Annual Report 2016 - dogman.se DK Not Logge… · Dogman began 2016 in the knowledge that the...

Annual Report 2016

TABLE OF CONTENTS

Introduction 4-7 Company Presentations 8-19 Management Review 20-25 Consolidated Income Statement 27 Consolidated Balance Sheet 28-29 Consolidated Changes in Equity 29 Consolidated Cash Flow Statement 30 Income Statement for the Parent Company 31 Balance Sheet for the Parent Company 32-33 Changes in Equity for the Parent Company 33 Cash Flow Statement for the Parent Company 34 Additional Disclosures 35-44 Signatures 45 Auditor’s Report 46-47 Presentation of the Board of Directors/Auditor 48

BrA Invest

”During the calendar year 2016, compared to 2015, which was up until then the BrA Invest Group’s best year so far, we have almost doubled the Group’s profit with good organic growth!”

B R A I N V E S T – B E T T E R B U S I N E S S

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During 2016, KB Components completed a three-year period of major transitions, factory relocations, acquisitions, huge investments and the commissioning of more new machines than we have ever done before. This work has been extreme-ly demanding for the organisation but, at the time of writing (March 2017), we can say that the efforts have been success-ful and therefore we expect to reap the benefits of these efforts over the next few years.

During the summer of 2016 we decided to replace the CEO at KB Components. I took on this role supported by deputy CEO Lars Holtskog who, as well as his role as the Group’s business developer, took on a strong operational role within KB, with main focus on our subsidiaries abroad and on the activities in Anderstorp (where the new CEO took up the post on 1/1/2017). We believe that this division of responsibilities has worked well and will continue to do so, as I, as CEO, have been able to focus on the Örkelljunga unit, where major changes have taken place and where active management is neces-sary to ensure schedules and finances for projects/investments are maintained.

On the other hand, Lars has been able to focus on the extensive development/change process in Lithuania, where focus has been on improving profitability after the move from Årevall/Värnamo, in China where focus has been on finding new customers/deals and in Mexico where we

are experiencing dramatic growth and are planning for sales well over MSEK 100 in 2018, compared with the MSEK 40 we achieved during 2015 when Lunketec was acquired. On the customer side, Lars has mainly focused on general industry while I have worked mostly with customers within the automotive industry.

KB Components ended 2016, particularly during the fourth quarter, with an upwards earnings trend. The year as a whole im-proved significantly compared with the full-year 2015 (although we are not at all satisfied with the operating margin of just over 5% which was attained) and given that things are starting to fall into place we have established a platform for increasing ear-nings capacity over the next few years.

We are planning to raise the operating margin to 7-8% in 2017 and to reach the long-awaited 10% in 2018, something our toughest competitor Nolato enjoys, and which lies at a level that ought to be sus-tainable in the long term presuming that the market does not change negatively in the way we saw in the crisis years of 2008-2009.

Dogman began 2016 in the knowledge that the distribution deal for Nestlé’s Purina ProPlan products had been ended and thus in terms of sales we would lose around MSEK 100 annually or a quarter of the entire volume of 2015. The uncerta-inty this created was quickly transformed into belief in the future and confidence as

customers clearly demonstrated a greater loyalty to Dogman and our accessories than to Nestlé and their Purina feed. So we managed to organically grow the ac-cessories business by almost 10% and, in terms of profit, we roughly managed to reproduce the results for the whole of 2015, this in a climate which during the second half of the year was marked by a drastic weakening of the krona, something which had a particularly negative impact on Dogman’s earnings capacity.

Our ”Friends for Life concept” in which we offer stores a franchise structure has been rolled out during the year and, at the time of writing, almost 10 customers/stores have taken on this offer. We had hoped for slightly more interest but we are confident that this will accelerate subse-quently and we have boosted resources for the organisation within the area, store establishment, to support this develop-ment. For Dogman it is important not to lose momentum in this work as we are seeing a trend in which larger businesses containing both a wholesale and a retail element are being created and we have a sense that former customers of Dogman, which has become part of larger organi-sations (Grizzly/Djurmagasinet/Arken), purchase less from us as they are better able to manage their own supplies. In this environment it is, of course, extremely im-portant that we work with and strengthen the Dogman brand!

Profit almost doubled!During the calendar year 2016, compared to 2015 which was up until then the BrA Invest Group’s best year so far, we have almost doubled the Group’s profit with good organic growth! Most of our holdings have progressed well and if any company deserves a particular mention then it is BAB which has literally ”exploded” with dramatic growth in sales, profit and even more importantly an order backlog which probably means that this company will be the Group’s largest operation in 2017, in terms of sales. Structurally we have wound up Living Story, which during the six years the company has been owned and run by BrA Invest has accumulated a loss before tax of over MSEK 50. We finally came to the conclusion that this operation, not even in the long term and after major financial and operational efforts, can achieve reasonable returns, and on account of this we decided during the winter to wind down the company.

BrA Invest


A N N U A L R E P O R T 2 0 1 6 – 5From left: Lars Holtskog, Roger Jönsson, Jörgen Sabel, Stefan Andersson, Pierre Olofsson, Kenneth Andersson, Lars Hermansson, Christer Andersson


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2016 continued – Profit almost doubled!

For BAB/3Hus, 2016 was very successful and our construction/property operation demonstrated higher profitability during the year than any of our other business areas regardless of how you measure it!

The combination of building up contracts with external, often public, clients and developing our own properties/real estate is, and is going to be, very successful in years to come.

The high demand on housing production is greater than the production capacity, which creates a very strong market position for construction contractors, as it provides the potential to decline less interesting objects and instead concentrate on more profitable contracts. The critical resource is therefore employees and we live in a world in which individuals sometimes jump between employers in the hunt for better conditions. To counteract this, BAB has worked hard to create job satisfaction, in which, not least, the working environment is an important factor in attracting and retaining employees. During the year, the number of employees at BAB has increased by almost 100 people and, at the time of writing, the total number of employees within the company is around 250.

With regards to areas where we are active, our positions are strong in Malmö/Lund, northwest Skåne and in Halmstad. As always the core of the operations is in construction services and in total we have 120 service vehicles wheeling around the aforementioned regions as a result of a large number of municipal but also private service agreements.

On the contract side we have built up the largest, best and healthiest order backlog in the history of the company. Current existing volume of orders together with expected orders within e.g. construction services means that with all probability we are going to grow BAB organically by over 50% during 2017 and, what is even more

things are looking better for Draken than before. Both Draken and Olofssons have replaced their CEOs during the year and we have faith that this will be the start of a rising trend for these businesses.

For BrA Invest as a whole the Group’s consolidated equity has, during the calendar year 2016 developed as per the following:

Opening Balance: MSEK 254.5 Closing Balance: MSEK 284.2

The following adjustments must be added to this:

Dividends paid to shareholders in BrA Invest: MSEK 15 Dividends paid to minority sharehol-ders in KB: MSEK 0.875

and buyout of minority shareholders in Dogman: MSEK 8.75

The ”value” created by companies within the BrA Group in 2016 can then be sum-med up to MSEK 54.3 and the Group’s return on equity during the year amounted to 21.3%, well above the target of a 20% return on the Group’s visible equity.

If we look at the time since the Group was formed, the annual returns on visible equity are as follows:

Return on visible equity

2005-2012 70 %/year 2013 12,9 % 2014 19,8 % 2015 65,3 % 2016 21,3 %

The good progress during the year has been boosted by the sales of three proper-ties (Resedan, Vårdsippan and Bjuvstorp) which in total have contributed around MSEK 18 in capital gains/increased equity, gains which could be said to be of a one-off character but gains which we expect to see again as part of our real estate development operation.

important, profitability is going to follow and we expect a record year in 2017, in which the operating margins will reach 5%, which historically is very high for a construction business.

In 2016, 3Hus disposed of three pro-perties in line with the strategy that we should not manage or own property but instead focus on development. During the year, focus has otherwise been on esta-blishing a base for new projects/deals for the years ahead and the following objects deserve a special mention:

•The Backsippan area in Åstorp where 62 (31+31) tenant-owned apartments are under construction with occupation planned for late autumn 2017.

•The Ejdern area in Örkelljunga where we intend to begin 32 apartments (rental or tenant-owned) during spring 2017 (Q2) as part of the first stage of the long-awaited housing production in this municipality.

•New office for BAB in Malmö. Land has been purchased beside Malmö’s outer ring road close to the Staffanstorp exit where we, in the autumn of 2017, are going to begin construction in the same style as Åstorp (sugarcube concept) to be able to house 30 or so white collar employees who are currently squashed into rental premises in central Malmö.

The work to find suitable land in suitable municipalities for housing production continues at full speed! The only cloud on the horizon for 3Hus is the Gajaden pro-perty which formerly housed Living Story as a tenant. We are working to find a new tenant for this property alternatively to divest it.

Here is a brief account of our three ”pro-blem companies”: Draken, Olofssons and Living Story (now two after the closure of LS) which during 2016 accumulated a loss to the sound of MSEK 16, at EBIT le-vel, of which LS contributed around MSEK 7. We have still not brought order into the-se businesses even if, in terms of trends,


A N N U A L R E P O R T 2 0 1 6 – 7

Structurally BrA has increased its stake in Dogman to 100% and in Ecogalvanic, KB Component’s subsidiary in Lithuania, to 80%.

If we compare to 2015 then returns on capital employed have improved dramatically for 3Hus/BAB, an effective combination of increased earnings for BAB and capital gains when divesting properties within 3Hus which both lower tied-up capital and provide good, tax-free (company sales) profits. We see poorer returns in Dogman because of the increase in tied-up capital, a result of Nestlé no longer financing goods in stock and because there is a degree of stockpiling of accessories. It has been possible to compensate for higher tied-up capital in KB linked to major investments by increasing earnings which on the whole means that we have raised our returns on this operation. At consolidated level we are closing in on the long-term goal of 15% on capital employed...!

In last year’s CEO’s presentation I compared the development of BrA Invest’s first 10 years with Warren Buffett’s Berkeshire Hathaway.

This year again we can declare that BrA Invest has by far ”beaten” this conglomerate both calculated on an annual basis but also as an average over the more than 50 years that Berkshire has succeeded to reach 20% per year returns on visible equity. We remain

focused on the ambition of always being ahead of Warren...!

I do not usually make forecasts for the future, but the situation for BrA Invest by large is so good that this time I dare to put my neck on the line and predict a turnover of SEK 2 billion and an (almost) doubling of the profits for 2017 (compared with 2016 which was already almost a doubling of the profits of 2015) and thus it will be, by far, the best year in the history of the Group!

CEO Stefan Andersson

(MSEK) Capital employed

EBIT Return (%)

Draken 30 -2 neg

Dogman 85 26 31

KB 450 39 9

Olofssons 40 -7 neg

BAB/3Hus 115 39 34

LS 0 -7 neg

Koncern 720 80 11


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Successful project development requires skills in everything from managing acquisi-tions of land and property, projection and planning processes to production, sales and management. 3Hus takes care of all this in a way that adds value, not least through close contact with the end custo-mer. Standing behind 3Hus is its sister company BAB Byggtjänst and its produc-tion resources. Together we have a great deal of knowledge and broad competence within all types of construction. This, and the financial strength of the parent com-pany, provides fantastic potential to be a long-term partner in projects that create profitability and growth for all.

With our local involvement we have so far chosen mainly to focus on local projects which we develop ourselves. This is des-cribed briefly below. In the future the work to review all BAB’s business areas will intensify.

BACKSIPPAN – TENANT-OWNED APARTMENTSThe properties Backsippan 14-16 in the municipality of Åstorp were acquired in 2013, after which a detailed development plan process was carried out for the pro-perties. We are building two tower blocks of 8 floors, amounting to 62 apartments, in tenant-owned apartment tenures (Backsip-pan Housing Association) designed for the

Project development gathering speed!During the year, 3Hus has become more of a purely project development company whose strategy is to develop real estate which is then divested at a suitable time. It is natural that the work is dominated by producing housing with different forms of tenure when there is such a huge demand for housing and the interest rate is so beneficial. Several properties have been divested during the year and currently a smal-ler stock remains to be managed. Of these, it is only Mässhallen (Anekdoten 1 in Åstorp municipality) that has been without a tenant since the start of the year 2017, with the others generating good returns.

Property AB 3Hus

CEO

Christer Andersson

target customer segment of house owners aged 50-64 and 65+. Production work star-ted at the end of the summer and the move-in date will be during late autumn 2017.

BJÖRNEKULLA ÅSAt the beginning of 2016, a letter of intent was prepared with AB Kvidingebyggen (the municipality of Åstorp’s property company) and Midroc Property Development AB for the joint development of the districts Gurkan 1 and Gladan 1-4. The districts are centrally located properties that are also close to nature in the city of Åstorp, with direct links to the railway station and the Söderås line. In 2020, passenger trains to Lund/Malmö will also launch, making Ås-torp an important regional railway hub. The intention is to utilise the properties and develop up to 300 interesting, effective and modern houses with various forms of tenure. The development planning process is underway and production is expected to start during 2019.

EJDERNIn April a letter of intent was prepared with the municipality of Örkelljunga regarding Ejdern, a centrally located housing and retail area in Örkelljunga town. There are detailed planned plots in parts of the area which, with slight changes have been made ready for construction during the financial year. Other areas are to be given a detailed plan and both partners will participate and work together in the process to create a high-quality and flexible product after which 3Hus is given the opportunity to develop the project over time at a suitable rate of construction for the market. A development in ten stages with the potential for 250 houses and premises for offices, retail and public sector operations.

EJDERN 16 – RENTAL APARTMENTSThe first stage of the Ejdern area consists of 32 rental properties divided into two blocks of 4 floors. The apartments are designed for the customer target group of singles aged 20-25 and 70+. The aim of this, and of the subsequent surrounding area/stages is to develop a larger stock of around a hundred rental properties using the same housing concept, a model house that can be changed with simple adjust-ments to its height and can also be desig-ned for other target customer groups. Plan-ning has been ongoing since the autumn and planning permission is expected to be ready at the start of 2017, after which production will begin at the end of March/beginning of April with move-in before the summer 2018.

HÄLLKISTAN – OFFICES AND WAREHOUSESAround 10,000 m² of land is reserved beside the outer ring road and Ystadvägen in Malmö where 3Hus is to develop new offices and warehouses for BAB’s Malmö/Lund operational region. Construction will be done according to the same concept, style and size as our head office in Åstorp with around 30 offices and warehouse facilities. Planning is fully underway and the application for planning permission will be submitted in February, with production expected to start in autumn 2017 with move-in at the end of 2018.

Fastighets AB 3Hus* Key Figures 2016 (2015)

Part of the BrA Invest Group since 2008

BrA Invest’s stake 100%

Sales 8,4 MSEK (13,3 MSEK)

EBIT 21,3 MSEK (3,8 MSEK)

Number of employees 1 (2)*including other property companies


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BAB Byggtjänst AB

CEO

Kenneth Andersson

In the 2000s, BAB Byggtjänst AB experienced positive growth with increased sales and a strong earnings capacity. This development stagnated in the 2010s, with profitability showing a decreasing trend and there was too much dependency on own projects initiated by the affiliated company Fastighets AB 3Hus.

In order to manage a change, a major intervention started in 2015 leaving no stone unturned with the aim of clarifying operations, increasing business skills as well as implementing a competitive and winning culture. This systematic work with all processes has given us a much more streamlined organisation and business. In combination with a stronger market this means that in 2016 we delivered the best profit in the history of the company!

In 2016, we gained an additional 100 employees, sales increased by 30% and profits increased by approximately MSEK 10. We have created a much stronger position in all regions and delivered the aims for 2016 – BAB’s year!

For 2017, the goal is to grow the business by a further 50% and achieve sales of at least MSEK 750 as well as strengthening profits further in order to meet the new operating target of at least 5%. The market is good but the fact is that BAB is racing ahead of its competitors. The company is building a winning culture with a high degree of satisfaction and growing self-confidence. We are no longer experiencing major problems with recruitment, in fact people are even seeking us out. Similarly few staff are leaving, choosing instead to stay with us, and in some cases even employees who left the company have come back.

At the start of 2017, the order backlog amounted to approximately MSEK 700. MSEK 400 of this is accounted for by production in the north-west Skåne region,

MSEK 240 in Malmö region and the rest in Halland region. During the second quarter of 2017, the Halland region unit will relocate to newly renovated, larger and more purpose-built premises beside the college in Halmstad. The new regional

director took up the post on March 1, 2017 The Malmö region outgrew its premises some time ago. The problem is currently being resolved with temporary office accommodation. In September 2017 we are going to begin construction of new offices which will be ready for occupation in December 2018. These offices are going to be similar to our head office in Åstorp in terms of size and design. With these new premises as a platform we are in the perfect position to grow the Malmö/Lund region to new heights.

In 2017, BAB Byggtjänst AB will continue working on the owners’ directive to collaborate with the affiliate company Fastighets AB 3Hus to create a strong player in the southern Swedish construction and property market, playing an important role and making a difference!

Success is planned! 2017 – BAB even better!

2016 – the best year so far! 2017 – even better...BAB Byggtjänst AB is a construction company with a history stretching back a whole century. The company’s head office is situated in Åstorp, in the north-west of Skåne, and it has branches in Malmö and Halmstad. The company has around 250 employees and in 2016 generated just under MSEK 500 in sales. BAB provides construction services and contracts and its customers are predominantly local authorities, government, industry and real estate and management 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 es-tablishment of branches in Malmö and Halmstad. The business area is gradually expanding and now ope-rates across the entire west of Skåne as well as southern Halland. Using this region as a basis there are a great deal of opportunities for further development and taking BAB to a new, much higher level.

BAB Byggtjänst AB Key Figures 2016 (2015)





Number of employees 193 (134)


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Excluding food sales and using comparable values, annual growth can be summarised as 4.8%, which is considered very good for this ”debut year”. Prior to this year we faced challenges to remain attractive to specialist retailers without any food sales. A couple of measures, including lowering the shipping charge limits, meant that we managed to increase sales within this customer segment. In terms of profitability we achieved the planned upswing of our gross margins as the sales of food with their more costly freight and thinner margins weighed down development. After efforts, such as closing and moving home the Norwegian warehouse, centralising Norwegian customer services to Sweden and freight procurement with emphasis on packages and half-pallets, the only conclusion that can be drawn is that we did most things right with our streamlined business. In particular, the key financial figures reveal a great deal about this. Adjusted for ”difficult influential global issues” such as the dramatic weakening of the krona during the autumn, the profits performed better than in 2015 and did so with MSEK 115 less in sales!

The return on total capital ended up at 25% and the capital turnover rate an industry best of 3.

Dogman – ”Great Place To Work” (GPTW)!AB Dogman

2016 was the year in which Dogman’s operations were streamlined so that we were trading only in our own goods and had total focus on, what in the industry is called, pet accessories. This was after we ended the 3PL agreement with Nestlé and distribution to specialist retailers. Starting out the year in the knowledge that we had MSEK 115 less turnover meant doing so with caution and with confidence based on the preparations that were made during the previous year (2015) facing this fact.

CEO

Pierre Olofsson

In a product-oriented industry and market-leading role, much of growth is about developing new products for the market. The company’s target for 10% of sales to come each year from new products ended up at 8.3%. During the year, the organisation has been strengthened and prepared with more employees in product development.

Starting in 2017, a new organisational structure and a new thorough strategy for brand and range are being implemented. The focus on creating growth with our own brands Dogman, Kennel Equip and Jacson is thus given the attention it deserves.

The process of becoming a service company that serves its customers and gives them the opportunity to succeed in their respective roles was developed during the year. Perhaps in particular with a dozen customers joining the franchise system (Friends for Life stores) and thus able to take advantage of a subsidised POS system, signage, store renovation and automated orders.

The company’s target of becoming one of Sweden’s top 20 workplaces within three years, in terms of satisfied employees, was boosted during the year. Work will continue according to plan during the coming year (2017) with new expected and improved positions. Anything else would be surprising...!

On the major customer front a breakthrough came, mainly in Norway and Finland, in the form of retail contracts with two well-known

players. Once again top marks to our brand and our logistical apparatus.

Meanwhile progress to strengthen and differentiate our customer values –Inspiration, Education and Accessibility - was made. Nevertheless in an industry in which concepts such as internal sourcing, new players and private labels constantly turn up, these values are difficult to achieve and need, more than ever, more attention. We believe the launch of a concept store in 2017 will make it easier for us to put across these values to other customers.

To continue the positive development the company has had in recent years, 2017 will feature investment in a new website including the customer values and with better functionality for our retailers. Our super premium food, Harmony by Dogman, should follow its plan from the autumn and, with a tireless attitude, we will gain a well-earned share of the food market once the year is summarised. Increasing our share of non-edible products and the Jacson brand will remain key to future success.

During the year, management by objectives will move to the next level of detail, with a focus this year on supply chain security and complaints. We will take a look at the results in a year.

Otherwise we look back on a year filled with new experiences for the business and, not least, a good result, while we gather our strength to tackle 2017 which should be at least as eventful and developmental a year. Quite simply a normal year for Dogman...!

AB Dogman (Kc) Key Figures 2016 (2015)







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Draken’s vision is to be one of Sweden’s most flexible and efficient film conversion companies within manufacturing of industrial packaging and technical films in polymer material, mainly polythene. With our broad machine park for film extrusion, printing and conversion, Draken offers one of the market’s broadest ranges of plastic film products for industrial use and technical film. Innovative materials and cost-effective recipe solutions mean there is a high degree of product flexibility and in combination with the extensive machine park this creates added value for our customers. Examples of products include packaging film, bags, sacks, hoods and construction films, and all the products can be tailored to the customer or manufactured in standard forms in small or large series. Through dedicated and systematic work in combination with our commitment and knowledge, we live with our business concept ”Only world class is good enough”.

In 2016 the business has undergone a major reorganisation phase resulting in a streamlined organisation and dramatically reduced costs. Our business skills are increasing in all divisions and in all busi-ness deals. New service operations have been introduced and newly adapted ope-

rational times have been implemented at the plant which increases our efficiency. We have worked actively with our supp-liers and have improved the purchase of raw materials and supplies. In combina-tion with improved product recipes, our margins increase giving us a greater com-petitive advantage.

Draken has many faithful customers who have been with us for several years. Un-fortunately the company lost certain volu-mes at the start of 2016, whom, to some extent, we managed to take back during the late autumn with the aforementioned measures. We are now well-placed to act aggressively and in a structured manner on the market in order to increase volu-mes, initially for the machine fleets with vacant capacity. Our business in Norway is developing positively and we ought to be able to increase volumes here in the next few years. At the time of writing (Feb 2017), most of our budgeted sales to new customers have been met, which is why our targets will be moved forward and we look forward to 2017 with confidence.

The company has periodically experienced a strained dialogue between staff and union organisations. These problems are now resolved and there is agreement on

most issues. In order to prepare ourselves for the future, in 2017 we are investing heavily in internal training for our staff so that we become more skilled at running our machines more effectively and with less rejects.

The future for Draken is to continue on the same track, i.e. increase our businessmanship for purchases and sales, more effective recipes, increase volumes and create a functioning cohesive organisation with a focus on quality and capacity. With hard work comes profitability, 2017 is Draken’s year!

2016, a year of restructure for profitabilityDraken i Reftele is one of Sweden’s oldest plastic production companies, founded in 1964. Since 2005 the company has been part of BrA Invest and in recent years has unfortunately had profitability problems. Intensive efforts were made in 2016 and the company implemented a major reorganisation to try and gain long-term profitability again.

Draken i Reftele AB

CEO Jörgen Sabel

Draken i Reftele AB Key Figures 2016 (2015)




EBIT -1,9 MSEK (-2,9 MSEK)



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At the start of the year we faced falling volumes and major ongoing tools projects in both Örkelljunga and Puebla. This, together with a deteriorating currency situation, i.e. the krona was weakening against the euro (almost all raw materials are bought in euro), affected our earnings negatively and this all in all led to the change of CEO in June when I, together with Lars Holtskog (CEO for KB 2011-2014 and part owner) took on more operative roles. The main focus for Lars has been the companies outside of Örkelljunga and customers within industry while my main focus has been the business in Örkelljunga and the automotive customer segment.

We have worked intensively within several areas where not least businessmanship in everything we do has been a key theme. If you are to succeed as a supplier to tough customers such as those KB serves then you need to be commercially driven, cost-effective and quick at making decisions and taking action. This change of management led to a quick turnaround in the operational day-to-day work as well as to a clear change of direction when it came to earnings and overall we succeeded in

After 3 tough years comes the harvesting years..!Over the past three years (2014-2016) KB Components has been on a significant structural journey! We have moved an entire company (Årevall Plast) from Värnamo mainly to Kaunas, we have bought and invested heavily in our operations in Mexico (Lunketec), we have established a ”green field” factory in Wuxi, China and been through the biggest expansion and investment round ever in the main factory in Örkelljunga! These major efforts have of course affected the company, employees and profitability in the short term, but we can now say that these three tough years have been successfully completed and we are now hopefully facing a number of years of harvesting with good organic growth and substantial increase in earnings!

KB Components AB

CEO

Stefan Andersson

ending the full-year in a significantly better way than the full year 2015 and, above all, the trend going into 2017 looks very bright. Operating margins ended on around 5% and we are looking forward to reaching 8% during 2017.

Another piece of good news during the year has been the level of activity on the market side. We have secured deals that at full expected volume in 1-3 years are going to yield annual sales of around MSEK 120. The majority of these orders are within the automotive customer segment and the two largest customers are VCC in Örkelljunga (mainly) and VW in Puebla. When it comes to orders, the deals have taken place mainly in our factories in Örkelljunga, Puebla and in Kaunas. Orders for the factories in Wuxi and Anderstorp have been few, which is a major concern for us. Measures to address this have already been put in place and we hope to see a more balanced picture in this aspect when we leave the calendar year 2017.

Investment activity has remained very high and, for example, a new 2,700 tonnes injection moulding machine has been installed in Örkelljunga and this, together with the 2,300 tonnes machine already installed plus another 2,300 tonnes machine which will be installed in April 2017 it means the entire new production hall is already full and what is extremely pleasing is that from the summer 2018 these machines will be operating at full

potential in three shifts, 5,000 hours per year! Therefore we are facing new challenges, i.e. creating the capacity to be able to take on new business...

At the end of the year the KB Group formu-lated the long-term goal of becoming one of the world’s leading suppliers of injection moulded products.

This will be achieved by developing and broadening our customer offer both geographically and in terms of products. We shall work constantly to improve our business and introduce new technical solutions to create smart, environmentally-friendly and cost-effective products which help our customers to meet the expectations of their end customer and increase their profitability.

In recent years we have come some part of the way by creating a global organisation with manufacturing units around the world and made major investments in technology and automation in order to ensure our competitiveness.

Job satisfaction / Commitment

3 of 4 Committedemplyees

(75% ofGPTW)

Growth> 10 % per år

Profitability > 8 %

Targets2017

KB Components AB (Kc) Key Figures 2016 (2015)


BrA Invest’s stake 91,25%




These targets have been broken down by division within each unit, in which the targets should be converted to action plans that include all employees within KB. Everyone should know what is expected of him/her and all targets should contribute to Growth, Profitability and Job satisfaction!

In 2017 we are going to communicate and follow up these clear targets within each division to ensure that everyone knows what is expected of him/her and everyone will also have the opportunity every month to highlight any problems that are making the work difficult.

Together we employees can help achieve KB’s targets and together we will celebrate our successes!


1 8 – A N N U A L R E P O R T 2 0 1 6

The market has been good in 2016 and the company has been operating at full capacity on both planer lines during normal forty-hour working weeks with some overtime. The demand for our products is at its highest during the summer half of the year and at its lowest around new year. We lost one of our bigger customers on the German market half way through the year, which led to a dip in the autumn. The majority of these volumes were replaced by subcontracting work, which brought sales down as we only sold machine hours excluding material. The drop in sales of around MSEK 20 compared with 2015 is 50% due to the fact that we replaced our own sales with subcontracting work. The other reason is that we have had a drop of 2,900 m³ in total production. On the plus side we have had an increase on the small planer of around 2,000 m³ but weighing up the scales, progress in our large planer has been very weak, around -5,000 m³ in 2016.

In 2016, 86% of the sales volume was from exports and Belgium, France, Netherlands, Germany and Spain are our main sales markets. A cooperation

Fresh startDuring recent years, Olofssons has had major problems with high staff turnover within key positions and in production, something that also affected the company in 2016. I took the post of new CEO after the holidays in 2016 and the company recruited a new production manager and what we (him and I) have in common is a long and solid background of the timber industry. Our goal is to provide stability and sustainability for a future positive development of the company. We are aware that we have hard work ahead of us in order to successfully turn Olofssons around into a profitable and attractive company both for customers, suppliers, employees and owners.

Olofssons Hyvleri AB

CEO Lars Hermansson

with a new French agent has begun and hopefully this can generate new business for us in 2017. We have taken back business in Germany which was lost in 2016, which will provide more volumes for the large planer. The strategy for our sales in 2017 is that we will work very actively and seek out new customers.

Our aim is to establish 3-5 new volume customers which can help increase the sales volume for the company. Our focus shall be on selling customised products where we do not compete with the saw mills’ standard products.

Several key people chose to seek out new challenges and left the company during the first half of 2016. Sven-Åke Allansson was recruited as new production director during the spring. Sven-Åke has many years of experience from similar previous posts. In addition we have recruited new planer operators for both planers. The autumn has been filled with training and bringing the new personnel up to date, including the undersigned. As we now face a new year it feels as if we have the organisation in place and it is starting to work really well. Moreover we have carried out major maintenance on both lines and

altogether this means that we are well equipped for 2017.

Losses for 2016, MSEK -7.0 (after financi-al posts) is a decrease of MSEK 2.3 com-pared to the year before. In order to be able to turn around the negative result we need to get large volumes moving through our plants. We need both to increase productivity and increase sales volumes. If we succeed in selling in larger volumes, that will probably mean that we will in-troduce shift work in production during parts of the year. Costings are going to be important for us so that we ensure we are producing the right products and that unprofitable production is replaced or that we are compensated for it.

The conditions are right for a good year in 2017. The economy is strong and the euro is in our favour. If sales fall into place and the development of our organisation takes further steps forward, it will result in improvements during the year. The decision has been taken to move financial administration to the parent company in Åstorp, which will result in rationalisation and savings.

Olofssons Hyvleri AB Key Figures 2016 (2015)




EBIT -6,8 MSEK (-3,9 MSEK)



2 0 – A N N U A L R E P O R T 2 0 1 6


A N N U A L R E P O R T 2 0 1 6 – 2 1

The BrA Invest Group had a turnover of MSEK 1,590.4, an increase of 5% compared to the previous year and reported an operating profit of MSEK 79.9, an increase of 57% compared to 2015. Our key figures were very strong and, at the end of 2016, we had a balance sheet total amounting to MSEK 993.3, shareholders’ equity of MSEK 284.2 (equity ratio of 28.6%) and a net debt (interest-bearing loans less cash) of MSEK 345.5. At the end of 2015, we had a net debt of MSEK 330.3, which meant that the major investment round (including the financing of tools in Örkelljunga and in Puebla) carried out in 2016, predominantly within KB, was managed with only increasing net debt marginally, mainly due to

Management ReviewAs we sum up 2016 we can say that we have the Group’s absolute best year ever behind us! We have seen profits improve in our main operations (KB, Dogman and BAB) and can add to that property sales within 3Hus and thus in total have seen an almost doubling of the profit before tax in 2016 compared with 2015.

Trends indicate the situation is improving especially within construction with the largest order backlog ever and KB, after three tough years of reorganisation and investment, is facing years of harvesting. ”The problem companies”, of which there are only two now (Draken and Olofssons) after closing down Living Story during the autumn, made operating losses of around MSEK 16, of which Living Story contributed MSEK 7, during the year.

BrA Invest CKS AB Corporate ID number: 556753-2501

the Group’s basically sound operative cash flow, but also due to our sales of property within 3Hus. The debt measure Net Debt/EBITDA went from 3.4 as of 31/12/2015 to 2.7 as of 31/12/2016.

KB Components focused, during the year, on taking care of the major orders (projects) which it has received in recent years mainly in Örkelljunga and in Puebla and major operative efforts have been made to manage tool production, automation equipment linked to new cells, fine-adjustment of the equipment and the steady flow of customer changes that interrupt already tight schedules. We have, at the time of writing (March 17), successfully completed large parts of

this project and we can see ahead of us increased volumes as customers ramp up production and as they increase their sales.

Our customer markets, light and heavy vehicles as well as general industry develop slightly differently. The major end customers within vehicles in Sweden, i.e. Volvo Cars, Volvo AB and Scania continue to invest and grow globally and in Sweden. This means that there is constant demand for new production of plastic in factories fairly near their assembly plants in Gothenburg and in Södertälje and together with the fact that every new generation of car or truck has around 20% more plastic, this pushes up injection moulding volumes, mainly of larger components, something

BrA Invest CKS AB

BAB Byggtjänst AB100%

Fastighets AB 3Hus100%

KB Components AB91,25%

Draken i Reftele AB100%

Dogman AB100%

Olofssons Hyvleri AB100%

Living Story AB100%

KB Components Plastunion AB

KB Components Lithuania

Ecogalvanic80%

DogmanAps

DogmanOY

DogmanAS

KB ComponentsPlastic Technology

(Wuxi) Co., Ltd.KB System ABKB Components

Lunketec


2 2 – A N N U A L R E P O R T 2 0 1 6

our operation in Örkelljunga benefits from. The reverse is the case for general industry in Sweden as we see a gradual relocation to old Eastern Europe countries and as this is being established these players chose to install new tools at the companies in these countries, which is damaging to our operation in Anderstorp, where there has been a drop of order inflow in recent years.

A source of great pleasure is that during the year improvements have been implemented and have been effective in our factory in Kaunas, Lithuania. After a couple of years of major commissioning problems, the second half of the year started in a very positive trend with growing profitability, dramatically reduced quality assurance costs and much better operational efficiency. The chrome plating plant, which has been a huge problem, is now running very well and the challenge there is to add both a second and third shift so that we can make full use of this investment. In November our stake in Ecogalvanic amounted to 80%, the company which runs the plant.

The orders for the year amounting to MSEK 120 when production is at full expected vo-lume is of course satisfying and bodes well for good volume development for KB in the next few years. The only fly in the ointment is that the majority of the orders will be placed for ongoing production in Örkelljunga, Pu-ebla and Kaunas. Our plants in Anderstorp and Wuxi are lacking new business, a pro-blem that we intend to address and resolve in 2017!

During the year, Dogman has, for the first time, acted without the partnership of Nest-lé and its Purina ProPlan products.

This change and the drop in sales of over MSEK 100 has barely been noticed and we can claim that Nestlé’s dependence on Dogman was larger than the other way round!! We have thus managed to continue to grow the business organically on our accessories at the same time as profitability (in ready cash and nominally) has remained

at the same level as 2015. This is despite that during the year we have had a very disadvantageous exchange rate, in which the krona weakened dramatically against the dollar in the second half of the year (in which the majority of our purchases are made) and somewhat against the euro, in which we also have high purchase volumes.

Our ”Friends for Life” concept, in which we link up with specialist retailers has been received fairly well by the market. We have around 10 stores which are either in opera-tion or are in the starting blocks, which is a good start, even if we had hoped and belie-ved in a bigger and faster influx.

The relocation of the Norwegian warehouse to Åstorp, which was completed during the autumn of 2015, has proved to be very successful. The deliveries from Åstorp to the end customers in Norway work very well and the best evidence of this is that sales in Norway have all but exploded during the year!

We are looking forward to continued strong development for Dogman in the next few years. The structure of the company, organisationally and from a personell point of view is fully in place and together with the strong brand there is good reason to expect the future to be bright. If the exchange rate were to change course or if any of the acquisition objects that have been discussed end up becoming business deals then the future could be a lot of fun...!

During the year BAB has established itself as the second largest operation within BrA Invest. We have organically grown the business by over 30%, the number of persons has increased by around 100 employees and profitability has gone up dramatically! (The profit in ready money has doubled).

The market for new construction in Sweden is currently very favourable and very strong. There is a need to build around 700,000 new apartments over the next 10 years and in addition a need for extensive

infrastructure projects in the form of road and railway maintenance and a large amount of new public buildings which means we are very optimistic about BAB’s future prospects. The strategy of growing organically rather than by acquisitions remains although we are always looking at potential acquisitions. There have been few opportunities for this so far as the sellers have had very high and often unrealistic expectations around the value of their companies. We continue to work with this and it would not be surprising if at the end of 2017 we have succeeded with one such project...!

BAB’s order backlog is at its largest ever and already now (March 2017) we can with certainty say that sales for the full-year 2017 will exceed MSEK 750 and thus we will achieve growth of over 50%. Fantastic! Profitability is expected to follow and the ambition is to exceed 5% in operating margin in 2017.

During the year, 3Hus divested 3 properties; Resedan, Vårdsippan and Bjuvstorp. These divestments have given capital gains of around MSEK 18 calculated on the opening property value that was determined after last year’s revaluation of our property stock. In other words we have proven that there continue to be overvalues in our different real estate assets.

The development of Backsippan in Åstorp is steaming ahead and it is most likely that all 62 apartments that are being built will become tenant-owned apartments. The sales of these have gone surprisingly well and, at the time of writing (March 2017), we have completed the first building, i.e. enough apartments are sold to ensure that the bank financing of the housing associa-tion is secure.

The sales of the tenant-owned apartments in the other house have begun and we expect this to go just as well so that we can create a larger association including all 62 apartments. The project Ejdern in

Management Review cont.


A N N U A L R E P O R T 2 0 1 6 – 2 3

Örkelljunga is underway and we intend, during the second quarter of 2017, to begin 32 rental apartments on this land. Other

development projects are underway and our aim ahead is to start to build at least 2 new residential properties ourselves every year.

Draken’s new CEO, Jörgen Sabel, who started in the spring has implemented a new, scaled-down organisation which should be able to meet profitability even at lower volumes. We have chosen to remove non-profitable deals and have so far not been able to replace these with better

deals so instead volumes have shrunk but the operating losses have fallen thanks to cost savings beginning to take effect. This strategy is correct and completely necessary as it is not possible to ”catch up with yourself” using increased volumes but at unacceptable margins. At the start of 2017 there is, for the first time in several years, the potential for Draken to end up making a profit.

Olofssons has had an incredibly difficult year with a large staff turnover, change of CEO and major problems keeping reasonable planing operations going without production

and quality interruptions. The loss was much larger (over MSEK 7 compared to MSEK 4 for 2015) than what we both thought and feared and we can say that, however we calculate it, the result for the year is a bitter disappointment. Lars Hermansson, our new CEO, needs to find a way to get the company quickly back on track. BrA Invest’s patience as owner of this business is about to run out!

After many years of huge losses and huge efforts in very many different ways we chose in the summer of 2016 to close down Living Story. We realised in the end that not even in the long term would we be able to take this


2 4 – A N N U A L R E P O R T 2 0 1 6

The Group’s results and financial positionThousand SEK 2016 2015 2014 2013 2012 2011 2010

Net sales 1 590 362 1 518 689 1 419 107 1 278 531 1 260 159 1 111 851 918 699

Net profit of financial items 67 703 44 317 32 746 26 390 16 593 12 440 82 330

Balance sheet total 993 333 943 446 781 155 724 038 611 251 637 692 459 287

Equity including minority stakeholders 284 230 254 537 162 114 135 617 123 802 116 600 148 744

Equity ratio including minority stakeholders 28,6% 27,0% 20,7% 18,7% 20,3% 18,3% 32,4%

Profit margin 4,3% 2,9% 2,3% 2,1% 1,3% 1,1% 9,0%

Interest coverage ratio 6,1 7,4 4,7 3,8 2,7 2,8 21,8

Return on equity 19,6% 15,3% 15,6% 14,0% 5,1% 5,3% 85,6%

Comparison figures for 2012 and earlier have not been recalculated in accordance with BFNAR 2012:1, which can mean comparisons may not be accurate.

Key events in 2016- BrA Invest increases its stake in Dogman from 95 to 100%.

- Living Story was closed down during the autumn of 2016.

- Fastighets AB 3Hus divests the properties Resedan, Vård-sippan and Bjuvstorp.

- Dogman moves its Norwegian customer services from Oslo to Åstorp.

- A dozen stores in Sweden join Dogman’s ”Friends for Life” concept.

- KB Components increases its stake in Ecogalvanic till 80%.

Proposed distribution of profitThe following amounts are at the disposal of the Annual General Meeting (in SEK):Retained earnings 62 826 940

Profit for the year 65 923 026

Total 128 749 966

The Board of Directors proposes the following distri-bution of profit:

Dividend to shareholders 30 000 000

Carried forward 98 749 966

Total 128 749 966

For more information about the company’s results and financial position, please refer to the income statements and balance sheets for both the Group and the parent company, with additional disclo-sures and notes. All amounts are stated in thousands of SEK.

Management Review cont.

business to reasonable profitability, as the main cause of the problem has been in the fact that we have not been able to develop design products that the market was willing to pay the price for and which were needed in order for the business to work. Knowledge about how you run a company in this industry has not been found within BrA Invest’s management and we need to be humble and learn something from this major failure. We have been able to limit the loss for the year for Living Story to MSEK 7, due to hard work on sales during the autumn and the entire stock was cleared by the start of December. Now the work remains to find a tenant for the property (Anekdoten) or to sell it.

When the Group changed banks during the spring the liquidity was somewhat strained. A few supplier payments were delayed and in some of the companies taxes and fees were recognised and paid somewhat late. The consequence of this was limited to interest on late payments. After changing banks and from, and including, the summer of 2016 the liquidity situation has been good, the Group generates large cash flows and the major investment round was started in KB in the autumn of 2014 is complete.

The major improvement in profits for the Group that we predicted in last year’s annual report has been realised, with style! Despite the important currency parameters not going in the right direction KB and BAB,

above all, have delivered in a way with which we are satisfied. The Group is both operationally and financially stronger than ever!

The situation for 2017 looks better than ever before! KB is entering a period of increasing volumes after a few years of good order intakes, which will now start to be delivered. BAB has the largest order backlog ever and one of our ”problem companies”, Living Story, is not going to cause any more losses. We can promise a strong improvement in 2017 compared with 2016 and if everything goes as we hope/believe then it will mean another doubling of our earnings!

BrA Invest CKS AB is based in Åstorp.


A N N U A L R E P O R T 2 0 1 6 – 2 5

The parent company’s results and financial position

Several years overview (thousand SEK) 2016 2015 2014 2013 2012 2011 2010

Net sales 3 750 5 100 5 064 4 920 4 165 2 000 1 000

Profit after financial items 54 297 11 103 5 020 945 18 893 9 655 52 955

Balance sheet total 352 337 167 637 148 040 115 570 129 455 102 384 76 676

Equity ratio (%) 36,6% 46,5% 37,9% 40,1% 40,1% 53,9% 99,3%

Average number of employees 4 4 4 4 5 2 1

Comparison figures for 2012 and earlier have not been recalculated in accordance with BFNAR 2012:1, which can mean comparisons may not be accurate.

EnviromentWithin the operating branches of production of plastic components and production of plastic products, activities are carried out which according to the Environ-mental Act must be reported. The company’s management is not aware of any changes to market conditions or significant sanitation requirements and none of the permit conditions have been exceeded.

OwnershipOf the shares in BrA Invest CKS AB, Stefan Andersson owns 33.4%, Kenneth Anderson owns 33.3% and Christer Anderson owns 33.3%

Financial risk managementFinancial risks can primarily be divided into the following categories: interest rate risk, currency risk, credit risk and liquidity risk.Interest rate 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 so far been affected by very few customer losses, mainly due 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.

Msek Msek

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2016 2015 2014 2013 2012 2011 2010 2016 2015 2014 2013 2012 2011 2010


2 6 – A N N U A L R E P O R T 2 0 1 6


A N N U A L R E P O R T 2 0 1 6 – 2 7

Consolidated Income Statement

INCOME STATEMENT for Note 2016 2015

Operating income:

Net sales 4 1 590 362 1 518 689

Change in inventories 596 272

Capitalised work for own account 30 413 51 338

Profit or loss on disposal of net assets 18 759 0

Other operating income 5 5 268 4 341

1 645 398 1 574 640

Operating costs:

Commodities and consumables -792 104 -716 445

Goods for resale -197 898 -294 538

Other external costs 6,7 -164 860 -144 954

Employee costs 8 -363 205 -320 105

Amortisation of tangible and intangible fixed assets -46 740 -45 961

Other operating costs -679 -1 775

-1 565 486 -1 523 778

Operating profit 79 912 50 862

Profit on financial investments:

Interest income 10 960 406

Interest costs 11 -13 169 -6 951

Profit after financial items 67 703 44 317

Tax on the year's profit 12 -14 772 -12 500

PROFIT FOR THE YEAR 52 931 31 817

Attributable to:

The Parent Company's shareholders 51 572 26 911

Holdings without controlling influence 1 359 4 906

52 931 31 817


2 8 – A N N U A L R E P O R T 2 0 1 6

Consolidated Balance Sheet

BALANCE SHEET as of 31 December Note 2016 2015

ASSETS

Fixed assets

Intangible fixed assets

Balanced expenses 13 125 0

Trademarks 14 0 0

Goodwill 15 13 405 22 754

13 530 22 754

Tangible fixed assets

Buildings and land 17 291 144 373 495

Discontinued costs in other property 16 3 148 0

Plant and machinery 18 119 567 91 103

Fixtures and fittings 19 16 964 21 160

New construction in progress and advances 20 53 934 11 581

484 757 497 339

Financial fixed assets

Other long-term securities 54 54

Other long-term receivables 22 2 309 2 281

2 363 2 335

Total fixed assets 500 650 522 428

Current assets

Inventories, etc.

Commodities and consumables 64 404 61 907

Products in manufacturing 1 572 1 897

Finished goods and goods for sale 104 315 89 047

Advances to suppliers 120 2 189

170 411 155 040

Short-term receivables

Accounts receivable 217 922 202 080

Current tax assets 600 0

Other receivables 8 969 3 326

Earned but not invoiced income 23 80 708 33 762

Prepaid costs and accrued income 24 9 022 8 038

317 221 247 206

Cash at bank and in hand 5 051 18 772

Total current assets 492 683 421 018

TOTAL ASSETS 993 333 943 446


A N N U A L R E P O R T 2 0 1 6 – 2 9

Consolidated Balance Sheet

Consolidated changes in equity


EQUITY AND LIABILITIES

Equity 25

Share capital 100 100

Other equity 216 041 211 126

Profit for the year 51 572 26 911

Equity attributable to the Parent Company's shareholders 267 713 238 137

Holdings without controlling influence 16 517 16 400

Total equity 284 230 254 537

Provisions

Provisions for tax 26 39 600 36 210

Other provisions 27 3 800 2 948

Total provisions 43 400 39 158

Long-term liabilities

Construction loans 28 15 333 0

Factoring facilities 28 0 23 960

Other liabilities to credit institutions 29, 30, 31 152 406 196 386

Other liabilities 12 210 576

Total long-term liabilities 179 949 220 922

Short-term liabilities

Overdraft facilities 28 158 162 82 945

Other liabilities to credit institutions 31 24 668 45 790

Advance payments from customers 1 512 78

Accounts payable 179 541 199 855

Current tax liabilities 10 381 5 051

Other liabilities 27 956 26 071

Invoiced but not earned income 23 20 624 12 447

Accrued costs and prepaid income 24 62 910 56 592

Total short-term liabilities 485 754 428 829

TOTAL EQUITY AND LIABILITIES 993 333 943 446

Share capitalOther own

capitallProfit for the year

Equity, Parent Company

Holdings without deciding influence Total equity

Amount at the start of the year, 01/01/2016

100 211 126 26 911 238 137 16 400 254 537

Appropriation of profits according to the Annual General Meeting

Dividends paid to shareholders 11 911 -26 911 -15 000 0 -15 000

Dividends to minorities 0 -875 -875

Acquisitions from minorities -7 626 -7 626 -1 124 -8 750

Sales to minorities -674 -674 674 0

Translation difference for the year 1 304 1 304 83 1 387

Profit for the year 51 572 51 572 1 359 52 931

Amount at year end, 31/12/2016 100 216 041 51 572 267 713 16 517 284 230


3 0 – A N N U A L R E P O R T 2 0 1 6

Consolidated Cash Flow Statement

CASH FLOW STATEMENT for Note 2016 2015

Operating activities

Operating profit 79 912 50 862

Adjustments for items that do not affect cash flow 32 30 950 46 336

Financial leasing 0 -2 445

Sales of net assets 29 951 0

Interest received 960 406

Interest paid -13 169 -6 951

Tax for the year -4 076 -6 437

Cash flow from operating activities before changes to operating capital 124 528 81 771

Changes to inventory -14 867 24 683

Changes to operating receivables -69 441 -8 342

Changes to operating liabilities 11 247 16 904

Cash flow from operating activities 51 467 115 016

Investment activities

Sales of net assets 0 -8 393

Net investments in intangible fixed assets -156 0

Net investments in tangible fixed assets -101 827 -88 967

Investment in securities 0 -40

Changes to long-term receivables -64 -89

Cash flow from investment activities -102 047 -97 489

Financing activities

Dividends -15 000 0

Changes to loans 49 158 9 389

Changes to long-term liabilities 12 138 0

Minority -9 625 -13 158

Cash flow from financing activities 36 671 -3 769

CASH FLOW FOR THE YEAR -13 909 13 758

Cash and cash equivalents at the start of the year 18 772 5 308

Exchange rate difference in cash and cash equivalents 188 -294

Cash and cash equivalents at the end of the year 5 051 18 772

Unused overdraft facilities 28 8 755 12 289

Available cash and cash equivalents at the end of the year 13 806 31 061


A N N U A L R E P O R T 2 0 1 6 – 3 1

INCOME STATEMENT FOR Note 2016 2015

Operating income:

Net sales 3,4 3 750 5 100

Other operating income 5 20 15

Total operating income 3 770 5 115

Operating costs:

Other external costs 6,7 -5 732 -2 731

Employee costs 8 -4 668 -4 185

Amortisation of tangible fixed assets -1 -4

Total operating costs -10 401 -6 920

Operating profit -6 631 -1 805

Profit on financial investments:

Profit on shares from group companies 9 60 754 12 968

Interest income 10 4 126 1 246

Interest costs 11 -3 952 -1 306

Total financial items 60 928 12 908

Profit after financial items 54 297 11 103

Appropriations

Group contributions received 33 513 26 764

Group contributions paid -20 384 -13 532

Total appropriations 13 129 13 232

Profit before tax 67 426 24 335

Tax on the year’s profit 12 -1 503 -2 509

PROFIT FOR THE YEAR 65 923 21 826

Income Statement for the Parent Company


3 2 – A N N U A L R E P O R T 2 0 1 6

Balance Sheet for the Parent Company


ASSETS

Fixed assets

Tangible fixed assets

Fixtures and fittings 19 0 1

0 1

Financial fixed assets

Shares in group companies 21 93 602 74 595

Deferred tax assets 26 0 1 490

93 602 76 085

Total fixed assets 93 602 76 086

Current assets

Short-term receivables

Changes in group companies 258 305 90 851

Current tax assets 192 0

Other receivables 134 47

Prepaid costs and accrued income 24 104 653

258 735 91 551

Total current assets 258 735 91 551

TOTAL ASSETS 352 337 167 637


A N N U A L R E P O R T 2 0 1 6 – 3 3

Balance Sheet for the Parent Company


EQUITY AND LIABILITIES

Equity 25

Restricted equity

Share capital - 1,000 shares 100 100

Total restricted equity 100 100

Unrestricted equity

Retained earnings 62 827 56 000


Total unrestricted equity 128 750 77 827

Total equity 128 850 77 927

Long-term liabilities 29

Liabilities to credit institutions 30, 31 20 417 10 000

Total long-term liabilities 20 417 10 000

Short-term liabilities 28 156 236 11 577

Overdraft facilities 31 16 333 8 000

Other liabilities to credit institutions 541 1 047

Accounts payable 28 163 57 867

Liabilities to group companies 16 5

Current tax liabilities 559 170

Other liabilities 24 1 222 1 044

Total short-term liabilities 203 070 79 710

TOTAL EQUITY AND LIABILITIES 352 337 167 637

Share capital Balanced profit Profit for the year Total equity

Amount at the start of the year, 01/01/2016 100 56 000 21 827 77 927

Appropriation of profits according to the Annual General Meeting

6 827 -21 827 -15 000


Amount at year end, 31/12/2016 100 62 827 65 923 128 850

Changes in Equity for the Parent Company


3 4 – A N N U A L R E P O R T 2 0 1 6

Cash Flow Statement for the Parent Company

CASH FLOW STATEMENT for Note 2016 2015

Operating activities

Operating profit -6 631 -1 805

Adjustments for items that do not affect cash flow 32 1 4

Interest received 4 126 1 246

Interest paid -3 952 -1 306

Tax for the year -194 -47

Cash flow from operating activities before changes to operating capital -6 650 -1 908

Changes to operating receivables -166 992 -9 790

Changes to operating liabilities -29 643 5 590

Cash flow from operating activities -203 285 -6 108

Investment activities

Investments/group contributions to subsidiaries -51 661 -27 121

Dividends/group contributions from subsidiaries 72 263 41 001

Net investments in tangible fixed assets 34 274 0

Cash flow from investment activities 54 876 13 880

Financing activities

Changes to loans 18 750 -8 000

Changes to overdrafts 144 659 228

Dividends -15 000 0

Cash flow from financing activities 148 409 -7 772

CASH FLOW FOR THE YEAR 0 0

Cash and cash equivalents at the start of the year 0 0

Cash and cash equivalents at the end of the year 0 0

Unused overdraft facilities 28 8 764 423

Available cash and cash equivalents at the end of the year 8 764 423


A N N U A L R E P O R T 2 0 1 6 – 3 5

Additional DisclosuresNote 1 Accounting and valuation principlesThe Swedish Annual Accounts Act and the Swedish Accounting Standards Board’s general guidelines BFNAR 2012:1 (K3) are applied in the prepara-tion of the financial statements.

Reporting currencyThe Annual Report is presented in Swedish kronor and amounts are stated in thousands of SEK, unless otherwise stated.

Consolidated Financial StatementsThe Consolidated Financial Statements include the Parent Company and the subsidiaries in which the Parent Company directly or indirectly holds more than 50% of votes or otherwise has a controlling influence. The Con-solidated Financial Statements are

drawn up according to the acquisition method, which means that equity in the subsidiaries on 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 app-ropriations for the year is included in profit for the year. The deferred tax liability is recognised as a provision, while the remaining amount has been recognised in Group equity.

Deferred tax in untaxed reserves has been calculated at 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.

Holdings without controlling influenceThe Group treats transactions with holdings without controlling influence as transactions with Group equity owners. The share of assets and liabilities, including goodwill which belongs to holdings without controlling influence, is measured at cost on the date of the business acquisition by the Group. For acquisitions from holdings without controlling influence, the difference bet-ween 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 holdings without controlling influence are also recor-ded in equity.

When the Group ceases to have controlling 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 StatementThe cash flow statement is prepared using the indirect method, which ma-kes adjustments for transactions for non-cash items. Besides cash on hand and demand deposits, cash and cash equivalents comprise current finan-cial investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

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

Revenue recognitionThe Group recognises revenue with regard to sales of goods when the sig-nificant 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 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 carried to cost 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 commissionsRevenue arising from subcontracted assignments at fixed rates is recogni-sed 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 comple-tion 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 carried to cost 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 on a project by project basis 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 re-cognised as liabilities.

Financial instrumentsFinancial assets and liabilities are recognised using the cost value method.

Financial assets in the form of securities are recognised at cost value, including any transaction fees which are directly attributable to the acquisition of the as-set. Long-term securities and ownership interests in other companies in which the actual value is lower than the recognised value are written down to the actual value if the drop in value is considered to be long-lasting.

Short-term placements are measured at the lower of the cost price and the net sale sales value. Long-term receivables and long-term liabilities are recognised at accrued cost value, which is equivalent to the current value of future pay-ments discounting the effective interest rate, which is calculated at the point of acquisition. Short-term receivables and derivative instruments, which do not constitute any part of the hedge relationship which is recognised in accordance with the rules for hedge accounting, are recognised at the lower of the acquisi-tion value and the net sales value.

Income TaxesRecognised 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.

No deferred tax is recognised on temporary differences in property if these are expected to be divested in such a way that does not trigger taxation.

Due to the relationship between recognition and taxation, the Parent Com-pany recognises the deferred tax liability on untaxed reserves as part of the untaxed reserves.


3 6 – A N N U A L R E P O R T 2 0 1 6

LeasesLeases are classified either as finance leases or as operating leases. Leases are classified as finance leases when the financial risks and re-wards of ownership have been substantially transferred to the lessee. All other leases are classified as operating leases.

Rights and obligations according to financial leases for which the Group is the lessee are recognised as assets and liabilities in the income statement. On the first recognition the assets and liabilities are valued at the lowest of the asset’s true value and the current value of the minimum lease charges.

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 pro-perty, plant and equipment.

DepreciationIf there is an indication that an asset may be depreciated, the Group esti-mates 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. Depreciation losses are recognised in the income statement.

InventoriesInventories are measured at the lower of cost and net realisable value. Deductions are made for obsolescence.

Receivables and liabilities in foreign currenciesReceivables 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.

ProvisionsProvisions 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 out-flow of resources will be required to settle the obligation. A condition is that it must be possible to make a reliable estimate of the amount to be paid.

Tangible and intangible fixed assets

Tangible and intangible fixed assets are recognised at acquisition 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.

Balanced fees for development 3 år

Trademarks 5 år

Goodwill 5-10 år

Buildings 33 - 50 år

Site improvements 20 år

Plant and machinery 5-10 år

Fixtures and fittings 4-10 år

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

Financial income and costsFinancial income and costs 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 costs include accrued amounts. Borrowing costs are recognised in the income statement in the year in which they occur.

Definition of key figures

Profit margins

Net loss/profit as % of net sales.

Interest coverage ratioProfit after financial items increased by interest costs divided by interest costs.

Return on equityNet profit as a percentage of average equity.

Equity ratioAdjusted equity as a percentage of total assets.

Note 2 Estimates and judgementsThe company management makes estimates and assumptions about the future. These estimates seldom match the 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 invento-ries and properties.

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 any such information, the recoverable value of the asset is calculated as the higher of the utility value and the net selling price.


A N N U A L R E P O R T 2 0 1 6 – 3 7

Notes to the Profit and Loss statementGroup Parent Company

2016 2015 2016 2015

Note 3 Purchase and sale between Group companies

The Parent Company’s sales are all internal within the Group. Parent Company’s purchases from companies in the Group amount to SEK 507,000 (SEK 397,000).

Note 4 Net revenue Net revenue by business segment

Manufacturing of plastic components 698 243 639 145

Construction operations 448 706 301 857

Trade of items for pets 290 179 395 610

Production of plastic products 76 330 82 211

Planing mill 60 142 79 714

Trade in decorative products 12 259 10 689

Real estate management 4 503 9 463

Total 1 590 362 1 518 689

Net revenue by geographical market

Scandinavia 1 241 655 1 201 602 3 750 5 100

Other 348 707 317 087 0 0

Total 1 590 362 1 518 689 3 750 5 100

Note 5 Other operating incomeWage subsidies 1 058 858 0 0

Other operating income 4 210 3 483 20 15

Total 5 268 4 341 20 15

Note 6 Leasing feesOperational leasing, including rental of premises

Leasing fees, cost for the year 23 237 31 007 581 435

Outstanding leasing fees fall due as follows:

Within one year 19 836 22 126 581 454

Later than one year but within five years 62 831 69 204 2 095 1 645

Later than five years 106 548 113 116 15 360 15 814

Total 189 215 209 446 18 036 17 913

The most substantial rental agreements comprise rental of premises.

Note 7 Remuneration for the auditorFees and expenses

Mazars SET Revisionsbyrå AB

Accounting services 1 010 1 004 959 959

Other services 182 499 182 499

Total 1 192 1 503 1 141 1 458

Other auditors:

Accounting services 68 72 0 0

Other services 0 0 0 0

Total 68 72 0 0 Auditing refers to the auditor’s work on the statutory audit.Auditors fees with regards to accounts carried out by Mazars SET Revisionsbyrå AB are charged in full to the Parent Company, BrA Invest CKS AB.


3 8 – A N N U A L R E P O R T 2 0 1 6

2016 2015

Note 8 Average number of employees, wages and other remuneration

Average number of employees Number of employees Of which men Number of employees Of which men

Parent Company

Sweden 4 4 4 4

Subsidiaries

Sweden 589 446 515 380

Norway 8 4 13 6

Finland 1 0 2 2

Denmark 1 0 1 1

Mexico 173 64 86 39

China 7 4 0 0

Lithuania 138 48 148 55

Total subsidiaries 917 566 765 483

Group total 921 570 769 487

Corporate management Women Men Women Men

Board of Directors 0 3 0 3

CEO and other corporate management 2 9 2 9

Employee costs Wages and remunerations

Social security costs Wages and remunerations

Social security costs

Parent Company

Board and CEO 2 100 924 1 545 754

(of which pension costs) (264) (269)

Other employees 945 580 739 525

(of which pension costs) (162) (167)

Subsidiaries 253 050 96 183 224 158 86 553

(of which pension costs) (15 703) (16 269)

Group total 256 095 97 687 226 442 87 832

(of which pension costs) (16 129) (16 705)

Group Parent company

2016 2015 2016 2015

Note 9 Profit on shares in group companiesAnticipated dividend 38 750 9 125

Profit or loss on divestments 28 004 603

Dividend from subsidiaries 0 3 750

Depreciation -6 000 -510

Total 60 754 12 968

Note 10 Interest incomeInterest income, group companies, 0 0 4 075 1 246

Other interest income 960 406 51 0

Total 960 406 4 126 1 246


A N N U A L R E P O R T 2 0 1 6 – 3 9


2016 2015 2016 2015

Note 11 Interest costsConsolidated interest costs 0 0 -78 -810

Interest income, other -13 169 -6 951 -3 874 -496

Total -13 169 -6 951 -3 952 -1 306

Note 12 Tax on profit for the yearCurrent tax -9 099 -9 458 -13 0

Deferred tax -5 673 -3 042 -1 490 -2 509

Summa -14 772 -12 500 -1 503 -2 509

Reported tax

Reported profit before tax 67 703 44 317 67 426 24 335

Tax in accordance with current tax rate, 22% -14 895 -9 750 -14 834 -5 354

Reconciliation of tax

Effect of foreign tax rate 755 -82 0 0

Non-deductible expenses -1 249 -1 100 -1 355 -120

Non-taxable income 4 494 414 14 686 2 965

Depreciation of consolidated goodwill -2 002 -1 506 0 0

Unrecognised loss carry-forwards -1 468 -460 0 0

Corrected earlier tax -407 0 0 0

Effect of utilised previously unrecognised loss carry-forwards

0 -16 0 0

Total -14 772 -12 500 -1 503 -2 509

Note 13 Capitalised development expensesOpening acquisition value 326 326

Procurement 156 0

Exchange rate difference 4 0

Closing acquisition value 486 326

Opening amortisation -326 -326

Amortisation for the year -35 0

Closing amortisation -361 -326

Book value 125 0

Note 14 TrademarksOpening acquisition value 5 231 5 231

Closing acquisition value 5 231 5 231

Opening amortisation -5 231 -5 154

Amortisation for the year 0 -77

Closing amortisation -5 231 -5 231

Book value 0 0

Note 15 GoodwillOpening acquisition value 73 862 72 714

Acquisition of subsidiaries 0 2 275

Sales/retirement of assets -5 600 0

Exchange rate difference 758 -1 127



Amortisation for the year -9 400 -8 902

Sales/retirement of assets 5 600 0

Exchange rate difference -707 701


Book value 13 405 22 754


4 0 – A N N U A L R E P O R T 2 0 1 6


2016 2015 2016 2015

Note 16 Discontinued costs in other propertyOpening acquisition value 0 0

Procurement 3 747 0

Translation difference for the year 69 0

Closing accumulated acquisition value 3 816 0

Opening amortisation 0 0

Amortisation for the year -656 0

Translation difference for the year -12 0

Closing accumulated amortisation -668 0

Book value 3 148 0

Note 17 Buildings and land Opening acquisition value 328 808 274 247

Procurement 4 377 54 561

Via sale of subsidiary -74 219 0Closing accumulated acquisition value 258 966 328 808

Opening amortisation -48 922 -41 978Amortisation for the year -6 720 -6 944Via sale of subsidiary 6 582 0

Closing accumulated amortisation -49 060 -48 922Opening revaluations -6 720 0

Annual revaluation 6 582 98 153

Annual amortisation of revalued amount -3 301 -1 952

Via sale of subsidiary -9 070 0Closing accumulated revaluations 83 830 96 201

Opening depreciation -2 592 0

Depreciation for the year 0 -2 592

Closing accumulated depreciation -2 592 -2 592

Book value 291 144 373 495

The above amounts include:

Book value of management properties 24 420 98 078

Actual value of management properties 28 200 111 700

Note 18 MachineryOpening acquisition value 322 308 284 337

Procurement 48 055 28 701

Takeover after acquisition 0 11 811

Sales/retirement of assets -1 244 -67

Reclassifications -519 0

Exchange rate difference 108 -2 474



Amortisation for the year -18 769 -17 234

Takeover after acquisition 0 -3 192

Sales/retirement of assets 809 8

Reclassifications 427 0

Exchange rate difference -403 859


Book value 119 567 91 103

Leased assets

The above book values include leased assets with:

Acquisition value 13 525 17 700

Accumulated amortisation -2 835 -6 301

10 690 11 399

The leased assets above refer to the splitting and planing line.


A N N U A L R E P O R T 2 0 1 6 – 4 1

Note 20 New construction in progress and prepayments for tangible assets

Opening acquisition value 11 581 10 444

Acquisition of subsidiaries 0 189

Change for the year 42 244 956

Translation difference for the year 109 -8

Book value 53 934 11 581

Note 21 Shares in group companiesOpening acquisition value 95 298 82 468

Acquisition 8 850 12 320

Shareholder contributions 22 427 510

Divestments -6 270 0


Opening depreciation -20 703 -20 193

Depreciation for the year -6 000 -510

Closing depreciation -26 703 -20 703

Book value 93 602 74 595

Information about subsidiaries

Company name and head office

CRN

Capital/ Voting rights

Number of shares

Book value

BAB Byggtjänst AB, Åstorp 556608-9669 100 % 1 500 17 853

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 100 % 30 000 33 500

Dogman AS, Hagan, Norge 986 467 025 100 % 100

Dogman Aps, Bröndby, Danmark 29 41 44 91 100 % 125 000

Dogman OY, Åbo, Finland 2366900-6 100 % 100

Olofssons Hyvleri AB, Vrigstad 556386-4668 100 % 10 000 1 350

KB Components AB, Örkelljunga 556081-6653 91,25 % 511 000 34 922

KB System AB, Örkelljunga 556306-9581 100 % 1 000

KB Components Plastunion AB, Anderstorp 556181-5209 100 % 30 000


2016 2015 2016 2015

Not 19 EquipmentOpening amortisation -142 475 -134 793 -50 -46

Opening acquisition value 163 635 155 402 51 51

Acquisition subsidiaries 0 4 456 0 0

Procurement 4 366 5 116 0 0

Sales/retirement of assets -3 104 -770 0 0

Reclassifications 374 55 0 0

Exchange rate difference -188 -624 0 0

Closing acquisition value 165 083 163 635 51 51

Acquisition subsidiaries 0 -232 0 0

Amortisation for the year -7 860 -8 125 -1 -4

Sales/retirement of assets 2 706 528 0 0

Reclassifications -427 -55 0 0

Exchange rate difference -63 202 0 0

Closing amortisation -148 119 -142 475 -51 -50

Book value 16 964 21 160 0 1


4 2 – A N N U A L R E P O R T 2 0 1 6

Note 23 Ongoing work

Earned but not invoiced income

Income accrued on unfinished contracts 453 210 194 585

Invoicing on unfinished contracts -372 502 -160 823

Total 80 708 33 762

Invoiced but not earned income

Income accrued on unfinished contracts -117 271 -116 935

Invoicing on unfinished contracts 137 895 129 382

Total 20 624 12 447

Net unfinished contract work 60 084 21 315

Note 24 Accruals and deferralsPrepaid costs and accrued income

Prepaid costs 6 540 6 282 104 653

Accrued income 2 482 1 757 0 0

Total 9 022 8 038 104 653

Accrued costs and prepaid income

Accrued employee costs 54 284 49 666 598 370

Accrued customer bonuses 2 226 3 198 0 0

Other accrued costs 5 619 2 314 624 674

Prepaid income 781 1 414 0 0

Total 62 910 56 592 1 222 1 044


2016 2015 2016 2015

Not 22 Other long-term receivablesOpening acquisition value 2 281 1 777

Acquisition of subsidiaries 0 385

Change for the year 61 150

Translation difference for the year -33 -31

Book value 2 309 2 281

Not 21 Shares in group companies cont.Information about subsidiaries

Bolagsnamn och säte forts.

CRN

Capital/ Voting rights

Number of shares

Book value

KB Components UAB, Kaunas, Litauen 300 066 964 100 % 10

Ecogalvanic UAB, Kaunas, Litauen 303 074 400 80,37% 387

Lunktetec de Mexico SA de CV, Pueblo, Mexico LME090403331 100% 10 850 000

KB Components Plastic Technology Co, Ltd, Wuxi, Kina 100%

Living Story AB, Åstorp 556304-6803 100 % 11 000 1 077

Fastighets AB Västra vägen, Åstorp 556825-8650 100 % 500 2 050

Fastighets AB Backsippan 14-16, Åstorp 556932-5441 100 % 50 50

Örkelljungahus Ejdern 14 AB, Åstorp 559084-3271 100 % 50 50

Örkelljungahus Ejdern 16 AB, Åstorp 559084-3289 100 % 50 50

Gajadfastigheten i Åstorp AB, Åstorp 556826-1944 100 % 500 50

Mässhallen i Åstorp AB, Åstorp 556838-8622 100 % 500 50

Total 93 602


A N N U A L R E P O R T 2 0 1 6 – 4 3


2016 2015 2016 2015Note 25 EquityOne share in BrA Invest CKS AB has a nominal value of 100 Swedish kronor. The number of shares is 1,000 and the share capital is tSEK 100.

Revaluation Fund

Amount at the start of the year 64 577 0

Provisions to funds during the year 0 66 952

Depreciation of revaluated assets -4 750 -2 375

Amount at year end 59 827 64 577

Not 26 Deferred tax assets/Provision for taxesOpening book value -36 210 -10 372 1 490 3 999

Acquisition of subsidiaries 0 -1 205 0 0

Sales of subsidiaries 2 064 0 0 0

Revaluation properties 0 -21 594 0 0

Annual deferred tax -5 673 -3 042 -1 490 -2 509

Translation difference for the year 219 3 0 0

Book value -39 600 -36 210 0 1 490

The temporary differences have resulted in deferred tax liabilities and receivables relating to the following:

Untaxed reserves -17 212 -15 323 0 0

Fixed assets -22 361 -25 066 0 0

Other assets -3 077 386 0 0

Provisions 1 023 761 0 0

Deficit 2 027 3 032 0 1 490

Total -39 600 -36 210 0 1 490

Note 27 Other provisionsOpening book value 2 948 2 689

Provisions for the year 852 259

Book value 3 800 2 948

Other provisions relate to pension provisions

Note 28 Credit limitsOverdraft facilities

Authorised limit 166 917 97 061 165 000 12 000

Construction loans

Authorised limit 75 000 0

Factoring facilities

Authorised limit 0 30 000


4 4 – A N N U A L R E P O R T 2 0 1 6

Note 29 Long-term liabilitiesLoans that fall due after 5 years 104 610 158 766 0 0

Note 30 Pledged securitiesPledges

Company mortgages 186 700 156 000 0 0

Property mortgages 265 750 198 850 0 0

Shares in subsidiaries 0 243 931 0 74 595

Pledged accounts receivable 0 45 937 0 0

Endowment insurance 1 778 1 924 0 0

Other pledged assets 48 174 61 927 0 0

Total pledges 502 402 708 569 0 74 595

Note 31 Liabilities to credit institutionsLong-term 152 406 196 386 20 417 10 000

part Short- 24 668 45 790 16 333 8 000

Total 177 074 242 176 36 750 18 000

Note 32 Items that do not affect cash flowAmortisation 46 740 45 961 1 4

Provisions 852 259 0 0

Capital gains -18 997 -66 0 0

Currency adjustment of internal differences 2 355 182 0 0

Total 30 950 46 336 1 4


2016 2015 2016 2015

Other informationNote 33 Any obligationsGuarantees for subsidiaries 203 609 249 418

Total 203 609 249 418

Note 34 Divestment of subsidiariesOn 1 February 2016 BrA Invest CKS AB sold all shares in Fastighets AB Resedan. The subsidiary’s operations consist of managing proprietary property.

On 30 June 2016 BrA Invest CKS AB sold all shares in Fastighets AB Vårdsippan and Fastighets AB Bjuvstorp 6:24.

The subsidiaries’ operations consist of managing proprietary property.

Note 35 Significant events after the end of the financial yearLars Holtskog buys 5% of shares in AB Dogman (took up post 01/01/2017)

Brf Backsippan is formed when 80% of tenant-owned properties are sold at the end of Q1 2017.

Note 36 AppropriationRetained earnings 62 826 940

Profit for the year 65 923 026

Total 128 749 966

The Board of Directors proposes the following distribution of profit:

Dividend to shareholders 30 000 000

Carried forward 98 749 966

Total 128 749 966


A N N U A L R E P O R T 2 0 1 6 – 4 5

Åstorp 31/03/2017

Stefan Andersson Kenneth Andersson Christer Andersson

Chief Executive Officer Chairman

My auditor’s report was submitted on 31 March 2017.

Bo Matson

Authorised public accountant


4 6 – A N N U A L R E P O R T 2 0 1 6

Auditor’s ReportTo the Annual General Meeting of BrA Invest CKS AB CRN: 556753-2501

Report on the Annual ReportStatements

I have audited the Annual Report and Consolidated Financial Statements of BrA Invest CKS AB for the year 2016.

In my opinion, the Annual Report and Consolidated Financial Statements have been prepared in accordance with the Swe-dish 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 of 31 December 2016 and of their financial performance and cash flows for the year as required by the Swedish Annual Accounts Act. The Management Review is consistent with the other sections of the Annual Report and Consolidated Financial Statements.

I therefore recommend that the Annual General Meeting adopts the Income Statements and Balance Sheets of the Parent Com-pany and the Group.

Basis for statements I have conducted my audit in accordance with the International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. My responsibilities in accordance with these standards is described in more detail in the section on Auditor’s Responsibilities. I am independent of the Parent Com-pany and the Group according to generally accepted auditing standards in Sweden and have otherwise completed my profes-sional duties in accordance with this requirement.

I consider the audit evidence I have obtained to be sufficient and appropriate to provide a basis for my opinion. Information other than the Annual Report It is the Board and the CEO who have responsibility for the other information. The other information is included

in the document which is called Annual Report for 2016, but does not include the Annual Report and my auditor’s statement regarding it.

My statement regarding the Annual Report does not include this information and I make no statement confirming the other information.

As part of my audit of the Annual Report, it is my responsibility to read the information that has been identified above and consider whether the information is to a significant extent incompatible with the Annual Report. In this review I take into account also the knowledge I have gathered during the audit, and assess whether the information otherwise seems to con-tain any errors.

If I, based on the work which has been carried out with regards to this information, reach the conclusion that the other informa-tion contains a significant error, I have an obligation to report this. I have nothing to report in this regard.

The responsibility of the Board of Directors and the CEO The Board of Directors and the CEO are responsible for drawing up the Annual Report and Consolidated Financial Statements and for ensuring they give an accurate picture in accordance with the Swedish Annual Accounts Act. The Board and the CEO also have responsibility for the

internal checks that they consider to be necessary to establish that the Annual Report and Consolidated Financial Statements do not contain any significant errors, either due to irregularities or mistakes.

The Board of Directors and the CEO are responsible, when drawing up the Annual Report and Consolidated Financial Sta-tements, for assessing the company and the Group’s ability to continue operating. They should inform, if appropriate, about any conditions that could affect the ability to continue operating and the use of the assumption of continued operation. The as-sumption of continued operation is not applied if the Board of Directors and the CEO intend to put the company into liquidation, cease operations or do not have a realistic alternative to doing one of these.

Responsibility of the auditor My aim is to attain a sufficient grade of certainty about whether the Annual Report and Consolidated Financial Statements as a whole contain any significant errors, either due to irregula-rities or mistakes, and to provide the auditor’s report which contains my statements. Sufficient certainty is a high degree of certainty, but is no guarantee that an audit which is carried out according to ISA and according to generally accepted auditing standards in Sweden will always uncover a significant error if there is any such error. Errors can occur due to irregularities or mistakes and are considered to be significant if they indi-vidually or together can be reasonably expected to influence the financial decisions that the user makes on the basis of the Annual Report and Consolidated Financial Statements.

As part of the audit in accordance with ISA I use professional judgement and retain a professionally sceptical attitude throug-hout the audit. Furthermore:

• I identify and assess the risks of significant errors in the Annual Report and the Consolidated Financial Statements, either due to irregularities or errors, design and implement audit procedures including on the basis of these risks and obtain audit evidence which is sufficient and appropriate for providing a basis for my statements. The risk of not dis-covering a significant error on the grounds of irregularities is higher than a significant error due to a mistake, because irregularities can include actions in collaboration, falsifica-tion, deliberate omissions, false information or failure to carry out internal checks.

• I gain an understanding of the part of the company’s inter-nal checks that is relevant for my audit in order to design audit measures which are appropriate for the circumstan-ces, but not to pass judgement on the efficiency of the internal checks.

• I evaluate the suitability of the auditing principles used and the suitability of the Board of Directors and CEO’s calculations in the accounts and the accompanying infor-mation.

• I come to a conclusion about the Board of Directors and the CEO using the assumption of continued operation when the Annual Report and the Consolidated Financial


A N N U A L R E P O R T 2 0 1 6 – 4 7

Statements are prepared. I also draw a conclusion, based on the evidence collected during the audit, about whether there are any significant factors of uncertainty which con-cern such events or conditions that could result in exten-sive doubt about the company and the Group’s ability to continue operating. If I come to the conclusion that there is a significant factor of uncertainty, I must, in the auditor’s report, draw attention to the information in the Annual Report and the Consolidated Financial Statements about the significant factor of uncertainty or, if such information is lacking, modify the statement about the Annual Report and the Consolidated Financial Statements. My conclusion is based on the audit evidence collected up until the date of the auditor’s report. However future events or condi-tions can mean that a company and a group is no longer able to continue operating.

• I evaluate the overall presentation, structure and content of the Annual Report and Consolidated Financial State-ments, including information, and whether the Annual Report reflects the underlying transactions and events in a way that gives a true and fair view.

• I gather sufficient and appropriate audit evidence with regards to the financial information for the units or the business activities within the Group in order to make a statement on the Consolidated Financial Statements. I am responsible for managing, monitoring and executing the Consolidated Audit. I alone am responsible for my state-ments.

I must inform the Board of Directors of, for example, the plan-ned length and focus as well as the time schedule of the audit. I must also inform them of any important observations during the audit, including significant shortcomings in internal checks which I identify.

Report on other requirements under laws and other statutesStatements In addition to my audit of the Annual Report and Consolidated Financial Statements, I have also audited the management of BrA Invest CKS AB for the year 2016 by the Board of Directors and CEO as well as the proposal for allocation of the company’s profit or loss.

It is my recommendation that the Annual General Meeting shall allocate the profit as proposed in the Management Review and grant the members of the Board of Directors and the CEO discharge from liability for the financial year.

Basis for statements I have conducted my audit in compliance with generally accep-ted auditing standards in Sweden. My responsibilities in accor-dance with these standards are described in more detail in the section on Auditor’s Responsibilities. I am independent of the Parent Company and the Group according to generally accep-ted auditing practice in Sweden and have otherwise completed my professional duties in accordance with this requirement.

I consider the audit evidence I have obtained to be sufficient and appropriate to provide a basis for my opinion.

The responsibility of the Board of Directors and the CEO It is the Board of Directors which has responsibility for propo-sing allocation of the company’s profit or loss. Any dividend proposal includes for instance an assessment of whether the

dividend is justifiable considering the requirements of the com-pany and the Group’s operations, scope and the risks placed on the size of the Parent Company and consolidated sharehol-ders’ equity, consolidation needs, liquidity and financial posi-tion in general.

The Board of Directors is responsible for the company’s or-ganisation and management of the company’s affairs. This includes, for example, regularly making an assessment of the company’s and Group’s financial situation and ensuring that the company’s organisation is designed so that accounts, ma-nagement of assets and the company’s financial affairs are checked in a secure fashion.

The CEO should take care of the ongoing management ac-cording to the guidelines of the Board of Directors and their direction and, for example, take the actions necessary for the company’s accounts to be complete in accordance with law and so that the management of assets is carried out in a secure fashion.

Responsibility of the auditor My aim with regards to the audit of the management, and the-refore my statement on liability discharge, is to gather audit evidence to be able, to a reasonable degree of certainty to assess whether any member of the Board or CEO to any signifi-cant extent:

• has taken any action or been guilty of any omission, which could give rise to any claims against the Company, or

• in any other way breaches the Companies Act, the Swedish Annual Accounts Act or the Articles of Association.

My goal regarding the audit of the proposed appropriation of the profit or loss, and therefore my related statement, is that with a reasonable degree of certainty determine whether the proposal is consistent with the Companies Act.

Reasonable certainty is a high degree of certainty, but no gua-rantee that an audit performed in accordance with generally accepted auditing standards in Sweden will always detect ac-tions or omissions that can give rise to any claims against the Company or that a proposal for the appropriation of the profit or loss is compatible with the Companies Act.

As part of an audit in accordance with generally accepted audit-ing standards in Sweden, I use professional judgment and have a professional sceptical attitude throughout the audit. The audit of the management and the proposed appropriation of the profit or loss is primarily based on the audit of the accounts.

Any additional audit measures conducted are based on my professional judgment, based on risk and materiality. It means that I focus the audit on such measures, areas and conditions that are essential for operations where deviations and trans-gressions would have special significance for the company’s situation. I go through and examine decisions, basis for deci-sions, actions taken and other circumstances relevant for my statement on liability discharge. As a basis for my statement on the Board of Directors’ proposal for allocation of the company’s profit or loss, I have examined the Board of Directors’ motiva-tion and a sample of data to determine whether the proposal is consistent with the Swedish Companies Act.

Helsingborg 2017-03-31

Bo Matson Authorised Public Accountant


4 8 – A N N U A L R E P O R T 2 0 1 6

Kenneth Andersson, born 1966Chairman

Has experience in the construction, real estate and retail industry. Worked at external companies between 1986-2001 and in an executive posi-tion since 1997. Has served as a CEO in the BrA Group’s companies since 2001.

Stefan Andersson, born 1964Member of the Board of Directors and CEO since 2008

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.

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

Auditor

Bo Matson, born 1952Authorised Public Accountant, Mazars SET Revisionsbyrå AB

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

Alternative auditor

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

Other audit responsibilities: Among others HSB Nordvästra Skåne, Hemlock AB, DigitasLBi AB, Arval AB

Board of Directors and auditors

Christer Andersson, born 1968Board Member

Has a background in the construction and real estate industry. Has held executive positions since 1989 at external companies and within the BrA Group since 2001.


A N N U A L R E P O R T 2 0 1 6 – 4 9

Notes


5 0 – A N N U A L R E P O R T 2 0 1 6

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BrA Invest - Box 163 - 265 22 Åstorp - Tfn 042-509 60 - Fax 042-599 20 - Org.Nr: 556753-2501 - www.brainvest.se

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