Transcom Annual Report 2019
Transcom Annual Report 2019
Transcom Annual Report 2019
2019
Contents
Administration report 1
Financial overview 4
Consolidated financial statements and notes 5
Parent Company financial statements
and notes 29
Signatures of the Board of Directors 39
Auditor’s report 40
Definitions 44
The formal annual accounts and the consolidated accounts comprise pages 1–43.
This is a translation of the original Swedish Annual Report. In the event of differences
between the English translation and the Swedish original, the Swedish Annual Report shall
prevail.
Administration report
Administration report
Transcom is a global customer experience specialist, pro- increase loyalty, retention and customer sales. This is why
viding customer care, sales and technical support through they partner with Transcom, whose core business is to
an extensive network of contact centers and work-at- deliver excellent multi- channel customer service and
home agents. Transcom’s principal role is to positively support.
impact customer loyalty and, thus, revenue through
making ser- vice and support interactions as effortless and
enjoyable as possible for our clients’ customers.
Transcom’s cus- tomer experience specialists engage
with customers in multiple channels, including phone, e-
mail, chat, messag- ing services, and social media
networks.
Transcom serves clients across the globe in virtually
every industry and area of public service. Many of our cli-
ents compete in fast-moving, mass consumer markets
that demand extreme levels of responsiveness to shifting
con- sumer needs and preferences. Transcom has deep
know- how in a wide range of industries, including
telecommuni- cations & media, consumer tech, financial
services,
e-commerce, retail, utilities, and logistics. Customer expe-
rience is a significant differentiator in all these sectors,
and the quality of customer care service delivery
continues to play a major role in influencing customer
choice when deciding which brands to do business with.
Transcom’s operations add value to clients’ businesses by
supporting the creation of outstanding customer
experiences, while reducing cost and helping to drive
growth.
Transcom does this directly, by delivering multi-
channel customer service and support in a cost-effective
way. But Transcom’s goal is also that the Company’s
activities bene- fit other parts of clients’ businesses. For
example,
Transcom’s analytic capabilities can generate insights
that ultimately contribute to the creation of a differentiated
customer experience, setting Transcom’s clients apart in
an increasingly competitive marketplace.
As a global specialist of outsourced customer care
solu- tions, Transcom has an important role in helping to
make sure that end customers form positive perceptions
of their interactions with the companies that Transcom
supports. To many of the Company’s clients, the quality
of their Customer care operations is fundamental to their
ability to execute their service-based strategies to
Financial overview
Income statement
Revenue for 2019 amounted to EUR 541.5 million
(543.6). Gross profit amounted to EUR 116.3 million
(91.1) and Operating result EUR 19.7 million (–12.6).
Operating result excluding non-recurring items
amounted to EUR 28.1 million (22.0). Non-recurring
items amounted to EUR 8.4 million (34.6) and consisted
of operational non-recurring
Cash flow
Operating cash flow improved and amounted to positive
EUR 51.4 million (2.5). This is mainly a result of higher
profit and improved working capital compared to last year.
Cash flow from investing activities amounted to EUR –18.2
mil- lion (–41.8) and is mainly explained by earnout-
payment for the Awesome acquisition and investments in
new sites in Philippines and Tunisia, countereffected by
the positive cash effect of EUR 6.5 million from the
divestment of part of the Spanish business. Cash flow
from financing activities amounted to EUR –32.1 million
(34.1), as this year was affected by payments of leases
being presented within financing activities, as a result of
IFRS 16. Net impact of repayment of loans and credit
facilities amounted to EUR
–3.5 million (37.6). Cash flow totaled EUR 1.1 million (–
5.2).
Parent Company
The Parent Company, Transcom Holding AB, does not
perform CRM services, but employs part of the
corporate management team. The Parent Company is a
Outlook
Transcom has built a foundation with improved EBITDA
margin from 5% to 9% between years 2015 and 2019.
2019 2018
Revenue (EUR million) 541 544
EBIT (EUR million) 19.7 –12.6
EBIT margin 3.6% –2.3%
EBITA excluding non-recurring items (EUR million) 39.0 31.6
EBITA margin excluding non-recurring items 7.2% 5.8%
EBITDA (EUR million) 40.4 4.8
EBITDA margin 7.5% 0.9%
EBITDA excluding non-recurring items (EUR million) 48.8 39.4
EBITDA margin excluding non-recurring items (EUR million) 9.0% 7.2%
Profit/loss before tax (EUR million) 2.1 –32.2
Profit/loss for the year (EUR million) –0.4 –31.0
Net cash flow from operating activities (EUR million) 51.4 2.5
Return on Equity –0.4% –28.7%
Equity ratio 21.4% 21.9%
Net debt/EBITDA excl non-recurring items 4.2 5.3
(Alternative performance measures see page 44)
Attributable to:
– equity holders of the parent –361 –30,957
– non-controlling interests – –
Consolidated statement
of comprehensive
income
January to December
Attributable to:
– equity holders of the parent –607 –30,813
– non-controlling interests – –
Consolidated statement
of financial position
December 31, December 31,
EUR thousand Note 2019 2018
ASSETS
Non-current assets
Goodwill 12 205,226 210,352
Other intangible assets 12 104,564 112,115
Tangible assets 13 21,493 17,923
Right of use assets 7 25,916 –
Deferred tax assets 11 1,305 2,416
Other receivables 3,000 2,163
361,504 344,968
Current assets
Trade receivables 14 59,075 71,123
Income tax receivables 6,252 4,450
Other receivables 15 13,303 10,839
Prepaid expenses and accrued income 15 36,006 37,845
Cash and cash equivalents 14,295 12,884
128,931 137,141
TOTAL ASSETS 490,435 482,109
Non-current liabilities
Interest-bearing liabilities 17, 23 201,034 216,725
Employee benefit obligations 18 3,318 2,632
Lease liability 7, 23 16,018 –
Provisions 19 13,659 18,074
Deferred tax liabilities 11 20,989 27,269
255,018 264,700
Current liabilities
Interest-bearing liabilities 17 13,687 1,285
Lease liability 7, 23 11,448 –
Provisions 19 20,746 22,514
Trade payables 18,798 23,761
Income tax payables 6,332 2,344
Other liabilities 20 18,613 21,100
Accrued expenses and prepaid income 21 40,674 40,678
130,297 111,683
Consolidated statement
of changes in equity
Consolidated statement
of cash flows
January to December
Notes to the
consolidated financial
statements
Note 1 Summary of significant accounting and valuation policies
1.1 General term leases and have not been recognized in the balance sheet. The same
Transcom Holding AB (publ) (the “Company” or the “Parent Company”) is for leases of low value.
and its Group companies (together, “Transcom” or the “Group”) is a global
customer experience specialist, providing customer care, sales and techni-
cal support through our extensive network of contact centers and work-at-
home agents. We are 26,000 customer experience specialists at 50 con-
tact centers across 20 countries, delivering services in 33 languages to
international brands in various industry verticals. Transcom Holding AB is
a privately held company.
The Company is a registered company domiciled in Stockholm, Sweden.
The address of the Company’s headquarter is Hälsingegatan 40, SE-113 43
Stockholm.
The consolidated financial statements were authorized for issue by the
Board of Directors on April 6, 2020.
These consolidated financial statements will be submitted for approval
at the Annual General Meeting on April 28, 2020.
The Group reviewed the existing lease contracts and in summary the
new standard had the following impact as per January 1, 2019:
1.3 Consolidation
The consolidated financial statements include the Group companies of
which the Group has control. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its
power over the investee. There is a presumption that a majority of
voting rights result in control. Group companies are fully consolidated
from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The consolidated accounts are prepared according to the
acquisition method, which entails acquisitions of subsidiaries being
viewed as transac- tions through which the Group indirectly acquires
the subsidiary’s assets and assumes its liabilities and contingent
liabilities. The Group’s equity therefore includes only the portion of the
subsidiary’s equity added since acquisition. The Group’s cost is
determined through an acquisition analysis in connection with the
acquisition. This analysis determines, in part, the cost of the holdings
or operations and, in part, the fair value of the identifia- ble assets,
liabilities and contingent liabilities assumed on the date of acquisition.
The cost of the subsidiary’s shares or operations consists of the fair
value of the compensation on the transfer date. The cost includes con-
ditional purchase considerations recognized as liabilities at fair value
per the acquisition date.
Business combinations are accounted for using the acquisition method.
Identifiable assets acquired and liabilities assumed are measured
initially at their fair values at the acquisition date. The excess of the
consideration transferred, and the acquisition-date fair value of any
previous equity inter- est in the acquiree, over the fair value of the
identifiable net assets acquired is recognized as goodwill.
Intra-Group receivables and liabilities, revenue and expenses, and
unrealized gains and losses that arise from transactions between
Group companies are eliminated in the consolidated accounts.
Note 11 Taxes
Income tax expense
EUR thousand 2019 2018
Current income tax on profit/loss for the year includes corporate income
Current income tax on profit/loss for the –8,099 –3,507 tax of EUR 7,499 thousand (2018: EUR 3,967 thousand) and witholding tax
year –1,868 –1,418 of EUR 600 thousand (2018: EUR 958 thousand). The deferred tax benefit
Adjustments in respect of prior years is related to amortization of intangible assets and recognition of deferred
Current taxes –9,967 –4,924 tax assets on losses in four entities. Adjustments in respect of prior years
mainly represent a correction of deferred tax liability related to intangible
assets and a provisions with respect to claims brought against the Group
Current year origination and reversal by tax authorities in one jurisdiction.
of temporary differences 5,420 6,931 As at December 31, 2019 eight Group entities were subject to tax
Adjustments in respect of prior years 2,043 –738 audits. Some of these tax inquiries have resulted in reassessments, while
Deferred taxes 7,463 6,193 others are still at an early stage and no reassessments have yet been
Income tax expense –2,504 1,268 raised. As at December 31, 2019 the provision related to tax audits
amounts to EUR 3,897 thousand (2018: EUR 4,027 thousand).
Deferred tax assets are recognized for tax losses carried forward to the extent that the realization of the related tax benefit through future taxable profit is
probable. The Group did not recognize deferred tax assets for losses amounting to EUR 52,327 thousand (2018: EUR 76,463 thousand). 5,062 thousand
(2018: EUR 38,159 thousand) of these losses have no expiration date. The corresponding deferred tax assets for the losses would have been 13,551 EUR
thousand (2018: EUR 18,970 thousand) based on each country expected tax rate.
Accumulated amortization
and impairment
As at January 1, 2019 – –15,092 – –13,200 –2,772 –31,064
Amortization for the year – –10,927 – –886 –1,758 –13,571
Translation differences – –120 – – –2 –122
As at December 31, 2019 – –26,139 – –14,086 –4,531 –44,757
Carrying value as at December 31, 2019 205,226 74,621 23,122 3,517 3,304 309,790
1) Goodwill and Customer relationships refers to surplus value added from the acquisitions of Awesome OS and Albania operations in 2018. During 2019 an adjustment on Goodwill was done
after final review of the acquired net assets.
Accumulated amortization
and impairment
As at January 1, 2018 – –5,262 – –12,347 –2,671 –20,280
Amortization for the year – –9,539 – –843 –93 –10,475
Translation differences – –291 – –10 –8 309
As at December 31, 2018 – –15,092 – –13,200 –2,772 –31,064
Carrying value as at December 31, 2018 210,352 86,091 23,206 2,396 421 322,467
1) Goodwill and Customer relationships refers to surplus value added from the acquisitions of Awesome OS and Albania operations.
Goodwill
Impairment testing for cash generating units. Customer relationships and development costs
The impairment test gave no indication of a need for goodwill impairment. Customer relationships mainly consist of intangible assets that were identi-
The Group treats the geographical regions as cash-generating units in fied during the past acquisitions based on the discounted cash flows
the sense referred to in IAS 36 Impairment of assets. In 2019 Awesome expected to be derived from the use and eventual sale of the asset, deter-
has been tested together with English-speaking. The carrying amounts of mined at the date of acquisition.
goodwill allocated to each cash-generating unit are: Development costs consist of amounts identified by executive manage-
ment’s where it is considered that technological and economical feasibility
exists, usually determined by reference to the achievement of defined mile-
EUR thousand 2019 2018
stones according to an established project management model. These
English-speaking 63,903 66,033 costs relate to development of assets for the use in the Group, no
Europe 141,323 144,319 indication of any loss in value.
Total 205,226 210,352
Brand
The calculation of the value in use was based on the following main
EUR thousand 2019 2018
assumptions:
Cash flows were projected based on past experience, actual operating English-speaking 5,535 5,541
results and the 3-year financial plans approved by the Board of Directors. Europe 17,587 17,666
Beyond the specifically forecasted period of three years, the Company Total 23,122 23,206
extrapolates cash flows based on estimated constant growth rates of 2.1
percent depending on executive management’s understanding of the Reported brands consists mainly of the brands Transcom and Xzakt and is
market. The anticipated annual revenue growth included in the cash-flow allocated to each cash-generating unit.
projections has been based on historical experience and expectations of
future changes in the market conditions. Market conditions take into
account the nature of risk and executive management’s estimations of
change within this market. These rates do not exceed the average long-
term growth rates for the relevant markets. The anticipated annual margin
growth totaled 1%.
Pre-tax discount rates 10.3 percent to 11.25 percent; Europe 11.25
percent (2018: 10.6) and English-speaking 10.3 percent (2018: Eng-
lish-speaking 11.7 and Awesome 8.4) were applied in determining the
recoverable amounts of the units. The discount rates is estimated based on
past experience, industry average weighted cost of capital and Group’s
industry related beta adjusted to reflect executive management’s assess-
ment of specific risks related to the unit. Reasonably possible changes in
key assumptions (such as discount rates, Revenue/Operating margin and
terminal growth rate) would not trigger any impairment loss to be recog-
nized.
Accumulated amortization
and impairment
As at January 1, 2019 –24,688 –24,680 –45,819 –21,932 –117,118
Depreciation for the year –555 –1,200 –3,910 –2,577 –8,243
Disposals 250 163 914 1,367 2,693
Dispsal of business – 1,747 – – 1,747
Translation differences –127 –223 –429 –298 –1,077
As at December 31, 2019 –25,120 –24,192 –49,246 –23,440 –121,998
Carrying value as at December 31, 2019 1,637 2,796 9,007 8,053 21,493
Cost
As at January 1, 2018 25,175 25,595 47,520 24,046 122,337
Acquisition of a subsidiary – 511 2,068 1,953 4,531
Investments 720 1,273 4,900 1,603 8,496
Disposals –169 –251 –854 –1,048 –2,321
Reclassifications 59 –37 –42 20 –
Translation differences 301 100 841 758 2,000
As at December 31, 2018 26,086 27,190 54,434 27,332 135,042
Accumulated amortization
and impairment
As at January 1, 2018 –24,092 –23,556 –41,542 –18,817 –108,008
Acquisition of a subsidiary – –359 –1,005 –735 –2,100
Depreciation for the year –427 –912 –3,255 –2,302 –6,896
Disposals 152 213 629 518 1,513
Reclassifications –16 33 –7 –10 –
Translation differences –304 –99 –639 –586 –1,627
As at December 31, 2018 –24,688 –24,680 –45,819 –21,932 –117,119
Carrying value as at December 31, 2018 1,398 2,510 8,615 5,399 17,923
Note 15 Other receivables and prepaid On March, 2018, Transcom replaced the previous financing agreement by
expenses and accrued EUR 180,000 thousand Senior Secured Fixed Rate Notes (SSFRN) listed on
Nasdaq, maturing in March 2023, as well as on the 19th of March 2018, a
income EUR 45,000 thousand Super Senior Revolving Credit Facility (SSRCF)
Agreement with Nordea and Danske Bank, both held by the Parent com-
Other receivables pany, maturing in September 2022. Interest rates in the revolving facility
EUR thousand 2019 2018 are based on LIBOR, STIBOR and EURIBOR plus margins. For the SSRCF
VAT recoverable 4,689 5,004 the Company is committed to meet certain test conditions. There was no
breach of covenants in 2019. In addition, a Senior Unsecured Fixed Rate
Amount due from public authorities 2,453 2,598
Notes (SUFRN), of EUR 10,000 thousand, was issued on July 24 2018. The
Client deposit related assets 571 370 maturity date is July, 2020. The SUFRN has been extended after the
Other receivables1 5,590 2,867 report- ing period. See note 29.
In the event of a change of control the SSRCF will need to be cancelled
Total 13,303 10,839
and be replaced by a new credit facility and the holders of SSFRN and SUFRN
1) Other receivables mainly relates to advanced payments and revaluation of derivatives have the right to request a repurchase of the Notes.
As per July 16, 2018, Transcom is financed by Santander of EUR 2,500
thousand and on December 21,2018 by BBVA of EUR 1,000 thousand.
Prepaid expenses and accrued income
EUR thousand 2019 2018 The table below shows the maturity profile of the Groups’s interest
Prepaid expenses 4,292 4,083 bearing liabilites including interests. For maturity profile for lease liabilities
Accrued income 31,715 33,762 see note 23.
Total 36,006 37,845
EUR thousand 2019 2018
All prepaid expenses and accrued income are expected to be settled within
12 months. Less than six months 3,247 10
Between six and twelve months 11,037 1,338
Between one and two years 277 13,589
Between two and five years 241,712 262,373
Total 256,273 277,309
Major assumptions used by the actuary for the calculation of the defined benefit pension scheme
2019 2018
% Italy Philippines USA Italy Philippines USA
Rate of increase in salaries 2.0 2.0 – 2.0 2.0 –
Discount rate 0.7–0.8 5.5 – 1.7–1.9 7.7 –
Assumptions regarding future mortality experience are set in accordance with published statistics and experience in each territory.
Amount recognized in the statement of financial position – movement in deficit during the year
2019 2018
EUR thousand Italy Philippines USA Total Italy Philippines USA Total
As at January 1 2,017 612 2 2,631 2,354 231 – 2,584
Movement in the year
Acquired employee benefit
obligations – – – – – 122 2 124
Current service cost and
settlements – 196 –1 195 – 183 – 183
Reclassification to asset – – – – – – – –
Interest cost 2 46 – 48 21 10 – 31
Past service cost –108 – – –108 –174 –147 – –321
Contributions – –100 – –100 – 195 – 195
Actuarial gains/losses –17 747 – 730 –22 –18 – –40
Benefits paid –136 – – –136 –162 – – –162
Translation difference 57 57 – 36 – 36
As at December 31 1,758 1,559 1 3,318 2,017 612 2 2,631
The Italian liability would increase with EUR 39 thousand if the discount rate would be lowered by 0.5 percent. An increase with the same percentage
would lower the liability with EUR 35 thousand.
The liability in the Philippines would increase with EUR 162 thousand if the discount rate would be lowered by 1 percentage point. An increase with
the same percentage would lower the liability with EUR 189 thousand. If the inflation rate assumption in the Philippines would increase with 1 percentage
point the liability would be EUR 168 thousand higher, the corresponding decrease would lower the liability with EUR 194 thousand.
Note 19 Provisions
Note 21 Accrued expenses and
prepaid income
Legal and Restruc
EUR thousand tax claims turing Other Total EUR thousand 2019 2018
As at January 1, 2019 12,028 3,429 25,133 40,588 Accrued personnel expenses 23,875 22,813
Provisions made2 1,695 3,066 2,047 6,808 Other accrued expenses1 16,643 17,703
Provisions used – –3,547 –7,090 –10,637 Deferred income 156 162
Provisions reversed – –2,049 –131 –2,180 Total 40,674 40,678
Reclass within 1) Other accrued expenses are mainly related to temporary agents, subcontractors
current liabilites3 –1,800 1,178 – –622 and rents.
Translation differences –1 –4 451 447
As at December 31, 20191 11,922 2,073 20,409 34,404
Provision which will be paid later than 12 months have been classified
as non-current provisions.
Financial liabilities
Interest-bearing
liabilities 201,034 – – 201,034 241,989 216,725 – – 216,725 274,981
Lease liabilities 16,018 – – 16,018 16,018 – – – – –
Provisions 143 13,516 – 13,659 13,659 145 17,929 – 18,074 18,074
Total noncurrent
financial liabilities 217,195 13,516 – 230,711 271,666 216,871 17,929 – 234,799 293,055
Interest-bearing
liabilities 13,687 – – 13,687 14,284 1,285 – – 1,285 1,350
Lease liabilities 11,448 – – 11,448 11,448 – – – – –
Provisions 14,350 6,396 – 20,746 20,746 16,239 6,275 – 22,514 22,514
Trade payables 18,798 – – 18,798 18,798 23,761 – – 23,761 23,761
Other liabilities incl.
accrued expenses 44,921 – – 44,921 44,921 43,934 – – 43,934 43,934
Total current financial
liabilities 103,204 6,396 – 109,600 110,197 85,219 6,275 – 91,494 91,559
Total financial liabilities 320,399 19,912 – 340,311 381,863 302,090 24,204 – 326,294 384,614
1) The fair values of the provisions and interest bearing liabilities have been calculated using a DCF model. The valuation requires management to make certain assumptions about the model
inputs, including forecast cash flows, the discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in man-
agement’s estimate of fair value for these interest bearing liabilities. Provisions refers to maximum potential earn-out in the acquisition of Awesome OS. These are based on certain EBITDA
targets for years 2018–2019.The nominal amount of the provision is USD 31,545 thousand in 2018. During 2019 first earn out of EUR 6,726 thousand was paid out, and the provison has
since been revalued to EUR 19,912 thousand as per December 2019 (including both fair value revaluation and foreign exchange effect). The fair values of the derivatives for cashflow
hedges are derived from quoted market prices in active markets.
Financial liabilities
Interest-bearing liabilities – 241,989 241,989 – 274,981 274,981
Lease liabilities – 16,018 16,018 – – –
Provisions – 13,659 13,659 – 18,074 18,074
Total noncurrent financial liabilities – 271,666 271,666 – 293,055 293,055
Interest-bearing liabilities 14,284 – 14,284 1,350 – 1,350
Lease liabilities 11,448 – 11,448 – – –
Provisions 20,746 – 20,746 22,514 – 22,514
Trade payables 18,798 – 18,798 23,761 – 23,761
Other liabilities incl. accrued expenses 44,921 – 44,921 43,934 – 43,934
Total current financial liabilities 110,197 – 110,197 91,559 – 91,559
Total financial liabilities 110,197 271,666 381,863 91,559 293,055 384,614
Opening Balance in acquired Net cash Foreign exchange Other non cash Closing
2018, EUR thousand balance subsidiaries flows movement flow changes balance
Borrowings 176,376 18 37,588 190 3,768 217,940
Other loans 71 – – – – 71
Financial Leases 4 – –2 – –2 –
Total 176,451 18 37,586 190 3,766 218,010
1) See consolidated statement of cash flows.
Current assets
Receivables from Group companies 3,589 4,014
Other receivables – 303
Prepaid expenses and accrued income 61 287
Total receivables 3,650 4,604
Cash and cash equivalents 244 10
Total current assets A10 3,894 4,614
TOTAL ASSETS 364,987 374,492
Non-current liabilities
Interest-bearing liabilities A9 183,405 195,222
Total non-current liabilities A10 183,405 195,222
Current liabilities
Interest-bearing liabilities A9 10,000 –
Trade payables 58 149
Liabilities to Group companies – 9
Other liabilities 425 399
Accrued expenses and prepaid income 2,539 2,588
Total current liabilities A10 13,022 3,145
Total liabilities 196,427 198,367
TOTAL EQUITY AND LIABILITIES 364,987 374,492
Pledged Assets A11
Parent Company –
Statement of changes in equity
Total Retained
number Share earnings incl.
of shares Share premium Profit/loss for Total
EUR thousand Note (thousand) capital reserve the year equity
As at January 1, 2018 11,938 8 20,501 105,926 126,435
Profit/loss for the year – – – 41,155 41,155
Issue of bonus shares A8 – 47 – –47 –
Shareholder contribution A7 – – – 8,535 8,535
As at December 31, 2018 11,938 55 20,501 155,569 176,125
Parent Company –
Statement of cash
flows
January to December
Parent Company
Notes to the financial statements
Note A1 Parent Company’s Note A3 Employees
accounting and valuation
Salaries, other remuneration and social security charges
policies
2019
Transcom Holding AB (“Parent Company”) corporate id number 556962- Board of Directors
4108 is a registered company domiciled in Stockholm, Sweden. The and Executive Other
address of the Company’s headquarter is Hälsingegatan 40, SE-113 43 EUR thousand management employees Total
Stockholm. Salaries –1,125 –282 –1,407
The Parent Company has prepared and presented the annual report Other remunerations –17 – –17
according to the Annual Accounts Act (1995:1554) and recommendation
RFR 2 Accounting for legal entities from the Swedish Financial Reporting Pension expenses – –58 –58
Board. RFR 2 means that the Parent Company, in the annual report for the Social security charges –349 –106 –455
legal entity, must apply all EU-approved IFRS and statements as far as
Total –1,491 –446 –1,937
possible within the framework of the Annual Accounts Act and taking into
account the connection between reporting and taxation. The
recommendation specifies exemptions and additions relative to IFRS. 2018
Board of Directors
The financial statements pertain January 1–December 31 for income
statement items and December 31 for balance sheet items.
The financial statements are presented in Euros which is the Company’s and Executive Other
presentation currency, rounded in thousand of Euro.
EUR thousand management employees Total
The Parent Company applies the same accounting principles as the
Group except in the cases stated below. Salaries –858 – –858
Other remunerations –22 – –22
Group companies
Shares in Group companies are recognized by the Parent Company at cost, Social security charges –270 – –270
including transaction costs less any impairment. Total –1,150 – –1,150
Personnel expenses are recognized in the Administrative expenses line in
the Income statement.
Salaries, including other remuneration and social charges were fully
Note A2 Intra-group revenues recharged to Transcom Worldwide AB and was netted on the same row
in the Income statement.
and cost of sales Salaries, other remuneration and other entitlements to the Board,
CEO and other Senior Executives, see note 6 for the Group.
During 2019, intra-group sales amounted to EUR 2,948 thousand related to
administative costs and services. In 2018 there was an intra-group sale of
EUR 978 thousand related to administration cost.
Average number of employees
2019
Women Men Total
Sweden 1 5 6
Total 1 5 6
2018
Women Men Total
Sweden – 1 1
Total – 1 1
Note A5 Interest
income/expense and
similar items
Interest income and similar items
EUR thousand 2019 2018
Interest income Group companies 7,266 1,872
Foreign exchange loss, net 118 252
Total 7,384 2,124
Financial liabilities
Interest-bearing liabilities 183,405 183,405 222,910 195,222 195,222 247,591
Total non-current financial liabilities 183,405 183,405 222,910 195,222 195,222 247,591
Interest-bearing liabilities 10,000 10,000 10,572 – – –
Trade payables 58 58 58 149 149 149
Other liabilities incl. accrued expenses 2,702 2,702 2,702 2,675 2,675 2,675
Total current financial liabilities 12,760 12,760 13,332 2,824 2,824 2,824
Total financial liabilities 196,165 196,165 236,242 198,046 198,046 250,415
1) The fair values of the interest bearing liabilities have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including
forecast cash flows, the discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate
of fair value for these interest bearing liabilities. The fair values of the derivatives for cashflow hedges are derived from quoted market prices in active markets.
Maturity profile of the financial assets and liabilities based on contractual undiscounted payments
2019 2018
EUR thousand <1 year 1–5 years Fair value <1 year 1–5 years Fair value
Financial assets
Trade receivables 3,589 – 3,589 – – –
Other receivables incl. accrued income 21 – 21 511 – 511
Cash and cash equivalents 244 – 244 10 – 10
Total current financial assets 3,854 – 3,589 521 – 521
Total financial assets 3,589 – 3,589 521 – 521
Financial liabilities
Interest-bearing liabilities – 183,405 222,910 – 247,591 247,591
Total non-current financial liabilities 183,405 222,910 – 247,591 247,591
Interest-bearing liabilities 10,000 – 10,572 – – –
Trade payables 58 – 58 149 – 149
Other liabilities incl. accrued expenses 2,702 – 2,702 2,675 – 2,675
Total current financial liabilities 12,760 – 13,332 2,824 – 2,824
Total financial liabilities 12,760 183,405 236,242 2,824 247,591 250,415
The following amounts in EUR are at the disposal of the Parent Company’s
Annual General Meeting:
Share premium reserve 20,501,042
Retained earnings 155,569,060
Profit/loss for the year –7,564,918
Total 168,505,184
The Board and the CEO propose that the unappropriated earnings at the
disposal of the Annual General Meeting be disposed of as follows:
Carried forward:
Share premium reserve 20,501,042
Retained earnings 148,004,142
Total 168,505,184
Fredrik Cappelen
Chairman of the Board
Jonas Dahlberg
President & CEO
Auditor’s report
This is a translation from the Swedish original.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance
about whether the annual accounts and consolidated
accounts as a whole are free from material
and related disclosures made by the Board of Directors requirements regarding independence, and to communi-
and the Managing Director. cate with them all relationships and other matters that
• Conclude on the appropriateness of the Board of may reasonably be thought to bear on our independence,
Direc- tors’ and the Managing Director’s use of the and where applicable, related safeguards.
going con- cern basis of accounting in preparing the From the matters communicated with the Board of
annual accounts and consolidated accounts. We also Directors, we determine those matters that were of
draw a conclusion, based on the audit evidence most significance in the audit of the annual accounts
obtained, as to whether any material uncertainty and consolidated accounts, including the most
exists related to events or conditions that may cast important assessed risks for material misstatement, and
significant doubt on the company’s and the group’s are there- fore the key audit matters. We describe
ability to continue as a going concern. If we conclude these matters in the auditor’s report unless law or
that a material uncer- tainty exists, we are required to regulation precludes disclosure about the matter.
draw attention in our auditor’s report to the related
disclosures in the annual accounts and consolidated Report on other legal and regulatory
accounts or, if such disclo- sures are inadequate, to requirements
modify our opinion about the annual accounts and Opinions
consolidated accounts. Our con- clusions are based on In addition to our audit of the annual accounts and
the audit evidence obtained up to the date of our con- solidated accounts, we have also audited the
auditor’s report. However, future events or conditions administra- tion of the Board of Directors and the
may cause a company and a group to cease to Managing Director of Transcom Holding AB (publ) for
continue as a going concern. the year 2019 and the proposed appropriations of the
• Evaluate the overall presentation, structure and content company’s profit or loss.
of the annual accounts and consolidated accounts, We recommend to the general meeting of sharehold-
including the disclosures, and whether the annual ers that the profit be appropriated in accordance with
accounts and consolidated accounts represent the the proposal in the statutory administration report and
underlying transactions and events in a manner that that the members of the Board of Directors and the
achieves fair presentation. Managing Director be discharged from liability for the
• Obtain sufficient and appropriate audit evidence financial year.
regard- ing the financial information of the entities or
business activities within the group to express an Basis for opinions
opinion on the consolidated accounts. We are We conducted the audit in accordance with generally
responsible for the direc- tion, supervision and accepted auditing standards in Sweden. Our responsibili-
performance of the group audit. We remain solely ties under those standards are further described in the
responsible for our opinions. Auditor’s Responsibilities section. We are independent of
the parent company and the group in accordance with
We must inform the Board of Directors of, among other professional ethics for accountants in Sweden and have
matters, the planned scope and timing of the audit. We otherwise fulfilled our ethical responsibilities in accord-
must also inform of significant audit findings during our ance with these requirements.
audit, including any significant deficiencies in internal We believe that the audit evidence we have obtained is
control that we identified. sufficient and appropriate to provide a basis for our
We must also provide the Board of Directors with a opinions.
statement that we have complied with relevant ethical
Responsibilities of the Board of Directors Our objective concerning the audit of the proposed
and the Managing Director appropriations of the company’s profit or loss, and
The Board of Directors is responsible for the proposal thereby our opinion about this, is to assess with
for appropriations of the company’s profit or loss. At reasona- ble degree of assurance whether the proposal
the pro- posal of a dividend, this includes an is in accordance with the Companies Act.
assessment of whether the dividend is justifiable Reasonable assurance is a high level of assurance,
considering the requirements which the company’s and but is not a guarantee that an audit conducted in
the group’s type of operations, size and risks place on accordance with generally accepted auditing standards
the size of the par- ent company’s and the group’s in Sweden will always detect actions or omissions that
equity, consolidation requirements, liquidity and can give rise to liability to the company, or that the
position in general. proposed appropri- ations of the company’s profit or
The Board of Directors is responsible for the compa- loss are not in accord- ance with the Companies Act.
ny’s organization and the administration of the As part of an audit in accordance with generally
company’s affairs. This includes among other things accepted auditing standards in Sweden, we exercise
continuous assessment of the company’s and the pro- fessional judgment and maintain professional
group’s financial situation and ensuring that the skepticism throughout the audit. The examination of the
company’s organization is designed so that the administra- tion and the proposed appropriations of the
accounting, management of assets and the company’s company’s profit or loss is based primarily on the audit
financial affairs otherwise are con- trolled in a of the accounts. Additional audit procedures performed
reassuring manner. The Managing Director shall manage are based on our professional judgment with starting
the ongoing administration according to the Board of point in risk and materiality. This means that we focus
Directors’ guidelines and instructions and among other the exami- nation on such actions, areas and
matters take measures that are necessary to fulfill the relationships that are material for the operations and
company’s accounting in accordance with law and where deviations and vio- lations would have particular
handle the management of assets in a reassuring importance for the compa- ny’s situation. We examine
manner. and test decisions under- taken, support for decisions,
actions taken and other circumstances that are relevant
Auditor’s responsibility to our opinion concerning discharge from liability. As a
Our objective concerning the audit of the basis for our opinion on the Board of Directors’ proposed
administration, and thereby our opinion about appropriations of the com- pany’s profit or loss we
discharge from liability, is to obtain audit evidence to examined whether the proposal is in accordance with
assess with a reasonable degree of assurance whether the Companies Act.
any member of the Board of Directors or the Managing Ernst & Young AB, Jakobsbergsgatan 24, PO Box
Director in any material respect: 7850, SE-103 99, Stockholm, was appointed auditor of
• has undertaken any action or been guilty of any Transcom Holding AB by the general meeting of the
omission which can give rise to liability to the shareholders on the 20 April 2019 and has been the
company, or com- pany’s auditor since 2017.
• in any other way has acted in contravention of the
Companies Act, the Annual Accounts Act or the
Articles of Association.
Stockholm 6 April,
2020 Ernst & Young AB
Erik Sandström
Authorized Public Accountant
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