Brainvest Annual Report 2014 by Thorn Reklambyrå AB

Annual Report 2014

BrA Invest TABLE OF CONTENTS Introduction 4-5 Company Presentations

6-20

Management's Review

21-24

Income Statement for the Group Balance Sheet for the Group Cash Flow Statement for the Group Income Statement for the Parent Company Balance Sheet for the Parent Company

25 26-27 28 29 30-31

Cash Flow Statement for the Parent Company 32 Additional Disclosures

33-34

Notes 35-42 Signatures 43 Auditor's Report

Presentation of the Board of Directors/Auditor 45

"The focus of the Group's investments was on the completion of two major construction projects under the management of 3Hus, namely 32 rental apartments in central Åstorp and the complete renovation of the health care centre, also in central Åstorp, as well as the buyout of KB Component's industrial property in Örkelljunga."

BRA INVEST – BETTER BUSINESS

BrA Invest

BrA Invest on track!

2014 marked the start of an anticipated and long-awaited redevelopment project. Several of the BrA companies have been involved in the project for many years, working on restructuring, productivity processes and improvements of various kinds and their efforts have at last generated a significant improvement in earnings! All the companies in the Group (with the exception of Draken and BAB) delivered improved underlying earnings compared to 2013, with Dogman reporting a dramatic improvement in earnings performance. We can emphatically and proudly claim that BrA Invest is on track, the right track! If we start by looking at the consolidated return for the business in general for the 2014 calendar year, we can see that equity has developed as follows: Opening balance: Closing balance:

SEK 135.6 million SEK 162.1 million

The following adjustment items should also be added: Dividend to holders of non-controlling interests in BAB: SEK 0.3 million We then get a total number for "the value" the BrA Group companies created in 2014 of SEK 26.8 million and the Group's return on equity during the year is therefore 19.8%. which is not far off the 20% target. If we look at the period since the Group was formed, the annual returns on book equity are as follows: Return on book equity: 2005-2012 70%/year 2013 12.9% 2014 19.8% In other words, growth was stable and very robust and we expect this will be sustained throughout 2015 and hopefully become even stronger! The financial requirements (covenants) that the Group has towards its main bank were met by a wide margin in terms of debt/equity ratio and followed the expected trend with regard to the equity ratio (target is reached in 2015), all according to plan and agreement.

4 – ANNUAL REPORT 2014

The Group's strategy, initiated in 2013 and gradually implemented in 2014, which is largely based on developing, investing in and strengthening the three "strong legs", i.e. BAB/3Hus, Dogman and KB Components, was implemented consistently throughout the year. The focus of the Group's investments was on the completion of two major construction projects under the management of 3Hus, namely 32 rental apartments (Resedan) in central Åstorp and the complete renovation of the health care centre, also in central Åstorp, as well as the buyout of KB Component's industrial property in Örkelljunga. The total investment volume for these three projects amounts to SEK 90 million. Dogman entered 2014 with the hope that it would be Dogman's year. And it definitely turned out to be just that! In 2013, the company initiated and implemented costcutting measures, mainly downsizing of personnel, as a result of the impact of actions taken to improve the efficiency of the company's infrastructure, involving years of investment in systems and various kinds of improvements. These cost savings continued in the first six months of 2014, which led to far more cost-effective operations. When it was finally possible for the cost savings to be combined with strong organic growth (accelerating during the year), it produced extremely strong earnings growth and started a trend that we are confident will continue for many years to come. Dogman has become and will remain the organic growth engine and cash cow of the BrA Invest Group!

It has been a very intensive year for KB Components! All of the operations in Värnamo (Årevall) have been relocated to the Group's other production units, with about 80% being moved to Kaunas, 10% to Örkelljunga and 10% to Anderstorp. During the relocation process, normal delivery capacity was maintained and a chrome coating facility was established and started up in Kaunas in a joint venture with Ecogalvanic! This investment (about SEK 10 million) is of extreme strategic significance as we are insourcing the capacity and expertise to chrome-coat plastic components, which is a service our customer base has long been asking for. We received a number of major breakthrough orders during the autumn from various sources, including the truck industry involving long production runs of large components for at least a 20-year period. As a result of these orders, it was decided to expand the facility in Örkelljunga (approximately 4,000 m²) and invest in three more injection moulding machines in the 2,300 to 3,200 tonnes (locking pressure) segment. The total investment for this project is SEK 70 million and its first (and largest) phase will be completed by the summer of 2015. KB Components succeeded in increasing underlying operating profit slightly compared to the 2013 full year period, despite the intense work of relocating production (and with all the costs this incurred taken through the income statement), the integration of Plastunion into the Group and the adjustment of relocated production operations, mainly to Kaunas. Now that all of these restructuring measures have been completed, the company is well positioned to deliver a significant increase in profits in 2015!

BRA INVEST – BETTER BUSINESS

We are confident that the company will once again deliver a positive performance and return to the trend that we have been accustomed to since the company was acquired almost 10 years ago. If we take a look at the underlying business performance of our companies and focus on return relative to capital employed, then the situation looks more or less as follows: (SEK million)

In recent years, BAB's problem has been that we have not achieved an adequate level of profitability in the major external construction projects. This has been due partly to stiff competition during the procurement process and also to inefficiencies within our business. We are now rectifying this by making some changes in management and initiating a bit of a fresh start in a business which we are convinced has tremendous future potential. We are operating in a rapidly-expanding region (western area of southern Sweden) which will be seeing a lot of new construction in the years to come. For instance, Lund is investing heavily in research facilities and there is an increasing share of residential construction spread fairly evenly across the region, even if the focus will most likely be on the Malmö-Lund area.

We will be ramping up our efforts to gain market share across the region and this will be supported by an increase in the production of rental properties under our own (3Hus) management. Our intention is to build 80 or so rental properties in the 2016 to 2017 period. From the start of 2018, the annual rate of investment for this type of project will be around SEK 100 million. Our three "problem" companies, Olofssons, Living Story and now, unfortunately, Draken too, continued to experience tough times in 2014. Although the accumulated loss for this group decreased, it is still at a totally unacceptable level. In last year's Statement from the CEO, I discussed the future of these companies with regular monitoring and evaluation for Living Story and in the summer of 2015 for Olofssons. Although the improvement in earnings in these companies has not been as good as we had hoped, there has still been an improvement and we will continue to operate these businesses in the conviction that earnings will continue to improve and accelerate throughout this year (2015). Unfortunately, a number of things have gone wrong for Draken in recent years. We have now appointed a new management team for the company and are fairly optimistic about 2015, which we believe will mark a turning point for Draken.

Return (%)

-1

neg

Dogman

270

Olofssons

-3

neg

BAB/3Hus

170

-8

neg

590

LS BAB continued to consolidate its position as a building services company during the year. Municipal operations, mainly in the North-West Skåne district (and Landskrona too) account for a large percentage of its sales. It has quickly become established in Halmstad and very successfully too! We now have operations with a 30-strong workforce of tradesmen there and have secured a long-term contract with the municipal real estate company. By continuing to conduct ourselves in an exemplary way, we will secure a key foothold in the county of Halland, which may lead to much greater volumes of business there in the future!

EBIT

Draken

From the left: Pierre Olofsson, Monika Öberg, Robert Ramnér, Christer Andersson, Erling Levin, Stefan Andersson, Åke Waldt, Kenneth Andersson, Lillemor Wallentin, Lars Holtskog, Roger Jönsson

Capital employed (approx.)

Group

Dogman (by far) and KB Components meet the target of 15-20% return on capital employed. BAB/3Hus need to improve (and have the potential to do so) their profitability greatly in the future to meet the Group target. Overall, we are reasonably satisfied with BrA Invest's growth in 2014 and, above all, we have continued to invest in the future in different ways and are therefore confident that the years ahead will be even better and highly successful for the Group!

CEO Stefan Andersson ANNUAL REPORT 2014 – 5

BRA INVEST – BETTER BUSINESS

Fastighets AB 3Hus

Accelerated pace! During the year, 3Hus has successfully completed 32 rental apartments in the Resedan neighbourhood of central Åstorp. All of them were leased by the end of the year and there is a waiting list for these apartments when any of them become available! In addition to the above rental properties, the property portfolio managed by 3Hus is a mixture of commercial properties whose tenants are mainly public authorities, such as the health care centre in central Åstorp, and a number of industrial properties, whose tenants include the BrA companies Living Story and BAB Byggtjänst. Common to all tenants and lease agreements is that we work with longterm contracts and with financially stable and strong partners. The market conditions with regard to the low levels of interest rates, which have been strengthened in 2014, advocate in favour of owning and managing good properties with good tenants on long-term leases. With the current portfolio and at the going rate, 3Hus has an annual operating surplus of approximately SEK 10 million. Together with the the BrA Group's other companies, which generate significant cash flows, we have a rather unique opportunity in that the demand for rental properties is strong in the market area in which we primarily

CEO Christer Andersson 6 – ANNUAL REPORT 2014

operate (north-west Skåne) and at the same time 3Hus and BAB together have the expertise and the financial firepower to meet this need in the short term and longer term. The challenge is therefore to find the land for this property development! In last year's Statement from the CEO, we mentioned that three development properties (Backsippan neighbourhood) had been purchased in 2013. The planning for these developments has been under way throughout 2014 and, as things currently stand, we will be able to cut the first turf on the site for this project in early 2016. The first stage of the plan involves the construction of about 40 rental apartments in a 9-storey building in 2016 and the second stage, in 2017, is the completion of another 40 or so rental apartments in a slightly lower building. We believe that the market in Åstorp can absorb this volume, which also represents an investment of approximately SEK 50 million in both 2016 and 2017, which we consider to be a level that is financially sustainable for the Group in those years.

Starting in 2018, we intend to accelerate the pace of construction of rental apartments corresponding to an investment of about SEK 100 million per year. The task of finding suitable locations and land for these future projects has to start immediately and we can thus assert that the pace of development will be stepped up in the future! Our former CEO, Berne Särbring, announced his retirement during the year and has therefore left the company. However, Berne will continue to work on various development projects on a part-time basis.

Fastighets AB 3Hus* Key figures 2014 (2013)

Part of the BrA Invest Group since 2008 BrA Invest's ownership is 100% Net sales SEK 11.1 million (SEK 9.9 million) EBIT SEK 4.3 million (SEK 4.1 million) Number of employees 2 (2) *including the other property companies

BRA INVEST – BETTER BUSINESS

BAB Byggtjänst AB

2015 - Comeback! BAB Byggtjänst AB is a construction company with a history stretching back one century. Its head office is in the town of Åstorp, in the north-west of Skåne in southern Sweden and its branch offices are located in Malmö and Halmstad. The company has 130 employees and generates almost SEK 300 million in sales. The company provides building services and contracting. Customers are primarily local authorities, state authorities, county councils, cooperatives and real estate companies. The company's market was the north-west area of Skåne until 2011. Two smaller companies were acquired in late 2011, which initiated the establishment of branch offices in Malmö and Halmstad. A great amount of effort has been put into integrating the companies and we now feel that everything is at last in place. This means that the business area covers the whole of western Skåne and southern Halland. This region serves as a base for exceptionally favourable conditions to develop and position the company on a new and higher level.

are gradually being analysed to enable the company to improve across the board in a systematic manner! Success is planned out! The goal is to make 2015 the first year for the comeback, which will see the company gradually return to its historically strong earning capacity. The principal owner has also charged the company and its sister company Fastighets AB 3Hus with the task of creating the conditions for many more project development activities than has previously been the case. To achieve this aim, 3Hus' project development department will be integrated more tightly into the construction company's operations than before.

Although the construction operations have been more sluggish, it is hoped this trend will be reversed in 2015 by the systematic efforts that have been initiated. A major extension project has been under way since November for the sister company, KB Components, and we are hoping to be able to commence the planning phase for 50 to 80 new apartments for Fastighets AB 3Hus in the Backsippan neighbourhood of Åstorp towards the end of 2015. BAB Byggtjänst AB and Fastighets AB 3Hus shall together play a key role and make a difference as a strong player in the construction and property market in southern Sweden! 2015 – the comeback begins!

BAB Byggtjänst AB experienced positive growth in the 2000s with increased sales and strong earnings capacity. This growth stagnated in the 2010s with profitability showing a decreasing trend and too much dependence on proprietary projects initiated by its sister company, Fastighets AB 3Hus. The principal owner decided in December 2014 to carry out a reorganisation to reverse the negative trend. The aim was to provide clarity of leadership, improve conditions for collaboration with Fastighets AB 3Hus and drive greater focus on the Malmö-Lund region. The initiative also places great emphasis on employee development with increased focus on targets, implementation and follow-up. All processes

CEO Kenneth Andersson 8 – ANNUAL REPORT 2014

We were forced to recognise significant impairment losses for a couple of major projects, which negatively impacted earnings in 2014. We will be placing considerable emphasis on ensuring the quality of the forecasts in 2015 to produce accurate reports based on the percentage-of-completion method of accounting. The company continued to consolidate its position in building services throughout the year. Several new agreements have been signed and existing agreements have developed positively.

BAB Byggtj채nst AB Key figures 2014 (2013)

Part of the BrA Invest Group since 2008 BrA Invest's ownership is 90% Net sales SEK 296.7 million (SEK 256.8 million) EBIT SEK 1.6 million (SEK 7.3 million) Number of employees 126 (111)

BRA INVEST – BETTER BUSINESS

AB Dogman

2014 – a successful year! The Dogman Group has 71 employees and its head office and warehouse are located in Åstorp, just a stone's throw from BrA Invest's premises. All of its central functions, including finance, IT, purchasing, marketing and customer service/office-based sales, operate from Åstorp. It has 16 sales personnel out in the field spread across Sweden, Denmark, Norway and Finland. It is true to say that 2014 was Dogman's year! The company's earnings more than doubled, with some organic growth especially in the second half of the year. Dogman has emerged as a far more profitable company than ever before after long years of streamlining processes, enhancing efficiencies and improving productivity in its logistics operations and the arduous task of building the Dogman trademark! A brief market analysis from the past year clearly reveals that the industry is continuing to attract the attention of various investors. It is even more apparent that there is ongoing escalating competition between the major wholesalers (including Dogman) and the retail chains in the industry. We hold a strong position over our competitors in both the fastmoving consumer goods and specialist retail sales channels and are very confident about the next few years. One of two challenges ahead of us is to meet the change in consumer behaviour with a focus on price and low-price chains. It is obvious that, over the year, volumes have shifted to chains that we are unable to get at. Notwithstanding, we have devised a plan in this period that is linked to our overall portfolio and we are looking forward with real confidence to seeing the results of our efforts in the second half of 2015. In practical terms, it involves pushing a strategy in which we focus on being seen as a Driving, Instructive, Inspiring and Accessible partner. With these values embedded in our portfolio of offerings, we make ourselves even more unique than our competitors and also pull away from the edge where the low-price chains are gathered. A manager for the Dogman Training Center will join the company at the beginning of 2015 and this new, dedicated resource will give us the opportunity to deliver according to plan. The

CEO Pierre Olofsson 10 – ANNUAL REPORT 2014

second challenge we face in 2015 is to make sure that the significant rise in currency value that we saw during the year does not impact our earnings. Most of our purchase volumes are exposed to the Dollar and the Euro and we will need to be crystal clear on this point with our customers in order to avoid a decline in profitability. Breakthroughs in sales have mainly been achieved in Denmark, which has reported a positive performance for the first time in many years. We have also seen success in Sweden where we have gained new customers in the Arken constellation of chain retailers, which have only made minimal amounts of purchases from us in the past. In Norway, business relations with XXL and Plantagen expanded and the growth that was finally achieved was brought about through the consolidated efforts of all the companies in the Group. Concerted attempts have been made to create a sales culture over the past few years and the importance of us all acting as ambassadors for Dogman and communicating the company's product offering is now clearer than ever. These days, the company generally has a completely different focus on selling and it's not just centred on the sales department. In 2015, work will continue to create a more sharplydefined culture, primarily by communicating the objectives of the purchasing department more explicitly, with a firmly-established link between Category Owners – growth, profitability, warehouse share and innovation grants.

An organisational change was carried out during the year involving the merger of the sales and marketing departments, which resulted in a significant improvement after little more than six months. We engaged in relatively low levels of investment in 2014 but will be gearing up in 2015 to execute our plan of action and deliver on our brand objectives; Topof-mind, Preference, Attitude and Repurchase. We realised the importance of making further investment in the brand after we had looked more closely at the brand survey at the end of the year. As many of 54% of consumers say they are not loyal to any brand or even know which brand they are purchasing in the stores. Our communication plan intends to induce these consumers to become buyers of Dogman products. In addition to the financial goals, we believe that customer satisfaction is the right approach to generate increased business. We are aiming for an average of 4, on a scale of 1 to 5, by 2017 seen from a Nordic perspective. In December, we had a score of 3.75. We will also be focusing on our employees in 2015 and making a sustained commitment to the goal of employee satisfaction. Our short-term goal is to be the best workplace in the region. In the long term, we aim to become Sweden's best workplace in comparable operations. Dogman's motto is "Success is planned out! Knowing what we have planned and that there is a positive buzz around us, we feel certain that 2015 will be Dogman's year too!

AB Dogman (Kc)

Key figures 2014 (2013) Part of the BrA Invest Group since 2007 BrA Invest's ownership is 95% Net sales SEK 368.3 million (SEK 351.8 million) EBIT SEK 22.3 million (SEK 10.0 million) Number of employees 71 (82)

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Draken i Reftele AB

2014 â&#x20AC;&#x201C; starting afresh! Draken i Reftele is a modern plastics producer with two main product areas: industrial packaging and technical film. We work with demanding customers in a sector that is mainly characterised by Scandinavian (Swedish) players and growth that is closely tied to general developments in Swedish industrial production. It has been a challenging year, with a change of CEO and something of an organisational restart with a lot of new employees moving into key positions and a number of problems in normal production activities. Draken stands out in the market with its vision of being Sweden's most flexible and efficient film conversion company for the manufacture of polymer materials for use in the areas of industrial packaging and technical film. High flexibility is achieved through an efficient selection of materials, offering customers a wide range of materials and cost-effective systems. We are able to provide solutions for extrusion, flexography printing and conversion all under the same roof. Examples of products are industrial packaging film, bags, sacks, hoods and building film. All products can be fully bespoke to individual customer requirements. Our determined and systematic approach, combined with our commitment and knowledge, allow us to implement Draken's business concept; Only world-class is good enough!

New challenges are continuously arising in our niche industry, requiring us to stay alert at all times. We need to be aware of the importance of creating short-term and longer-term action plans that enable us to adapt our operations to what the market is calling for and demanding. We have continued with our business development programme throughout 2014, with a focus on change-overs and product quality, to ensure we sustain high levels of efficiency. Levels of scrapped material are still very low and a lack of our own regranulates has meant that, on occasions, we have been unable to be competitive in certain products at certain times. In 2015, we will continue to identify quality suppliers of raw materials with whom we may secure long-standing and close partnerships that produce mutually rewarding business outcomes.

For most of 2014, the plastics industry has been facing massive challenges in a faltering market and prices in the raw materials markets have not been following the same trajectories as in the past. Raw materials prices in the June-July period remained higher than we have become accustomed to in recent years. In the last quarter, our expectations of a decline were greater than what the outcome actually was. The suppliers restricted access, thereby making it possible to keep the price of raw materials up, albeit only temporarily.

Our 110 my building film was awarded a certificate of approval during the year. This certification will give us an even sharper competitive edge in the future as the market is becoming increasingly interested in this product for environmental and cost-related reasons.

CEO Lillemor Wallentin 12 â&#x20AC;&#x201C; ANNUAL REPORT 2014

Our new management system was fully finalised in December and has brought a more dynamic tool that gives us greater strength in the organisation. The system will provide clarity about what each and every one of us is expected to do and how to do it. Its full implementation in the organisation begins in Q1 of 2015.

In spite of a weak performance in 2013, we decided to invest in a new conversion machine. The machine was brought into operation in Q2 of 2014 and, after a certain running-in period, is now operating at full production capacity. This machine gives us a greater competitive advantage with regard to mail order bags, carrier bags and similar products. Compared with older machines previously in use, this one delivers high operating efficiency and significantly shorter set-up times. Draken appointed a new CEO last August and made some changes to the management team. We will be working with renewed energy to try to turn the company's negative trend around and deliver a positive set of results. There will continue to be a strong focus throughout 2015 on product development, skills enhancement training for employees and, not least, a focus on efficiency aimed at securing a competitive edge in the marketplace.

Draken i Reftele AB

Key figures in 2014 (2013) Part of the BrA Invest Group since 2005 BrA Invest's ownership is 100% Net sales SEK 87.6 million (SEK 84.5 million) EBIT SEK -1.8 million (SEK -0.8 million) Number of employees 37 (35)

BRA INVEST – BETTER BUSINESS

KB Components AB

Restructuring produces effects! A busy year has come to a close and we can sum it up by saying that KB is in a stronger position as a result of the consolidation that took place, increased volumes of business from our key customers and our focus areas starting to produce results. As the year began, the decision had already been taken to shut down the factory in Värnamo and activities had been initiated to implement the closure in 2014. The factory has now been completely shut down and all operations have been moved primarily to Kaunas without any significant impact on the delivery capability, but at a much higher than expected cost. The estimated total cost for the closure of the factory coupled with relocation and installation expenses is just over SEK 15 million, which has been fully charged to the income statement in 2014. Sales were up on the previous year by approximately 20%. A significant part of this increase is attributable to the fact that the acquisition of Plastunion had an impact on the income statement for the full year. The various segments developed in slightly different directions during the year. The furniture segment began unexpectedly low at the start of the year and maintained a lower than budgeted volume until the last quarter when it began to turn. The automotive segment has delivered an unexpectedly strong performance during the year, but with lower volumes in the last quarter, while Industry and Medical have performed more or less as expected. KB has successfully secured new orders and customer tools during the year which, at the expected full rate of production, will generate an annual turnover of SEK 100 million for the Group. This volume is expected to start in late 2016 and gain full effect in 2018.

CEO Robert Ramnér 14 – ANNUAL REPORT 2014

With an increase in capacity requirements due to volumes secured from our customers, KB has decided to buy out the factory premises it previously leased in Örkelljunga to provide it with flexibility for future expansion. The expansion project commenced during the year and is scheduled for completion by mid-2015. The factory's production area is being extended by approximately 4,000 m² and three large machines with a locking pressure of 2,300 to 3,200 tonnes will be installed in the new space to meet customer requirements. This represents a total investment of some SEK 70 million before all the parts are in place. During the year, we entered into a joint venture in Kaunas, Lithuania, where we now have the opportunity to offer an end-to-end solution for chromate-coated plastics and metals. This is in line with our customers' wishes to be able to purchase high-quality chrome plated plastics from us as a system supplier. The insourcing of various components has been implemented, production has started and first deliveries to customers have taken place. Furthermore, new chrome deals have been closed during the year, which will have a positive impact on volumes in coming years.

During the year, we have increased the focus on our customers where we wish to be able to provide support in several markets. This has been met with a positive response, with many of our customers requesting our expertise in design, material selection, simulation and efficient production and all this close to their assembly facilities in different markets. In the coming period, we will be stepping up our various activities aimed at establishing our presence in new markets, probably Mexico and China. Last, but not least, we are continuing to invest in the field of metal replacement and secured a number of projects in this important area during the year. Many of our customers have a driving ambition to reduce overheads and get products that are lighter in weight. This, in turn, has a positive environmental impact in many applications. KB is working actively to highlight its experience and expertise in this area and will continue to develop its capabilities in order to be able to satisfy customer requirements and expectations in the future. As far as KB is concerned, customers are the reason we exist. We will continue to develop and expand our partnerships with all of them!

KB Components AB (Kc) Key figures 2014 (2013)

Part of the BrA Invest Group since 2009 BrA Invest's ownership is 91.25% as from 30 April 2015 Net sales SEK 614.5 million (SEK 511.8 million) EBIT SEK 30.1 million (SEK 34.9 million) Number of employees 393 (323)

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Olofssons Hyvleri AB

A marginal improvement but still tough! There was a certain imbalance in the wood processing industry in Sweden in 2014, with the slightly better market situation being "compensated" for with many of the major players increasing their production capacity by increasing the shift work in their existing production equipment. Several of Olofssons' competitors (and suppliers) have improved their profitability during the year (from heavy losses in recent years), thanks in part to the stronger market situation but perhaps mainly to the weakening of the Krona against the Euro. The situation has also improved for Olofssons, which has been able to report an increase in earnings, although not as much and as quickly as we had hoped. The company currently has a positive cash flow and, with a good order book and with a better and more efficient organisation than ever, there is the promise of brighter times ahead.

Throughout the year, we have tried to keep to a plan and a strategy that involve stopping planing/vane operations rather than accepting orders with margins that are so small that not even variable costs are covered. In effect, this has meant that we have been forced to stop production on some days, especially during the low season of December-January and this has, of course, meant major losses for the company in these months. The order backlog and forward planning in production have both been short for large parts of the year. This has made planning difficult and, on occasions, we have been forced to carry out numerous and sometimes unnecessary change-overs that have had an adverse impact on company earnings. However, we have realised that the attempt that was made in the first six months of 2012 to increase the shift time in the company only works if the customers with whom we work fit into our production structure and together allow us to have efficient production runs and series with smart operations.

CEO Stefan Andersson 16 â&#x20AC;&#x201C; ANNUAL REPORT 2014

In line with this plan, we have been operating by the motto "More of what we are already good at" and have therefore focused our sales efforts on some niche customer groups and geographic markets. We are pleased to report that we already achieved some success with this strategy in 2014 when we established stable relationships with key customers, chiefly in the Netherlands, Belgium and Germany. At the time of writing (start of 2015), our order book is stronger than in the year-ago period, which should mean a progressive improvement in the situation ready for the all-important season which commences in March, peaks in May and June, and then gradually falls off in September and October.

Obviously, the year's reported earnings, a loss of just over SEK 4 million before tax, is highly unsatisfactory. However, it is an improvement over 2013 and reflects a trend that has led us to decide now (before the record date in the summer of 2015, as announced in last year's Statement from the CEO) to continue the activities of Olofssons Hyvleri and work exhaustively to achieve a zero operating profit in the company this year. We feel this is a reasonable and realistic goal/plan which, if accomplished, will mean the operations are generating a certain amount of positive cash flow (SEK 2-3 million). We can thus declare the worst of the crisis to be over and allow ourselves to look to the future with a little more optimism.

Olofssons Hyvleri AB Key figures 2014 (2013)

Part of the BrA Invest Group since 2008 BrA Invest's ownership is 100% Net sales SEK 78.1 million (SEK 72.1 million) EBIT SEK -3.6 million (SEK -5.5 million) Number of employees 17 (18)

BRA INVEST – BETTER BUSINESS

Living Story AB

Brand image and uniqueness! Living Story has been making efforts to sell off its excess stock of products during the year. The excess inventory has put a burden on the company in various ways throughout the whole of 2012 and 2013. The focus has been on "getting rid" of out-dated products to make room for fresh, trendy items in a range that appeals to our main customer groups. This has been given priority and has been managed partly via a temporary outlet in the shopping centre in Löddeköpinge, with which we had good success in the first half of 2014. At the beginning of 2015, Living Story had a product range and an organisational platform that are in balance for the first time since BrA acquired the company at the start of 2011 and it can now focus on the main task of driving profitable sales and growth! In the past few years, Living Story has been working with various kinds of infrastructure. In 2012, the company moved from its Vikingland premises in central Åstorp to its present premises with fresh, purpose-built logistics and showroom space, suitably located beside the E4 motorway. The move also means that we are now more or less next door to Dogman with which we work collaboratively in various ways, including freight, business systems and warehouse personnel. We brought stability to the business and organisation in 2013 by establishing online sales to our store customers and by positioning the Living Story brand firmly in the market. Purchases made in 2011 and 2012 far exceeded demand and we were forced to deal with this excess stock in 2014. We have spent a tremendous amount of energy working on clearance sales, promotions and, not least, the temporary outlet store in Löddeköpinge. As the

CEO Christer Andersson 18 – ANNUAL REPORT 2014

year has progressed and our stock of slow-moving tail-end products has declined, we have gradually been renewing our range. Now, at the time of writing (March 2015) we can describe the situation as satisfactory and well received in the market. The company's financial performance during the three-year period described above has been extremely weak. It recognised aggregate losses of more than SEK 30 million in the entire period, which is an amount that will be very difficult to recover in the foreseeable future. However, one positive highlight is that there is a market for Living Story's products and it is relatively stable. Competitor companies such as Artwood, Miljögården, Silkflower and Affari all report sales of up to SEK 100 million and good profitability. They have been working for a long time with their concepts and have a loyal base of customers who return year after year and place orders for their products. Although Living Story has just begun its "concept journey", it

has a firm foundation for creating something good. So we now need to hold steady and believe in what we do, even if success doesn't happen overnight. The business plan that was established in early 2014 has not been fully complied with. However, the trend is pointing in the right direction and the business plan that we are following this year, in 2015, will bring us closer to a breakeven, although we will probably not make it all the way to that target this year.

Living Story AB

Key figures 2014 (2013) Part of the BrA Invest Group since 2011 BrA Invest's ownership is 100% Net sales SEK 13.6 million (SEK 25.8 million) EBIT SEK -8.3 million (SEK -11.5 million) Number of employees 11 (21)

BRA INVEST – BETTER BUSINESS

20 – ANNUAL REPORT 2014

BRA INVEST – BETTER BUSINESS

BrA Invest CKS AB Reg.number: 556753-2501

Management’s Review

It was gratifying to see in the 2014 calendar year that the extensive and long-term programme to enhance the competitive edge of our companies via a structured approach with processes, organisation and investment, which has been in progress for many years, was at last paying off with growth and dividends. Dogman has experienced almost explosive growth, particularly in the second half of the year. Cumulatively, this has meant the company's operating profit has more than doubled compared to 2013. We now have three "problem companies", one of which unfortunately is Draken i Reftele. At the close of 2014, they continued to pose a problem for the Group, albeit not as much as a year ago. The aggregate operating loss of these three companies in 2014 was approximately SEK 14 million, compared with SEK 20 million in 2013. The Group's total investments are again well in excess of SEK 100 million for the year, with the largest investment projects being KB's acquisition of "its" industrial property in Örkelljunga for SEK 34 million (property value) and the expansion work that is taking place in Örkelljunga. BrA Invest CKS AB

BAB Byggtjänst AB 90%

Fastighets AB 3Hus 100%

KB Components UAB

KB Components AB * 91,25%

KB Components Plastunion AB

Draken i Reftele AB 100%

KB System AB

Dogman AS

Dogman AB 95%

Dogman Aps

Olofssons Hyvleri AB 100%

Living Story AB 100%

Dogman OY

* Applies as from 30 April 2015.

KB Components has had an extremely busy year. It has acquired a new CEO (Robert Ramnér took over from Lars Holtskog, who moved home and became CEO of Dogman Norway), has moved out of and closed down the factory in Värnamo (formerly Årevall Plast) and last, but not least, has begun work on extending its factory in Örkelljunga to create just over 4,000 m2 of new space. This decision was taken to enable the company to handle new orders that it has won from customers in the heavy duty vehicles sector and other business sectors. Many employees did a fantastic job, under difficult circumstances, to ensure that the move from Värnamo, which was primarily to Kaunas, went smoothly and efficiently as far as fulfilling commitments to customers and keeping production running in Värnamo were concerned. It was a slightly tougher experience for the team in Lithuania and we had some occasional quality issues during the start-up phase of the large volumes of new production. At the time of writing (March 2015), the number of employees in Kaunas has risen to around 120. This also includes the staff in our

part-owned Ecogalvanic (chrome coating of plastic components), which was also started up, with some major difficulties at times, during the year. We estimate that the total cost to the company for the relocation of production, adjustments to the relocated processes and the start-up of Ecogalvanic is at least SEK 15 million, which is charged in full to the operating profit for 2014. KB repurchased "its" industrial property in Örkelljunga on 1 September 2014 for a property value of approximately SEK 34 million. The purchase was immediately followed by a decision to expand, involving an investment of approximately SEK 70 million. Work has been in progress since then and the property section will be fully completed by the summer of 2015. This investment in a highly-automated injection moulding facility, with massive machinery of 2,300 to 3,200 tonnes, is the largest industrial investment that has been made in Örkelljunga for a considerable time and we are confident that the technical excellence that KB is establishing through this project will lead the industry and will assure and enhance the entire Group's competitive edge in the years ahead.

In the first quarter of 2015, BrA Invest and the large non-controlling shareholders of KB Components agreed to utilise the option (which was available to both the parties) and which had been issued in connection with the new share issue at the beginning of 2009. This means that, as at 30 April 2015, BrA's holding in KB Components increases from 72.50% to 91.25%. BrA Invest now holds an ownership stake of 90% or more in all seven business segments. This is advantageous from a taxation point of view and has a bearing on the prospects of effective and efficient funding. Dogman's plans for 2014 to achieve a dramatic increase in earnings as a result of the costsaving measures implemented in 2013 were an outstanding success! The steady volumes at the beginning of the year were in line with previous volumes. They gradually rose as the year progressed and Dogman had a sequential growth rate in the last quarter of 2014 and achieved 10% growth over the corresponding quarter of the previous year.

ANNUAL REPORT 2014 – 21

BRA INVEST – BETTER BUSINESS

Management’s Review continued We estimate that most of the growth in the second half of the year comes from increasing market share. Several of our competitors have been going through a rough period and their customers have not been receiving deliveries in the quantities they have specified. Several Arken stores have decided to switch all of their requirements to Dogman, and other customers, including Granngården, have drastically increased their range of Dogman items in their stores. After a few teething problems in 2012 and 2013 following the acquisition of Jacson of Scandinavia in the autumn of 2011, the business is developing well and going from strength to strength. The customers have returned to this range of "good-quality equestrian and riding equipment at affordable prices" and we are observing definite growth in this product range. Our smaller markets, Finland and Denmark, have displayed strong growth throughout the year and both of these markets are now profitable. We have a rapidly expanding business in Denmark, in particular, which will give us great satisfaction for many years to come! We have implemented a number of organisational changes during the year, the most important of which is the appointment of Lars Holtskog (former CEO of KB) as Manager of Dogman's Norwegian business operations (as of 1 April 2014) and the appointment of a new CEO at the end of the year. Pierre Olofsson, who was Head of Sales and Marketing, was appointed the new CEO of Dogman in December 2014. He took over from Kenneth Andersson, who has taken on the role of CEO of BAB. Pierre has a strong background and track record in the area of marketing and sales, which is to be Dogman's prime focus from now on, now that we feel that the company's infrastructure and processes are firmly in place and that profitability is moving up to very acceptable levels. In other words, we can and must invest heavily in profitable organic growth in the years to come! During the year, BAB successfully established operations in Halmstad after winning a contract for HFAB, the municipal real estate company. As a result of this contract, we had 30 or so tradesmen working for us at the end of the year and we won our first major contract (worth SEK 19 million) in early January 2015. I think we can therefore safely say that BAB has secured a position for itself in Halmstad! 22 – ANNUAL REPORT 2014

The company's operating profit has not reached expected levels. We have had difficulty maintaining acceptable margins on major public projects amid tough competition. We have even made a loss on some of these projects either because they were secured at very low prices or because the project implementation has not been entirely optimal. Owing to the problems with profitability, we decided at the end of the year to establish a new organisation with a new CEO (Kenneth Andersson, see above). In conjunction with this, the former Managing Director, Peter Wetterlöv, moved full-time into the role of Site Manager for the Malmö office with responsibility for the operations there, which we believe have considerable growth potential.

million/year. We have a portfolio of essentially newly constructed properties and long-term contracts with all the tenants, which makes us confident about speeding up the pace of new development!

From now on, BAB will have a much closer working relationship with 3Hus, our real estate company. Christer Andersson took over as CEO and new head of 3Hus at the end of the year, succeeding Berne Särbring who will now be working part-time, one day a week, for 3Hus. Christer will also be working as business and project developer for BAB and it is our aim to accelerate the pace of our proprietary rental projects from today's investments of SEK 50 million/year to SEK 100 million/year from 2018 onwards. From 2015 through 2017, BAB/3Hus will be implementing and completing 80 or so rental apartments in the Backsippan neighbourhood of Åstorp. Planning and design of this project are well advanced.

In conjunction with this, Draken made some changes to its senior management and carried out a minor reorganisation which is intended to mark the start of a new phase for the company. It is now essential to develop a long-term improvement plan, particularly for production which has sadly been neglected somewhat in recent years. We have also decided to commit ourselves to a more professional relationship with our customers. In this respect, it is crucial to provide excellent quality and service and charge for it accordingly.

During the year, 3Hus completed the Resedan rental construction project in central Åstorp and all 32 apartments have been leased out since September. It is pleasing to note that there is a waiting list of potential tenants for these apartments when any of them become available. All of the properties in the portfolio have now been fully let. NSVA (Nordvästra Skånes Vatten och Avlopp) moved into the Gajaden industrial property during the year on a long-term lease. Renovation of the health care centre was completed in the first quarter of 2014 and Region Skåne County Council is renting the property under a 5-year lease. During the year, profitability improved as the properties that had been under renovation/new construction were leased out. The trailing net income for the fourth quarter of 2014 for the current portfolio amounts to approximately SEK 10 million/year and since the annual interest expense has fallen in line with the general decline in interest rates, the present earning capacity of 3Hus' entire portfolio is SEK 7

The negative growth that Draken underwent in 2013 continued throughout 2014. The problems within the company are largely self-inflicted as the situation for most of its competitors is relatively good, or at least not worse than before. The problems with profitability led to a decision in August to appoint a new CEO. Lillemor Wallentin, who has previously held managerial positions in sales, production, logistics and other parts of the company, took over the post of CEO.

The material prices (granules) that are so important for Draken have not followed previous patterns during the year. Our timing in the purchasing cycles has been slightly wrong, which is a disaster for profitability. The price of materials dropped dramatically at the end of 2014 and the beginning of 2015 in keeping with falling oil prices, which normally benefits the company. Olofssons Hyvleri reduced its loss (SEK -4.6 million before tax) and made zero profit at an EBITDA level. This improvement is partly due to modifications in the K3 accounting rules, which were introduced on 1 January 2014, including the rule that stipulates that finance leased equipment is recognised as an asset in the balance sheet while remaining lease costs are recognised in liabilities. As far as Olofssons is concerned, this means that the equity in the company on 1 January 2013 is increased by SEK 5.7 million and that the monthly lease costs of just under SEK 200 thousand were replaced with interest expense and amortisation amounting to SEK 80 thousand/ month. Consequently, the company's annual costs were reduced by a total of SEK 1.5 million. The final payment for Olofssons' large

BRA INVEST – BETTER BUSINESS

plane was made on 31 January 2015, which is when it also legally became the property of the company.

Once again, Living Story reported a weak performance for the year, even though its loss (SEK -8.6 million before tax) was less than in 2013. The company significantly reduced its costs during the year but was unfortunately not able to maintain its sales volumes. A lot of effort has been spent on reducing stocks of hard-to-sell products through end-of-line sales at the outlet in Löddeköpinge shopping centre and by other means. Unfortunately, this has diverted resources from the essential activities surrounding the production of a product range and many customers have felt that new products are missing from the Living Story range and have consequently decided not to place orders.

However, the loss is still at an unacceptably high level. The key to redressing this situation is to continue to focus on customers with requirements that match Olofssons' production structure and do "a lot of what the company is good at". As we move into 2015, the order book for the new year has never looked healthier and includes a number of major, long-term contracts that have been secured with customers in Germany and elsewhere. We are certain that losses will continue to decline throughout 2015 and thus the earlier question mark about the future of the company, which was due to be assessed in the summer of 2015, will be determined in a positive manner.

A lot more work was done on the range at the end of 2014 and beginning of 2015, however, and we are able to say that, at the time of

writing (March 2015), Living Story has a good range of products. The next step is to get this range out into the market in an effective and efficient way. As regards the earnings forecast for 2015, we anticipate an appreciable improvement although it seems too much to expect to break even just yet. The BrA Group can look back on a year with substantially greater underlying profitability compared to past years, but still at a level below the targets we have set. KB Components, Dogman and BAB/3Hus are our three strong legs that are stronger than ever and we are expecting to see these operations continue to grow in a very positive way. If we can combine this with Living Story's and Olofssons Hyvleri's declining losses and a swing back to profitability for Draken i Reftele, then 2015 has all the makings of being the strongest year ever for BrA Invest!

Important events in 2014

Proposed distribution of profit

- Dogman more than doubles its operating profit and is profitable on all four Nordic markets.

The following amounts are at the disposal of the Annual General Meeting (in SEK):

- KB Components successfully relocates all the operations in Värnamo to other divisions within the Group. The total cost for this, which is at least SEK 15 million, is charged to operating profit for the year.

Retained earnings

46,270,014

Profit for the year

9,730,281

- KB Components repurchases "its" industrial property in Örkelljunga on 1 September 2014.

The Board of Directors proposes the following distribution of profit:

- KB Components decides to add a 4,000 m² extension to its property in Örkelljunga. Together with the machinery and automation equipment for this facility, the total cost of investment is SEK 70 million.

To be carried forward

56,000,295

Total

56,000,295

Total

- All of 3Hus' properties have been fully let by the end of the year. - BAB establishes operations in Halmstad.

56,000,295

For more information about the company's results and financial position, please see the Income Statements and Balance Sheets of both the Group and the Parent Company, with the Additional Disclosures and Notes. All amounts are stated in SEK thousands

The Group’s results and financial position SEK 1,000

2014

2013

2012

2011

2010

2009

2008

1,419,107

1,278,513

1,260,159

1,111,851

918,699

837,073

538,507

32,746

26,390

16,593

12,440

82,330

42,722

17,562

Total assets

781,155

724,038

611,251

637,692

459,287

451,419

256,614

Equity

162,114

135,617

123,802

116,600

148,744

80,877

31,712

20.7%

18.7%

20.3%

18.3%

32.4%

17.9%

12.4%

2.3%

2.1%

1.3%

1.1%

9.0%

5.1%

3.3%

4.7

3.8

2.7

2.8

21.8

12.9

4.6

15.6%

14.0%

5.1%

5.3%

85.6%

92.7%

51.7%

Net sales Profit after financial items

Equity ratio Profit margin Interest cover ratio Return on equity

Comparative figures for 2012 and previous years have not been restated according to BFNAR 2012:1, which may mean that comparisons are not exact. ANNUAL REPORT 2014 – 23

BRA INVEST – BETTER BUSINESS

SEK m Msek

1 200

Msek 1 000

1 000

100,0%

90,0%

80,0%

70,0%

60,0%

50,0%

40,0%

30,0%

20,0%

10,0%

180

Msek

160

800

140

120

600

nansiella poster

Nettoomsättning

200

200 0

100

400

0 Net Nettoomsättning Resultatet eftersales finansiella poster Eget kapital

Msek

0 0,0% Profit after financial items Eget kapital Balansomslutning inkl minoritetsintressen Eget kapital inkl minoritetsintressen Resultatet efter finansiella poster

Totalfinansiella assets poster ResultatetBalansomslutning efter

180

SEK m Msek

Msek

100,0%

160 Msek

90 80

90,0% 90

180

140

160

120

80,0% 80

140

100

7070,0%

6060,0%

2013

120

2012

100

5050,0%

2011

4040,0%

2010

3030,0%

2009

2020,0%

Eget kapital

20 0

Balansomslutning

2014

2008 Resultatet efter finansiella poster

1010,0% 0 0,0%

Equity Egetkapital kapitalinkl minoritetsintressen Eget

Non-controlling interests Soliditet inkl. minoritetsintressen Resultatet efter finansiella poster

The Parent Company’s results and financial position SEK 1,000

2014

2013

Net sales

5,064

4,920

4,165

2,000

1,000

Profit after financial items

5,020

945

18,893

9,655

52,955

Total assets

148,040

115,570

129,455

102,384

76,676

Solvency (%)

37.9%

40.1%

53.9%

99.3%

Average number of employees

2012

2011

2010

Comparative figures for 2012 and previous years have not been restated according to BFNAR 2012:1, which may mean that comparisons are not exact.

Financial risk management The main risks arising from the Group's financial instruments are interest rate risk, foreign exchange risk, credit risk and liquidity risk. Interest rate risk Existing interest-bearing debt carries variable interest rates. Currency risk The business is in principle exposed to certain transaction risks. The company does not normally use forward contracts or similar financial instruments. Credit risk The business involves a large number of customers with varying credit ratings. The company has suffered very few customer losses to date, due in part to credit checks and credit limits. The credit risk is assessed to be limited. Liquidity risk In recent years, the Group has reported large positive cash flows from the companies’ operations. Investments that have been carried out have been financed with loans and own funds. Continuing sound profitability means that the liquidity risk is deemed to be low.

24 – ANNUAL REPORT 2014

0,0% Soliditet inkl. minoritetsintresse

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Income Statement for the Group INCOME STATEMENT for

Note

2014

2013

1,419,107

1,278,531

Operating income: Net sales Change in stocks Own work capitalised Other operating income

-3,775

2,540

19,920

27,359

5,689

3,654

1,440,941

1,312,084

Raw materials and consumables

-649,117

-541,284

Goods for resale

-279,311

-276,988

6.7

-130,597

-138,669

-301,931

-284,940

-37,932

-34,838

Operating expenses:

Other external expenses Personnel expenses Depreciation of property, plant and equipment, and amortisation of intangible assets Other operating expenses

Operating profit

-793

-331

-1,399,681

-1,277,050

41,260

35,034

Profit from financial investments: Interest income

369

725

Interest expense

-8,883

-9,369

32,746

26,390

-9,579

-8,360

23,167

18,030

18,247

10,495

Profit after financial items

Tax on profit for the year

PROFIT FOR THE YEAR

Attributable to: Shareholders of the Parent Non-controlling interests

4,920

7,535

23,167

18,030

ANNUAL REPORT 2014 â&#x20AC;&#x201C; 25

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Balance Sheet for the Group BALANCE SHEET as at 31 December

Note

2014

2013

ASSETS

Non-current assets Intangible assets Trademarks

230

Goodwill

29,807

38,724

29,884

38,954

Property, plant and equipment Land and buildings

232,269

149,748

Plant and machinery

72,691

76,887

Equipment, tools and fixtures & fittings

20,609

25,875

Work in progress and prepayments for property, plant and equipment

10,444

30,670

336,013

283,180

Financial assets Other non-current securities holdings Other non-current receivables

Total non-current assets

1,838

1,766

1,852

1,790

367,749

323,924

66,121

72,947

Current assets Inventories, etc. Raw materials and consumables Unfinished goods Finished goods and goods for resale Prepayments to suppliers

116

109,362

91,408

3,840

175,625

168,294

197,067

198,555

Current receivables Trade receivables Tax assets Other receivables

725

7,466

6,268

Income recognised, but not invoiced

16,545

13,596

Prepaid expenses and accrued income

10,670

9,259

232,473

227,678

5,308

4,142

Total current assets

413,406

400,114

TOTAL ASSETS

781,155

724,038

Cash and bank balances

26 â&#x20AC;&#x201C; ANNUAL REPORT 2014

BRA INVEST – BETTER BUSINESS

Balance Sheet for the Group BALANCE SHEET as at 31 December

Note

2014

2013

EQUITY AND LIABIITIES

Equity

Share capital Other equity Profit for the year Equity attributable to owners of the parent Non-controlling interests Total equity

100

109,327

98,085

18,247

10,495

127,674

108,680

34,407

26,904

162,081

135,584

Provisions Provisions for taxes

10,372

8,884

Other provisions

2,689

2,418

13,061

11,302

Total provisions

Non-current liabilities Building credit facility

27,000

Invoice credit facility

24,294

21,606

Other debt to credit institutions

177,185

151,103

281

293

228,760

200,002

70,120

92,093

41,524

18,453

Other liabilities Total non-current liabilities

Current liabilities Overdraft facility

Other debt to credit institutions Prepayments from customers Trade payables Current tax liabilities Other liabilities

3,008

158,006

158,156

2,468

5,316

27,810

32,368

Revenue invoiced but not yet recognised

9,293

10,792

Accrued expenses and prepaid income

68,006

56,964

Total current liabilities

377,253

377,150

TOTAL EQUITY AND LIABILITIES

781,155

724,038

524,648

501,984

None

MEMORANDUM ITEMS

Pledged assets

Contingent liabilities

ANNUAL REPORT 2014 – 27

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Cash Flow Statement for the Group CASH FLOW STATEMENT for

Note

2014

2013

41,260

35,034

36,543

34,928

-2,445

-2,338

Operating activities Operating profit Adjustments for non-cash items Finance leases Interest received Interest paid

369

725

-8,767

-9,166

Tax for the year

-8,088

-5,719

Operating cash flow before changes in working capital

58,872

53,464

Decrease/increase in inventories

-7,331

4,594

Decrease/increase in operating receivables

-4,623

-7,087

Decrease/increase in operating liabilities

-21,818

27,236

Cash flows from operating activities

25,100

78,207

-12,938

-43,600

-10

528

-46,406

-54,084

Investing activities Acquisition of subsidiaries Net investment in intangible assets Net investment in property, plant and equipment Change in non-current receivables Cash flows from investing activities

-72

-79

-59,426

-97,235

32,185

22,447

2,583

-3,211

Financing activities Increase/decrease in borrowings Non-controlling interests Translation difference in equity

724

-842

35,492

18,394

CASH FLOW FOR THE YEAR

1,166

-634

Cash and cash equivalents at beginning of year

4,142

4,776

Cash and cash equivalents at end of year

5,308

4,142

Cash flows from financing activities

Unutilised overdraft facilities according to Note 27

27,592

35,534

Available cash and cash equivalents at end of year

32,900

39,676

28 â&#x20AC;&#x201C; ANNUAL REPORT 2014

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Income Statement for the Parent Company INCOME STATEMENT for

Note

2014

2013

3.4

5,064

4,920

5,084

4,923

6.7

-2,461

-2,947

-4,204

-3,567

Operating income: Net sales Other operating income Total operating income:

Operating expenses: Other external expenses Personnel expenses Depreciation of property, plant and equipment

-9

-16

Total operating expenses:

-6,674

-6,530

Operating profit

-1,590

-1,607

2,700

Profit from financial investments: 9

7,167

Interest income

1,228

1,848

Interest expense

-1,785

-1,996

Total financial items

6,610

2,552

Profit after financial items

5,020

945

Profit from investments in Group companies

Year-end appropriations: Group contributions received

20,645

13,570

Group contributions paid

-15,207

-22,382

5,438

-8,812

10,458

-7,867

-728

2,317

9,730

-5,550

Total year-end appropriations

Profit before tax

Tax on profit for the year

PROFIT FOR THE YEAR

ANNUAL REPORT 2014 â&#x20AC;&#x201C; 29

BRA INVEST – BETTER BUSINESS

Balance Sheet for the Parent Company BALANCE SHEET as at 31 December

Note

2014

2013

ASSETS Non-current assets Property, plant and equipment Equipment, tools and fixtures & fittings

69,488

Financial assets Investments in Group companies

62,275

Deferred tax assets

3,999

4,726

66,274

74,214

66,279

74,228

81,380

41,100

Total non-current assets Current assets Current receivables Receivables from Group companies Other receivables

305

242

81,761

41,342

Total current assets

81 761

41,342

TOTAL ASSETS

148,040

115,570

Prepaid expenses and accrued income

30 – ANNUAL REPORT 2014

BRA INVEST – BETTER BUSINESS

Balance Sheet for the Parent Company BALANCE SHEET as at 31 December

Note

2014

2013

Share capital - 1,000 shares

100

Total restricted equity

100

46,270

51,820

EQUITY AND LIABIITIES

Equity

Restricted equity

Unrestricted equity Retained earnings Profit for the year

9,730

-5,550

Total unrestricted equity

56,000

46,270

Total equity

56,100

46,370

Non-current liabilities

Debt to credit institutions

18,000

Total non-current liabilities

18,000

11,349

25,989

Current liabilities Overdraft facility

Other debt to credit institutions Trade payables Liabilities to group companies Current tax liabilities Other liabilities Accrued expenses and prepaid income

Total current liabilities

TOTAL EQUITY AND LIABILITIES

8,000

500

726

51,365

35,128

1,694

6,258

980

1,007

73,940

69,200

148,040

115,570

MEMORANDUM ITEMS

Pledged assets

62,275

69,488

Contingent liabilities

223,800

189,604

ANNUAL REPORT 2014 – 31

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Cash Flow Statement for the Parent Company CASH FLOW STATEMENT for

Note

2014

2013

-1,590

-1,607

Operating activities Operating profit Adjustments for non-cash items

Interest received

1,228

1,848

Interest paid

-1,785

-1,996

Tax for the year

-2,138

-1,739

Decrease/increase in operating receivables

-40,420

17,300

Decrease/increase in operating liabilities

11,380

-877

-31,178

14,684

Investment/Group contribution to subsidiaries

--15 327

-23,482

Dividend/Group contribution from subsidiaries

35,145

16,270

Operating cash flow before changes in working capital

Cash flows from operating activities

Investing activities

Net investment in property, plant and equipment Cash flows from investing activities

-13

19,818

-7,225

Financing activities Increase/decrease in borrowings

26,000

Decrease/increase in overdraft facilities

-14,640

-7,459

Cash flows from financing activities

11,360

-7,459

CASH FLOW FOR THE YEAR

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Unutilised overdraft facilities according to Note 27

651

16,011

Available cash and cash equivalents at end of year

651

16,011

32 â&#x20AC;&#x201C; ANNUAL REPORT 2014

BRA INVEST – BETTER BUSINESS

Additional disclosures

Note 1 Recognition and measurement

For accounting periods beginning on or after 1 January 2014, the Group and Parent Company apply the Swedish Annual Accounts Act and the Swedish Accounting Standards Board's general guidelines BFNAR 2012:1 (K3) in the preparation of their financial statements. Amounts for the comparative year have been restated and the respective impacts on profit and equity are presented in the note for equity.

carried out. This means that the revenue is recognised on the basis of the degree of completion. The degree of completion is determined on the basis of contract costs incurred for the work carried out as a ratio of the calculated overall costs for completing the contract. For commissions for which the outcome cannot be calculated in a reliable manner, revenue equivalent to the actual costs is recognised. Expected losses are expensed as soon as they are known. Profit on services carried out on a T&M basis is recognised as the work is carried out. Recognition of construction contracts and similar commissions

Accounting currency The Group presents its annual report in Swedish Kronor (SEK) and all amounts are stated as SEK 1,000 unless otherwise stated.

Group financial statements The Group’s financial statements include the Parent Company and the subsidiaries in which the Parent Company directly or indirectly holds more than 50% of the votes or otherwise has a controlling influence. The Group applies the acquisition method of accounting for its financial statements, which means that equity in the subsidiaries at the acquisition date is completely eliminated. This means that the Group's equity only includes that part of the subsidiaries' equity that has arisen after the acquisition. Year-end appropriations and untaxed reserves are divided between equity and deferred tax liabilities. Deferred tax attributable to the year-end appropriations for the year are included in profit for the year. The deferred tax liability has been recognised as a provision, while the remaining amount has been recognised in Group equity. Deferred tax in untaxed reserves has been calculated as 22%. If the consolidated cost of the shares exceeds the book value of the company's net assets in the acquisition analysis, the difference is reported as goodwill in the consolidated statement. The Group writes off this value over a 5 to 10 year period. The rate of depreciation is based on the long-term strategic importance of the acquisitions to the Group. Internal profits within the Group are eliminated fully. The current exchange rate method is used to translate the accounts of foreign subsidiaries. This means that each balance sheet is recalculated to the balance date rate and that the income statements are translated at the average exchange rates for the period. The translation differences that arise are carried directly to Group equity.

Non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. The non-controlling share of assets and liabilities, including goodwill, has been measured at cost on the date of the business acquisition by the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary company is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in the Group's income statement. The fair value is used as the initial carrying amount and forms the basis for subsequent accounting.

Cash flow statement The cash flow statement has been prepared using the indirect method, which makes adjustments for transactions for non-cash items. Besides cash on hand and demand deposits, cash and cash equivalents comprise current financial investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Measurement principles, etc. Assets, provisions and liabilities have been measured at cost unless otherwise stated below.

Revenue recognition The Group recognises revenue with regard to sales of goods when the significant risks and rewards of ownership of the goods have been transferred to the buyer and when the revenue amount can be calculated in a reliable manner. Profit on services rendered at fixed rates is recognised as the work is

Revenue arising from subcontracted assignments at fixed rates is recognised by the Group as the work is carried out. This means that revenue is recognised on the basis of the degree of completion. The degree of completion is determined on the basis of the actual project costs as a ratio of the calculated project costs of the entire contract. For commissions for which the outcome cannot be calculated in a reliable manner, revenue equivalent to the actual costs is recognised. Expected losses are expensed as soon as they are known. Profit on subcontracted assignments carried out on a T&M basis is recognised as the work is carried out. Construction contracts are recognised in the Balance Sheet project by project either as Recognised, but not invoiced income under current assets, or as Invoiced, but not recognised income under current liabilities. Projects with higher recognised income than invoiced are recognised as assets, while projects invoiced for more than recognised income are recognised as liabilities.

Income taxes Recognised income tax includes current tax, adjustments concerning current tax in previous years, and changes in deferred tax. All current tax payable/receivable is valued at nominal amounts and in accordance with the tax rules and tax rates adopted or that have been announced and are very likely to be adopted. Tax effects related to items that are recognised in the income statement, are also recognised in the income statement. Tax is recognised directly in equity if the tax is attributable to items that are recognised directly in equity. Deferred tax is calculated according to the balance sheet liability method on all significant temporary differences between recognised and taxable values of assets and liabilities. The temporary differences arise mainly via untaxed reserves. Deferred tax assets concerning loss carry-forwards or future tax deductions are recognised only to the extent that it is probable that the deductions can be settled against future taxable profit. Due to the relationship between recognition and taxation, the Parent Company recognises the deferred tax liability on untaxed reserves as part of the untaxed reserves.

Leases Leases are classified either as finance leases or as operating leases. Leases are classified as finance leases when the financial risks and rewards of ownership have been substantially transferred to the lessee. All other leases are classified as operating leases. Rights and obligations under finance leases where the Group is the lessee are recognised as assets and liabilities in the balance sheet. Assets and liabilities are initially measured at the fair value of the asset or, if lower, at the present value of the minimum lease payments. Leased assets are depreciated on a straight-line basis over the remaining expected useful life of the asset. The obligation under a finance lease is recognised as non-current and current liabilities respectively. Minimum lease payments are recognised as interest and amortisation of the liabilities. The minimum lease payments for operating leases for which the Group is the lessee are charged on a straight-line basis over the lease term. Assets leased under an operating lease remain in the Group as property, plant and equipment since rights and obligations under the lease remain with the Group. Such assets are measured in the same way as other property, plant and equipment.

Impairment If there is an indication that an asset may be impaired, the Group estimates the asset’s recoverable amount. If the carrying amount of an asset exceeds its recoverable value, the asset is written down to this value. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value-in-use. The value-in-use is the expected future cash flows generated by the asset. Impairment losses are recognised in the income statement.

ANNUAL REPORT 2014 – 33

BRA INVEST – BETTER BUSINESS

Inventories

Definition of key figures

Inventories are measured at the lower of cost and net realizable value. Deductions are made for obsolescence.

Profit margin

Net profit as a percentage of net sales.

Receivables

Interest coverage ratio

Receivables are recognised at the amount that is estimated to be paid, based on an individual assessment.

Profit after financial items increased by interest expenses via interest expenses.

Receivables and liabilities in foreign currencies

Return on equity

Receivables and liabilities in foreign currencies are stated at the rates of exchange on the balance sheet date. If hedging transactions are used, such as forward foreign exchange contracts, the forward exchange rate is used.

Net profit as a percentage of average equity. Equity ratio

Adjusted equity as a ratio of total assets

Provisions Provisions are recognised when the Group has, or can be considered to have, an obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Note 2 Estimates and judgements

Property, plant and equipment and intangible assets

Each year, the Group considers whether there is any indication that the value of an asset is lower than its carrying amount. If there is such an indication, the Group calculates the asset’s recoverable amount, which is the higher of the asset’s fair value less costs to sell and its value in use.

Property, plant and equipment and intangible assets are stated at cost less scheduled depreciation and amortisation based on estimates of the useful lives of the assets. The Parent Company and the Group companies use the following depreciation/amortisation periods.

Note 3 Purchase and sale between Group companies

Capitalised development expenses 3 years Trademarks 5 years Goodwill

5–10 years

Buildings

33–50 years

Site improvements

20 years

Plant and machinery

5–10 years

Fixtures and fittings

4–10 years

Investment properties The fair values of the investment properties have mainly been derived using a valuation carried out by an independent valuer.

Financial income and expenses Financial income and expenses consist of interest income on bank deposits, receivables and interest-bearing securities, interest expenses, distributed income, and realised profits and losses on financial investments. Interest income and interest expenses include accrued amounts. Borrowing costs are recognised in the income statement in the year in which they occur.

34 – ANNUAL REPORT 2014

The company management makes estimates and assumptions about the future which seldom match actual results. The estimates and assumptions which may involve a risk of significant adjustments in the carrying values of assets and liabilities are primarily valuations of inventories and properties.

The Parent Company’s sales are all internal within the Group. The Parent Company’s purchases from companies in the Group are SEK 397 thousand (SEK 418 thousand)

BRA INVEST – BETTER BUSINESS

Notes

The Group

Parent company

2014

2013

Manufacture of plastic components

614,458

511,777

Trading of pet articles

367,472

351,399

Construction business

252,145

228,849

Note 4 Net sales

2014

2013

5,064

4,920

Net sales by business segment

Production of plastic products

86,895

84,145

Planing

78,136

72,085

Trading of decoration products

13,011

25,772

Property management Total

6,990

4,504

1,419,107

1,278,531

1,112,132

1,062,345

Net sales by geographic market

Nordic countries Other countries Total

306,975

216,186

1,419,107

1,278,531

5,064

4,920

Note 5 Other operating income Wage subsidies

737

574

Other operating income

4,952

3,080

Total

5,689

3,654

27,728

26,955

397

Note 6 Lease payments Operating leases, including property rentals Lease payments, costs for the year Remaining lease payments are due as follows: Within one year

19,681

26,517

397

In one to five years

50,056

66,085

1,588

Over five years

96,566

144,582

16,211

16,608

166,303

237,184

18,196

18,593

Total The most significant leases are lease of premises.

Note 7 Audit fees Fees and remuneration Mazars SET Revisionsbyrå AB Audit assignment

889

779

889

779

Other services

235

222

235

222

1,124

1,001

1,124

1,001

160

198

Total

Other auditors: Audit assignment Other services Total Audit services are the auditors’ statutory audit. Audit fees concerning audit by Mazars SET Revisionsbyrå AB are charged to the Parent Company BrA Invest CKS AB in their entirety.

ANNUAL REPORT 2014 – 35

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

2014

2013

Note 8 Average number of employees and salaries and other benefits Average number of employees

Number of employees

of whom men

Number of employees

of whom men

Parent company Sweden

Subsidiaries Sweden

512

372

482

340

Norway

Finland

Denmark

Lithuania

127

Total subsidiaries

657

430

592

380

Group total

661

434

596

383

Company management

Women

Men

Women

Men

Board of Directors

CEO and other company management

Salaries and remuneration

Social security expenses

Salaries and remuneration

Social security expenses

820

1,203

Personnel expenses Parent company Board of Directors and CEO

1,707

(of which pension expenses)

(284)

Other employees

967

(of which pension expenses)

Subsidiaries

673

(131) 213,609

(of which pension expenses)

Group total

502

77,762

216,283

79,084

200,262

2014

74,583 (14,146)

202,138

(14,728)

The Group

390 (139)

(14,313)

(of which pension expenses)

720 (272)

75,693 (14,557)

Parent company 2013

2014

2013

14,500

2,700

Note 9 Profit from investments in Group companies Anticipated dividend Impairment

-7,333

Total

7,167

2,700

1,848

Note 10 Interest income 0

1,228

Interest income other

Interest income Group companies

369

725

Total

369

725

1,228

1,848

Note 11 Interest expense Interest expense Group companies

-917

-1,019

Interest expense other

-8,883

-9,369

-868

-977

Total

-8,883

-9,369

-1,785

-1,996

36 â&#x20AC;&#x201C; ANNUAL REPORT 2014

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

The Group

Note 12 Tax on profit for the year

2014

Parent company 2013

2014

2013

Current tax

-8,088

-5,719

Deferred tax

-1,491

-2,641

-728

2,317

Total

-9,579

-8,360

-728

2,317

Reported profit before tax

32,746

26,390

10,458

-7,867

Tax at the effective rate of 22%

-7,204

-5,806

-2,301

1,731

Reported tax

Reconciliation of tax Effect of foreign tax rates Non-deductible costs Non-taxable income Amortisation of Group goodwill Loss carry-forwards not recognised Prior period tax adjustment Impact of utilising previous loss carry-forwards not recognised Total

-47

320

-718

-365

-1,617

-8

286

3,190

594

-1,985

-1,499

-517

-770

-367

606

-9,579

-8,360

-728

2,317

Note 13 Capitalised development costs Opening cost Sales/disposals

326

486

-160

Closing cost

326

Opening amortisation

-326

-486

Sales/disposals Closing amortisation Carrying amount

160

-326

5,231

Note 14 Trademarks Opening cost Closing cost

5,231

Opening amortisation

-5,001

-4,831

-153

-170

-5,154

-5,001

230

72,775

62,355

11,463

Amortisation for the year Closing amortisation Carrying amount

Note 15 Goodwill Opening cost Acquisition of subsidiaries Translation difference

-61

-1,043

Closing cost

72,714

72,775

Opening amortisation

-34,051

-26,228

-8,927

-8,338

Amortisation for the year Translation difference

515

Closing amortisation

-42,907

-34,051

Carrying amount

29,807

38,724

ANNUAL REPORT 2014 â&#x20AC;&#x201C; 37

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

The Group

Parent company

2014

2013

182,588

150,210

2014

2013

Note 16 Land and Buildings Opening cost Purchases

53,897

7,376

Take-over upon acquisition

37,762

25,223

Sales/disposals Closing accumulated cost Opening depreciation

-221

274,247

182,588

-32,840

-16,157

Depreciation for the year

-4,987

-3,476

Take-over upon acquisition

-4,151

-13,274

Sales/disposals Closing accumulated depreciation

-41,978

-32,840

232,269

149,748

Carrying amount of investment properties

89,220

36,956

Fair value of investment properties

94,100

Carrying amount The above amount includes:

Note 17 Plant and machinery Opening cost Purchases Take-over upon acquisition

329,198

240,681

12,459

12,388

69,209

-60,015

-3,145

Reclassifications

1,011

9,703

Translation difference

1,684

362

Sales/disposals

Closing cost

284,337

329,198

Opening depreciation

-252,311

-175,621

Depreciation for the year Take-over upon acquisition Sales/disposals Reclassifications

-15,580

-13,966

-58,675

56,808

2,885

-6,910

Translation difference

-563

-24

Closing depreciation

-211,646

-252,311

72,691

76,887

Cost

17,700

Accumulated depreciation

-5 591

-4,883

12,109

12,817

160,098

162,236

38 13

Carrying amount Leased assets The above carrying amounts include leased assets at:

The leased assets reported above relate to the splitting and planing line.

Note 18 Fixtures and fittings Opening cost Purchases Sales/disposals Reclassifications Translation difference

3,070

7,831

-7,823

-743

-55

-9,525

112

299

Closing cost

155,402

160,098

Opening depreciation

-134,223

-132,784

-37

-21

Depreciation for the year

-8,275

-8,889

-9

-16

Sales/disposals

7,725

743

Reclassifications

6,910

Translation difference

-72

-203

Closing depreciation

-134,793

-134,223

-46

-37

20,609

25,875

Carrying amount 38 â&#x20AC;&#x201C; ANNUAL REPORT 2014

BRA INVEST – BETTER BUSINESS

The Group

Parent company

2014

2013

Opening cost

30,670

4,151

Net change

-20,226

26,519

Closing cost

10,444

30,670

2014

2013

82,348

81,248

1,100

Note 19 Construction in progress and advances concerning property, plant and equipment

Note 20 Investments in Group companies

Opening cost Acquisitions Shareholder contributions

120

Closing cost

82,468

82,348

Opening impairment

-12,860

Impairment for the year

-7,333

Closing impairment

-20,193

-12,860

Carrying amount

62,275

69,488

Information concerning subsidiaries Reg. no.

Capital/ Votes

Number of shares

Carrying amount

BAB Byggtjänst AB, Åstorp

556608-9669

90%

1,350

1,143

Fastighets AB 3Hus, Åstorp

556739-8010

100%

1,000

100

Draken i Reftele AB, Gislaved

556476-2093

100%

4,000

2,500

Dogman AB, Åstorp

556493-9519

95%

28,500

24,750

986,467,025

100%

100

29 41 44 91

100%

125,000

2366900-6

100%

100

Olofssons Hyvleri AB, Vrigstad

556386-4668

100%

10,000

1,350

KB Components AB, Örkelljunga

556306-9581

100%

1,000

16,885

KB Components Årevall AB, Värnamo

556498-0885

100%

5,000

KB Components Plastunion AB, Anderstorp

556181-5209

100%

30,000

KB Örkelljunga Fastighets AB

556785-0705

100%

1,000

KB Components UAB, Kaunas, Lithuania

300,066,964

100%

Ecogalvanic UAB, Kaunas, Lithuania

303,074,400

56.9%

239

Company Name and Domicile

Dogman AS, Hagan, Norway Dogman Aps, Bröndby, Denmark Dogman Oy, Turku, Finland

Living Story AB, Åstorp

556304-6803

100%

11,000

7,077

Fastighets AB Västra vägen, Åstorp

556825-8650

100%

500

2,050

Fastighets AB Vårdsippan, Åstorp

556825-8635

100%

500

4,050

Fastighets AB Backsippan 14-16, Åstorp

556932-5441

100%

Fastighets AB Resedan, Åstorp

556926-5621

100%

170

Gajadfastigheten i Åstorp AB, Åstorp

556826-1944

100%

500

Mässhallen i Åstorp AB, Åstorp

556838-8622

100%

500

Fastighets AB Bjuvstorp 6:42, Åstorp

556825-9070

100%

500

2,050

Total

62,275

Note 21 Other non-current receivables Opening cost Investment for the year Carrying amount

1,766

1,687

1,838

1,766

ANNUAL REPORT 2014 – 39

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

The Group 2014

Parent company 2013

2014

2013

242

Note 22 Work in progress Income recognised, but not invoiced Recognised income for construction work in progress

273,872

120,343

Invoiced for construction work in progress

-257,327

-106,747

16,545

13,596

Recognised income for construction work in progress

-74,633

-53,414

Invoiced for construction work in progress

83,926

64,206

Total

9,293

10,792

Net construction work in progress

7,252

2,804

Prepaid expenses

7,452

6,982

305

Accrued income

3,218

2,277

10,670

9,259

305

242

Accrued personnel expenses

50,209

48,619

341

318

Accrued bonus to customers

2,736

3,190

13,416

4,073

639

689

1,645

1,082

68,006

56,964

980

1,007

Total

Income invoiced, but not recognised

Note 23 Accrued items Prepaid expenses and accrued income

Total

Accrued expenses and prepaid income

Other accrued expenses Prepaid income Total

Note 24 Equity The face value of a share in BrA Invest CKS is SEK 100. The number of shares was 1,000 and the share capital is SEK 100,000. The Group

Opening balance at 1 Jan 2014, as per adopted balance sheet

Share capital

Other equity

Profit for the year

100

98,930

11,449

Equity Non-controlling parent interests company 110,479

27,323

Total equity

137,802

Adjustment of the opening balance sheet 1 January 2013: Finance leases

5,662

Adjusted useful life of goodwill

-5,788

-219

--6,007

-719

-183

-902

-607

-588

-1,460

-36

-1,496

1,113

98,085

10,495

108,680

10,495

-10,495

Deferred tax Adjustment of the comparative year (2013): Component management real estate Adjusted useful life of goodwill Finance leases Opening balance at 1 Jan 2014, as per adjusted balance sheet

100

Distribution of profit according to the decision of the AGM

1,113 26,904

135,584 0

Dividend to non-controlling interest

-300

Sale to non-controlling interest

2,498

747

385

1,132

Translation difference for the year

747

Profit for the year Balance at 31 Dec 2014 40 â&#x20AC;&#x201C; ANNUAL REPORT 2014

100

109,327

18,247

4,920

23,167

18,247

127,674

34,407

162,081

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

Note 24 Equity Parent company

Share capital

Retained earnings

Profit for the year

Total equity

100

34,362

11,908

46,370

17,458

-17,458

51,820

-5,550

46,370

-5,550

5,550

9,730

56,100

Opening balance at 1 Jan 2014, as per adopted balance sheet Effect of K3

100

Opening balance at 1 Jan 2014, as per adjusted balance sheet Distribution of profit according to the decision of the AGM Profit for the year Closing balance

100

46,270

The Group

Parent company

2014

2013

2014

2013

Note 25 Deferred tax assets/ Provisions for taxes Opening carrying amount Provisions for the year Utilised amount for the year Carrying amount

-8,884

2,417

4,726

2,409

2,317

-1,488

-11,301

-727

-10,372

-8,884

3,999

4,726

-13,815

-12,871

-3,094

-3,444

172

368

The temporary differences have resulted in deferred tax assets and liabilities concerning the following: Untaxed reserves Non-current assets Other assets Provisions Loss of which blocked for taxation in 2015

Total

685

651

5,680

6,412

3,999

4,726

327

184

-10,372

-8,884

3,999

4,726

2,418

2,163

Note 26 Other provisions Opening carrying amount Provisions for the year

271

255

2,689

2,418

Limit granted

97,712

127,627

12,000

42,000

Unutilised credit facility

27,592

35,534

651

16,011

27,000

30,000

Carrying amount Other provisions relate to pension provisions

Note 27 Credit limits Overdraft facility

Building credit facility Limit granted Invoice credit facility Limit granted

ANNUAL REPORT 2014 â&#x20AC;&#x201C; 41

BRA INVEST â&#x20AC;&#x201C; BETTER BUSINESS

The Group 2014

Parent company 2013

2014

2013

Note 28 Non-current liabilities Loans falling due within 2-5 years

49,100

40,934

18,000

128,085

110,169

Business mortgages

156,000

Property mortgages

157,750

Shares in subsidiaries

148,348

136,288

62,275

69,488

45,550

31,021

0 0

Loans falling due after 5 years

Note 29 Memorandum items Pledged assets

Mortgaged trade receivables Capital insurance

1,804

1,674

15,196

19,251

524,648

501,984

62,275

69,488

Surety for subsidiaries

223,800

189,604

Total contingent liabilities

223,800

189,604

37,932

34,838

271

255

-1,660

-229

Other pledged assets Total pledges

Contingent liabilities

Note 30 Non-cash items Amortisation Provisions Capital gains in fixtures and fittings Other

Total

36,543

34,928

42 â&#x20AC;&#x201C; ANNUAL REPORT 2014

BRA INVEST – BETTER BUSINESS

Åstorp 9 April 2015

Stefan Andersson

Kenneth Andersson

CEO

Chairman

Christer Andersson

My audit report was submitted on 9 April 2015

Bo Matson Authorised Public Accountant

ANNUAL REPORT 2014 – 43

BRA INVEST – BETTER BUSINESS

Audit Report To the Annual General Meeting of BrA Invest CKS AB Reg. no. 556753-2501 Report on the Annual Report and Consolidated Financial Statements I have audited the Annual Report and Consolidated Financial Statements of BrA Invest CKS AB for the year 2014. The company’s Annual Report and Consolidated Financial Statements are presented on pages 20-42 of the printed edition of this document. The responsibility of the Board of Directors and CEO for the Annual Report and Consolidated Financial Statements The Board of Directors and the CEO are responsible for the presentation of an Annual Report and Consolidated Financial Statements that present a true and fair view in accordance with the Swedish Annual Accounts Act, and for the internal controls deemed necessary by the Board of Directors and the CEO in order to present an Annual Report and Consolidated Financial Statements that are free from material misstatement, whether caused by irregularity or error. Responsibility of the auditor It is my responsibility to state an opinion concerning the Annual Report and the Consolidated Financial Statements on the basis of my audit. I conducted my audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. These standards require that I comply with ethical business requirements and plan and perform the audit to obtain reasonable assurance that the Annual Report and the Consolidated Financial Statements are free from material misstatement. An audit involves performing procedures to obtain evidence about the amounts and disclosures in the Annual Report and the Consolidated Financial Statements. The auditor decides which procedures to use, by assessing the risks of material misstatement in the Annual Report and the Consolidated Financial Statements, whether caused by irregularity or error. In making those risk assessments, the auditor considers the components of the internal control that are relevant to how the company prepares the Annual Report and the Consolidated Annual Report to give a true and fair view, for the purpose of performing the assessments that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also involves evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the CEO in the Annual Report, as well as evaluating the overall presentation of the Annual Report and the Consolidated Financial Statements. I consider the audit evidence I have obtained to be sufficient and appropriate to provide a basis for my opinion. Opinion In my opinion, the Annual Report and the Consolidated Financial Statements have been prepared as required by the Swedish Annual Accounts Act and, in all material respects, present a true and fair view of the financial position of the Parent Company and the Group as at 31 December 2014, and of their 44 – ANNUAL REPORT 2014

financial performance and cash flows for the year as required by the Swedish Annual Accounts Act. The Management’s Review is consistent with the other sections of the Annual Report and the Consolidated Financial Statements. I therefore recommend that the Annual General Meeting adopts the Income Statements and Balance Sheets of the Parent Company and the Group. Report on other requirements under laws and other statutes In addition to my audit of the Annual Report and the Consolidated Financial Statements, I have also audited the proposal for allocation of the company’s profit or loss, as well as the management of BrA Invest CKS AB for the year 2014 by the Board of Directors and CEO. The responsibility of the Board of Directors and the CEO The Board of Directors is liable for the proposed appropriation of the company's profit or loss, and the Board of Directors and the CEO are liable for management under the Swedish Companies Act (aktiebolagslagen). Responsibility of the auditor My responsibility is to express an opinion, with a reasonable level of assurance, on the proposal for allocation of the company’s profit or loss and on its management, based on my audit. I have conducted my audit in compliance with generally accepted auditing standards in Sweden. As a basis for my opinion on the Board of Directors' proposal for allocation of the company’s profit or loss, I have examined evidence to determine whether the proposal is consistent with the Swedish Companies Act. As a basis for my opinion on discharge from liability, in addition to my audit of the Annual Report and the Consolidated Financial Statements, I have examined significant decisions, actions taken and circumstances in the company in order to determine the possible liability to the company of any member of the Board of Directors or the CEO. I have also examined whether any member of the Board of Directors or the CEO has otherwise acted in contravention of the Swedish Companies Act, the Swedish Annual Accounts Act or the company's Articles of Association. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Opinion It is my recommendation that the Annual General Meeting shall appropriate the profit as proposed in the Management’s Review and grant the members of the Board of Directors and the CEO discharge from liability for the financial year. Helsingborg 9 April 2015 Bo Matson Authorised Public Accountant

BRA INVEST – BETTER BUSINESS

Board of Directors and auditors

Stefan Andersson, born 1964

Auditor

Member of the Board of Directors and CEO since 2008

Bo Matson, born 1952

Education and professional experience: MSc (Eng), Mechanical Engineering, Master of Business Administration, CEO and President of BrA Invest since 2008, CEO of Gunnebo Troax AB and member of Gunnebo's Executive Management Board, 2002-2008, Division Manager, Atlas Copco Secoroc, 2000-2002, Division Manager, Trelleborg Protective Products, 1996-2000, other management positions in ABB Stal, 1988-1996 in such locations as Finspång, North Brunswick, NJ, USA and Nuremberg, Germany.

Authorised Public Accountant, Mazars SET Revisionsbyrå AB

Current Board positions: Chairman of the Boards of all subsidiaries of BrA Invest. Member of the Board of Directors of the Chamber of Commerce and Industry of Southern Sweden

Other audit responsibilities: Among others Marco Group, Stenbocken, Ulf Malmgren Gruppen, Godbiten

Alternate auditor

Rose-Marie Östberg, born 1963 Authorised Public Accountant, Mazars SET Revisionsbyrå AB

Kenneth Andersson, born 1966 Chairman

Other audit responsibilities: Among others Öresundskraft, Helsingborgshem, HSB Nordvästra Skåne, Mäster Grön

Has experience in the construction, property and retail industry. Worked at external companies between 1986-2001, and in an executive position since 1997. He has served as a CEO in the BrA Group's companies since 2001.

Christer Andersson, born 1968 Board member Has a background in the construction and property industry. He has held executive positions since 1989 at external companies and within the BrA Group since 2001.

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Notes

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THORNREKLAMBYRÅ

BrA Invest - Box 163 – SE-265 22 Åstorp - Tel. +46 (0)42-509 60 - Fax +46 (0)42-599 20 – Reg. no.: 556753-2501 - www.brainvest.se