BIOHIT GROUP?S TRANSITION TO IFRS
BIOHIT GROUP STOCK EXCHANGE RELEASE on 14 March 2005 at 4:00 pm
BIOHIT GROUPS TRANSITION TO IFRS
This release provides information of the transition to IFRS standards and the
reconciliations of equity on 1 January 2004 and 31 December 2004 and a
reconciliation of the net income for 2004. The reconciliations related to each
interim period will be demonstrated in the related interim report.
Biohits date of adoption of IFRS standards is 1 January 2004. Biohits first
financial statement employing IFRS principles will be prepared for the fiscal
year ending on 31 December 2005. The first interim report in accordance with IAS
34 will be published for the quarter ending on 31 March 2005.
Biohit has adopted IFRS 1 and the following exemptions allowed by it: business
combinations, employee benefits and cumulative translation differences. The
attached financial information has been compiled according to the IAS/IFRS
standards applicable on the date of this release.
Prior to adoption of the IFRS standards, Biohits financial statements were
based on the Finnish Accounting Standards (FAS). The FAS-compliant accounting
principles are included in Biohit Groups annual financial statement for 2004,
which is the last financial statement in compliance with the Finnish Accounting
Standards. The differences between IFRS and FAS, which affect to Biohit, are
reported in the notes presented with the attached reconciliations. The
comparative FAS figures presented in this release are in accordance with
previously published information.
The most significant changes in the Groups profit and loss statement figures
and balance sheet totals are due to financial leasing, pension liabilities,
deferred taxes, capital loans and related interests and goodwill.
The effects of IFRS adjustments on the income statement for 2004
The result for the 2004 fiscal year according to the FAS is MEUR -0.6. IFRS
adoption improves the result by MEUR 0.4; i.e., the result for the fiscal year
according to IFRS principles is MEUR -0.2.
The impact of IFRS adjustments on the balance sheet on 1 January 2004 and on 31
December 2004
Total assets in 2003 according to the FAS are MEUR 21.9. The IFRS adjustments
increase the total assets by MEUR 1.1, and therefore the opening IFRS balance
sheet total is MEUR 22.9. Total assets in 2004 amount to MEUR 21.2 under the
FAS. The IFRS adjustments increase the total assets by MEUR 1.6, and therefore
the closing IFRS balance totals MEUR 22.8.
Effects of the transition to IFRS accounting on the Groups balance sheet: 1
January 2004
MEUR IFRS FAS IFRS
1.1.2004 1.1.2004 adjustment
Assets
Non current assets
Property, plant and equipment (8) 6,5 6,2 0,3
Goodwill 2,6 2,6 0,0
Other intangible assets (8) 0,7 1,0 -0,3
Deferred income tax assets (7) 2,2 1,1 1,1
12,0 11,0 1,1
Current assets
Inventories 4,1 4,1 0,0
Trade and other receivables 5,7 5,7 0,0
Cash and cash equivalents 1,1 1,1 0,0
10,9 10,9 0,0
Total assets 22,9 21,9 1,1
Equity and liabilities
Share capital 2,2 2,2 0,0
Share premium fund 15,4 15,4 0,0
Retained earnings -3,3 -3,6 0,3
Capital loan (1) 0,0 1,2 -1,2
14,3 15,3 -0,9
Other non-current liabilities (2) 0,5 0,0 0,5
Deferred income tax liabilities 0,1 0,1 0,0
Retirement benefit obligations (3) 0,2 0,0 0,2
Interest-bearing debt (1) 3,5 2,3 1,2
4,4 2,4 2,0
Trade and other payables 3,2 3,2 0,0
Short-term interest-bearing debt 1,0 1,0 0,0
4,1 4,1 0,0
Total liabilities 8,5 6,5 2,0
Total equity and liabilities 22,9 21,9 1,1
Effects of the transition to IFRS accounting on the Groups balance sheet: 31
December 2004
MEUR IFRS FAS IFRS
31.12.2004 31.12.2004 adjustment
Assets
Non current assets
Property, plant and equipment (8) 6,8 6,6 0,2
Goodwill (6) 2,6 2,3 0,3
Other intangible assets (5, 8) 1,2 1,2 0,0
Deferred income tax assets (7) 1,9 0,8 1,1
12,6 11,0 1,6
Current assets
Inventories 3,6 3,6 0,0
Trade and other receivables 5,3 5,3 0,0
Cash and cash equivalents 1,3 1,3 0,0
10,2 10,2 0,0
Total assets 22,8 21,2 1,6
Equity and liabilities
Share capital 2,2 2,2 0,0
Share premium fund 13,1 13,1 0,0
Retained earnings -1,2 -1,9 0,7
Capital loan (1) 0,0 1,2 -1,2
14,1 14,7 -0,5
Other non-current liabilities (2) 0,6 0,0 0,6
Deferred income tax liabilities 0,1 0,1 0,0
Retirement benefit obligations (3) 0,1 0,0 0,1
Interest-bearing debt (1, 5) 3,8 2,4 1,4
4,6 2,5 2,1
Trade and other payables 3,0 3,0 0,0
Short-term interest-bearing debt (5) 1,0 1,0 0,1
4,1 4,0 0,1
Total liabilities 8,6 6,5 2,1
Total equity and liabilities 22,8 21,2 1,6
Reconciliation of equity
MEUR 31.12.2004 1.1.2004
Equity under FAS 14,7 15,3
IAS 19 Employee benefits (3) -0,1 -0,2
IAS 39 Capital loans (1) -1,2 -1,2
IAS 23 Interests on capital loans (2) -0,6 -0,5
IFRS 3 Goodwill (6) 0,3 0,0
IAS 17 Financial leasing (5) 0,0 0,0
IAS 12 Deferred taxes (7) 1,0 0,9
Equity under IFRS 14,1 14,3
Reconciliation of profit or loss
MEUR 31.12.2004
Loss for the period under FAS -0,6
IAS 19 Employee benefits (3) 0,1
IAS 23 Interests on capital loans (2) -0,1
IFRS 3 Goodwill (6) 0,3
IAS 17 Financial leasing (5) 0,0
IAS 12 Deferred taxes (7) 0,1
Loss for the period under IFRS -0,2
Effects of the transition to IFRS on the previously reported Group profit and
loss statement for the fiscal year 1 January - 31 December 2004
MEUR IFRS FAS IFRS
2004 2004 adjustments
Sales 26,7 26,7 0,0
Other operating income 0,2 0,2 0,0
Increase/decrease in inventories in finished
goods and in work in progress -0,5 -0,5 0,0
Production for own use -5,1 -5,1 0,0
Personnel expenses (3) -10,7 -10,8 0,1
Depreciation (6) -1,5 -1,8 0,3
Other operating expenses -8,9 -8,9 0,0
Operating profit / loss 0,2 -0,2 0,4
Finance costs-net (2) -0,2 -0,1 -0,1
Profit / loss before tax 0,0 -0,3 0,3
Direct taxes -0,2 -0,3 0,1
Loss for the year -0,2 -0,6 0,4
Key financial ratios
IFRS FAS
2004 2004
Earnings per share -0,01 -0,05
Equity per share 1,09 1,04
Equity ratio 62,30 63,70
The key financial ratio formulas are the same as in the 2004 FAS.
NOTES ON RECONCILIATIONS:
(1) Capital loans
In the financial statements according to FAS the capital loans MEUR 1.2 are
presented separately within equity. In the IFRS balance sheet the capital loans
are presented as a liability in accordance with IAS 39.
(2) Interests on capital loans
In the FAS financial statements the accumulated interests on capital loans are
not recorded in the financial statements but presented as commitments in the
notes. In the IFRS financial statements the accumulated interests on the capital
loans are included in the balance sheet in the non current liabilities.
The amount of accumulated interests on 1.1.2004 is MEUR 0.5, decreasing the IFRS
opening equity 1.1.2004 by MEUR 0.4 and increasing the deferred tax receivables
by MEUR 0.1. The accumulated interests on the capital loans on 31.12.2004 are
MEUR 0.6. The interests decrease the profit before taxes by MEUR 0.1 for the
fiscal year 2004.
(3) Pension obligations
The disability element of the Finnish TEL pension scheme has been accounted for
as a defined benefit plan in accordance with IAS 19.
In December 2004 the Ministry of Social Affairs and Health approved certain
changes to the accounting of obligations for disabilities that are effective on
1 January 2006. As a result of this change, the disability element of TEL is
accounted for as a defined contribution plan under IFRS. The actuarially
calculated disability obligation of MEUR 0.1 has been recognised in the balance
sheet at the date of transition. The above mentioned reduction in pension
obligations has been recognised as a non-recurring gain of MEUR 0.1 in the 2004
IFRS profit and loss statement.
Additionally the balance sheet at the date of transition includes MEUR 0.1 of
pension obligations of subsidiaries, which are accounted for as a defined
benefit plan.
(4) Intangible Assets
The development costs have been activated in the FAS financial statements in
accordance with IAS 38 since 1.1.2004.
(5) Lease contracts
In the financial statements according to FAS all the leasing contracts are
accounted for as operational leases. In the IFRS balance sheet the financial
leases are in compliance with IAS 17 recorded in the assets and liabilities to
the amount corresponding the market value of the leased asset or lower net
present value of lease payments at the time of contract initiation. The effect
on the IFRS balance sheet as of 31.12.2004 is for intangible assets MEUR 0.2 and
for debts MEUR 0.2.
(6) Amortization of goodwill
In accordance with IFRS 3, goodwill is no longer amortized on a systematic basis
but tested annually for impairment in accordance with IAS 36. This change
improves earnings before tax in 2004 by MEUR 0.3.
(7) Income taxes
Changes in deferred tax liabilities and assets arising from the above mentioned
differences are taken into account in the IFRS balance sheet, increasing the
IFRS balance sheet tax assets by MEUR 0.2.
The deferred tax assets relating to the tax loss carry forwards of the group are
included in the IFRS balance sheet to the extent they can probably be utilised.
The inclusion of the deferred tax assets relating to the tax loss carry forwards
in the IFRS balance sheet increase deferred tax assets by MEUR 0.8 and MEUR 0.9
at 1.1.2004 and 31.12.2004 respectively.
(8) Leasehold improvements
In the FAS balance sheet the leasehold improvements are classified as intangible
assets while in the IFRS balance sheet they are in the property, plant and
equipment. The carrying value of leasehold improvements on 1.1.2004 is MEUR 0.3
and 31.12.2004 MEUR 0.2.
Cash flow statement calculations
There are no significant differences between cash flow statement in accordance
with IFRS standards and FAS.
Segment Reporting
The primary segment reporting format is based on business sectors which are
liquid handling segment and diagnostics segment. The secondary segment reporting
format is based on geographical segments which are Europe, America, Asia, and
other parts of the world.
The calculations have not been audited.
Helsinki, 14 March 2005
Board of Directors of Biohit Group
Additional information: Osmo Suovaniemi, CEO
Tel: 09-773 861, suora: 09-773 86 250
GSM: 040-745 5605
Fax: 09-773 86 205
Email: osmo.suovaniemi@biohit.com
http://www.biohit.com
Distribution: Helsinki Exchanges
Financial Supervisory Authority
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