundation’s financial statements. On this basis, it is our opinion that the information provided in the Management’s review is consistent with the consolidated financial statements and the Foundation’s financial statements.

Copenhagen, 26 March 2012 Our audit has not resulted in any qualification.

OPINION In our opinion, the consolidated financial statements and the Foundation’s financial statements give a true and fair view of the Group’s and the Foundation’s financial position at 31 December 2011, and of the results of the Group’s and the Foundation’s operations and the consolidated cash flows for the financial year 1 January - 31 December 2011 in accordance with the International Financial Reporting Standards, as adopted by the EU, and additional disclosure requirements

KPMG Statsautoriseret Revisionspartnerselskab

Jesper Ridder Olsen State-Authorised Public Accountant

Independent Auditor’s Report

Income Statement of the Group (EURk) Note

Revenue

2011

2010

2009

1,386,320

1,423,112

1,443,148

Change in inventories of finished goods and work in progress

Other operating income

Raw materials and consumables

Other external expenses

4 Personnel costs

(702)

2,117

9,378

10,851

12,744

28,282

(60,444)

(55,651)

(63,748)

(859,641)

(899,671)

(930,807)

(323,151) (308,619) (325,689)

Depreciation, amortisation and impairment losses; property plant and equipment and intangible assets

Other operating expenses

(2,849)

(7,845)

(8,027)

Operating profit

87,541

82,380

65,629

(62,843) (83,807) (86,908)

Profit/(loss) after tax from investments in associates

Financial income

8,263

(3,655)

(8,751)

13,226

13,468

28,269

7 Financial expenses

(15,308) (16,861) (21,137)

93,722

Profit before tax

75,332

64,010

Tax on profit for the year

(20,082)

(25,689)

2,209

Net profit for the year

73,640

49,643

66,219

Attributable to:

The Foundation

Non-controlling interests

Total

Income Statement of the Group

71,980

47,826

63,060

1,660

1,817

3,159

73,640

49,643

66,219

Statement of Comprehensive Income of the Group (1.000 EURk) Note

2011

2010

2009

Net profit for the year

73,640

49,643

66,219

Foreign exchange adjustments on translation to presentation currency

1,207

(1,140)

(825)

Foreign exchange adjustments on translation of foreign entities

(2,826)

5,718

(2,834)

Value adjustments of hedging instruments:

Value adjustments for the year

Value adjustments transferred to financial expenses

Actuarial gains/(losses) on defined benefit pension plans

Tax on other comprehensive income

Other comprehensive income after tax

(14,083)

(6,550)

(1,988)

3,877

3,925

3,739

(14,714)

(2,982)

1,559

4,360

1,057

(352)

(22,179)

(701)

Total comprehensive income

51,461

49,671

65,518

Attributable to:

The Foundation

Non-controlling interests

Total

49,647

47,609

1,814

2,062

61,810 3,708

51,461

49,671

65,518

Statement of Comprehensive Income of the Group

Balance Sheet of the Group at 31 december (1.000 EURk) 1 January Note Assets 2011 2010 2009 2009

Film rights, etc.

38,047

35,143

44,672

58,776

In-house produced film rights

Goodwill

8,232

15,551

13,293

13,073

90,426

93,037

97,678

Trademarks

44,580

95,456

44,209

40,970

34,744

Intangible assets under development and prepayments for film rights 24,320 15,809

13,536

7,655

Intangible assets

210,149

209,704

205,605

203,749

Land and buildings

173,797

178,440

186,183

190,276

Plant and machinery

16,482

18,943

18,807

18,912

Tools and equipment

17,402

19,744

20,801

19,065

Leasehold improvements

3,812

4,540

5,399

5,901

Property, plant and equipment under construction

6,264

3,319

1,752

4,929

Property, plant and equipment

217,757

224,986

232,942

239,083

Investment properties

30,938

30,854

30,907

30,870

Investments in associates

Other investments

12,238

9,335

10,462

3,841

3,897

3,898

19,715 4,953

Deferred tax

22,156

22,184

17,840

26,738

Other non-current assets

38,235

35,416

32,200

51,406

Total non-current assets

492,535

495,005

506,198

531,063

Inventories

128,855

129,259

135,712

151,396

Trade receivables

Receivables from associates

206,773

231,087

234,997

3,648

2,405

3,342

246,591 3,382

Other receivables

60,811

60,663

81,185

58,229

Prepayments

64,432

47,478

38,575

45,385

Receivables

335,664

341,633

358,099

353,587

Securities

183,439

152,321

30,289

19,256

Cash and cash equivalents

154,259

148,807

162,061

36,220

Total current assets

802,217

772,020

686,161

560,459

TOTAL ASSETS

Balance Sheet of the Group at 31 december

1,294,752

1,267,025

1,192,359

1,091,522

Balance Sheet of the Group at 31 december (continued)

1 January Note Equity and liabilities 2011 2010 2009 2009

Capital fund

29,593

29,513

29,564

29,528

Other reserves

(20,348) (7,357) (10,021) (7,193)

Transferred comprehensive income

487,793

431,056

395,321

342,170

Foundation’s share of equity

497,038

453,212

414,864

364,505

Non-controlling interests

8,848

7,919

6,636

2,939

Equity

505,886

461,131

421,500

367,444

Pensions

Deferred tax

48,642

32,591

25,649

25,064

7,945

6,661

1,421

24,891

Other provisions

11,056

10,125

5,878

3,909

Mortgage debt

112,612

112,307

112,608

21,767

Other credit institutions

38,572

38,140

42,118

44,692

Other financial liabilities

7,891

5,922

6,878

6,802

Deferred income

5,002

5,252

11,370

11,609

Non-current liabilities

231,720

210,998

205,922

138,734

Other credit institutions

71,627

65,159

59,269

123,895

Prepayments from customers

56,611

54,267

49,846

47,237

Trade payables

201,749

222,370

225,789

221,455

Corporate income tax, etc.

13,637

18,175

9,241

3,154

Other payables

132,292

138,935

131,026

114,117 45,527

Other provisions

58,149

66,227

61,370

Deferred income

23,081

29,763

28,396

29,959

Current liabilities

557,146

594,896

564,937

585,344

Total liabilities

788,866

805,894

770,859

724,078

TOTAL EQUITY AND LIABILITIES

1,294,752

1,267,025

1,192,359

1,091,522

Balance Sheet of the Group at 31 december

Cash Flow Statement of the Group (1.000 EURk) Note

2011

2010

2009

87,541

82,380

65,629

Operating profit

Adjustment for non-cash operating items, etc.:

Depreciation, amortisation and impairment losses

62,843

83,807

86,908

Other non-cash operating items, net

(1,376)

(1,160)

(16,214)

Provisions and deferred income

(11,152)

21,797

30,716

Cash generated from operations before change in working capital

137,856 186,824 167,039

Change in inventories

(925)

12,536

26,811

Change in receivables

11,119

30,970

13,567

Change in trade payables and other payables

(40,649)

(33,462)

(29,113)

Change in working capital (30,455) 10,044 11,265 Cash generated from operations 107,401 196,868 178,304

Interest received

10,921

4,915

6,868

Interest paid

(10,527)

(14,106)

(16,155)

Corporate income tax paid

(20,331)

(16,183)

(6,354)

Cash flows from operating activities 87,464 171,494 162,663

Acquisition of intangible assets

(43,550)

(41,618)

(40,619)

Acquisition of property, plant and equipment

(18,798)

(23,305)

(19,613)

Disposal of property, plant and equipment

2,618

4,211

2,811

Acquisition of financial assets

(1,812)

(1,115)

(4,173)

Disposal of financial assets

10,226

3,695

Acquisition of securities

(73,430)

(151,401)

(27,188)

Disposal of securities

43,150

26,846

15,647

Acquisition of subsidiaries and jointly controlled entities

(296)

(1,117)

(400)

Disposal of subsidiaries and jointly controlled entities

805

3,992

25,000

Cash flows from investing activities (81,087) (183,507) (44,840)

Net addition from payables to credit institutions, etc.

Dividends to non-controlling shareholders

Donations

3,258

(5,466)

5,945

(447)

(704)

(621)

(7,403) (6,747) (6,895)

Cash flows from financing activities (4,592) (12,917) (1,571) Net cash flows from operating, investing and financing activities 1,785 (24,930) 116,252

Cash and cash equivalents at 1 January

Foreign exchange adjustment of cash and cash equivalents

Cash and cash equivalents at 31 December

148,807

162,061

36,220

3,667

11,676

9,589

154,259

148,807

162,061

The cash flow statement cannot be derived directly from the balance sheet and income statement. The cash and cash

equivalents at the reporting date include cash and cash equivalents pledged as security in the amount of 8,448 (2010:

8,378 and 2009: 3,360); see note 15.

Cash Flow Statement of the Group

Statement of Changes in Equity of the Group (1.000 EURk) Capital fund Equity at 1 January 2011 Net profit for the year Foreign exchange adjustments on translation to presentation currency Foreign exchange adjustments on translation of foreign entities

Reserve for hedging transactions

Reserve for foreign exchange adjustments

Transferred compre Nonhensive controlling income interests

Total equity

29,513

(9,446)

2,089

431,056

7,919

461,131

71,980

1,660

73,640

(73)

1,172

1,207

(2,958)

132

(2,826)

Value adjustments of hedging instruments: Value adjustments for the year

(14,083)

Value adjustments transferred to financial expenses

3,877

Actuarial gains/(losses) on defined benefit pension plans

(14,714)

Tax on other comprehensive income

240

4,120

Other comprehensive income

(10,039)

(2,952)

(9,422)

154

4,360

Total comprehensive income in 2011

(10,039)

(2,952)

62,558

1,814

51,461

(22,179)

Used for charitable purposes and associated costs

(7,403)

Acquisition/disposal, non-controlling interests

(438)

Dividends, non-controlling interests

(447)

Other capital items

1,582

29,593

(19,485)

(863)

487,793

8,848

505,886

Equity at 31 December 2011

Statement of Changes in Equity of the Group

Statement of Changes in Equity of the Group (continued)

Capital fund Equity at 1 January 2010

Reserve for hedging transactions

29,564

(6,642)

Reserve for foreign exchange adjustments (3,379)

Transferred compre Nonhensive controlling income interests 395,321

Total equity

6,636

421,500

Net profit for the year Foreign exchange adjustments on translation to presentation currency Foreign exchange adjustments on translation of foreign entities

47,826

1,817

49,643

(51)

(401)

(683)

(11)

(1,140)

5,462

256

5,718

Value adjustments of hedging instruments: Value adjustments for the year

(6,550)

Value adjustments transferred to financial expenses

3,925

Actuarial gains/(losses) on defined benefit pension plans

(2,982)

Tax on other comprehensive income

222

835

1,057

Other comprehensive income

(51)

(2,804)

5,468

(2,830)

245

Total comprehensive income in 2010

(51)

(2,804)

5,468

44,996

2,062

49,671

Used for charitable purposes and associated costs

(6,747)

Acquisition/disposal, non-controlling interests

(75)

Dividends, non-controlling interests

(704)

Other capital items Equity at 31 December 2010

(2,514)

29,513

(9,446)

2,089

431,056

7,919

461,131

Statement of Changes in Equity of the Group

Statement of Changes in Equity of the Group (continued)

Capital fund

Reserve for hedging transactions

Reserve for foreign exchange adjustments

Transferred compre Nonhensive controlling income interests

Total equity

Equity at 1 January 2009

29,528

(9,087)

(30,243)

391,893

2,939

385,030

Effect of transition to IFRS

1,894

30,243

(49,723)

(17,586)

Restated equity at 1 January 2009 29,528

(7,193)

342,170

2,939

367,444

Net profit for the year Foreign exchange adjustments on translation to presentation currency Foreign exchange adjustments on translation of foreign entities

63,060

3,159

66,219

(1,285)

420

(825)

(3,379)

545

(2,834)

Value adjustments of hedging instruments: Value adjustments for the year

(1,988)

Value adjustments transferred to financial expenses

3,739

Actuarial gains/(losses) on defined benefit pension plans

1,559

Tax on other comprehensive income

(437)

(352)

Other comprehensive income

551

(3,379)

1,542

549

(701)

Total comprehensive income in 2009

551

(3,379)

64,602

3,708

65,518

(6,895)

Used for charitable purposes and associated costs

(6,895)

Acquisition/disposal, non-controlling interests

610

Dividends, non-controlling interests

(621)

Other capital items Equity at 31 December 2009

(4,556)

29,564

(6,642)

(3,379)

395,321

6,636

421,500

Statement of Changes in Equity of the Group

List of Notes to the Consolidated Financial Statements NOTE

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

Accounting policies Revenue Other operating income Personnel costs Depreciation, amortisation and impairment losses Financial income Financial expenses Taxes Intangible assets Property, plant and equipment Investment properties Financial assets Inventories Securities Cash and cash equivalents Equity Pensions Deferred tax Other provisions Fees paid to elected auditor Operating leases Contingent liabilities and collateral Financial risks and financial instruments Related parties Standards and interpretations not yet adopted Subsequent events Acquisition and disposal of businesses Effect of transition to IFRS Group entities

List of Notes to the Consolidated Financial Statements

1 Accounting policies

The Egmont Foundation is a commercial foundation

Use of estimates and judgements

domiciled in Denmark. The annual report of the Egmont

Judgements, estimates and assumptions have to be

Foundation for 2011 comprises both the consolidated

made about future events when determining the

financial statements of the Egmont Foundation and its

carrying amount of certain assets and liabilities. The

subsidiaries (the Group) and the separate financial state-

estimates and assumptions made are based on historical

ments of the Egmont Foundation.

experience and other factors that the Group deems appropriate in the circumstances, but which are uncer-

The consolidated financial statements have been

tain and unpredictable by nature. Therefore, the actual

prepared in accordance with the International Financial

results may deviate from such estimates. Consequently,

Reporting Standards (IFRS), as adopted by the EU, and

previous estimates may have to be changed as a result

additional Danish disclosure requirements for annual

of changes in the circumstances forming the basis of

reports.

such estimates, or because of subsequent events or the emergence of new information.

The annual report for 2011 is the first annual report in which the consolidated financial statements have

Information about the most significant accounting

been prepared in accordance with IFRS. The Egmont

estimates is included in the following notes: note 9

Foundation’s separate financial statements continue

Intangible assets, note 13 Inventories, note 17 Pensions,

to be prepared in accordance with the Danish Financial

note 18 Deferred tax and note 19 Other provisions.

Statements Act. The most recent annual report, comprising both the consolidated financial statements and the

Consolidated financial statements

Egmont Foundation’s financial statements, was prepared

The consolidated financial statements comprise the

in accordance with the Danish Financial Statements

Egmont Foundation and subsidiaries in which the

Act. The accounting effect of the transition to IFRS is

Egmont Foundation has control of financial and operat-

explained in note 28, to which reference is made.

ing policies in order to obtain returns or other benefits from its activities. Control is obtained when the Group holds more than 50 % of the voting rights, whether

BASIS OF PREPARATION

directly or indirectly, or otherwise has a controlling interest in the relevant entity.

The Egmont Foundation’s functional currency is Danish kroner (DKK). For communication and reporting reasons,

Entities in which the Group has significant influence,

the consolidated financial statements are presented in

but not a controlling interest, are considered associates.

euro (EUR), rounded to the nearest thousand (EURk).

Significant influence is typically obtained when the Group, directly or indirectly, owns or holds more than

The consolidated financial statements have been

20 % of the voting rights, but less than 50 %.

prepared on the historical cost basis except for the following assets and liabilities, which are measured at fair

When assessing whether the Egmont Foundation exer-

value: derivative financial instruments, securities and

cises control or significant influence, the potential voting

investment properties.

rights that are exercisable at the end of the reporting period are taken into account.

The accounting policies set out below have been applied

consistently to the financial year and to the comparative

In the consolidated financial statements jointly

figures for 2010 and 2009.

controlled entities are included according to the pro-

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

rata method. The pro-rata method means that the

a contractual right. Deferred tax related to the revalua-

proportionate share of the entities’ items in the financial

tions made is recognised.

statements is included in the corresponding items in the consolidated financial statements.

The acquisition date is the date when the Egmont Foundation effectively obtains control of the acquired

The consolidated financial statements have been pre-

business.

pared by consolidating the Egmont Foundation’s and the individual subsidiaries’ financial statements, prepared in

When the business combination is effected in stages,

accordance with the Group accounting policies. On con-

where either control, joint control or significant influ-

solidation, intra-group income and expenses, sharehold-

ence is obtained, the existing equity interest is remeas-

ings, intra-group balances and dividends, and realised

ured at fair value and the difference between the fair

and unrealised gains and losses on transactions between

value and carrying amount is recognised in the income

the consolidated entities are eliminated. Unrealised

statement. The additional equity investments acquired

gains on transactions with associates are eliminated in

are recognised at fair value in the balance sheet.

proportion to the Group’s ownership share of the associate. Unrealised losses are eliminated in the same way as

Any excess (goodwill) of the consideration transferred,

unrealised gains to the extent that impairment has not

the value of non-controlling interests in the acquired

taken place. Transactions with pro-rata consolidated

entity and the fair value of any existing equity interest

entities are eliminated proportionally.

over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as good-

In the consolidated financial statements, the items of

will under intangible assets. Goodwill is not amortised,

subsidiaries are recognised in full. The non-controlling

but is tested for impairment at least annually. The first

interests’ shares of the profit for the year, comprehensive

impairment test is performed before the end of the year

income and of the equity of subsidiaries not wholly

of acquisition. Upon acquisition, goodwill is allocated

owned are included in the Group’s net profit for the year,

to the cash-generating units, which subsequently form

comprehensive income and equity, respectively, but are

the basis for the impairment test. Goodwill and fair

disclosed separately.

value adjustments in connection with the acquisition of a foreign entity with another functional currency than

Business combinations

the presentation currency of the Egmont Foundation are

Businesses acquired or formed during the year are

treated as assets and liabilities belonging to the foreign

recognized in the consolidated financial statements

entity and upon initial recognition translated into the

from the date of acquisition or formation. Businesses

foreign entity’s functional currency at the exchange rate

disposed of or wound up are recognised in the consoli-

at the transaction date. Negative differences (negative

dated financial statements until the date of disposal or

goodwill) are recognised in profit for the year at the

winding-up. The comparative figures are not restated for

acquisition date.

newly acquired businesses. Discontinued operations are disclosed separately; see below.

The consideration transferred for an acquired business consists of the fair value of the agreed consideration in

The acquisition method is used for acquisitions of new

the form of assets transferred, liabilities assumed and

businesses over which the Egmont Foundation obtains

equity instruments issued. If part of the consideration is

control. The acquired businesses’ identifiable assets,

contingent on future events or compliance with agreed

liabilities and contingent liabilities are measured at fair

conditions, this part of the consideration is recognised at

value at the acquisition date. Identifiable intangible

fair value at the date of acquisition. Costs attributable to

assets are recognised if they are separable or arise from

business combinations are expensed as incurred.

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

If uncertainties regarding the identification or measure-

Foreign currency translation

ment of acquired assets, liabilities or contingent liabilities

A functional currency is determined for each of the

or determination of the consideration exist at the

reporting entities in the Group. The functional currency

acquisition date, initial recognition will take place on the

is the currency used in the primary economic environ-

basis of provisional values. If it subsequently becomes

ment in which the individual reporting entity operates.

apparent that the identification or measurement of the

Transactions denominated in currencies other than the

transferred consideration, acquired assets, liabilities or

functional currency are considered foreign currency

contingent liabilities was incorrect on initial recognition,

transactions.

the determination is adjusted retrospectively, including goodwill, until 12 months after the acquisition, and the

On initial recognition, foreign currency transactions are

comparative figures are restated. Subsequently, goodwill

translated to the functional currency at the exchange

is not adjusted. Changes to estimates of contingent

rates at the transaction date. Foreign exchange differ-

considerations are recognised in the income statement.

ences arising between the exchange rates at the transaction date and at the date of payment are recognised in

The acquisition of further non-controlling interests after

the income statement as financial income or financial

obtaining control is considered an ownerâ&#x20AC;&#x2122;s transaction,

expenses.

and the difference between acquisition cost and the share of such non-controlling interests acquired is recog-

Receivables, payables and other monetary items

nised directly in equity.

denominated in foreign currencies are translated to the functional currency at the exchange rates at the end

Gains or losses on the disposal or winding-up of sub-

of the reporting period. The difference between the

sidiaries, jointly controlled entities and associates are

exchange rates at the end of the reporting period and

stated as the difference between the selling price or the

at the date at which the receivable or payable arose

disposal consideration and the carrying amount of net

or was recognised in the latest financial statements is

assets, including goodwill, at the date of disposal, less

recognised in the income statement as financial income

the cost of disposal. If the disposal of either control, joint

or financial expenses.

control or significant influence takes place in stages, the retained equity investment is remeasured at fair value,

In the consolidated financial statements, the income

and the difference between the fair value and carrying

statements of entities with another functional currency

amount is recognised in the income statement.

than the presentation currency (EUR) are translated at the exchange rates at the transaction date, and the

Non-controlling interests

balance sheet items are translated at the exchange

On initial recognition, non-controlling interests are

rates at the end of the reporting period. An average

measured at the fair value of the ownership share or at

exchange rate for each month is used as the transaction

the proportionate share of the fair value of the acquired

date exchange rate to the extent that this does not

businessâ&#x20AC;&#x2122; identifiable assets, liabilities and contingent

significantly distort the presentation of the underlying

liabilities. In the first scenario, goodwill in relation to

transactions. Foreign exchange differences arising on

the non-controlling interestsâ&#x20AC;&#x2122; ownership share of the

translation of the opening balance of equity of such

acquired business is thus recognised, while, in the latter

foreign entities at the exchange rates at the end of the

scenario, goodwill in relation to the non-controlling

reporting period and on translation of the income state-

interests is not recognised. The measurement of non-

ments from the exchange rates at the transaction date

controlling interests is chosen transaction by transaction

to the exchange rates at the end of the reporting period

and stated in the notes in connection with the descrip-

are recognised directly in other comprehensive income

tion of acquired businesses.

and presented in equity under a separate translation

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

non-controlling interestsâ&#x20AC;&#x2122; share of equity.

reserve. The exchange rate adjustment is allocated between the equities of the Foundation and the non-

On partial disposal of associates and jointly controlled

controlling interests.

entities, the proportionate share of the accumulated Foreign exchange adjustments of intra-group balances

translation reserve recognised in other comprehensive

which are considered part of the total net investment in

income is transferred to the income statement for the

foreign entities with another functional currency than

year together with any gains or losses from the disposal.

the presentation currency (EUR) are recognised in other comprehensive income and presented in equity under a

Any repayment of intra-group balances which constitute

separate translation reserve.

part of the net investment in the foreign entity is not considered a partial disposal of that subsidiary.

On recognition in the consolidated financial statements of associates with another functional currency than the

Derivative financial instruments

presentation currency (EUR), the share of profit/loss for

Derivative financial instruments are recognised at the

the year is translated at average exchange rates and

date a derivative contract is entered into and measured

the share of equity, including goodwill, is translated at

in the balance sheet at fair value. Positive and nega-

the exchange rates at the end of the reporting period.

tive fair values of derivative financial instruments are

Foreign exchange differences arising on the transla-

included in other receivables and payables, respectively,

tion of the share of the opening balance of equity of

and a set-off of positive and negative values is only

foreign associates at the exchange rates at the end of

made when the entity has the right and the intention

the reporting period, and on translation of the share

to settle several financial instruments net. Fair values of

of profit/loss for the year from average exchange rates

derivative financial instruments are computed on the

to the exchange rates at the end of the reporting

basis of current market data and generally accepted

period, are recognised in other comprehensive income

valuation methods.

and presentedÂin equity under a separate translation Changes in the fair value of derivative financial instru-

reserve.

ments designated as and qualifying for recognition as a On disposal of wholly-owned foreign entities with

hedge of the fair value of a recognised asset or liability

another functional currency than the presentation cur-

are recognised in the income statement together with

rency (EUR), the exchange rate adjustments that have

changes in the value of the hedged asset or liability as

been recognised in other comprehensive income and are

far as the hedged portion is concerned. Hedging of

attributable to the entity are reclassified from other com-

future cash flows according to agreement (firm commit-

prehensive income to the income statement together

ment), except for foreign currency hedges, is treated as a

with any gains or losses from the disposal.

fair value hedge. The portion of the value adjustment of a derivative financial instrument that is not included in a hedge is recognised under financial items.

On disposal of partially owned foreign subsidiaries with another functional currency than the presentation currency (EUR), the amount of the translation reserve attrib-

Changes in the portion of the fair value of derivative

utable to non-controlling interests is not transferred to

financial instruments designated as and qualifying as a

the income statement.

cash flow hedge that is an effective hedge of changes in future cash flows are recognised in other comprehensive

On partial disposal of foreign subsidiaries with another

income in equity under a separate hedging reserve until

functional currency than the presentation currency (EUR)

the hedged cash flows affect the income statement. At

without a loss of control, a proportionate share of the

that time, any gains or losses resulting from such hedged

translation reserve is transferred from the Group to the

transactions are transferred to other comprehensive

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

income and recognised under the same item as the

uncertainty about the possibility of return, revenue is not

hedged item.

recognised until the goods have been delivered and the time period for return has elapsed.

If the hedging instrument no longer qualifies for hedge accounting, the hedge will cease to be effec-

Advertising income is recognised on the delivery date,

tive. The accumulated change in value recognised

typically when issued or broadcasted.

in other comprehensiveincome is transferred to the income statement when the hedged cash flows affect

Revenue from the sale of film broadcasting rights is

the income statement. If the hedged cash flows are

recognised at the time when the film becomes accessible

no longer expected to be realised, the accumulated

to the customer (availability date).

change in value will be transferred to the income statement immediately. The portion of a derivative financial

Royalties received are accrued and recognised as income

instrument not included in a hedge is recognised under

in accordance with the concluded agreement.

financial items. Rental income is accrued and recognised as income on a For derivative financial instruments that do not qualify

straight-line basis over the lease term in accordance with

for treatment as hedging instruments, changes in fair

the concluded agreement.

value are currently recognised in the income statement under financial items.

Barter agreements where the services exchanged are dissimilar are recognised at fair value and accrued as the services are performed or over the period specified

INCOME STATEMENT

in the concluded agreement. Fair value is measured at the value of either the delivered or the received services,

Revenue

depending on which services can be measured reliably.

Revenue from the sale of goods for resale and finished goods is recognised in the income statement when all

Revenue is measured at the fair value of the agreed con-

the following conditions have been satisfied:

sideration exclusive of VAT and taxes charged on behalf

• the Group has transferred to the buyer the signifi-

of third parties. All discounts granted are recognised as a

cant risks and rewards of ownership of the goods;

reduction of revenue.

• the Group retains neither continuing managerial involvement to the degree usually associated with

Other operating income and expenses

ownership nor effective control over the goods sold;

Other operating income and expenses comprise items

• the amount of revenue can be measured reliably;

secondary to the principal activities of the entities,

• it is probable that the economic benefits associated

including gains and losses on the disposal of businesses,

with the transaction will flow to the Group; and

which are not continuing operations, intangible assets

• the costs incurred or to be incurred in respect of the

and property, plant and equipment, as well as continu-

transaction can be measured reliably.

ing value adjustments of investment properties at fair value. Gains and losses on the disposal of entities,

Magazine subscriptions are accrued and recognised over

intangible assets and property, plant and equipment are

the period in which the items are dispatched (issued).

determined as the selling price less disposal costs and the carrying amount at the date of disposal.

If, based on past experience or otherwise, the Group

can make a reliable estimate of the amount of goods

Government grants

that will be returned, a provision for the goods esti-

Government grants comprise film and ticket subsidies

mated to be returned will be recognised. When there is

for in-house produced films. Grants are recognised

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

when there is reasonable assurance that they will be

Film rights are measured at cost. For purchases, the cost

received. Film subsidies for in-house produced films

is allocated proportionally to the cinema, DVD and TV

recognised in the balance sheet are offset against the

media, as well as to markets.

cost of in-house produced films. Ticket subsidies are recognised in the income statement under other operat-

Film rights are amortised according to a revenue-based

ing income.

method over the period during which they are expected to generate income on the respective market and in the

Share of result from investments in associates

respective media.

The proportionate share of the associates’ results after tax and non-controlling interests and after elimination

Other intellectual property rights with a limited useful

of the proportionate share of intra-group gains/losses is

life, such as domain names and magazine titles, are

recognised in the consolidated income statement.

measured at cost on initial recognition and amortised on a straight-line basis over the useful life (typically 5 to

Financial income and expenses

10 years).

Financial income and expenses comprise interest income and expense, gains and losses on securities, payables

In-house produced film rights

and transactions denominated in foreign currencies,

In-house produced film rights are measured at cost,

amortisation of financial assets and liabilities, including

which includes indirect production costs, less grants

finance lease commitments. Furthermore, changes in

received, accumulated amortisation and impairment, or

the fair value of derivative financial instruments which

at the recoverable amount where this is lower.

are not designated as hedging instruments as well as the ineffective portion of the hedges are also included.

In-house produced film rights are amortised according to a revenue-based method over the period during

Borrowing costs relating to general borrowing or loans

which they are expected to generate income.

directly relating to the acquisition, construction or development of qualifying assets are allocated to the cost of

Goodwill

such assets.

On initial recognition, goodwill is recognised in the balance sheet at cost as described under ‘Business

Tax for the year

combinations’. Subsequently, goodwill is measured at

Tax for the year, which comprises current tax and

cost less accumulated impairment losses. Goodwill is not

changes in deferred tax for the year, is recognised in the

amortised.

income statement, in other comprehensive income or directly in equity.

The carrying amount of goodwill is allocated to the Group’s cash-generating units at the date of acquisition. The identification of cash-generating units is based

BALANCE SHEET

on the management structure and internal financial control.

Film rights, etc. Film rights comprise film, DVD and TV rights. Film rights

Trademarks

are recognised as an intangible asset at the time when

Acquired intellectual property rights, including trade-

control over the asset is transferred. Prepayments for

marks acquired in business combinations, are measured

film rights are recognised in the balance sheet as prepaid

at cost on initial recognition. Trademarks with an

intangible assets, and when control is gained over the

indefinite useful life are not amortised but are tested for

assets, the prepayments are reclassified to film rights.

impairment at least once annually.

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

Property, plant and equipment

Depreciation is made on the basis of the asset’s residual

Land and buildings, plant and machinery, tools and

value less any impairment losses. The residual value and

equipment and leasehold improvements are measured

useful life of the assets are reassessed every year. If the

at cost less accumulated depreciation and impairment.

residual value exceeds the carrying amount, depreciation is discontinued.

Cost comprises the purchase price and any costs directly attributable to the acquisition until the date when the

In case of changes in the useful life or the residual value,

asset is available for use.

the effect on depreciation is recognised prospectively as a change in accounting estimates.

Subsequent costs, e.g. in connection with replacing components of property, plant and equipment, are

Gains and losses on the disposal of property, plant and

recognised in the carrying amount of the relevant asset if

equipment are determined as the difference between

it is probable that the costs will result in future economic

the selling price less disposal costs and the carrying

benefits for the Group. The replaced components are

amount at the date of disposal. Gains or losses are rec-

derecognised in the balance sheet, and the carrying

ognised in the income statement under other operating

amount is transferred to the income statement. All other

income or other operating costs, respectively.

costs incurred for ordinary repairs and maintenance are recognised in the income statement as incurred.

Investment properties Properties are classified as investment properties when

The cost of assets held under finance leases is recog-

they are held for the purpose of obtaining rental income

nised at the lower of the fair value of the assets and the

and/or capital gains. On initial recognition, investment

present value of future minimum lease payments. In the

properties are measured at cost, consisting of the

calculation of present value, the interest rate implicit in

acquisition cost of the property and any costs directly

the lease or the Group’s incremental borrowing rate is

attributable to the acquisition. Subsequently, investment

used as the discount rate.

properties are measured at fair value. Changes in the fair value are recognised in the income statement as a

When individual components of an item of property,

value adjustment of investment properties under other

plant and equipment have different useful lives, the cost

operating income/costs in the financial year in which the

of such individual components is accounted for and

change occurs.

depreciated separately. Depreciation is provided on a straight-line basis over the expected useful lives, based

Realised gains and losses on the disposal of investment

on the following estimates of the useful lives of the

properties are determined as the difference between

assets:

the carrying amount and the selling price and are also recognised in the item ‘value adjustment of investment

Corporate properties (head offices)

25, 50 years

Properties used for operational purposes Installations and conversions (the useful life depends on the nature of conversion)

properties’’ under other operating income/costs.

25 years

10, 15, 25 years

Investments in associates Investments in associates are recognised in the consolidated financial statements according to the equity

Plant and machinery

3 - 15 years

method, which means that the investments are meas-

Tools and equipment

3 - 5 years

ured in the balance sheet at the proportionate share of

5 - 10 years

the associates’ net asset values calculated in accordance

Leasehold improvements

with the Group’s accounting policies minus or plus the Land is not depreciated.

proportionate share of unrealised intra-group gains

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

and losses and plus any excess values on acquisition,

amount is the higher of an assetâ&#x20AC;&#x2122;s fair value less expected

includingÂgoodwill. Investments in associates are tested

disposal costs and its value in use. Value in use is the pre-

for impairment when impairment indicators are identi-

sent value of future cash flows expected to be derived

fied.

from an asset or the cash-generating unit to which the asset belongs.

Investments in associates with negative net asset values are measured at EUR 0 (nil). If the Group has a legal or

An impairment loss is recognised if the carrying amount

constructive obligation to cover a deficit in the associate,

of an asset or a cash-generating unit exceeds the

such deficit is recognised under liabilities.

recoverable amount of the asset or the cash-generating unit. Impairment losses are recognised in the income

Receivables from associates are measured at amortised

statement.

cost less any impairment losses. Impairment of goodwill is not reversed. Impairment of On the acquisition of investments in associates, the

other assets is reversed only to the extent that changes

acquisition method is used; see the description of busi-

in the assumptions and estimates underlying the impair-

ness combinations.

ment calculation have occurred. Impairment is only reversed to the extent that the assetâ&#x20AC;&#x2122;s increased carrying

Impairment of non-current assets

amount does not exceed the carrying amount that

Goodwill and intangible assets with indefinite useful

would have been determined (net of amortisation or

lives are subject to annual impairment tests, initially

depreciation) had no impairment loss been recognised

before the end of the acquisition year. Likewise, devel-

for the asset in prior years.

opment projects in process are subject to an annual impairment test.

Inventories Inventories are measured at the lower of cost according

The carrying amount of goodwill is tested for impair-

to the FIFO method and the net realisable value.

ment together with the other non-current assets of the cash-generating unit to which goodwill has been

Goods for resale and raw materials and consumables

allocated. If the carrying amount exceeds the recover-

are measured at cost, comprising purchase price plus

able amount, it is written down to the recoverable

delivery costs.

amount via the income statement. As a main rule, the recoverable amount is calculated as the present value of

The cost of finished goods and work in progress com-

expected future net cash flows from the entity or activ-

prises the cost of raw materials, consumables, direct

ity (cash-generating unit) to which goodwill has been

wages and salaries and indirect production overheads.

allocated.

Indirect production overheads comprise indirect materials, wages and salaries as well as maintenance and

Deferred tax assets are subject to annual impairment

depreciation of production machinery and equipment as

tests and are recognised only to the extent that it is

well as administration and management costs.

probable that the assets will be utilised. The net realisable value of inventories is calculated The carrying amount of other non-current assets is

as the selling price less costs of completion and costs

tested annually for impairment indicators. When there is

necessary to effect the sale and is determined taking into

an indication that assets may be impaired, the recover-

account marketability, obsolescence and development in

able amount of the asset is determined. The recoverable

expected selling price.

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

Receivables

in variables such as salary levels, interest rates, inflation

Receivables are measured at fair value on initial recogni-

and mortality. The present value is determined only for

tion and are subsequently measured at amortised cost

benefits earned by employees from their employment

less any impairment.The Group considers evidence of

with the Group. The actuarial present value less the fair

impairment both on an individual level and on a group

value of any plan assets is recognised in the balance

level where considered relevant.

sheet under pension obligations.

Prepayments

If a pension plan constitutes a net asset, the asset is only

Prepayments, such as prepaid royalty and prepaid

recognised if it represents future refunds from the plan

authors’ fees, which are recognised under assets,

or will lead to reduced future payments to the plan.

comprise costs incurred concerning subsequent financial years. Prepayments are measured at cost.

Pension costs for the year are recognised in the income statement based on actuarial estimates and

Securities

financial expectations at the beginning of the year.

Securities consist mainly of listed bonds that are held for

Any difference between the expected development

investment of excess liquidity and managed in accord-

in pensionplan assets and liabilities and the realised

ance with a documented investment strategy. Securities

amounts determined at year-end is termed an actuarial

are measured initially at the listed price at the trade date

gain or loss and is recognised in other comprehensive

and subsequently at the listed price at the end of the

income.

reporting period using the fair value option. Value adjustments are recognised directly in the income statement.

Non-current employee benefits are recognised at the best estimate of the expenditure required to settle the

Pension obligations and similar

present obligation at the end of the reporting period.

non-current liabilities The Group has entered into pension plans and similar

Current tax payable/receivable and deferred taxes

arrangements with the majority of the Group’s employ-

Current tax payable and receivable is recognised in the

ees.

balance sheet as tax computed on the taxable income for the year, adjusted for tax on the taxable income of

Obligations relating to defined contribution plans where

prior years and for tax paid on account.

the Group regularly pays fixed pension contributions to independent pension funds are recognised in the

Deferred tax is measured using the balance sheet

income statement in the period during which employ-

liability method on the basis of all temporary differences

ees earn entitlement to them, and any contributions

between the carrying amount and the tax base of assets

outstanding are recognised in the balance sheet under

and liabilities. However, deferred tax is not recognised

other payables.

on temporary differences relating to goodwill that is not deductible for tax purposes and on office premises and

For defined benefit plans, an actuarial calculation (the

other items where temporary differences, apart from

Projected Unit Credit method) is performed annually of

business combinations, arise at the date of acquisition

the present value of future benefits payable under the

without affecting either result for the year or taxable

defined benefit plan. The present value is determined on

income. Where different tax rules can be applied to

the basis of assumptions about the future development

determine the tax base, deferred tax is measured based

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

on Managementâ&#x20AC;&#x2122;s planned use of the asset or settle-

Provisions are measured at the best estimate of the

ment of the liability.

expenses required to settle the obligation.

Deferred tax assets, including the tax base of tax loss

When provisions are measured, the costs required

carryforwards, are recognised under other non-current

to settle the obligation are discounted provided that

assets at the expected value of their utilisation; either

such discounting would have a material effect on the

as a set-off against tax on future earnings or as a set-off

measurement of the liability. A pre-tax discount rate is

against deferred tax liabilities in the same legal tax entity

used that reflects the current market interest rate level

and jurisdiction.

plus risks specific to the liability. Changes in the discount element during the financial year are recognised in the

Deferred tax assets and liabilities are set off if the entity

income statement under financial expenses.

has a legally enforceable right to set off current tax liabilities and tax assets or intends either to settle current

Warranty provisions are recognised as the underlying

tax liabilities and tax assets on a net basis or to realise the

goods are sold based on historical warranty costs experi-

assets and settle the liabilities at the same time.

ence in previous financial years.

Deferred tax is adjusted for eliminations of unrealised

Restructuring costs are recognised under liabilities

intra-group gains and losses.

when a detailed, formal restructuring plan has been announced to the employees affected no later than

Deferred tax is measured according to the tax rules and

at the end of the reporting period. On acquisition of

at the tax rates applicable in the respective countries

businessesÂ, provisions for restructuring in the acquiree

at the end of the reporting period when the deferred

are only included in goodwill when, at the acquisition

tax is expected to be realised as current tax. Changes in

date, the acquiree had an existing liability for restructur-

deferred tax due to changed tax rates are recognised in

ing.

the comprehensive income for the year. A provision for onerous contracts is recognised when the Other provisions

expected benefits to be obtained by the Group from a

Other provisions primarily consist of provisions for

contract are lower than the unavoidable costs of meet-

goods sold with a right of return, where, based on past

ing its obligations under the contract.

experience or otherwise, the Group can make a reliable estimate of the amount of goods that will be returned as

Financial and non-financial liabilities

well as expected restructuring costs, etc.

Financial liabilities are recognised as at the date of borrowing as the net proceeds received less transaction

Provisions are recognised when the Group incurs a

costs paid. In subsequent periods, the financial liabilities

legal or constructive obligation due to an event occur-

are measured at amortised cost, such that the difference

ring before or at the end of the reporting period, and

between the proceeds and the nominal value is recog-

meeting the obligation is likely to result in an outflow of

nised under financial expenses in the income statement

economic benefits.

over the term of the loan.

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

Financial liabilities also include the capitalised residual

Presentation of discontinued operations

lease commitment under finance leases, which is meas-

Discontinued operations represent a separate major line

ured at amortised cost. Other liabilities are measured at

of business whose activities and cash flows can be clearly

net realisable value.

distinguished, operationally and for financial reporting purposes, from the other business areas, provided that

Deferred income

the unit has been disposed of or that it is held for sale

Deferred income, including the sale of film broadcasting

and the sale is expected to be carried out within twelve

rights, is measured at amortised cost.

months in accordance with a formal plan. Discontinued operations also include businesses which are classified as

Assets held for sale

held for sale in connection with the acquisition.

Assets held for sale consist of non-current assets and disposal groups held for sale. Disposal groups are defined

The profit after tax on discontinued operations and value

as a group of assets to be disposed of in a single transac-

adjustments after tax of related assets and liabilities and

tion, through sale or otherwise. Liabilities associated

gains and losses on disposal are presented as a separate

with assets classified as held for sale are those liabilities

line item in the income statement with a restatement of

directly associated with the assets that will be trans-

comparative figures. The notes disclose revenue, costs,

ferred in the transaction. Assets are classified as held for

value adjustments and tax for the discontinued opera-

sale if their carrying amount will be recovered principally

tions.

through a sale within 12 months in accordance with a formal plan rather than through continuing use.

Assets and related liabilities for discontinued operations are presented in separate line items in the balance sheet

Assets or disposal groups held for sale are measured at

without a restatement of comparative figures; see the

the lower of their carrying amount at the date of clas-

section ‘Assets held for sale’, and the principal items are

sification as held for sale and their fair value less disposal

specified in the notes.

costs. Assets are not depreciated or amortised from the date when they are classified as held for sale.

CASH FLOW STATEMENT The cash flow statement shows the cash flows from

Impairment losses on initial recognition as held for sale

operating, investing and financing activities for the year,

and gains and losses on subsequent remeasurement at

the year’s changes in cash and cash equivalents as well

the lower of carrying amount and fair value less disposal

as the Group’s cash and cash equivalents at the begin-

costs are recognised in the income statement under the

ning and end of the year.

items to which they relate. Gains and losses are disclosed in the notes.

The cash flow effect of acquisitions and disposals of businesses is shown separately in cash flows from invest-

Assets and associated liabilities are presented as sepa-

ing activities. Cash flows from acquired businesses are

rate line items in the balance sheet, and the principal

recognised in the cash flow statement from the date of

items are specified in the notes. Comparative figures in

acquisition, and cash flows from disposals of businesses

the balance sheet are not restated.

are recognised until the date of disposal.

Notes to the Consolidated Financial Statements (EURk)

1 Accounting policies (continued)

Cash flows from operating activities are calculated

FINANCIAL RATIOS

according to the indirect method as the profit for the

Financial ratios are calculated in accordance with the

year before net financials, adjusted for non-cash operat-

Danish Society of Financial Analysts’ ‘Recommendations

ing items, changes in working capital and corporate

and Financial Ratios 2010’.

income tax paid. The financial ratios stated under financial highlights Cash flows from investing activities comprise payments

have been calculated as follows:

in connection with the acquisition and disposal of businesses and activities and the acquisition and disposal of

Operating margin

intangible assets, property, plant and equipment and

Operating profit x 100

other non-current assets, as well as securities. Acquisitions of assets by means of finance leases are treated as non-cash transactions.

Revenue Equity ratio Equity, excl. non-controlling interests, x 100

Cash flows from financing activities comprise the rais-

Total assets

ing of loans and repayment of interest-bearing debt, donations made and transactions with non-controlling interests. Cash and cash equivalents comprise cash and market-

Return on equity Net profit for the year, excl. non-controlling interests, x 100 Average equity, excl. non-controlling interests

able securities with a residual term of less than three months at the acquisition date which are subject to an insignificant risk of changes in value. Cash flows in other currencies than the functional currency are translated using average exchange rates unless these deviate significantly from the rates at the transaction date. Cash flows from operating, investing and financing activities for discontinued operations are disclosed in a note. SEGMENT INFORMATION The Egmont Foundation is not officially listed, and in accordance with IFRS, segment information need therefore not be presented.

Notes to the Consolidated Financial Statements (EURk)

Revenue

Sale of goods

Royalty

Rental income

Total

2011

2010

2009

1,326,867

1,371,027

1,383,563

50,817

43,124

50,588

8,636

8,961

8,997

1,386,320

1,423,112

1,443,148

2010

2009 16,214

Other operating income

2011

Sale of TV productions

1,148

1,825

Government grants

665

1,616

1,497

Miscellaneous

9,038

9,303

10,571

Total

10,851

12,744

28,282

Personnel costs

Wages and salaries

Defined contribution pension plans

Defined benefit pension plans

Other social security costs

Total

2011

2010

2009

(266,917)

(256,750)

(273,078)

(16,272)

(16,521)

(14,907)

(3,852)

(1,801)

(3,674)

(36,110)

(33,547)

(34,030)

(323,151) (308,619) (325,689)

Average number of employees, total

4,161

4,312

4,754

Compensation paid to the Management Board amounts to 3,088 (2010 and 2009: 2,742), of which pension contributions amounts to 346 (2010: 331 and 2009: 284). Compensation paid to the Board of Trustees amounts to 377 (2010: 411 and 2009: 398). 5

Depreciation, amortisation and impairment losses

Amortisation, intangible assets

Impairment losses, intangible assets

Depreciation, property, plant and equipment

Impairment losses, property, plant and equipment

Total

2011

2010

2009

(34,920)

(37,837)

(45,124)

(1,952)

(16,434)

(12,936)

(23,746)

(25,588)

(27,618)

(2,225)

(3,948)

(1,230)

(62,843) (83,807) (86,908)

Financial income

2011

2010

2009

Interest income, financial assets, measured at amortised cost

2,771

3,113

6,528

Interest income, securities

5,242

3,036

540

Foreign exchange gains, net

2,407

5,139

15,034

Change in fair value, derivative financial instruments

1,726

Other financial income

Total

Notes to the Consolidated Financial Statements (EURk)

800

602

2,006

1,578

4,441

13,226

13,468

28,269

Financial expenses

2011

2010

2009

Interest expenses, financial liabilities, measured at amortised cost

(7,113)

(7,929)

(12,299)

Interest expenses, derivative financial instruments

(3,877)

(3,925)

(3,739)

Change in fair value, securities, net

(991)

(2,471)

(597)

Other financial expenses

(3,327)

(2,536)

(4,502)

Total

(15,308) (16,861) (21,137)

Taxes

2011

2010

2009

Current tax

(14,752)

(22,968)

(12,349)

Deferred tax

(5,667)

(2,654)

14,651

Adjustment for prior years

337

(67)

(93)

Total

(20,082)

(25,689)

2,209

Tax on the profit for the year results as follows:

Calculated tax, 25 % on profit before tax

Adjustment of calculated tax in foreign entities relative to 25 %

(23,431)

(18,833)

(16,003)

(2,083)

(706)

1,135

Tax effect of:

Non-taxable income less non-tax deductible expenses

3,029

(8,643)

3,315

Share of net profit/(loss) after tax in associates

2,066

(914)

(2,188)

Changes in deferred tax assets not previously recognised

16,043

Adjustment for prior years

Total

3,474

337

(67)

(93)

(20,082)

(25,689)

2,209

Effective tax rate

21.4 %

34.1 %

-3.5 %

In 2009, the Group recognised an unrecognised deferred tax asset in the Danish jointly taxed companies, as these companies’ earnings made it probable at the end of the reporting period that the deferred tax asset could be utilised. Tax recognised in other comprehensive income:

Tax on value adjustment of hedging instruments

240

222

Tax on actuarial gains/(losses) on defined benefit pension plans

4,120

835

(437)

Total

4,360

1,057

(352)

Notes to the Consolidated Financial Statements (EURk)

Intangible assets

Intangible assets under Film In-house development rights, produced Trade- and pre etc. film rights Goodwill marks payments Cost at 1 January 2011

Foreign exchange adjustments

Additions

Government grants

Transferred

Cost of assets disposed of

Cost at 31 December 2011

103,716

79,698

130,270

46,773

16,420

165

1,229

4,091

1,023

(11)

6,962

13,644

739

31,746

(9,541)

23,934

(712)

(23,222)

(3,530)

(10,973)

(13,838)

(502)

131,247

73,345

121,262

47,294

24,933

Amortisation and impairment losses at 1 January 2011

Foreign exchange adjustments

Amortisation and impairment losses of assets disposed of

Amortisation

(27,516)

(7,404)

Amortisation and impairment losses at 31 December 2011

(93,200)

(65,113)

(30,836)

(2,714)

(68,573) (64,147) (37,233) (2,564)

(611)

494

(1,022)

(3,621)

(652)

(2)

3,374

7,122

11,329

502

Transferred

(338)

338

Impairment losses

(641)

(1,311)

0 0 (613)

Carrying amount at 38,047 8,232 90,426 44,580 31 December 2011

24,320

Cost at 1 January 2010

116,954

56,025

124,766

40,970

Adjustment, beginning of year

12,289

14,203 0

Foreign exchange adjustments

1,212

564

6,897

2,759

(2)

Additions

4,837

15,038

3,333

23,914

Government grants

(5,504)

Transferred

15,437

6,698

(4,299)

3,044

(20,880)

Cost of assets disposed of

(34,724)

(5,412)

(427)

(815)

Cost at 31 December 2010

103,716

79,698

130,270

46,773

16,420

Amortisation and impairment losses at 1 January 2010

Adjustment, beginning of year

(12,289)

Foreign exchange adjustments

(1,275)

(557)

(791)

Amortisation and impairment losses of assets disposed of

34,345

4,423

Transferred

618

(3,204)

3,285

(699)

Impairment losses

(801)

(1,129)

(12,639)

(1,865)

Amortisation

(29,178)

(8,659)

Amortisation and impairment losses at 31 December 2010

(68,573)

(64,147)

(37,233)

(2,564)

93,037

44,209

(72,282) (42,732) (27,088)

(667)

0 (611)

Carrying amount at 31 December 2010

35,143

15,551

Notes to the Consolidated Financial Statements (EURk)

15,809

Intangible assets (continued)

Intangible assets under Film In-house development rights, produced Trade- and pre etc. film rights Goodwill marks payments Cost at 1 January 2009

118,777

47,510

110,077

34,744

7,861

3,651

223

15,347

6,226

320

666

3,756

19,076

2,807

24,044

(9,064)

17,353

(369)

(17,526)

Foreign exchange adjustments

Cost, business combinations

Additions

Government grants

Transferred

Cost of assets disposed of

(26,903)

(2,017)

(3,465)

(191)

Cost at 31 December 2009

116,954

56,025

124,766

40,970

14,203

Amortisation and impairment losses at 1 January 2009

Foreign exchange adjustments

(2,015)

(206)

(1,363)

Amortisation and impairment losses of assets disposed of

26,702

1,336

Transferred

102

Impairment losses

(1,371)

(11,104)

(461)

Amortisation

(35,699)

(9,425)

Amortisation and impairment (72,282) losses at 31 December 2009

(42,732)

(27,088)

97,678

40,970

(60,001) (34,437) (14,621)

(206)

0 (667)

Carrying amount 44,672 at 31 December 2009

13,293

13,536

Goodwill The carrying amount of goodwill is tested annually for impairment. The impairment tests are carried out for the Group’s cash-generating units, based on their management structure and internal financial control; see below: 2011

2010

2009

Magazines, Norway*

31,137

30,820

34,765

Books, Norway

10,592

10,228

9,609

Nordisk Film, Cinemas

4,187

Nordisk Film, Partners

2,191

4,134

TV 2, Norway

37,520

37,208

34,958

Other units

6,990

8,403

10,025

Carrying amount

90,426

93,037

97,678

*Incl. Magazines, Sweden in 2009

In the impairment test of the cash-generating units, the recoverable amount, equivalent to the discounted value of expected future net cash flows, is compared with the carrying amount of the cash-generating units. The recoverable amount is based on the value in use, determined by using expected net cash flows that are based on management-approved budgets and business plans for 2012, projections for subsequent years up to and including 2016, and average growth during the terminal period. For the primary cash-generating units, the following pre-tax discount rates have been used: 11.5 to 14.4 % (2010: 11.5 to 14.0 % and 2009: 11.2 to 14.9 %).

Notes to the Consolidated Financial Statements (EURk)

Intangible assets (continued)

The average expected growth during the terminal period is -4.1 % for Magazines, Norway (2010 and 2009: -4.7 %), 2.0 % for Books, Norway, and 2.6 % for TV 2, Norway (2010 and 2009: 2.0 % and 2.6 %). Expected growth during the terminal period is not estimated to exceed the long-term average growth rate in the business areas. The impairment tests for goodwill for 2011, 2010 and 2009 show that the recoverable amount exceeds the carrying amount of the Group’s primary cash-generating units, Magazines, Norway; Books, Norway; Nordisk Film, Cinemas; and TV 2, Norway. The impairment of goodwill of 12,639 in 2010 and 11,104 in 2009 is mainly attributable to restructuring or the shutdown/disposal of activities in Magazines, Sweden, in 2009, Nordisk Film, Partners and Other units. Trademarks Trademarks with an indefinite useful life relate to the individual cash-generating units’ primary sales. The Group is testing the carrying amount of trademarks with an indefinite useful life for impairment annually; see below:

2011

2010

17,242

17,098

2009

Magazines, Norway

Books, Norway

9,566

9,487

8,853

TV 2, Norway

17,772

17,624

15,057

Carrying amount

44,580

44,209

40,970

17,060

Trademarks for Magazines, Norway, and TV 2, Norway, are tested by using the Relief from Royalty method to assess future cash flows from royalty income for the individual trademark. The royalty rate, determined on the basis of the cash-generating unit’s products and the reputation of such products, ranged from 5 to 14 % for 2009 to 2011. The trademark of Books, Norway, has been tested together with the goodwill of the cash-generating unit to which it relates. The following pre-tax discount rates have been used: 9.9 to 11.0 % (2010: 10.0 to 11.0 % and 2009: 8.0 to 11.0 %). The average expected growth during the terminal period is -3.5 % for Magazines, Norway (2010 and 2009: -3.5 %), 2.0 % for Books, Norway, and 2.5 % for TV 2, Norway (2010 and 2009: 2.0 % and 2.5 %). The impairment tests for trademarks for 2009 to 2011 show that the recoverable amount exceeds the carrying amount. The Group assesses that probable changes in the assumptions underlying the impairment calculations will result in no need for impairment of goodwill and trademarks in the Group’s primary cash-generating units. Film rights and in-house produced film rights The Group makes regular estimates of the useful lives of film rights and in-house produced film rights based on its expected sales in the cinema, DVD and TV media and in markets, which are naturally subject to uncertainty as actual sales may differ from estimated sales. The Group continuously receives sales estimates, and if impairment indicators are identified, film rights and in-house produced film rights are written down for impairment. The useful lives of film rights and in-house produced film rights for 2009 to 2011 were at the expected level.

Notes to the Consolidated Financial Statements (EURk)

Property, plant and equipment

Property, plant and Leasehold equipment Land and Plant and Tools and improve- under buildings machinery equipment ments construction

Cost at 1 January 2011

210,992

104,552

79,343

15,239

Foreign exchange adjustments

613

707

290

3,319 10

Additions

430

7,557

5,390

542

4,879

Transferred

(1,918)

Cost of assets disposed of

Cost at 31 December 2011

614

142

412

750

(1,701)

(7,535)

(3,423)

(2,159)

(26)

210,948

105,423

82,012

14,468

6,264

Depreciation and impairment losses at 1 January 2011

Foreign exchange adjustments

Depreciation and impairment losses of assets disposed of

Impairment losses

Depreciation Depreciation and impairment losses at 31 December 2011

(32,552) (85,609) (59,599) (10,699)

177

(88)

179

1,330

6,972

2,889

1,636

(28)

(2,253)

(6,106) (7,963) (8,079) (1,598)

(37,151) (88,941) (64,610) (10,656)

Carrying amount 173,797 at 31 December 2011

16,482

17,402

3,812

6,264

Hereof assets held under finance leases

Cost at 1 January 2010

Foreign exchange adjustments

Additions

Transferred

Cost of assets disposed of

Cost at 31 December 2010

2,151

336

211,686

98,956

77,630

15,776

1,752

(291)

11,852

2,644

(649)

(4)

1,861

9,127

8,905

681

2,731 (1,160)

586

(282)

794

(2,850)

(15,445)

(9,554)

(1,363)

210,992

104,552

79,343

15,239

3,319

Depreciation and impairment losses at 1 January 2010

Foreign exchange adjustments

Depreciation and impairment losses of assets disposed of

Transferred

Impairment losses

Depreciation

(25,503) (80,149) (56,829) (10,377)

(7)

(11,040)

(1,917)

755

1,703

14,510

8,596

1,335

208

384

(592)

(3,136) (78) (579) (155)

(5,609) (9,060) (9,254) (1,665)

Depreciation and impairment (32,552) losses at 31 December 2010

Carrying amount at 31 December 2010

178,440

(85,609)

(59,599)

(10,699)

18,943

19,744

4,540

3,319

944

Hereof assets held under finance leases

3,093

Notes to the Consolidated Financial Statements (EURk)

Property, plant and equipment (continued)

Property, plant and Leasehold equipment Land and Plant and Tools and improve- under buildings machinery equipment ments construction

Cost at 1 January 2009

210,663

83,787

65,730

12,619

4,929

Foreign exchange adjustments

695

Cost, businesses combinations

14,549

5,703

1,147

359

1,062

Additions

1,034

6,158

8,191

722

3,508

Transferred

169

4,402

Cost of assets disposed of

(875)

(9,940)

568

2,447

(7,044)

(3,624)

(1,205)

Cost at 31 December 2009

211,686

98,956

77,630

15,776

1,752

Depreciation and impairment losses at 1 January 2009

Foreign exchange adjustments

(146)

(12,702)

(4,345)

(936)

Depreciation and impairment losses of assets disposed of

755

9,627

3,078

605

Transferred

(706)

1,401

(797)

Impairment losses

(758)

(1,230)

(441)

Depreciation

(20,387) (64,875) (46,665) (6,718)

(5,725) (10,735) (9,068) (2,090)

Depreciation and impairment (25,503) (80,149) (56,829) (10,377) losses at 31 December 2009

Carrying amount 186,183 18,807 20,801 5,399 1,752 at 31 December 2009

Hereof assets held under finance leases

3,448

1,892

The cost of land and buildings totalled 210,663 at 1 January 2009. Of this amount, land and buildings recognised at fair value at 1 January 2009 according to the annual report for 2010, presented in accordance with the Danish Financial Statements Act, came to 163,627. The latter value has been used as the new cost.

Investment properties

2011

2010

2009

Fair value at 1 January

30,854

30,907

30,870

Foreign exchange adjustments

Fair value at 31 December

(53)

30,938

30,854

30,907

Investment properties consist of a rental property in Denmark, let out under a long-term lease. The fair value is calculated according to the net rental method, and thus the value of the property has been calculated on the basis of its expected operating income from 2010 to 2011 of about 1,800 and a required rate of return of 6 %, determined on the basis of the general market level and specific circumstances relating to the property. The cost at 1 January 2009 of 30,870 is equivalent to the fair value at 1 January 2009 according to the annual report for 2010, presented in accordance with the Danish Financial Statements Act. The latter value has been used as the new cost. Rental income amounted to 2,285 (2010: 2,227 and 2009: 1,838) and operating costs to 567 (2010: 467 and 2009: 361).

Notes to the Consolidated Financial Statements (EURk)

Financial assets Investments in jointly controlled entities

Note 29 includes an outline of the Group’s investments in jointly controlled entities. The Group’s investments in jointly

controlled entities are consolidated on a pro-rata basis. The Group’s shares of jointly controlled entities’ revenue, costs, assets

and liabilities are as follows:

2011

2010

2009

Revenue

345,716

322,883

283,258

Costs

(311,786)

(304,325)

(271,450)

Profit/(loss) before tax

33,930

18,558

11,808

Non-current assets

48,743

55,529

51,577

Current assets

199,261

182,229

164,466

Total assets

248,004

237,758

216,043

Non-current liabilities

109,629

138,217

133,922

Current liabilities

135,871

123,138

109,429

Total liabilities

245,500

261,355

243,351

The Group’s operating lease commitments, contingent liabilities and collateral provided in jointly controlled entities appear

from notes 21 and 22.

Investments in associates

Cost at 1 January

Foreign exchange adjustments

Additions

2011

2010

2009

26,320

24,916

25,502

172

1,502

3,154

7,214

1,207

1,677

Disposals

(6,267) (1,305) (5,417)

27,439

Cost at 31 December

26,320

24,916

Adjustments at 1 January

Foreign exchange adjustments

Share of profit/(loss) for the year

Additions

Dividends

Disposals

Transferred for set-off against receivables

Transferred to provisions

Adjustments at 31 December

Carrying amount at 31 December

(16,985)

(14,454)

(5,787)

(336)

(1,256)

(2,066)

8,263

(3,655)

(8,751)

128

376

(846) (221) (305) (6,196)

436

1,122

771

1,921

1,575

(132)

(242)

(15,201)

(16,985)

(14,454)

12,238

9,335

10,462

Note 29 includes an outline of the Group’s investments in associates. The revenue, profit/loss for the year, assets and liabilities of the primary associates are as follows: Revenue

Net profit/(loss) for the year

Assets

Liabilities

2011

194,676

6,613

80,594

161,514

2010

183,988

2,873

71,712

159,132

2009

122,967

(26,649)

59,273

144,284

Notes to the Consolidated Financial Statements (EURk)

Inventories

2011

2010

2009

Raw materials and consumables

2,487

3,382

3,631

Work in progress 3,447

3,371

4,850

Manufactured goods and goods for resale 101,530

96,634

100,883

TV programmes 21,391

25,872

26,348

Total 128,855

129,259

135,712

At the end of the reporting period, the Group estimates the write-down to realisable value for manufactured goods and goods for resale, which primarily relates to books and game consoles. The estimate is based on expected sales and therefore subject to some uncertainty. The inventories of Lindhardt og Ringhof were reduced from 2010 to 2011, mainly as a consequence of the divestment of the Books Clubs to Gyldendal and the closure of the map publisher Legind, as well as increased digitalisation in educational publishers. The inventories and impairment of inventories, expensed for the year amounted to 229,494 (2010: 172,461 and 2009: 180,808) and 13,356 (2010: 11,215 and 2009: 16,463), respectively. Reversed impairment of inventories in the income statement amounted to 3,760 (2010: 4,799 and 2009: 4,905). Inventories included capitalised payroll costs in the amount of 8,437 (2010: 8,733 and 2009: 9,500).

Securities 2011

2010

2009

Listed bonds 181,205

149,456

27,576

Other

2,234

2,865

2,713

Total 183,439

152,321

30,289

The average duration of the bonds is 6 months.

Cash and cash equivalents 2011

2010

2009

Cash and bank account deposits

154,259

148,807

162,061

Total 154,259

148,807

162,061

Of which deposited in fixed-term deposit 31,405 (2010: 44,726) and cash and cash equivalents pledged as collateral 8,448 (2010: 8,378 and 2009: 3,360). 16

Equity The Egmont Foundation is a commercial foundation and thus subject to special conditions relating to its capital, as set out in the Foundation’s Charter. The Foundation’s assets are used for donations in connection with the Foundation’s Charitable Activities. The balance of the Foundation’s assets is transferred to a reserve to ensure that the Foundation are provided with the necessary capital for consolidation and expansion in accordance with sound business principles. The Foundation’s equity ratio stood at 39.1 % (2010: 36.4 % and 2009: 35.4 %).

Notes to the Consolidated Financial Statements (EURk)

Pensions The Group mainly has defined contribution pension plans, as the Group’s defined benefit pension plans in both its wholly-owned and its jointly controlled Norwegian entities were closed to new members in 2004 and 2008, respectively. In addition, the Group has pension plans in Sweden that have been established together with other enterprises as part of collective agreements (multi-employer plans). Such plans are defined benefit plans, but are treated as defined contribution plans because the pension funds are unable to provide the information necessary to calculate the individual enterprise’s share of the obligation. For defined benefit pension plans, the obligation is calculated at the actuarial present value at the end of the reporting period. These pension plans are funded in whole or in part through pension funds for the employees. The present value of the defined benefit pension obligations depends on the assumptions used as a basis for the actuarial calculation. The calculation is based on assumptions relating to discount rate, expected return on assets, future wage or salary increases, mortality and future development of the pension obligation. The primary assumptions lie within the framework determined by the public authorities in Norway and are reviewed as at the reporting date. The lower discount rate affected the defined benefit pension obligations for 2011. In 2010, the Group reviewed the primary assumptions to ensure that they were representative of the Group’s pension plans, which resulted in a change to the assumptions for pension, wage and salary adjustments.

Pensions

Defined benefit pension obligations

Other pension obligations

Total

2011

2010

2009

(39,269)

(23,779)

(21,022)

(9,373)

(8,812)

(4,627)

(48,642) (32,591) (25,649)

Defined benefit pension obligations are specified below:

Present value of defined benefit pension obligations

(84,576)

(68,401)

(63,392)

Fair value of pension plan assets

50,142

47,842

45,207

Payroll tax

(4,835)

(3,220)

(2,837)

Net liability at 31 December

(39,269)

(23,779)

(21,022)

Movement in the present value of the defined benefit pension obligations:

Liability at 1 January

Foreign exchange adjustments

Current service cost

Past service cost

Calculated interest relating to liability

Actuarial gains/(losses)

Curtailments and repayments

Benefits paid, etc.

Liability at 31 December

(68,401)

(63,392)

(56,055)

(575)

(4,079)

(10,223)

(3,287)

(3,124)

(4,062)

(909)

1,826

(172)

(2,678)

(2,818)

(2,669)

(11,686)

430

5,541

1,993

2,960

2,756

(84,576)

(68,401)

2,255 (63,392)

Notes to the Consolidated Financial Statements (EURk)

1 7 Pensions (continued) 2011 2010 2009

Movement in the fair value of pension plan assets:

Pension assets at 1 January

47,842

45,207

40,212

Foreign exchange adjustments

401

2,790

7,334

Adjustments relating to previous year(s)

529

Expected return on pension plan assets

2,668

2,713

2,690

Actuarial gains/(losses)

(1,278)

(1,347)

(3,661)

Contributions paid into the pension plans

2,156

2,076

2,586

Curtailments and repayments

(1,451)

(2,166)

Benefits paid, etc.

(2,204)

(2,146)

(1,788)

Pension assets at 31 December

50,142

47,842

45,207

Return on pension assets:

Actual return on pension plan assets

1,390

1,366

(971)

Expected return on pension plan assets

(2,668)

(2,713)

(2,690)

Actuarial losses on pension plan assets

(1,278)

(1,347)

(3,661)

Average composition of pension plan assets:

Bonds

48.7 %

11.9 %

17.1 %

11.3 %

Money market and the like

21.4 %

16.9 %

14.4 %

Property

18.0 %

16.9 %

16.8 %

49.1 %

57.5 %

Average assumptions used for the actuarial calculations at the end of the reporting period in the individual pension plans:

Discount rate

2.6 %

4.2 %

4.9 %

Inflation rate

3.3 %

3.8 %

4.0 %

Adjustment of wages and salaries

3.5 %

4.0 %

4.3 %

Expected return on pension funds

4.1 %

5.3 %

5.6 %

Amount of defined benefit pension obligations for current and previous years:

Defined benefit pension obligations

(84,576)

(68,401)

(63,392)

Pension assets

50,142

47,842

45,207

Payroll tax

(4,835)

(3,220)

(2,837)

Net liability at 31 December

(39,269)

(23,779)

(21,022)

Pension costs in the income statement:

Current service cost

3,342

3,647

4,002

Calculated interest relating to liability

2,721

2,842

2,726

Curtailments and repayments

(1,042)

Expected return on pension plan assets

(2,656)

(2,614)

(2,633)

Impact of change to pension plans

(2,479)

140

Payroll tax

445

405

481

Pension costs

3,852

1,801

3,674

Actuarial gains/(losses) recognised in other comprehensive income

Notes to the Consolidated Financial Statements (EURk)

(14,714)

(2,982)

1,559

Deferred tax

Deferred tax at 1 January

Foreign exchange adjustments

Deferred tax for the year recognised in the income statement

Deferred tax for the year recognised in other comprehensive income

Deferred tax at 31 December

2011

2010

2009

15,523

16,419

1,847

(5)

701

273

(5,667)

(2,654)

14,651

4,360

1,057

(352)

14,211

15,523

16,419

Deferred tax has been recognised in the balance sheet as follows:

Deferred tax, asset

22,156

22,184

Deferred tax (liability)

(7,945)

(6,661)

(1,421)

Deferred tax, net

14,211

15,523

16,419

17,840

Deferred tax assets are recognised for all unutilised tax losses to the extent it is considered probable that taxable profits will be realised in the foreseeable future against which the losses can be offset. The amount to be recognised in respect of deferred tax assets is based on an estimate of the probable time of realising future taxable profits and the amount of such profits. The Group has assessed that deferred tax assets totalling 22,156 (2010: 22,184 and 2009: 17,840), primarily attributable to Norway, can be realised in the foreseeable future. This is based on the forecast earnings base of the enterprises in which the tax assets can be utilised.

2011

2010

2009

The deferred tax relates to:

Intangible assets

(8,534) (4,732) (2,833)

Property, plant and equipment

(3,276)

(6,396)

Receivables

(46)

(151)

634

Inventories

3,620

2,981

6,768

Other current assets

836

(200)

(429)

Provisions

14,431

12,104

9,790

Other liabilities

(1,032)

1,878

3,387

Tax loss carry-forwards, etc.

8,212

10,039

(298)

Total

14,211

15,523

16,419

(600)

Unrecognised deferred tax assets relate to:

Tax losses

Temporary differences

1,837

1,871

213

977

2,235

3,232

Notes to the Consolidated Financial Statements (EURk)

19 Other provisions

Goods sold with a right of return

Other

66,034

10,318

Other provisions at 1 January 2011

Foreign exchange adjustments

Provisions made

53,972

5,118

Provisions used

(54,185)

(3,262)

Reversed

(6,375)

(2,497)

Other provisions at 31 December 2011

59,507

9,698

Goods sold with a right of return include magazines and books that the shops can return according to agreement. At the date of sale, the Group estimates how many goods are expected to be returned or exchanged based on historical experience of selling such goods. This estimate is naturally subject to uncertainty, as the quantity actually returned may deviate from the estimated quantity. However, the uncertainty concerning the return of magazines is limited due to the short period allowed for returning them. Other provisions include warranty provisions, in respect of which expected partial compensation from the supplier is recognised in other receivables. 20

Fees to elected auditor

Statutory audit

2011

2010

2009

(1,510) (1,554) (1,620)

Tax consultancy

(87)

(158)

(590)

Other assurance statements

(71)

(70)

(128)

Other services

Total fees to KPMG

(778)

(583)

(470)

(2,446)

(2,365)

(2,808)

Statutory audit

(215)

(204)

(255)

Tax consultancy

(50)

(28)

(13)

Other assurance statements

(17)

(3)

Other services

(98)

(24)

(102)

Total fees to other auditors

(363)

(273)

(373)

Total

(2,809) (2,638) (3,181)

Operating leases Operating leases comprise leases for properties of 138,082 (2010: 145,754 and 2009: 120,856) and other leases of 8,696 (2010: 5,999 and 2009: 2,679). These figures include leases for properties entered into by jointly controlled entities of 65,258 (2010: 64,542 and 2009: 61,494).

2011

2010

2009

Non-cancellable operating lease payments amount to:

Up to 1 year

32,167

33,708

29,172

Between 1 to 5 years

88,132

81,093

67,486

More than 5 years

26,480

36,952

26,876

Total

146,779

151,753

123,534

During 2011 32,273 (2010: 35,679 and 2009: 36,858) was recognised as expense in the income statement in respect of operating leases.

Notes to the Consolidated Financial Statements (EURk)

Contingent liabilities and collateral The Group has provided security to mortgage credit institutions of 112,612 (2010: 112,379 and 2009: 112,524) over corporate and investment properties, for which the carrying amount constitutes 166,192 (2010: 168,375 and 2009: 170,679). The Group’s jointly controlled entities have provided security of 2,414 to other credit institutions over miscellaneous assets (a floating charge). The carrying amount of such assets amounted to 161,436 (2010: 117,139 and 2009: 95,347). Contractual investment commitments relating to intangible film rights amount to 29,893 (2010: 28,323 and 2009: 16,319). Entities in the Group have furnished miscellaneous guarantees, etc., for 16,526 (2010: 20,606 and 2009: 17,972). These figures include guarantees furnished by jointly controlled entities for 10,429 (2010: 7,425 and 2009: 7,420).

Financial risks and financial instruments As a result of its operations, investments and financing, the Egmont Group is exposed to a number of financial risks, including market risks. Corporate Treasury is handling the centralised management of liquidity and financial risks in the Group’s wholly owned entities. Corporate Treasury operates as a counterparty to the Group’s entities, thus undertaking centralised management of liquidity and financial risks. Liquidity and financial risks arising at jointly controlled entities are reported to Corporate Treasury and thus managed on a decentralised basis. Management monitors the Group’s financial risk concentration and financial resources on an ongoing basis. The overall framework for financial risk management is laid down in the Group’s Treasury Policy. The Treasury Policy comprises the Group’s currency and interest rate policy, financing policy and policy regarding credit risks in relation to financial counterparties and includes a description of approved financial instruments and risk framework. The overall framework is assessed on an ongoing basis. The Group’s policy is to refrain from engaging in speculative transactions. Thus, the Group’s financial management focuses exclusively on managing and reducing financial risks that are a direct consequence of the Group’s operations, investments and financing. There are no major changes in the Group’s risk management policy relative to 2010 and 2009. Currency risks The Group is exposed to exchange rate fluctuations as a result of the individual consolidated enterprises entering into purchase and sales transactions and having receivables and payables denominated in currencies other than their functional currency. If the exposure exceeds the Group’s limit for currency exposure, such exposure is hedged by means of forward exchange contracts, among other hedging instruments. The value of forward exchange contracts is recognised in the income statement. The Group’s primary currency exposure is denominated in NOK and EUR and relates to the Group’s investments in wholly owned and jointly controlled entities, including long-term intra-group loans. Basically, these currency risks are not hedged, as ongoing hedging of such long-term investments is not considered to be the best strategy based on overall risk and cost considerations. A 5 % and 1 % drop in the exchange rates of NOK and EUR, respectively, would have impacted the 2011 profits by about EUR -8.4 million (2010: EUR -8.2 million) and about EUR 0.6 million (2010: EUR 0.5 million), respectively, and the equity at 31 December 2011 in terms of NOK by about EUR -6.8 million (2010: EUR -6.6 million), and in terms of EUR

Notes to the Consolidated Financial Statements (EURk)

Financial risks and financial instruments (continued)

by about EUR 5.0 million (2010: EUR 4.4 million). A positive change in foreign exchange rates would have had a reverse impact on profits and equity based on the financial instruments recognised at end-2011 and end-2010, and unchanged figures for production/sales, unchanged price and interest rate levels. Interest rate risks As a result of its investment and financing activities, the Group has an exposure related to fluctuations in interest levels in the Nordic countries. The Group’s policy is to hedge interest rate risks relating to loans when it is assessed that interest payments may be secured at a satisfactory level. The Group’s interest rate risks are managed by entering into interest swap contracts, with floating rate loans being converted into fixed interest loans. The principal amount of interest swap contracts concluded by the Group for hedging purposes was EUR 90 million at 31 December 2011 and at 31 December 2010. The fair value in the balance sheet amounted to EUR 20.1 million at 31 December 2011 and EUR 9.8 million in 2010, and the value adjustment of the equity for 2011 was negative by EUR 10 million and EUR 2.8 million after tax in 2010. As a result of the Group’s use of derivative instruments to hedge its interest rate exposure relative to instruments of debt, changes in the fair value of the hedging instruments will impact the Group’s reserve for hedging transactions under equity. A one percentage point drop in interest rates would reduce equity by about EUR 11 million. In addition, such an interest rate drop would reduce the income statement by about EUR 1 million (on a 12-month rolling basis) by way of loss of interest income from net deposits and market value changes to derivative financial instruments. Liquidity risks The Group’s liquidity reserve comprises cash and cash equivalents, securities and unutilised credit facilities. To ensure optimum utilisation of cash and cash equivalents, the Group operates with cash pools. T he Group has net deposits of EUR 104.7 million (2010: EUR 76.7 million). The Group’s financing consists primarily of Danish floating rate mortgage loans expiring in 2028 and floating rate loans denominated in NOK maturing in 2012-13. The bulk of the latter loans were refinanced in January 2012, with the refinanced loans thus expiring in 2015. The Group’s liabilities other than provisions fall due as shown below. The debt repayment schedule is based on undiscounted cash flows incl. estimated interest payments based on current market conditions: Contrac Carrying tual cash Within 1 to 4 amount flows 1 year years

Mortgage debt

112,612

144,356

2,611

15,775

125,970

Other credit institutions

110,199

110,281

71,622

38,659

Other financial liabilities

91,724

95,130

87,239

7,891

Finance lease liabilities

2,151

687

1,464

Trade payables

201,749

Non-derivative financial instruments

518,435

553,667

363,908

63,789

125,970

Derivative financial instruments

23,410

36,815

4,897

12,126

19,792

31 December 2011

541,845

590,482

368,805

75,915

145,762

After 5 years

Notes to the Consolidated Financial Statements (EURk)

Financial risks and financial instruments (continued)

Carrying amount

Mortgage debt

Contractual cash flows

Within 1 year

1 to 4 years

After 5 years

112,307

154,983

2,812

16,566

135,605 0

Other credit institutions

99,261

100,460

60,690

39,770

Other financial liabilities

89,057

91,927

86,005

5,922

Finance lease liabilities

4,038

4,597

2,010

2,343

244

Trade payables

222,370

Non-derivative financial instruments

527,033

574,337

373,887

64,601

135,849

Derivative financial instruments

31 December 2010

18,552

49,500

10,200

15,100

24,200

545,585

623,837

384,087

79,701

160,049

Mortgage debt

112,608

173,589

3,552

17,765

152,272

Other credit institutions

96,047

98,393

57,771

40,622

Other financial liabilities

84,986

87,385

80,507

6,878

Finance lease liabilities

5,340

5,886

2,230

3,417

239

Trade payables

225,789

Non-derivative financial instruments

524,770

591,042

369,849

68,682

152,511

Derivative financial instruments

31 December 2009

16,733

57,200

11,300

17,300

28,600

541,503

648,242

381,149

85,982

181,111

Credit risks The Group’s credit risks relate primarily to trade receivables, securities and cash and cash equivalents. The Group is not exposed to any significant risks associated with a particular customer or business partner. According to the Group’s policy for accepting credit risk, all major customers are regularly credit rated. Trade receivables The Group has received collateral relating to sales. This occurs typically in connection with the distribution of magazines where deposits are received. In addition, some of the Group’s entities take out credit insurance against losses on trade receivables to the extent deemed relevant. Collateral provided is included in an assessment of the need to make impairment. Trade receivables backed by collateral, with a consequent reduction in overall credit risk, amount to 32,322 (2010: 46,234 and 2009: 39,311).

Notes to the Consolidated Financial Statements (EURk)

Financial risks and financial instruments (continued) Â Â Â Trade receivables, including trade receivables backed by collateral, that have not yet fallen due and have not been impaired, can be broken down by geographical area as follows:

2011

2010

2009

Denmark

36,391

47,311

54,416

Other Nordic countries

85,834

103,976

99,386

Other European countries

38,131

45,874

43,261

Other countries

3,430

2,773

2,163

Total

163,786 199,934 199,226

In addition, the aging of trade receivables past due is as follows:

Up to 30 days

25,183

17,574

17,428

Between 30 and 90 days

14,473

12,705

13,169

Over 90 days

13,732

13,219

16,762

Total

53,388

43,498

47,359

Impairment losses at 1 January

12,345

11,588

10,728

Foreign exchange adjustments

(52)

(637)

(602)

Impairment losses for the year

4,010

4,762

6,033

Realised impairment losses

(3,193)

(1,730)

(1,412)

Reversed impairment losses

(2,709)

(1,638)

(3,159)

Impairment losses at 31 December

10,401

12,345

11,588

Securities, cash and cash equivalents The Group is exposed to counterparty risk through its cooperation with financial counterparties via funds deposited, but also via credit commitments. The Group manages this risk by cooperating with banks with a sound credit rating.

Categories of financial instruments

Financial instruments are broken down into categories of financial assets and liabilities below:

2011

2010

2009

183,439

152,321

30,289

Financial assets measured at fair value via the income statement

183,439

152,321

30,289

Trade receivables

206,773 231,087 234,997

Securities (fair value option)

Receivables from associates

Other receivables

Cash and cash equivalents

Receivables

3,648

2,405

3,342

60,811 60,663 81,185 154,259

148,807

162,061

425,491 442,962 481,585

Derivative financial instruments

3,925

8,749

9,956

Financial liabilities designated at fair value 3,925 via the income statement

8,749

9,956

Derivative financial instruments

19,485

9,803

6,777

Financial liabilities used as hedging instruments

19,485

9,803

6,777

Notes to the Consolidated Financial Statements (EURk)

Financial risks and financial instruments (continued)

Mortgage debt

2011

2010

2009

112,612 112,307 112,608

Other credit institutions (non-current)

38,572

36,654

41,293

Other credit institutions (current)

71,627

65,159

59,269

Other financial liabilities

91,724

89,057

84,986

Finance lease liabilities

2,151

4,038

5,340

Trade payables

201,749 222,370 225,789

518,435

Financial liabilities measured at amortised cost

529,585

529,285

The carrying amount of receivables and other financial liabilities (current) is equal to the fair value. Mortgage debt and debt to other credit institutions (non-current) are floating rate cash loans, and thus the fair value is equal to the carrying amount. Securities are measured at listed prices (level 1). Derivative financial instruments are valued at fair value on the basis of inputs other than listed prices that are observable for the liability, either directly or indirectly (level 2).

Related parties

The Egmont Foundation is a commercial foundation and has no related parties with control. The Egmont Group’s related parties with significant influence comprise the Foundation’s Board of Trustees, Management Board and their close relatives, as well as enterprises in which this group of persons has material interests. The compensation paid to the Board of Trustees and Management Board appears from note 4. Related parties with significant influence also comprise associates; see notes 12 and 29. Transactions with associates consisted of short-term loans to associates of 12,489 (2010: 10,475 and 2009: 3,342). 25

Standards and interpretations not yet adopted

The IASB has issued a number of new standards and interpretations that have not yet become mandatory for the Egmont Foundation’s consolidated financial statements for 2011. None of these new standards or interpretations are expected to have a significant effect on the consolidated financial statements, except for: IFRS 11, Joint arrangements, will become effective from the 2013 financial year. According to the standard, it will no longer be possible to consolidate jointly controlled entities on a pro-rata basis. Jointly controlled entities are subsequently to be recognised according to the equity method, which means that the share of net profit or loss must be recognised under financial items. This will primarily result in a reduction of the Group’s revenue and operating profit (EBIT) in respect of the Norwegian part of Egmont Books, while the net profit or loss will remain unchanged. Comparative figures will have to be restated.

Subsequent events On 8 January 2012, the Group entered into an agreement regarding the acquisition of the remaining 50 % shareholding in TV 2, Norway, the acquisition date being 1 February 2012. The Group additionally acquired all shares in Venuepoint Holding ApS (Billetlugen) on 9 March 2012. Information about business combinations after the end of the reporting period appears from note 27.

Notes to the Consolidated Financial Statements (EURk)

Acquisition and disposal of businesses Acquisitions and disposals in 2011, 2010 and 2009 In 2009, the Group disposed of the TV production business area. The selling price in 2009 amounted to EUR 25 million in cash, excl. disposal costs. In 2010, the Group received additional contingent consideration of EUR 3.9 million in cash and expects no further income from the disposal. Previously recognised non-current assets amounted to EUR 1.5 million, net working capital to EUR 1.1 million and cash and cash equivalents to EUR 2.9 million. ACQUISITIONS IN 2012 TV 2, Norway On 8 January 2012, the Group entered into an agreement regarding the acquisition of the remaining 50 % shareholding in TV 2, Norway, with effect from 1 February 2012. With 100 % ownership of TV 2, the Group’s acquisition helps underpin its position as one of the Nordic region’s leading media groups. The purchase consideration totalled EUR 274 million and included the takeover of a loan to the owners of EUR 135 million. Thus the purchase consideration for the shares amounted to EUR 139 million. Goodwill, which is not deductible for tax purposes, represents the value of personnel, know-how, a platform for future income from advertising, distribution and user-paid services, as well as full ownership of the shares. The acquisition was effected after the end of the reporting period, and the expected opening balance sheet is therefore based on provisionally determined fair values.

1 February 2012

Intangible assets

Other non-current assets

195,536 68,495

Current assets

155,665

Loan to owners

(135,325)

Other non-current liabilities

(233,609)

Current liabilities

(87,969)

Identifiable net assets

(37,207)

Non-controlling interests

(150)

Fair value of 50 % shareholding

(99,270)

Goodwill

275,475

138,848

Purchase consideration

Transaction costs (advisers’ fees) attributable to the acquisition amount to EUR 0.9 million. The fair value of the 50 % shareholding recognised in 2011 less the estimated control premium was provisionally determined at EUR 99 million at 1 February 2012. Based on this value and the IFRS rules regarding business combinations achieved in stages, an amount of EUR 162 million is expected to be recognised as an unrealised gain in connection with the acquisition of the remaining 50 % in 2012. The revenue and results of TV 2, Norway, are expected to remain at the same level as in 2011. Venuepoint On 9 March 2012, the Group acquired all shares in Venuepoint Holding ApS (Billetlugen). The purchase consideration amounted to EUR 5.4 million in cash plus a subsequent payment expected to amount to EUR 3.4 million. The subsequent payment is based on expectations for future earnings. Due to the short interval between the acquisition and the approval of the annual report, it has not been practically feasible to allocate the purchase consideration to the assets and liabilities acquired.

Notes to the Consolidated Financial Statements (EURk)

Effect of transition to IFRS Changes in accounting policies on transition to IFRS The annual report for 2011 is the first annual report in which the consolidated financial statements have been prepared in accordance with IFRS, as adopted by the EU. The consolidated financial statements in the annual report for 2010 were prepared in accordance with the Danish Financial Statements Act. On the transition to IFRS in the consolidated financial statements, the Group has used IFRS 1, “First-time adoption of International Financial Reporting Standards”. The opening balance sheet and comparative figures have been prepared in accordance with the standards and interpretations applicable at 31 December 2011. According to IFRS 1, the opening balance sheet is dated 1 January 2009 (date of transition) and has been prepared as if the relevant standards and interpretations had always applied, except where the special transitional and commencement provisions of IFRS have been used. The transition to IFRS has resulted in the following changes to the Group’s accounting policies: • Goodwill and trademarks with indefinite useful lives are not amortised, but are tested for impairment at least once annually. Previously, goodwill and trademarks were amortised on a straight-line basis over their useful lives. • Properties are recognised at cost less accumulated depreciation according to the cost price method. The Group’s rental property is classified as an investment property and recognised at fair value, with value adjustments made via the income statement. Previously, properties were recognised at fair value, with revaluations made via equity. • Revenue from the sale of film broadcasting rights to TV stations is recognised at the availability date. Previously, the sale of film broadcasting rights to TV stations was recognised at the invoice date. Royalty costs, etc. attributable to the deferred revenue are accrued and recognised under prepayments in the balance sheet. • Marketing costs are recognised in the income statement at the date of delivery from the supplier. Previously, marketing costs were recognised under prepayments until the time of utilisation. • Acquired film rights are recognised as an intangible asset at the time when control over the asset is obtained. Until such time, payments are recognised as prepayments for intangible assets. Previously, acquired film rights were recognised in the balance sheet under inventories at the time of conclusion of the agreement, and the portion of film rights for which the rights owner had not been paid was recognised under current trade payables. • The portion of in-house produced film rights attributable to the sale of broadcasting rights is included in deferred revenue and is recognised as revenue in the income statement once the TV stations and distribution companies can freely use the asset. Previously, the sale of broadcasting rights was included in the net asset comprising in-house produced film rights. • Actuarial gains and losses on defined benefit pension plans are recognised directly in other comprehensive income. Previously, actuarial gains and losses were recognised as personnel costs in the income statement. • Securities managed in accordance with a documented investment strategy are recognised at fair value at the end of the reporting period, using the fair value option. Value adjustments are recognised directly in the income statement. Previously, securities were recognised at cost and fair value in the balance sheet, respectively, and value adjustments were recognised in the income statement. • The fair value changes of interest rate swaps are recognised in the income statement in the cases where the swaps are ineffective according to the IFRS documentation requirements, or where the Group has chosen not to use IFRS hedge accounting.

Notes to the Consolidated Financial Statements (EURk)

Effect of transition to IFRS (continued)

• Barter agreements where the services exchanged are dissimilar are recognised at fair value and accrued as the services are performed or over the period specified in the concluded agreement. Fair value is measured at the value of either the delivered or the received services, depending on which services can be measured accurately. • Impact of the changes on deferred tax. The Group has chosen to make use of the following optional exemptions in IFRS 1: • Business combinations effected before the date of transition, 1 January 2009, have not been adapted to IFRS. • For corporate and investment properties, the cost at the date of transition has been fixed at the carrying amount according to the annual report for 2010 (equivalent to the fair value). • The reserve for foreign exchange adjustments was reset to zero at the date of transition. Reclassifications Apart from the changes in the accounting policies relating to recognition and measurement, the following reclassifications and layout changes, including a restatement of comparative figures, have been made:

• Compensation from third parties relating to warranty provisions is recognised as other receivables. Previously, compensation from third parties was recognised under warranty provisions. • Non-controlling interests are presented as part of the Group’s equity. • Provisions are divided into non-current and current liabilities. • Deferred tax is presented under other non-current assets and non-current liabilities. • The portfolio of TV programmes is presented under inventories. • Foreign exchange adjustments arising on the translation of foreign entities, etc., value adjustments of hedging instruments and actuarial gains/losses on defined benefit pension plans are recognised as other comprehensive income.

Notes to the Consolidated Financial Statements (EURk)

Effect of transition to IFRS (continued)

Reconciliation of balance sheet and equity at 1 January 2009

Previous accounting policies

Effect of transition to IFRS IFRS

1 Intangible assets

166,674

43,030

209,704

2 Property, plant and equipment

284,448

(45,365)

239,083

3 Investment properties

30,870

24,668

26,738

475,790

55,273

531,063

Other non-current assets Deferred tax Non-current assets

4 Inventories incl. film rights

209,398

(58,002)

151,396

5 Receivables

345,357

8,230

353,587

Deferred tax

26,738

(26,738)

18,352

904

19,256

6 Securities

Cash and cash equivalents Current assets

36,220

636,065

(75,606)

560,459

Assets

1,111,855

(20,333)

1,091,522

7 Equity excl. non-controlling interests

Non-controlling interests Equity

382,091

(17,586)

364,505

2,939

385,030

(17,586)

367,444

8 Provisions

9 Non-current liabilities

10 Current liabilities

Liabilities

104,336

(50,472)

53,864

73,261

11,609

84,870

549,228

36,116

585,344

726,825

(2,747)

724,078

Equity and liabilities

1,111,855

(20,333)

1,091,522

Notes to the Consolidated Financial Statements (EURk)

Effect of transition to IFRS (continued)

Reconciliation of balance sheet and equity at 31 December 2010

Previous accounting policies

Effect of transition to IFRS IFRS

1 Intangible assets

132,480

71,269

203,749

2 Property, plant and equipment

272,395

(47,409)

224,986

3 Investment properties

30,854

13,232

22,184

418,107

76,898

495,005

Other non-current assets Deferred tax Non-current assets

4 Inventories incl. film rights

190,215

5 Receivables

Deferred tax

6 Securities

Cash and cash equivalents Current assets

(60,956)

129,259

332,140

9,493

341,633

22,184

(22,184)

151,700

621

152,321

148,807

845,046

(73,026)

772,020

Assets

1,263,153

3,872

1,267,025

7 Equity excl. non-controlling interests

Non-controlling interests Equity

441,497

11,715

7,919

453,212 7,919

449,416

11,715

461,131

8 Provisions

115,349

(65,972)

49,377

9 Non-current liabilities

156,369

5,252

161,621

542,019

52,877

594,896

813,737

(7,843)

805,894

10 Current liabilities

Liabilities

Equity and liabilities

Notes to the Consolidated Financial Statements (EURk)

1,263,153

3,872

1,267,025

Effect of transition to IFRS (continued)

Notes to reconciliation of balance sheet and equity

31.12.2010

01.01.2009

1 Intangible assets

Film rights

20,425

30,793

Prepayments relating to film rights

15,564

7,273

5,792

4,964

Reversal of amortisation and any recognised impairment of goodwill and trademarks

29,488

71,269

43,030

In-house produced film rights

2 Property, plant and equipment

Properties recognised at cost

(48,588)

Reversal of depreciation of investment properties

1,179

(47,409)

0 (45,365)

3 Investment properties

Reclassification of investment property

30,870

Foreign exchange adjustments, net

(45,365)

30,870

(16)

30,854

30,870

4 Inventories incl. film rights (60,956) (58,002)

Film rights, etc.

5 Receivables Sale of TV broadcasting rights

7,152

Compensation from third party relating to warranties

2,341

8,230 0

9,493

8,230

6 Securities 621

Adjustment to fair value

904

7 Equity excl. non-controlling interests

Reversal of amortisation and any recognised impairment of goodwill and trademarks

26,879

Film rights

1,033

865

Deferred revenue relating to sale of film broadcasting rights

(3,586)

(7,767)

(12,417)

(11,588)

(842)

Properties recognised at cost Deferred revenue relating to sale of goods Provisions for return of goods Adjustment of securities to fair value Foreign exchange adjustments, etc.

(1,312)

927

904

1,033 11,715

0 (17,586)

Notes to the Consolidated Financial Statements (EURk)

Effect of transition to IFRS (continued)

Notes to reconciliation of balance sheet and equity

31.12.2010

01.01.2009

8 Provisions Film rights

Compensation from third party relating to warranties

2,341

Adjustment of deferred tax, net

(4,253)

(5,400)

Provisions for return of goods Reclassification of other provisions Reclassification of non-current employee obligations

927

436

9 Non-current liabilities 5,252

Deferred revenue relating to sale of film broadcasting rights

0 (45,527)

(65,972) (50,472)

1,225 (66,227)

11,609

10 Current liabilities

Film rights

(27,500)

(20,817)

(927)

(436)

Deferred revenue relating to sale of film broadcasting rights

12,186

11,842

Reclassification of other provisions

66,227

45,527

Reclassification of non-current employee obligations

Deferred revenue relating to sale of goods

2,891

52,877

36,116

Reconciliation of income statement and total comprehensive income

Previous accounting policies

Effect of transition to IFRS IFRS

2010

1,420,084

3,028

1,423,112

2,117

12,744

11 Revenue

Change in inventories of finished goods and work in progress Other operating income Raw materials and consumables

(55,651)

12 Other external expenses

(923,572)

23,901

(899,671)

13 Personnel costs

(311,601)

2,982

(308,619)

14 Depreciation, amortisation and impairment losses;

property plant and equipment and intangible assets

15 Other operating expenses

Operating profit

(68,283) (15,524) (83,807) (7,805)

(40)

(7,845)

68,033

14,347

82,380

Profit after tax from investments in associates

(3,655)

16 Financial income

12,758

710

13,468

17 Financial expenses

(16,846)

(15)

(16,861)

Profit before tax

60,290

15,042

75,332

18 Tax on profit for the year

(23,617)

(2,072)

(25,689)

Net profit for the year

36,673

12,970

49,643

19 Other comprehensive income after tax

Total comprehensive income

Notes to the Consolidated Financial Statements (EURk)

36,673

12,998

49,671

Effect of transition to IFRS (continued)

Notes to reconciliation of income statement and total comprehensive income

2010

11 Revenue Sale of TV broadcasting rights

1,498

In-house produced rights

5,646

Deferred revenue relating to goods

(2,891)

Provisions for return of goods

(1,225)

3,028

12 Other external expenses

Film rights

23,059

Sale of TV broadcasting rights

(840)

Deferred revenue relating to goods

1,578

Provisions for return of goods

104 23,901

13 Personnel costs

Accumulated actuarial gains/(losses)

2,982

14 Depreciation and amortisation of property plant and equipment and intangible assets Goodwill and trademarks

11,570

Film rights

(23,059)

In-house produced film rights

(1,498)

Properties

(3,180)

Investment properties

643 (15,524)

15 Other operating expenses

Adjustment of earn-out

(40)

16 Financial income

Amortisation of film payables

Interest rate swap(s)

602

Financial income of the Egmont Foundationâ&#x20AC;&#x2122;s Charitable Activities

104

710

17 Financial expenses

Adjustment of securities to fair value

(15)

18 Tax on profit for the year

Adjustment of tax on profit for the year, net

(2,072)

19 Other comprehensive income after tax

Accumulated actuarial gains/(losses)

(2,982)

Other items

3,010

Notes to the Consolidated Financial Statements (EURk)

Effect of transition to IFRS (continued)

Reconciliation of cash flow statement

Previous accounting policies 2010

Effect of transition to IFRS IFRS 2010

2010

20 Cash flows from operating activities

142,081

29,413

171,494

21 Cash flows from investing activities

(32,918)

(150,589)

(183,507)

22 Cash flows from financing activities

(12,213)

(704)

(12,917)

Change in cash and cash equivalents

96,950

(121,880)

(24,930)

189,637

(27,576)

162,061

11,676

298,263

(149,456)

148,807

Cash and cash equivalents at 1 January Foreign exchange adjustment Cash and cash equivalents at 31 December Notes to reconciliation of cash flow statement

2010

20 Cash flows from operating activities IFRS changes, primarily film rights and sale of TV broadcasting rights; see above

29,413

21 Cash flows from investing activities Reclassification

(124,555)

IFRS changes

(26,034)

(150,589)

22 Cash and cash equivalents Reclassification

Notes to the Consolidated Financial Statements (EURk)

(27,576)

29 Group entities Unless otherwise stated, the entities are wholly owned. Insignificant – including primarily dormant – entities are not included in the outline. The entities marked with * are owned directly by the Egmont Foundation. SUBSIDIARIES Ownership share Country

Entity

Registered office

2011

Denmark

Egmont International Holding A/S*

Copenhagen

Egmont Holding A/S

Copenhagen

Egmont Magasiner A/S

Gentofte

Egmont Specialblade A/S

Gentofte

Go-Card A/S

Gentofte

De Danske Vægtkonsulenter A/S

Egmont Serieforlaget A/S

Copenhagen

Egmont Creative Center A/S

Copenhagen

Lindhardt og Ringhof Forlag A/S

Copenhagen

Nordisk Film A/S

Copenhagen

Nordisk Film Distribution A/S

Copenhagen

Nordisk Film Shortcut A/S

Copenhagen

Nordisk Film Production A/S

Copenhagen

Nordisk Film Biografer A/S

Copenhagen

Scala Bio Center Aalborg ApS

BioCenter Kolding A/S Kolding - 50 % 50 % (Fully consolidated in 2009 and 2010 and merged with Nordisk Film Biografer A/S in 2011)

NF Live A/S

Victoria Film Rights A/S Copenhagen - (Merged with Nordisk Film Production A/S in 2011)

Kino.dk A/S

Copenhagen

Vild med Underholdning A/S

Copenhagen

Dansk Reklame Film A/S

Copenhagen

Fine & Mellow A/S

Copenhagen

Nordisk Trading Company A/S

(Owned by MBO in 2009)

Nordisk Special Marketing A/S Aalborg - (Merged with Nordisk Film Distribution A/S in 2011, wholly owned in 2010, jointly controlled with MBO in 2009)

Nordisk Film TV A/S

Copenhagen

Substanz A/S

Copenhagen

Egmont Administration A/S

Copenhagen

A.Film A/S

Copenhagen 50 %

Ejendomsselskabet Vognmagergade 11 ApS*

Copenhagen

Ejendomsselskabet Gothersgade 55 ApS*

Copenhagen

Ejendomsaktieselskabet Lygten 47-49

Copenhagen

Norway

Egmont AS

Oslo

Egmont Holding AS

Oslo

Egmont Serieforlaget AS

Oslo

Farum

Aalborg

80 %

Copenhagen

74 %

2010

80 %

74 %

2009

80 %

74 %

60 %

Kolding

50.1 % 75 %

- 50.1 %

50.1 %

50 %

Notes to the Consolidated Financial Statements (EURk)

Group entities (continued)

SUBSIDIARIES Ownership share

Country

Entity

Registered office

2011

2010

2009

Norway

Nordisk Film AS

Nordisk Film Produksjon AS Oslo - (Merged with Nordisk Film Production AS in 2011)

Nordisk Film Post Production AS

Oslo

Nordisk Film Distribusjon AS

Oslo

Nordisk Film & TV AS

Oslo

Nordisk Film Production AS

Oslo

Nordisk Film ShortCut AS

Drammen Kino AS

Oslo

66 %

Drammen

66.7 %

Neofilm AS

Oslo

66.7 %

Sportskort AS

Oslo

96.82 %

96.25 %

52.6 %

Egmont Hjemmet Mortensen AS

Oslo

Hjemmet Mortensen Trykkeri AS

Oslo

Hjemmet Mortensen Fagmedia AS

Oslo

Hjemmet Mortensen Markedskontakt AS Nittedal - - (Merged with Hjemmet Mortensen Fagmedia AS in 2010)

Sweden

Egmont Holding AB

Egmont Tidskrifter AB

Auto, Motor och Sport Sverige AB

Stockholm 51 %

Egmont Tidskrifter BM AB

Stockholm

Vagabond Media AB Stockholm - (Merged with Egmont Tidskrifter AS in 2011)

Egmont Kärnan AB

Egmont Editions AB

Sudd AB

Sören och Anders Interessenter AB

Änglatroll AB

Skandinaviske Skoledagböcker AB

Stockholm

Nordisk Film Sverige AB

Stockholm

Nordisk Film Produktion Sverige AB

Stockholm

Nordisk Film Post Produktion AB

Stockholm

Nordisk Film Distribution AB

Stockholm

Nordisk Film ShortCut AB

Stockholm

66 %

Nordisk Film TV-Produktion AB

Stockholm

Nordic Media Link AB

Stockholm

Spiderbox Entertainment AB

Stockholm

Finland

Egmont Holding Oy/Egmont Holding Ab

Helsinki

Oy Nordisk Film Ab

Helsinki

Dominova Oy/AB

Helsinki

BK Pro Fitness Oy

Vasa

Notes to the Consolidated Financial Statements (EURk)

66 %

Malmö Malmö

Malmö Malmö Stockholm

60 %

Malmö Malmö

- -

Group entities (continued)

SUBSIDIARIES Ownership share Country

Entity

Registered office

2011

2010

2009

Germany

Egmont Holding GmbH

Egmont Ehapa Verlag GmbH

Berlin

Egmont Verlagsgesellschaften mbH

Mitte-Editionen GmbH

Berlin

Egmont Ehapa Rights Management GmbH

Berlin

Egmont Ehapa Comic Collection GmbH

Berlin

Egmont Horizont Verlag GmbH Stuttgart - - (Merged with Egmont Holding GmbH in 2010)

Berlin Cologne

United Kingdom Egmont Holding Ltd.

London

Egmont UK Ltd.

London

Poland

Egmont Polska sp. z o.o.

Warsaw

Czech Republic

Egmont CR s.r.o.

Hungary

Egmont Hungary Kft.

Russia

ZAO Egmont Russia Ltd.

Estonia

Egmont Estonia AS

Tallinn

Latvia

Egmont Latvija SIA

Riga

Lithuania

UAB Egmont Lietuva

Vilnius

Ukraine

Egmont Ukraine LLC

Kiev

Romania

Egmont Romania S.R.L.

Bulgaria

Egmont Bulgaria EAD

Croatia

Egmont d.o.o.

USA

Egmont US Inc.

The Student Planner LLC

China

Egmont Hong Kong Ltd.

Hong Kong

Egmont Sourcing (HK) Ltd.

Hong Kong

Prague Budapest Moscow

Bukarest Sofia Zagreb New York Denver

50.5 %

Notes to the Consolidated Financial Statements (EURk)

Group entities (continued)

JOINTLY CONTROLLED ENTITIES Ownership share Country

Registered office

2011

2010

2009

Denmark

Pumpehuset af 2011 A/S

Copenhagen

50 %

Respirator Media & Development A/S

Copenhagen

Scandinavian Media Alliance A/S

Copenhagen

50 %

MBO Group A/S

Aalborg

50.1 %

Norway

AE-TV Holding AS

Bergen

50 %

TV 2 Gruppen AS

Bergen

50 %

TV 2 AS

Bergen

50 %

Nydalen Studios AS

Oslo

50 %

OB-Team AS

Oslo

50 %

Nordic World AS

Oslo

TV 2 AS owns

50.1 %

50 %

Oslo

50 %

Outside Broadcast Team AS

Bergen

50 %

Eventyrkanalen AS

Bergen

50 %

TV 2 Torget AS

Bergen

50 %

Vimond Media Solutions AS

Bergen

50 %

Kanal 24 Norge AS

Fredrikstad

50 %

TV 2 Zebra AS

Mediehuset Nettavisen AS

Bergen

TV 2 Gruppen AS owns Mosart Medialab AS

55 %

Bergen 84.5 %

84.5 %

Cappelen Damm Holding AS

Oslo

50 %

Cappelen Damm AS

Oslo

50 %

Cappelen Damm Salg AS

Oslo

50 %

Tanum AS

Oslo

50 %

Map Solutions AS

Oslo

50 %

(Merged with Cappelen Damm AS in 2011)

Sentraldistribusjon ANS

Oslo

Larsforlaget AS

Oslo

Entity

TV 2 Gruppen AS owns

Cappelen Damm Holding AS owns Flamme Forlag AS

50 % 66 %

100 %

50 % 66 %

Oslo 80 %

Barnemagasinet AS

Cappelen Damm Holding AS owns Oslo

50 %

Maipo Film AS

Oslo

55.1 %

50.1 %

Sweden

Fladen Film AB

Stockholm

50 %

Finland

Solar Films Oy

Helsinki

50.1 %

Egmont Kustannus Oy Ab

Helsinki

50 %

Notes to the Consolidated Financial Statements (EURk)

Group entities (continued)

JOINTLY CONTROLLED ENTITIES Ownership share Country

Entity

Registered office

Turkey

Dogan ve Egmont Yayincilik A.S.

Australia

Hardie Grant Egmont Pty Ltd

China

Children’s Fun Publishing Company Ltd.

Thailand

Nation Egmont Edutainment Company Ltd.

2011

2010

2009

Istanbul

50 %

Melbourne

50 %

Beijing

49 %

Bangkok

50 %

ASSOCIATES Ownership share Country

Entity

Registered office

2011

2010

2009

Hvidovre

49.69 %

50 %

Denmark

Zentropa Folket ApS

(Jointly controlled company in 2010 and 2009)

Ugebladenes Fælles Opkrævningskontor I/S

Albertslund

50 %

I/S Ugebladsdistributionen*

Albertslund

50 %

Copenhagen Bombay Holding ApS

Copenhagen

33.3 %

Publizon A/S

Aarhus

36 %

40 %

Oxygen Magasiner A/S

Copenhagen

40 %

ABCiTY A/S

Copenhagen

24.42 %

Norway

Motor ANS

Oslo

50 %

Filmweb AS

Oslo

34 %

Biip.no AS

Oslo

Egmont Serieforlaget AS owns

45 %

TV 2 AS owns

45 %

Norges Televisjon AS

Oslo

TV 2 Gruppen AS owns

RiksTV AS

TV 2 Gruppen AS owns

Norges Mobil TV AS

33.3 %

Oslo 33.3 %

33.3 %

Oslo

TV 2 Gruppen AS owns

33.3 %

Sweden

Golfresan AB

Stockholm

24.7 %

Finland

Matila Röhr-Nordisk Oy

Helsinki

30 %

HD-Post Oy

Helsinki

40 %

London

50 %

United Kingdom Wendy Promotion Ltd.

* Danish partnerships forming part of associates do not prepare official annual reports.

Notes to the Consolidated Financial Statements (EURk)

Income Statement of the Egmont Foundation (1.000 EURk) Note

2011

2010

Royalty income, etc.

3,940

4,624

Personnel costs

(161)

(165)

Other external expenses

(868)

(962)

Operating profit

2,911

3,497

Dividends from investments in subsidiaries

4,842

Financial income

853

693

Financial income from assets of the charitable and liquid reserve funds

104

Financial expenses

(40)

(557)

Profit before tax

8,566

3,737

Tax on profit for the year

(382)

(918)

Net profit for the year

8,184

2,819

Distribution of net profit

Transfer to reserve fund

1,637

Transfer to charitable fund

4,910

Transfer to liquid reserve fund

1,637

2,274

Total

8,184

2,819

Income Statement of the Egmont Foundation

545

Balance Sheet of the Egmont Foundation at 31 December (1.000 EURk) Note Assets Investments in subsidiaries

2011 181,699

2010

181,214

Investments in associates

252

Financial assets

181,951

181,466

Total non-current assets

181,951

181,466

Receivables from group enterprises

105,535

Other receivables

292

103,847 4,484

Receivables

105,827

108,331

Securities

565

Cash and cash equivalents

469

1,613

Total current assets

106,861

110,509

TOTAL ASSETS

288,812

291,975

Equity and liabilities

2011

2010

Capital fund

29,593

29,513

Reserve fund

230,678

230,701

Charitable fund

11,628

10,630

Liquid reserve fund

4,588

4,114

Total equity

276,487

274,958

Pensions

397

380

Non-current liabilities

397

380

Payables to group enterprises

170

359

Donations committed but not yet paid

8,424

9,126

Other payables

3,334

7,152

Current liabilities

11,928

16,637

Total liabilities

12,325

17,017

TOTAL EQUITY AND LIABILITIES

288,812

291,975

Balance Sheet of the Egmont Foundation at 31 December

1 Accounting policies The financial statements of the Egmont Foundation have been prepared in accordance with the provisions of the Danish Financial Statements Act applying to class C enterprises (large) and the financial reporting requirements of the Foundation’s Charter. The accounting policies have been changed such that investments in subsidiaries and associates, which were previously recognised according to the equity method, are now measured at cost. As a consequence of this change, value adjustments to investments and equity have been reversed. Comparative figures have been restated. The change has been introduced to achieve better coherence between the Foundation’s financial statements and the provisions of the Charter concerning distribution of net profit. The effect is a EUR 135.5 million reduction of equity at 1 January 2010; see note 7. No cash flow statement has been included for the Egmont Foundation, as reference is made to the consolidated cash flow statement. Royalty income, etc. Royalties received are accrued and recognised as income in accordance with the concluded agreement. Investments in subsidiaries and associates Investments in subsidiaries and associates are measured at cost. Where cost is lower than the recoverable amount, impairments are made to this lower value. Dividends Dividends from investments in subsidiaries and associates are recognised in the financial year in which the dividend is declared, typically at the time when the general meeting approves the distribution of dividend by the relevant company. To the extent that the dividend distributed exceeds accumulated earnings after the acquisition date, dividend is recognised as a reduction of the cost of the investment. Equity Profit is distributed according to the Foundation’s Charter. The Charitable Activities’ donations and associated expenses are charged directly to the liquid reserve fund under equity. The Foundation’s equity consists of a capital fund and a reserve fund intended for the Commercial Activities. The capital fund is an undistributable reserve, while the reserve fund comprises distributable reserves. The charitable fund serves to ensure the existence of funds required for the Egmont Foundation’s Charitable Activities. The liquid reserve fund is the amount which is to be used for charitable purposes under the Foundation’s Charter within the scope of the Charitable Activities. In the calculation of tax, due allowance is made for the deductibility of charitable donations made according to the Egmont Foundation’s Charter. These are charged to equity. Tax provisions for future donations are also taken into account. Provision for deferred tax is made in case the Egmont Foundation does not expect to use liquid funds for charitable purposes equal to the tax provisions.

Notes of the Egmont Foundation (EURk)

Personnel costs

2011

2010

Wages and salaries

(107)

(143)

Pensions

(37)

(17)

(161)

(165)

Adjustment of pension obligation

Total

(37)

Compensation paid to the Board of Trustees amounted to 124 in 2011 (2010: 124), of which 60 (2010: 60) was included in the costs of the Charitable Activities. The Management Board of the Foundation is also employed by Egmont International Holding A/S, which pays all salaries to the Management Board. The Foundation pays an overall fee to Egmont International Holding A/S for this administration. 3

Tax on profit for the year

2011

Calculated royalty tax for the year

(382)

(918)

(382)

(918)

Total

2010

Tax on profit for the year consists of royalty tax.

Investments in subsidiaries

Cost at 1 January

Foreign exchange adjustments

Cost at 31 December

2011

2010

181,214

181,528

485

(314)

181,699

181,214

Value adjustments at 1 January

135,595

Change in accounting policies

(135,595)

Value adjustments at 31 December

Carrying amount at 31 December

181,699

181,214

2011

2010

252

Investments in associates

Cost at 1 January

Foreign exchange adjustments

Cost at 31 December

252

Investments in associates consist of 50â&#x20AC;&#x2030;% of the equity in I/S UgebladsdistribuÂtionen, Albertslund.

Capital fund

Balance at 1 January

Foreign exchange adjustments

Balance at 31 December

2011

2010

29,513

29,564

(51)

29,593

29,513

Notes of the Egmont Foundation (EURk)

Reserve fund

2011

2010

Balance at 1 January

230,701

366,870

Foreign exchange adjustments

627

(448)

Change in accounting policies

(135,595)

Transfer from distribution of net profit

1,637

545

Transfer to liquid reserve fund

(2,287)

(671)

Balance at 31 December

230,678

230,701

Charitable fund

2011

2010

Balance at 1 January

10,630

12,369

Foreign exchange adjustments

(22)

Transfer from distribution of net profit

4,910

Transfer to liquid reserve fund

(3,941)

(1,717)

Balance at 31 December

11,628

10,630

9 Liquid reserve fund

Balance at 1 January 2010

Foreign exchange adjustments

Used for charitable purposes

Costs

Transfer from reserve fund

Use according to articles 6-10

Use according to article 11

Total

5,794

415

6,209

(10)

(5,284)

(470)

(5,754)

(993)

604

671

Transfer from charitable fund

1,717

Transfer from distribution of net profit

2,048

226

2,274

Balance at 31 December 2010

3,876

238

4,114

Foreign exchange adjustments

Used for charitable purposes

(5,939)

(466)

(6,405)

Costs

(998)

Transfer from reserve fund

2,058

229

2,287

Transfer from charitable fund

3,941

Transfer from distribution of net profit

1,473

164

1,637

Balance at 31 December 2011

4,422

166

4,588

The liquid reserve fund is the amount which is to be used for charitable purposes under the Foundation’s Charter within the scope of the Charitable Activities.

Notes of the Egmont Foundation (EURk)

Board of Trustees and Management Board of the Egmont Foundation BOARD OF TRUSTEES Mikael Olufsen (Chairman) Director, born 1943, took office 1993 Member of the Boards of TryghedsGruppen smba (CM), Tryg A/S (FM), Tryg Forsikring A/S (CM), Malaplast Ltd., Thailand (CM), Advisory Board to Careworks Africa Ltd. (CM), Gigtforeningen (CM), WWF Verdensnaturfonden, Danmark-Amerika Fondet Steen Riisgaard (Vice Chairman) CEO, Novozymes A/S, born 1951, took office 2002 Member of the Boards of WWF Verdensnaturfonden (CM), Rockwool International A/S (VC), ALK-Abello A/S, CAT Science A/S Ulrik Bülow CEO, Otto Mønsted A/S; CEO, House of Business Partners A/S, born 1954, took office 2003 Member of the Boards of GateHouse A/S (CM), Intersport Danmark A/S (CM), Arator A/S (CV), Oreco A/S, Plaza Ure & Smykker A/S, Royal Unibrew A/S, Tivoli Friheden A/S, Toms Gruppen A/S, Gigtforeningen

the Danish Arbitration Association (CM), the Council of the Danish Bar and Law Society, the Danish Institute of Arbitration Lars-Johan Jarnheimer Director, born 1960, took office 2011 Member of the Boards of BabyBjörn AB (CM), Sweden; BRIS (Children’s Rights in Society) (CM), Sweden; Arvid Nordquist HAB, Sweden; CDON-Group AB, Sweden, INGKA Holding BV, the Netherlands Anna von Lowzow Journalist and film director, born 1961, took office 1996 Peder Høgild Operator supervisor, born 1958, took office 2009 Marianne Oehlenschlæger HR consultant, born 1958, took office 2011

MANAGEMENT BOARD

Torben Ballegaard Sørensen Director, born 1951, took office 2006 Member of the Boards of CAT Forsknings- og Teknologipark A/S (CM), Tajco Group A/S (CM), Thomas A/S (CM), Realfiction ApS (CM), Monberg & Thorsen A/S (VC), Systematic A/S (VC), LEGO A/S, Pandora A/S, AS3 Companies A/S, AB Electrolux, Sweden

Steffen Kragh President and CEO, born 1964 Member of the Boards of Nykredit Realkredit A/S (VC), Nykredit Holding A/S (VC), Foreningen Nykredit, Cappelen Damm Holding AS (CM), Norway

Jeppe Skadhauge Attorney and partner, Bruun & Hjejle, born 1954, took office 2009 Member of the Boards of Blindes Støttefond (CM), Tømmerhandler Johannes Fogs Fond (VC),

CM: C:

Hans J. Carstensen Chief Financial Officer, born 1965 Chairman, V Vice Chairman.

All information as of 26 March 2012.

Board of Trustees and Management Board of the Egmont Foundation