TIDMXCT
RNS Number : 9641D
XCounter AB
31 March 2011
PRESS RELEASE
Stockholm, 31 March 2011
XCounter 2010 annual report and accounts
XCounter AB (publ) (AIM:XCT), a technology leader in direct
conversion and photon counting digital X-ray imaging for medical,
dental and industrial markets, is pleased to announce its results
for 12 months period to 31 December 2010.
Highlights for 2010
Financial
-- Net sales increased 88.1% to SEK 34.8m (GBP3.1m) (2009: SEK
18.5m (GBP1.7m))
-- Group loss before tax reduced 47.6% to SEK 30.0m (GBP2.7m)
(2009: SEK 57.3m (GBP5.1m))
-- Group loss reduced 49.8% to SEK 28.3m (GBP2.5m) (2009: SEK
56.4m (GBP5.1m))
-- Earnings per share before dilution were SEK -0.29 (-GBP0.026)
(2009: SEK -1.26 (-GBP0.113))
-- On 14 January 2010 XCounter successfully completed a
fundraising of net SEK 23.7m (GBP2.08m)
Operational
-- XCounter acquired remaining 50.2% shareholding in Oy AJAT Ltd
("AJAT") and holds now 100%
-- The collaboration with Artemis Imaging GmbH to develop an
innovative 3D breast imaging detector system was started in
December 2010. Artemis will fund XCounter's Mammo-CT detector
development including delivery of a fully functioning detector
prototype. The Directors expect over the next 18-20 months, the
contribution of Artemis to XCounter is expected to reach
approximately SEK 14m (EUR1.55m)
-- New CFO, Fredrik Henckel, joined XCounter on 22 April
2010
-- New VP Sales & Marketing, Bernd Sadlo, joined XCounter on
11 October 2010
The following events of importance have taken place subsequent
to the 2010 year end:
-- On 18 January 2011, XCounter successfully completed a
fundraising of SEK 19.1m (GBP1.8m) by placing 77,470,412 new
ordinary shares
-- In addition to the EGM, on 18 January 2011, Yngvar
Hansen-Tangen joined the Board of XCounter as a Non-executive
Director. Hansen-Tangen is a part time medical doctor and is a
director of and significant shareholder in Viking Holding AS, a
company holding 2.3% of the issued share capital of XCounter.
-- On 21 February 2011, XCounter successfully completed a minor
fundraising of SEK 1.5m (GBP0.14m) by issue of 5,619,670 new
ordinary shares
-- On 28 March 2011, XCounter announced a Proposed Delisting
from AIM, simultaneously Relisting on NASDAQ OMX First North and
proposed Share Consolidation
Summary of the Group Company's financial
development
---------------------------------------------------
kSEK 2007 2008 2009 2010
---------- -------- --------- -------- --------
Revenue 0 0 18 497 34 841
---------- -------- --------- -------- --------
Net loss -94 913 -112 464 -56 390 -28 261
---------- -------- --------- -------- --------
Mikael Strindlund, CEO of XCounter said:
"Throughout 2010, XCounter has made significant progress towards
its goal of becoming a technology leader within the field of
specialty digital X-ray detector solutions.
We are pleased to note increased interest in the combined
technologies of XCounter and AJAT in the high performance X-ray
detector space, within dental, industrial and medical applications.
We believe that this confirms our strategy to focus on this
technology. The start of the Mammo CT project is a major step
forward and validates the applicability of our technology when
applied to a very demanding application with high sensitivity to
radiation dose.
On 28 March 2011, we announced a Proposed Delisting from AIM, a
simultaneous Relisting on NASDAQ OMX First North and a proposed
Share Consolidation which we are convinced will increase the trade
and interest in our shares as well as save substantial costs and
time.
We are confident that the investment in dental applications in
combination with strengthening distribution channels should provide
strong growth potential for the company."
For further information, please contact:
XCounter AB Tel: +46 (0) 8 622 23 00
Mikael Strindlund, CEO
Nomura Code Securities Tel: +44 (0) 20 7776 1200
Clare Terlouw/ Richard Potts
Capital MS&L Tel: +44 (0) 207 307 5330
Mary Clark/Anna Davies Chief Executive's statement 2010
Continued commercial progress in line with our strategy
Our goal is to establish and position XCounter as the leading
provider of direct conversion and cutting edge specialty X-ray
detector solutions for dental, medical and industrial imaging
applications.
Detectors using XCounter's digital direct conversion solid state
detector technology based on Cadmium Telluride (CdTe) combined with
photon counting technologies enable superior image quality at
minimal radiation dose. Those features are ideal for various
applications within the medical, dental fields and industrial
fields. We believe that the ability for multi color imaging
differentiating energy levels may enhance performance and customer
value. Our existing building blocks can be tiled into different
sizes of detector solutions depending on application needs. High
detector read-out speed >1000 fps (frames per sec) allow fast
image acquisition for dynamic imaging. In addition, photon counting
is especially suited for 3D applications where the total dose is
split within several projections each acquired with a faction of
the total dose.
During 2010, we continued our growth and marketing headway in
the dental and industrial markets, while in parallel developing new
detector solutions for new applications.
In parallel to our activities within the dental and medical
field we are increasing our presence in industrial X-ray
applications. We have identified and work with several new
commercial partners in this sector. First results and deliveries of
prototypes are already forthcoming and we are confident that
XCounter is on the right path to accelerate the commercial progress
within this new segment.
On 18 January 2011, XCounter was pleased to confirm that a
fundraising with net proceeds of SEK 19.1m (GBP1.8m) had been
successfully completed.
Acquisition of Oy AJAT Ltd ("AJAT")
Following the acquisition of a 49.8% stake in AJAT in May 2009,
XCounter acquired the remaining 50.2% in June 2010. AJAT designs,
manufactures and markets cutting-edge radiation detection and
imaging devices for dental and industrial applications, which are
highly complementary to XCounter's existing technology and
portfolio. The combination of XCounter's photon counting and
tomosynthesis expertise and AJAT's direct conversion detector
technology forms an excellent platform to meet future market
requirements.
AJAT continues to perform well. In 2010, we were able to
significantly increase our sales into the industrial segment as
well as broaden the penetration of the dental market through
expansion of our network of dental OEM and distribution partners.
We have seen particular demand for our direct conversion dental
panoramic and cephalometric sensors as well as the ART Plus dental
systems. New exiting detectors and systems are in the pipeline.
Furthermore, our extensive multi-year agreement with a Norwegian
company, specializing in industrial technology development within
the energy industry, continues to progress according to our
expectations.
Collaboration with Artemis Imaging GmbH ("Artemis")
In December 2010, XCounter commenced a major project from
Artemis Imaging GmbH. Artemis intends to develop, validate,
clinically test and, through partnerships, commercialize a
low-dose, high-resolution breast CT scanner. The scanner will use
XCounter's digital direct conversion solid state detector
technology in combination with photon counting technologies which
both are key elements to ensure superior image quality at lowest
possible radiation dose. The collaboration agreement stipulates
that Artemis will fund XCounter's Mammo-CT detector development
including delivery of a fully functioning detector prototype. Over
the next 18-20 months Artemis contribution to XCounter is expected
to reach approximately SEK 14m (EUR1.55m).
Financial review & Outlook
During the year of 2010, XCounter recorded revenue of kSEK
34,841 (2009: kSEK 18,497).
Tight cost control and cash flow remains an absolute priority
for management. We continue to leverage on the positive financial
effects from the cost restructuring program initiated 2008. AJAT's
operating cost base is now fully included in the consolidated
accounts.
The Group loss for the period was SEK 28.3m (GBP2.5m) compared
to SEK 56.4m (GBP5.1m) for the same period in 2009. This is in line
with management's expectations for the period.
Cash flow remains an absolute priority for XCounter and as at 31
December 2010, the company's net cash position was SEK 7.5m
(GBP0.7m) compared to SEK 13.3m (GBP1.3m) at the end of the same
period in 2009.
These audited results has been prepared under the assumption of
going-concern. However, the Group's current cash resources will
fund the Group's operations until end of Q3 2011. If agreements and
OEM initiatives currently under consideration should fail to secure
sufficient cash flow, it is the assessment of the Board of
Directors that the Company would need to raise additional capital
in order to continue the business operations in their current form
under the going-concern assumption.
As announced on 22 December 2010 the Directors believed that the
Group would have sufficient cash resources for at least the next 12
months. Due to increased capital expenditure required for an
expansion of AJAT facilities, investment in patents, and less cash
generated from operations and R&D projects for the Group in
total, the Directors now expect that current cash resources will
fund operations at a sufficient level until end of Q3 2011.
XCounter's current work and focus are:
-- initiatives to create new OEM and dealer accounts for the
Group's existing products in the dental and industrial sectors;
-- expanding opportunities throughout the X-ray imaging industry
with new R&D projects in the medical and dental field;
-- using the XCounter-AJAT competencies to expand business in
existing X-ray markets and new segments, e.g. non-destructive
testing; security; small animal imaging; and
-- given the favourable acquisition of AJAT, continuing to
identify and evaluate suitable acquisition and cooperation targets
in line with our strategy.
Proposed re-listing on NASDAQ OMX First North
XCounter announced a Proposed Delisting from AIM, a simultaneous
Relisting on NASDAQ OMX First North and a proposed Share
Consolidation on 28 March 2011. If approved at the AGM 26 April
2011, the re-listing is planned to commence on 9 June 2011. The
Directors believe that a re-listing on NASDAQ OMX First North would
lead to greater liquidity in the Ordinary Shares, increased analyst
coverage and PR coverage, potential annual cost savings of
approximately EUR100,000 and reduced complexity. Further
information and a Shareholder circular have been sent to all
Shareholders and can also be found at the Company's website.
Through the new hires of a CFO and a VP Sales & Marketing,
XCounter has now established a management team with necessary
skills and experience which should enable the Company to achieve
further growth and optimization of its business.
I would like to take to opportunity to thank our hard-working
and dedicated employees and our important commercial partners in
making 2010 a successful year.
Danderyd 30 March 2011
Mikael Strindlund
CEO, XCounter AB
Corporate Governance Statement
XCounter AB is governed by its articles of association and
Swedish company law. The Board recognises the importance of sound
corporate governance and where practicable, given the size of the
Company, complies with the main provisions of the UK Corporate
Governance Code (the "Combined Code").
The Combined Code recommends that smaller quoted companies such
as XCounter should have at least two independent Non-Executive
Directors on the Board. The Company currently has five Directors,
three of whom are Non-Executive Director; Tim Haines, Dan Kerpelman
and Yngvar Hansen-Tangen. The Board considers Daniel Kerpelman to
be independent notwithstanding the fact that he has been granted a
total of 100,000 options, giving him a 0.09 per cent shareholding
in the Company. Dan Kerpelman is appointed Senior Independent
Director for the purpose of the Combined Code. Tim Haines and
Yngvar Hansen-Tangen are not regarded as independent as they are
affiliated to substantial shareholders, being Abingworth
respectively Viking Holding AS.
The Board has established guidelines which require certain
matters to be reserved for its decision only. These matters
include: strategy and management, structure and capital, financial
reporting and controls, major contracts, communications,
remunerations, delegation of authority and corporate governance
matters.
The roles of the Chairman and the Chief Executive Officer, being
Lothar Koob and Mikael Strindlund respectively, are separate and
have been clearly defined. The key responsibilities of the Chairman
are: to lead the Board and the Company; to build a close
relationship with the Chief Executive Officer, the Board and the
major shareholders; to work with the Chief Executive Officer to
define the optimal international business strategy to develop
XCounter's technology into a commercial success; to provide clear
vision and leadership to drive sustainable growth and create value
for shareholders; to communicate the business plan and the
Company's strategy to all stakeholders.
The Chief Executive Officer together with the management team
make day-to-day operating decisions to ensure proper management of
the Company's business and implement the Board's approved strategy
to deliver operational performance.
The Chairman and the Chief Executive Officer are the principal
points of contact for investors, analysts, fund managers, media and
other interested parties. In addition, access is available to the
Non-Executive Director if this is required. The Senior Independent
Director is appointed by the Board to secure investor communication
in circumstances where normal channels of communication may not be
appropriate.
The Board is provided with comprehensive monthly financial and
operational information to support its understanding of the
business and related operational issues, and to enable it to fulfil
its responsibilities accordingly.
As to financial reporting the Board approves announcements of
interim results and the annual report.
During 2010 the Board held 10 meetings, 8 of which were fully
attended.
At the AGM held on 28 April 2010 all members of the Board were
re-elected except for Yngvar Hansen-Tangen who was elected as new
Board member at the EGM 18 January 2011.
The Board has established an Audit Committee, a Remuneration
Committee and a Nomination Committee with formally delegated duties
and responsibilities, each of which has written terms of reference
approved by the Board.
The Audit Committee has a primary responsibility for monitoring
the quality of internal controls and ensuring that the financial
performance of the Group is measured and reported properly.
Furthermore the committee is responsible for reviewing reports from
the Group's auditors relating to the Group's accounting and
internal controls. Due to the size of the Company, the Audit
Committee does not believe that an internal audit function is
needed. This decision will be reviewed on a regular basis.
Following the AGM held on 8
May 2009, for the Audit Committee Tim Haines was elected
chairman and its other member is Dan Kerpelman. The Audit Committee
held two meetings during 2010, which were fully attended. The
Company's external auditors, Deloitte AB followed by KPMG AB, were
also attending the meetings reporting the status of the Group's
accounting and internal controls.
The Remuneration Committee determines the terms and conditions
of service, including the remuneration and grant of options to
Executive Directors under any Employee Stock Option Programs or
other share incentive schemes. Following the AGM held 8 May 2009,
the Remuneration committee is chaired by Dan Kerpelman and its
other member is Tim Haines. The Remuneration Committee has held two
meetings during 2010, which was fully attended.
The Nomination Committee has the responsibility for the
composition of the Board, including structure, size and that the
adequate skills, knowledge and experience are available. Following
the AGM held 8 May 2009 Lothar Koob was elected Chairman of the
Nomination Committee and its other members are Dan Kerpelman and
Tim Haines. The Nomination Committee held one meeting during 2010,
which was fully attended.
To ensure that the members of the Board understand the views of
the major shareholders, a continuous dialogue is kept with them.
Two of the major shareholders are represented on the Board of
Directors, and the Chief Executive Officer and the Chairman are
regularly in contact with major shareholders.
Performance evaluation procedures
A regular review of the structure, size and composition
(including the skills, knowledge and experience) required of the
Board compared with its current position, and recommendations with
regard to any changes, is conducted by the Nomination
Committee.
Evaluation of the Chief Executive Officer's performance is
carried out by the Chairman and the results reviewed with the
Non-Executive Directors. Non-Executive Directors are appraised by
the Chairman. The Chairman is appraised by the Non-Executive
Directors.
Internal controls review
The Board is responsible for the Company's system of internal
controls and for reviewing its effectiveness. Such a system is
designed to manage rather than eliminate the risk of failure to
achieve business objectives, and can only provide reasonable and
not absolute assurance against material misstatements or loss.
The Board has conducted a general review of the Company's system
of internal controls. The Board's assessment, based on this review,
is that the internal controls are satisfactory for a company of
XCounter's size.
Shareholder communications
The Company has a communication strategy with its shareholders,
the majority of whom are institutional. All Company announcements
are issued via the London Stock Exchange and then posted on the
news and publications section of the Company's website
www.xcounter.se as soon as released. The Company's investor
information section of its website includes historical financial
information, a link to the Company's share price as well as
information on members of the Board and Senior Management.
Non-audit services
XCounter's Auditors have performed non-audit services on certain
accounting issues. None of the non-audit services provided by the
Auditors has been of such character that objectivity and
independence has been jeopardized.
XCounter's Corporate Governance Statement is available on the
Company's website www.xcounter.se.
The Board of Directors consists of:
Lothar Koob, aged 62, Chairman since 2007
Mr. Koob, is currently a General Partner of Extera Partners,
based in Cambridge Massachusetts, USA, and is the former executive
Vice President of Analogic Corporation, based in Peabody, MA. He
has a proven track record in the successful executive management of
worldwide businesses in the areas of R&D, operations, sales and
marketing, service, and quality and regulatory functions. Mr. Koob
has more than 20 years' experience in managing medical imaging and
instrumentation business activities (CT, MRI, ultrasound,
ophthalmic imaging). His experience also includes 12 years as
general manager of Worldwide MRI and Ultrasound Businesses for
Siemens Medical, from 1990 to 1998 and Ophthalmic Instrumentation
and Systems Business of Zeiss/Humphrey, from 1998 to 2001.
Mr. Koob is currently a director of Ultrasonix Medical, Nexstim
Oy and Helix Medical. In the past ve years he has also been a
director of BK Medical and Sky Computers, which are both
subsidiaries of Analogic. Mr. Koob retired as a director of BK
Medical and Sky Computers in 2005.
Mikael Strindlund, aged 52, Chief Executive Officer, Board
member since 2009
Mikael Strindlund became CEO of XCounter on September 15, 2008.
Mr. Strindlund joined XCounter from Sectra AB, the Swedish IT and
medical technology company, where he served as Managing Director
for Germany, Austria and Switzerland. Between 2005 and 2007, Mr.
Strindlund was CEO of Ortivus AB, a healthcare IT company, before
which he was President of a wholly owned subsidiary of Getinge AB,
Maquet Critical AB, a company focused on ventilation and perfusion
systems. Between 1995 and 1999, Mr. Strindlund was General Manager
for mammography and mobile X-ray worldwide at Siemens Medical
Systems.
Tim Haines, aged 53, Non-Executive Director, Board member since
2006
Mr Haines joined Abingworth Management Limited in September
2005. Mr. Haines holds a BSc in Economics from Exeter University
and an MBA from INSEAD. Mr Haines has extensive international
management experience in the life sciences industry including as
Chief Executive of Astex Therapeutics (2000-2005) and Chief
Executive of two divisions of Datascope Corp (1993-2000). His other
current directorships are with Chroma Therapeutics Limited, Fovea
Pharmaceuticals SA, Stanmore Implants Ltd, K Spine and IMI
Intelligent Medical Implants AG.
Daniel Kerpelman, aged 52, Non-executive Director, Board member
since 2007
Daniel Kerpelman has more than 20 years' international
management experience in the medical imaging industry and has
successfully commercialised breakthrough technologies. Mr Kerpelman
held a series of senior appointments at GE Healthcare between 1988
and 2002 including General Manager of the Global Diagnostic X-Ray
Division. Between 2002 and 2005, Mr Kerpelman was President, Health
Imaging Group & Senior Vice President at Eastman Kodak where he
built up the company's digital imaging and healthcare information
technology businesses. Between 2005 and 2007, Mr Kerpelman was CEO
of SGS in Geneva.
Mr Kerpelman is currently President & CEO of Bio-Optronics
and on the Board of Directors of the University of Rochester
Medical Center, VirtualScopics and Cotecna.
Yngvar Hansen-Tangen aged 43, Non-executive Director, Board
member since 2011
Yngvar Hansen-Tangen is director and major shareholder in Viking
Holding AS - a family held investment company. He is also on the
board of Viking Holding Eiendom AS and Hansen-Tangen Shipping AS.
He has been managing director of Viking Technology AS and Viking
Dredging AS. He has also worked as a PR-officer at the Oslo Stock
Exchange and as a journalist in Faedrelandsvennen AS. From
1999-2003 he was Member of the City Parliament, the City Government
and the Educational Executive Committee in Kristiansand, Norway.
Hansen-Tangen holds a degree in Medicine from the University of
Oslo and a Bachelor of Arts in Economics from Northwestern
University, USA.
XCounter AB management:
Mikael Strindlund, aged 52, Chief Executive Officer Christer
Ullberg aged 43, Chief Technical Officer
Fredrik Henckel, aged 39, Chief Financial Officer Bernd Sadlo,
aged 47, VP Sales & Marketing
BOARD OF DIRECTORS' REPORT
The Board of Directors and the Chief Executive Officer (CEO) of
XCounter AB (publ) ("XCounter" or the "Company"), corporate
registration number 556542-8918, hereby submit the annual report
and the consolidated annual accounts for 2010.
Introduction
XCounter is a technology leader in direct conversion and photon
counting digital X-ray imaging for medical, dental and industrial
markets. The Company was founded in 1997 and is listed on the
London Stock Exchange's AIM market. The Company is based in
Stockholm, Sweden and Espoo, Finland. The address to the head
office is Svardvagen 11D 6 tr, 182 33 Danderyd, Sweden. At the
parent company the activities are mainly R&D for photon
counting development and applications of detectors, next to
management and administration.
2010 - Highlights
Following the acquisition of a 49.8% stake in AJAT in May 2009,
XCounter acquired the remaining 50.2% in June 2010. AJAT is a
Finnish company developing, manufacturing and marketing
cutting-edge radiation detection and imaging devices for dental and
industrial applications, which are highly complementary to
XCounter's existing technology and portfolio.
The transaction marks an important milestone in the company's
new direction - not only from a technology perspective, but also by
opening up new markets and increasing opportunities to broaden our
customer base. The combination of XCounter's photon counting and
tomosynthesis expertise and AJAT's direct conversion detector
technology forms an excellent platform to meet future market
requirements.
AJAT's business continues to do well. In 2010 we have seen
increasing industrial sales as well as an increase of the dental
market penetration through an expanding network of dental OEM and
distribution partners. We have seen particular demand for our
direct conversion dental panoramic and cephalometric sensors as
well as the ART Plus dental systems. In addition, our extensive
multi-year agreement with a Norwegian company, specializing in
industrial technology development within the energy industry,
continues to progress according to our expectations.
In December 2010 XCounter commenced a major project with Artemis
Imaging GmbH. Artemis intends to develop, validate, clinically test
and, through partnerships, commercialize a low-dose,
high-resolution breast CT scanner. The scanner will use XCounter's
digital direct conversion solid state detector technology in
combination with photon counting technologies which both are key
elements to ensure superior image quality at lowest possible
radiation dose. The collaboration agreement stipulates that Artemis
will fund XCounter's Mammo-CT detector development including
delivery of a fully functioning detector prototype. Over the next
18-20 months Artemis contribution to XCounter is expected to reach
SEK approximately 14m (EUR1.55m).
Intellectual Property
As of 31 December 2010, XCounter (parent) has submitted a total
of 28 active patent families, with 61 patents granted. Due to the
change of strategy towards focusing on development and marketing of
digital X-ray detector technologies we have revisited our patent
strategy. This has lead to a decision to keep only the patents
relating to defined core technologies. The patents cover extra oral
dental imaging systems and new detector technologies that are
substantially different from those used in today's traditional
medical X-ray technologies. Our patents protect a series of product
pipelines beyond the product platforms we are presently developing.
In addition to new detector technologies in medical imaging, our
patents also cover new application areas outside medical imaging,
like industrial applications.
Dividends
XCounter has not declared or paid any dividends on its shares
since incorporation. The Directors' current intention is to retain
the Company's earnings in the foreseeable future to finance its
future development.
Major shareholders
Major shareholders as of 31 December
2010 No of shares %
----------------------------------------- ------------- ------
The Bank of New York (Nominees) Limited 36,027,871 32.1%
----------------------------------------- ------------- ------
HSBC Global Custody Nominee (UK)
Limited 17,019,840 15.1%
----------------------------------------- ------------- ------
Nordea Bank AB 10,584,173 9.4%
----------------------------------------- ------------- ------
Acrorad CO Ltd 8,720,292 7.8%
----------------------------------------- ------------- ------
Vidacos Nominees Limited 4,843,218 4.3%
----------------------------------------- ------------- ------
Abingworth * 4,631,998 4.1%
----------------------------------------- ------------- ------
Nortrust Nominees Limited 4,427,277 3.9%
----------------------------------------- ------------- ------
BBHISL Nominees Limited 3,330,352 3.0%
----------------------------------------- ------------- ------
In the table above only shares registered at Euroclear in
Stockholm and London are disclosed.
* Abingworth has shares registered under nominee accounts
which total the shareholding to 12.78%.
There is only one category of shares, ordinary.
Remunerations to the Board of Directors and to key
management
Wages and salaries to key management are disclosed in note 19
and 26.4.
Personnel and environment
XCounter complies with the agreement between
Industriarbetsgivarna and Sveriges Ingenjorer (The Swedish
Association of Graduate Engineers)/Unionen and the Finnish Metal
Union. For the Company to maximize its competitive power it is
important to take advantage of and optimize all resources
available, especially human resources. XCounter's equality of
opportunity policy means equality of opportunity independent of
sex, education, ethnic origin, religion etc. It should be
considered in the every day work, in the recruitment for different
positions and working teams as well in education, training and
organisation. It is followed up and evaluated annually. XCounter
has on several occasions granted employee stock option programs to
the employees of the Company. The total average sick leave for
XCounter AB 2010 was 5.19% (2009: 2.37%) and excluding long term
sick leave the average was 1.26% (2009: 1.33%).
XCounter's work environment policy provides instructions how the
operations within XCounter should be executed and controlled in
order to avoid accidents and ill-health.
Outlook
XCounter continues to make progress and is delighted to have
completed the acquisition of AJAT. We continue to work towards our
goals as well as working to take advantage of recent commercial
progress, in particular:
-- initiatives to create new OEM and dealer accounts for the
Group's existing products in the dental and industrial sectors,
which shall boost the group's profitable growth;
-- expanding opportunities throughout the X-ray imaging industry
with new R&D projects in the medical and dental field; and
-- using the XCounter-AJAT competencies to expand business in
existing X-ray markets and new segments, e.g. non-destructive
testing; security and small animal imaging.
In addition, and in light of our success of our recent
acquisition of AJAT, the Board will continue to evaluate suitable
acquisitions which complement our commercial strategy.
Going concern
As of December 31, 2010, the Group's current assets exceed its
current liabilities by approximately SEK 4.7m and the Group had
cash outflows from operations of SEK 21.5m during the year ended
December 31 2010. This report has been prepared under the
assumption of going-concern. However, the Group's current cash
resources will fund the Group's operations until end of Q3 2011 at
a sufficient level. The Group closely monitors its liquidity needs
and has developed detailed cash flow projections for the upcoming
year. These forecasts include assumptions about research and
development activities, market growth and supplier co-operation.
These cash flow projections are based on numerous assumptions and a
change in such assumptions could have a material impact on the
projects. The Board and management believes based on its current
liquidity that if agreements and OEM initiatives currently under
consideration should fail to secure sufficient cash flow, it is the
assessment of the Board of Directors that the Company would need to
raise additional capital in order to continue the business
operations in their current form under the going-concern
assumption.
SIGNIFICANT RISKS AND UNCERTAINTY FACTORS
Financial risks
It cannot be ruled out that additional funding may be required
to finance XCounter`s continued operations. This can take place in
a less favourable market situation and on terms which are less
favourable than what the directors consider these to be today. Such
external financing may have a negative impact on XCounter's
operations or the rights of the shareholders. If shares or other
securities are issued, shareholders may experience dilution and
debt financing may contain terms which limit the company's
flexibility. There is no assurance that financing at such time can
be secured at all or on terms acceptable to the Company.
Additional financial risk factors are disclosed in note 3
Financial risk management.
Customers and partners
XCounter's five largest partners and customers together
accounted for approximately 80% (2009: 60%) of net sales if AJAT.
Accordingly, the loss of a customer could have a significant effect
on the Company's earnings and position. Following the expected
increase and expansion of the operations, the proportion of
Company's sales to the largest partners and customers are expected
to gradually decline.
Early stage of development
Some of XCounter's products are at an early stage of
development. There can be no assurance that any of the Company's
product candidates will be successfully developed. The Company may
encounter delays and incur additional costs and expenses over and
above those currently expected. Further, there can be no assurance
that any of the Company's developed products will successfully
complete the clinical testing process or that they will meet the
regulatory, cost and production requirements necessary for
commercial distribution. Even if XCounter products are launched,
there can be no guarantee that they will be accepted by the market
or that they will generate significant revenues.
Technology change and existing competition
The market for digital X-ray imaging is characterized by
significant technological change. XCounter is targeting markets
where marketed products already exist and where other companies
also develop new products. Research and development by other
companies as well as changes in complementary imaging techniques
may render the Company's products in development obsolete.
Competitors, some of which have considerable financial resources
may precede the Company in developing and receiving regulatory
approval or may succeed in developing a product that is more
effective or economically viable. Further, developed products must
meet clinical practice and patient expectations. There can be no
assurance that the Company's technologies will not be subject to
copying, mimicking or reverse engineering.
Product liability
The Company's activities expose it to potential product
liability and professional indemnity risks that are inherent in the
development and manufacture of medical instruments for diagnostic
purposes using X-ray. Any product liability claim brought against
the Company could result in an increase in the Company's product
liability insurance rates or its ability to obtain such insurance
in the future and may result in an obligation to pay damages in
excess of such insurance policy limits.
Legislative and regulatory risks
The clinical evaluation, manufacture and marketing of the
Company's products are subject to regulation by government and
regulatory agencies. In addition, legislative and regulatory change
may affect the Company's business and prospects. The commercial
success of the Company may also depend in part on the extent to
which reimbursement for treatment will be available.
Patents and proprietary rights
The Company's prospects will in part depend on its exploitation
of technology. There can be no assurance that, inter alia, patents
are issued with respect to the Company's patent applications or
that third parties will not assert the ownership, validity or scope
of any issued patents. Further, the success of the Company will
also depend upon non-infringement of third party patents.
Third party dependence
XCounter will be reliant on securing and retaining partners for
additional prototype development, manufacturing and subsequent
marketing. The success of the present business model is and will
continue to be in part dependant upon the establishment and
continuation of satisfactory relationships and licensing of
products to third parties.
Dependence on key personnel
The Company's success will depend upon the experience and
continued services of executives and technical personnel, whose
retention cannot be guaranteed.
Summary of the Group Company's financial development
(kSEK) 2010 2009 2008
------------------------------- --------- --------- ----------
Revenue 34,841 18,497 -
Other operating income 277 1,515 290
Operating loss -26,743 -54,814 -119,457
Net loss -28,261 -56,390 -112,464
Net loss per share -0.29 -1.26 -2.58
Intangible assets 99,053 110,573 38,667
Cash and cash equivalents (31
December) 7,484 13,287 97,214
Total number of shares at par
value SEK 0.1 112,393 43,553 43,553
Share capital 11,239 21,776 21,776
------------------------------- --------- --------- ----------
XCounter recorded revenues of kSEK 34,841, primarily relating to
AJAT sales of X-ray dental detectors, dental systems and industrial
detectors for the period January-December 2010. Capitalized
expenditure for development amounted to kSEK 3,230 (2009: kSEK
2,943) relating to both XCounter and AJAT.
Tight cost control has been a key focus for XCounter during the
year and will continue to be a priority for the management team.
Although AJAT`s operating cost base is included in the consolidated
accounts for the year, other external costs and personnel costs
have decreased significantly compared to 31 December 2009.
The Group loss for the period was SEK 28.3m compared to SEK
56.4m in 2009. This is in line with management's expectations for
the period.
Cash flow has been the absolute priority for XCounter and during
Q4 2010 XCounter AB initiated a fundraising resulting in gross
proceeds of SEK 20.5m to the Company in January 2011. Read more
under Other information and significant events after the balance
sheet date.
At 31 December 2010, the Company's net cash position was SEK
7.5m compared to SEK 13.3m in 2009.
Significant events after the balance sheet date
-- On 18 January 2011 XCounter successfully completed a
fundraising of SEK 19.1m (GBP1.8m) by placing 77,470,412 new
ordinary shares
-- In addition to the EGM, on 18 January 2011, Yngvar
Hansen-Tangen joined the Board of XCounter as a Non-executive
Director. Hansen-Tangen is a part time medical doctor and is a
director of and significant shareholder in Viking Holding AS, a
company which holds 2.31% of the issued share capital of
XCounter.
-- On 21 February 2011 XCounter successfully completed a minor
fundraising of SEK 1.5m (GBP0.14m) by issue of 5,619,670 new
ordinary shares
-- On 28 March 2011 XCounter announced a Proposed Delisting from
AIM, a simultaneously Relisting on NASDAQ OMX First North and
proposed Share Consolidation
Major shareholders following the fundraising on 18 January
2011
Major shareholders as of 18 January
2011 No of shares %
----------------------------------------- ------------- ------
The Bank of New York (Nominees) Limited 78,236,496 41.2%
----------------------------------------- ------------- ------
HSBC Global Custody Nominee (UK)
Limited 31,073,325 16.4%
----------------------------------------- ------------- ------
Lynchwood Nominees Limited 11,395,756 6.0%
----------------------------------------- ------------- ------
Vidacos Nominees Limited 10,843,218 5.7%
----------------------------------------- ------------- ------
Nordea Bank AB 10,584,173 5.6%
----------------------------------------- ------------- ------
Acrorad CO Ltd 8,720,292 4.6%
----------------------------------------- ------------- ------
Nortrust Nominees Limited 8,427,277 4.4%
----------------------------------------- ------------- ------
In the table above only shares registered at Euroclear in
Stockholm and London are disclosed.
Abingworth has shares registered under nominee accounts
which total the shareholding to 12.93%.
Annual General Meeting
The Annual General Meeting will be held on 26 April 2011 at
XCounter's headquarters in Stockholm, Danderyd. Notice of the
meeting was set out in a Circular to shareholders dated 28 March
2011.
Proposed distribution of net results
The following losses in the Parent Company are at the disposal
of the Annual General Meeting (SEK):
Result brought forward -169,859,499
Loss for the period -24,642,990
-----------------
Total -194,502,489
The Board and the Chief Executive Officer propose that the
accumulated deficit, SEK -194,502,489 will be brought forward.
Concerning the results and the position of the Group and the
Parent Company in other regards, see the income statements, balance
sheets, cash-flow statements, statements of changes in equity and
notes below.
All amounts are stated in SEK thousands (kSEK) unless otherwise
stated.
CONSOLIDATED INCOME STATEMENT (kSEK)
Note January-December January-December
1,2 2010 2009
Operating income
Revenue 16 34,841 18,497
Other operating
income 17 277 1,515
----------------- -----------------
Total operating
income 35,118 20,012
Work performed
by the entity
and capitalized
Work performed
by the entity
and
capitalized 3,230 2,493
----------------- -----------------
Total work
performed by
the entity and
capitalized 3,230 2,493
Operating
expenses
Raw material
costs -17,943 -9,576
Other external
costs 17,18,20,24,26,27 -14,081 -28,947
Personnel costs 19 -26,101 -31,828
Depreciation and
amortization of
equipment and
intangible
assets 6 -6,966 -6,968
Total operating
expenses -65,091 -77,319
Operating loss -26,473 -54,814
Result from
financial items
Financial income 28 227 678
Financial
expenses 28 -3,445 -3,206
----------------- -----------------
Total result
from financial
items -3,218 -2,528
Loss before
taxes -29,961 -57,342
Income tax 14 1,700 952
Net loss for the
year -28,261 -56,390
Net loss
attributable
to:
Parent Company
shareholders -28,261 -55,030
Non-controlling
shareholders - -1,360
Basic and
diluted loss
per share
(SEK) 21 -0.29 -1.26
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (kSEK)
January-December January-December
2010 2009
Net loss for the year -28,261 -56,390
Other comprehensive loss for the year:
Foreign currency translation difference -5,198 -2,004
Total other comprehensive loss for
the year -5,198 -2,004
Total comprehensive loss for the year -33,459 -58,394
Total comprehensive loss for the year
attributable to:
Parent company shareholders -33,459 -56,659
Non-controlling shareholders - -1,735
Consolidated BALANCE SHEET (kSEK)
Note 31 December 31 December
1,2 2010 2009
ASSETS
Non-current assets
Intangible assets 6 99,052 110,573
Tangible fixed asssets 6 1,569 3,701
Deferred tax assets 14 5,024 6,500
------------ ------------
Total non-current assets 105,645 120,774
Current assets
Inventories 8 4,804 4,403
Trade receivables 3,495 1,398
Other receivables 9 2,980 521
Prepaid expenses and accrued
income 9 2,647 3,598
Cash and cash equivalents 10 7,484 13,287
------------ ------------
Total current assets 21,410 23,207
Total assets 127,055 143,981
============ ============
EQUITY AND LIABILITIES
Parent company shareholders
Share capital 11,239 21,776
Additional paid in capital 705,708 675,387
Retained loss -630,997 -620,157
Translation reserve -6,827 -1,629
Equity attributable to parent
company shareholders 79,123 75,337
Non-controlling interest - 14,839
------------ ------------
Total shareholders equity 11 79,123 90,216
Non-Current liabilities
Borrowings 13 21,013 22,606
Deferred tax liabilities 14 10,022 13,910
Trade and other payables 12 - 815
Provisions 15 150 200
------------ ------------
Total Non-current liabilities 31,185 37,531
Current liabilities
Trade and other payables 12 16,747 13,234
Provisions 15 - 3,000
Total current liabilities 16,747 16,234
Total liabilities 47,932 53,765
Total equity and liabilities 127,055 143,981
============ ============
Pledged assets - -
Contingent liabilies - -
Consolidated Statement of CHANGES IN EQUITY (kSEK)
Equity
attributable
Additional to parent
Share paid in Translation Retained company Non-controlling
capital capital reserve loss shareholders interest Total
--------- ----------- ------------ --------- ------------- ---------------- --------
Balance at 1
January 2009 21,776 674,281 - -565,127 130,930 - 130,930
Total
comprehensive
loss for the
year 2009 - - -1,629 -55,030 -56,659 -1,735 -58,394
Total recognized
loss and
expense for
2009 - - -1,629 -55,030 -56,659 -1,735 -58,394
Share-based
payments - 1,106 - - 1,106 - 1,106
Acquisition of
operations - - - - - 16,575 16,575
--------- ----------- ------------ --------- ------------- ---------------- --------
Balance at 31
December 2009 21,776 675,387 -1,629 -620,157 75,377 14,839 90,216
--------- ----------- ------------ --------- ------------- ---------------- --------
Balance at 1
January 2010 21,776 675,387 -1,629 -620,157 75,377 14,838 90,215
Total
comprehensive
loss for the
year 2010:
Net loss -28,261 -28,261 -28,261
Other
comprehensive
loss -5,198 -5,198 5,109
Total recognized
loss and
expense for
2010 - - -5,198 -28,261 -33,459 - -33,459
Decrease of
Share capital -17,421 - 17,421 - - -
New share issue 4,672 18,979 - - 23,650 - 23,650
Share-based
payments - 485 - - 485 - 485
Non-controlling
interest - - - - - -14,838 -14,838
Issue for
non-cash
consideration
for
Acquisition 2,212 10,857 - - 13,069 - 13,069
--------- ----------- ------------ --------- ------------- ---------------- --------
Balance at 31
December 2010 11,239 705,708 -6,827 -630,997 79,123 - 79,123
--------- ----------- ------------ --------- ------------- ---------------- --------
Consolidated CASH FLOW STATEMENT (kSEK)
Note January-December January-December
1,2 2010 2009
Cash flows used in operating
activities
Loss before taxes -29,961 -57,342
Interest received 28 216 393
Interest paid 28 -38 -363
Tax paid -15 -
Adjustments for: 23
- Amortization 5,566 3,923
- Depreciation 1,400 3,046
- Disposal 539 4,726
- Net change in provision -3,050 3,200
- Currency exchange gain 3,211 -285
- Interest income -117 -390
- Interest expense 727 1,222
- Other financial expenses 105 1,849
- Share-base payments 485 1,106
Changes in working capital:
- Changes in inventories -1,034 655
- Other receivables -2,349 92
- Current liabilities 3,026 -10,584
Net cash used in operating
activities -21,289 -48,752
Cash flow (used in)/from
investing activities
Capitalized patent
expenditure 6 -1,884 -830
Received contribution/income
for development 6 1,873 -
Capitalized expenditure for
development -3,230 -2,493
Purchase of equipment,
tools, fixtures and
fittings 6 -29 -
Sales of equipment, tools,
fixtures and fittings 6 309 519
Amortization of loan -1,314 -
Acquisition of business 25 -1,954 -31,194
Net cash flow (used in)/from
investing activities -6,229 -33,998
Cash flow from financing
activities
Proceeds from issuance of
shares and warrants 26,826 -
Costs related to issuance of
shares and warrants -3,176 -
Change in other loans -751 -942
Net cash from financing
activities 22,899 -942
Cash flow for the period
excluding translation
differences -4,619 -83,692
Translation differences on
cash and cash equivalents -1,184 -235
Cash flow for the year -5,803 -83,927
Cash and cash equivalent at
the beginning of the year 10 13,287 97,214
Cash and cash equivalent at
the end of the year 10 7,484 13,287
INCOME STATEMENT FOR THE PARENT COMPANY (kSEK)
Note January-December January-December
1,2 2010 2009
Revenue
Revenue 16 1,686 306
Other
operating
income 17 189 372
Total
operating
income 1,875 678
Work
performed by
the entity
and
capitalized
Work
performed by
the entity
and
capitalized 6 2,071 -
----------------- -----------------
Total work
performed by
the entity
and
capitalized 2,071 -
Operating
expenses
Other
external
costs 6,18,19,20,24,26,27 -10,418 -26,897
Employee
benefit
expenses 19 -17,107 -24,656
Depreciation
and
amortization
of equipment
and
intangible
assets 6 -960 -3,147
Total
operating
expenses -28,485 -54,700
Operating
loss -24,539 -54,022
Profit from
financial
items
Other
interest
income and
similar
profit
items 28 63 368
Interest
expenses and
similar
profit
items 28 -167 -24
----------------- -----------------
Total result
from
financial
items -104 344
Loss after
financial
items -24,643 -53,678
Income tax - -
Net loss for
the year -24,643 -53,678
Total
comprehensive
loss for the
year -24,643 -53,678
Total
comprehensive
loss for the year
attributable to:
Parent company
shareholders -24,643 -53,678
BALANCE SHEET FOR THE PARENT COMPANY (kSEK)
Note 31 December 31 December
ASSETS 1,2 2010 2009
Non-current assets
Intangible fixed assets 6 38,865 38,667
Tangible fixed assets 6 691 2,230
Financial assets
Loan to subsidiary 1,344 -
Participations in group companies 7, 25 57,204 43,879
------------- -------------
Total non-current assets 98,104 84,776
Current assets
Accounts receivable - 387
Other receivables 9 2,187 220
Prepaid expenses and accrued income 9 1,696 3,576
Cash and bank balances 10 255 3,535
------------- -------------
Total current assets 4,138 7,718
TOTAL ASSETS 102,242 92,494
============= =============
EQUITY AND LIABILITIES
Share capital 11,239 21,776
Statutory reserve 274,180 274,180
------------- -------------
Total restricted equity 285,419 295,956
Share premium reserve 421,636 391,801
Share-based payment 9,893 9,407
Loss brought forward -601,388 -565,131
Net loss for the year -24,643 -53,678
------------- -------------
Total non-restricted equity -194,502 -217,601
Total equity 11 90,917 78,355
Provisions
Long term provisions for other
liabilities and charges 150 200
Short term provisions for other
liabilities and charges - 3,000
Total provisions 15 150 3,200
Current liabilities
Accounts payable - trade 2,619 1,821
Intercompany short term loan 1,814 -
Other liabilities 6,742 9,118
------------- -------------
Total current liabilities 12 11,175 10,939
TOTAL EQUITY, PROVISIONS AND
LIABILITIES 102,242 92,494
============= =============
Pledged assets - -
Contingent liabilities - -
CHANGES IN EQUITY FOR THE PARENT COMPANY (kSEK)
Restricted
equity Non-restricted equity
------------------------ --------
Share Share- Net loss
Share Statutory premium based Retained of the Total
capital reserve reserve payment loss period equity
-------- ---------- -------- -------- --------- ---------- --------
Balance at 1
January 2009 21,776 274,180 391,801 8,301 -452,664 -112,466 130,928
Distribution of
net losses as
resolved by the
Annual General
Meeting - - - - -112,466 112,466 -
Share-based
payments - - - 1,106 - - 1,106
Net loss for the
year - - - - - -53,678 53,678
-------- ---------- -------- -------- --------- ---------- --------
Balance at 31
December 2009 21,776 274,180 391,801 9,407 -565,131 -53,678 78,355
-------- ---------- -------- -------- --------- ---------- --------
Balance at 1
January 2010 21,776 274,180 391,801 9,407 -565,131 -53,678 78,355
Distribution of
net losses as
resolved by the
Annual General
Meeting - - - - -53,678 53,678 -
Decrease of
Share capital -17,421 - - - 17,421 - -
New share issue 4,672 - 18,978 - - - 23,650
Share-based
payments - - - 485 - - 485
Issue for
non-cash
consideration
for
Acquisition 2,212 - 10,857 - - - 13,069
-------- ---------- -------- -------- --------- ---------- --------
Net loss for the
year - - - - - -24,643 -24,643
-------- ---------- -------- -------- --------- ---------- --------
Balance at 31
December 2010 11,239 274,180 421,636 9,892 -601,388 -24,643 90,917
-------- ---------- -------- -------- --------- ---------- --------
CASH FLOW STATEMENT FOR THE PARENT COMPANY (kSEK)
Note January-December January-December
1,2 2010 2009
Cash flows used in operating
activities
Loss before taxes 23 -24,643 -53,678
Interest received 28 33 364
Interest paid 28 -5 -21
Adjustments for:
- Depreciation 960 3,147
- Disposal 539 4,726
- Net change in provision -3,050 3,200
- Currency exchange gain - -2
- Interest income -29 -362
- Interest expense 13 2
- Other financial expenses 105 19
- Share-base payments 485 1,106
Changes in working capital:
- Other receivables 286 -744
- Current liabilities 1,547 -10,399
Net cash used in operating
activities -23,759 -52,643
Cash flow used in/from
investing activities
Received contribution/income
for development 6 1,873 -
Capitalized expenditure for
development 6 -2,070 -
Purchase of equipment,
tools, fixtures and
fittings 6 -15 -
Sales of equipment, tools,
fixtures and fittings 6 309 519
Amortization loan -1,314 -
Acquisition of shares in
subsidiary 25 -1,954 -41,450
Net cash flow used in/from
investing activities -3,171 -40,931
Cash flow from financing
activities
Proceeds from issuance of
shares and warrants 26,826 -
Costs for issuance of shares
and warrants -3,176
Net cash from financing
activities 23,650 -
Net decrease/increase in
cash and cash equivalents -3,280 -93,574
Cash and cash equivalent at
the beginning of the year 10 3,535 97,109
Cash and cash equivalent at
the end of the year 10 255 3,535
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 2010
1 General information
XCounter is a technology leader in direct conversion and photon
counting digital X-ray imaging for medical, dental and industrial
markets. The Company was founded in 1997 and is listed on the
London Stock Exchange's AIM market. The Company is based in
Stockholm, Sweden and Espoo, Finland. The address to the head
office is Svardvagen 11D 6 tr, SE-182 33 Danderyd, Sweden.
During 2008, the Company initiated a restructuring plan to
optimize usage of resources and prioritise a more commercial
oriented strategy in order to shorten the time frame for XCounter's
products to reach the market with a clear focus on dedicated X-ray
detector technologies.
An important milestone in the Company's development occurred in
May 2009, when a 49.8% ownership stake in the Finnish company Oy
AJAT Ltd ("AJAT") was acquired, simultaneously as board and voting
control were achieved. Now in June 2010 the remaining 50.2% of
issued shares was acquired giving the company 100% ownership of
AJAT. AJAT is an OEM supplier of digital solid state X-ray
detectors for dental and industrial application. The acquisition
provides a complementary technology that strengthens XCounter's
strategy focusing on X-ray imaging using photon counting technology
and is an important contribution to the Company's efforts to create
a sustainable business providing leading X-ray detectors.
The Company's goal is to become the number one provider of
leading edge speciality X-ray detectors. To that end the Company
intends to develop and market advanced speciality X-ray
applications using state of the art detector technologies and
innovative software algorithms such as tomosynthesis 3D and photon
counting principles. Important activities in this future work
are:
-- initiatives to create new OEM and dealer accounts for the
group's existing products in the dental and industrial sector,
which shall boost the group's profitable growth;
-- expanding opportunities throughout the X-ray imaging industry
with new R&D projects within the medical and dental field
-- using the XCounter-AJAT competencies to expand business in
existing X-ray markets and new segments, e.g. non-destructive
testing; security; small animal imaging; and
-- given the favourable acquisition of AJAT, the Company will
continue to evaluate suitable acquisition targets in line with our
strategy
At the moment cash is a limited resource for the Group and the
cash generated from AJAT is not sufficient to cover the cash needed
for the business of XCounter in Danderyd. Until the Group reaches
sustainable profitability and is cash positive there will not be a
particular policy regarding cash and capital handling. Once the
Group reaches the phase just mentioned and all Capital loans have
been repaid, a policy including targets and objectives is to be
established.
1.1 Personnel and Organisation
At the end of the period the total number of employees amounted
to 26 (2009: 26), whereof 16 are employed by AJAT.
2 Summary of signi cant accounting policies
The accounting policies applied in the preparation of these
nancial statements are set out below. These policies have been
consistently applied to all the years presented.
2.1 Basis of preparation
The nancial statements for the group have been prepared in
accordance with International Financial Reporting Standards (IFRS),
as adopted by the European Union (EU). The group comply according
to Swedish Financial Reporting Board RFR 1 and RFR 2, Supplementary
accounting rules for groups. The nancial statements have been
prepared under the historical cost method, as modified by the
financial assets and financial liabilities at fair value through
profit or loss (held for trading). The accounting standards applied
are set out below.
The parent company complies with the Swedish Annual Accounts Act
and Swedish Financial Reporting Board RFR Reporting for legal
entities. Application of the RFR entails that the Parent company,
in the annual report for the legal entity, shall comply with all
EU-approved IFRS's and pronouncements as far as possible within the
Annual Accounts Act, the Pension Obligations Vesting Act
("Tryggandelagen") and taking into account the connection between
reporting and taxation.
Fixed assets and financial liabilities consist of amounts which
are expected to be recovered or settled after more than twelve
months from the closing date of the period. Current assets and
current liabilities consist of amounts expected to be recovered or
settled within 12 months from the closing date of the period.
The differences between the accounting policies are described
below. The following accounting policies for the parent company
have been applied consistently to all periods presented in the
financial reports.
Unless otherwise indicated below, the Parent Company in 2010
changed the accounting principles in accordance with the above in
the Group.
The change in accounting principles for the revised IFRS 3
Business Combinations and amended IAS 27 Consolidated and separate
financial statements as applied in the Group provides on
transaction costs and contingent considerations are not the same
changes to the accounting policies of the Parent Company, see below
under the heading "Subsidiaries, joint ventures and associated
companies. "
a) Classification and presentation
For the parent company an income statement and a statement of
comprehensive income is reported, which for the Group, these two
reports together, form a statement of comprehensive income.
Further, the parent company balance sheet entries and cash flow
statement for the reports of the group have titles statement of
financial position and statement of cash flows. Income statement
and balance sheet is for the parent company established under the
Annual Accounts Act, while the statement of comprehensive income,
statement of changes in equity and cash flow analysis based on IAS
1 Presentation of Financial Statements and IAS 7 Cash flow
Statements. The differences in consolidated reports that are
evident in the income statement and balance sheet consist primarily
of accounting for fixed assets and equity and the existence of
provisions as a separate item in the balance sheet.
b) Subsidiaries, associated companies and joint ventures
Shares in subsidiaries, associated companies and joint ventures
are included in the parent company using the cost method. This
means that transaction costs are included in the carrying amount of
investments in subsidiaries, associated companies and join
ventures. In the consolidated accounts, transaction costs related
to subsidiaries directly in the results when they arise.
Contingent consideration valued based on the probability of the
purchase price will be deleted. Any changes to the provision/claim
is on/or reduces cost. In the consolidated accounts contingent
consideration at fair value is accounted through profit or
loss.
Acquisitions at low cost that equal expected future losses and
expenses are withdrawn during the expected periods of losses and
costs incurred. Acquisitions at low cost arising from other causes
are recognized as a provision to the extent it does not exceed the
fair value of acquired identifiable non-monetary assets. The part
that exceeds this value is recognized immediately. The part that
does not exceed the fair value of acquired identifiable
non-monetary assets are recognized as revenue on a systematic basis
over a period calculated as the remaining weighted average useful
life of the acquired identifiable assets which is depreciable. In
the consolidated accounts acquisitions at low cost is accounted
directly into the results.
2.2 New accounting policies in 2010
The revised IFRS 3, Acquisitions, will be applied for the
Company for current and future acquisitions. This change has not
had any historical effects on the Condensed Consolidated Interim
Statement of Changes in Equity. This change impacted the
acquisition of the remaining 50.2% in 2010 by the valuation of the
Non-cash consideration settlement. The effect of valuation of the
Non-cash consideration with IFRS 3 led to no increase of
established goodwill from end of December 2009. IAS 27,
Consolidation and separate Financial statements is also revised.
Other new or revised IFRS standards have not had any effect on the
financial position or results of the Company or the Parent
Company.
2.3 Basis of consolidation
XCounter AB has prepared consolidated accounts. The consolidated
nancial statements incorporate the nancial statements of the
Company and entities controlled by XCounter. Control is achieved,
where the Company has the power to govern the nancial and operating
policies of an entity so as to obtain bene ts from its activities.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation. Unrealised gains and losses are also
eliminated. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by
the group.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the group. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at
the date of exchange. Identifiable assets acquired and liabilities
and values at the contingent liabilities assumed in a business
combination regarding measured initially at their fair acquisition
date, irrespective of the extent of any minority interest.
Acquisitions of non-controlling interest are accounted for as
transactions with owners in their capacity as owners and therefore
no goodwill is recognized as a result of such transactions. The
adjustments to non-controlling interests are based on a
proportionate amount of the net assets of the subsidiary.
Previously, goodwill was recognized on the acquisition of
non-controlling interests in a subsidiary, which represented the
excess of the cost of the additional investment over the carrying
amount of the interest in the net assets acquired at the date of
the transaction.
The excess of the cost of acquisition over the fair value of the
group's share of the identifiable net assets acquired is recorded
as goodwill. If the cost of acquisition is less than the fair value
of the net assets of the subsidiary acquired, the difference is
recognized directly in the income statement.
2.4 Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the steering committee that makes
strategic decisions. XCounter manage and reports its operations as
a single segment - development, manufacturing and marketing of
dedicated X-ray detector technologies.
2.5 Foreign currency translation
a) Functional and presentational currency
Items included in the nancial statements are measured in SEK,
which is the Company's functional and presentation currency. The
functional currency of Oy AJAT Ltd is in EUR.
b) Transactions and balances
Foreign currency transactions are translated into functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign
exchange gains and losses resulting from settlement of such
transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies
and recognized in the income statement.
Foreign exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the income statement
within "finance income or cost". All other foreign exchange gains
and losses are presented in the income statement within "Other
external costs".
c) Group companies
The results and financial position of all the group entities
(none of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the parent companies
functional currency are translated for consolidation purposes as
follows:
(a) Assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet;
(b) Income and expenses for each income statement are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
(c) All resulting exchange differences are recognized as a
separate component in other comprehensive loss.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges of
such investments, are taken to shareholders' equity in other
comprehensive result. When a foreign operation is partially
disposed of or sold, exchange differences that were recorded in
equity are recognized in the income statement as part of the gain
or loss on sale.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
2.6 Equipment, tools, xtures and ttings
Equipment, tools, xtures and ttings are stated at historical
cost less any accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Subsequent
costs are included in the asset's carrying amount or recognized as
a separate asset, as appropriate, only when it is probable that
future economic bene ts associated with the item will ow to the
Company and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to the income statement
during the nancial period in which they are incurred.
Depreciation is calculated using the straight-line method to
allocate their cost over their estimated useful lives, as
follows:
- Equipment and tools 3 -5 years
- Leasehold improvements Term of leasehold 1 - 3 years
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount (Note 2.7).
Gains and losses on disposals are determined by comparing
proceeds with carrying amount, and are recognized within other
operating income/expense net, in the income statement.
2.7 Intangible assets
a) Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the group's share of the net identifiable
assets of the acquired subsidiary at the date of acquisition.
Goodwill on acquisitions of subsidiaries is included in "intangible
assets". For the purpose of impairment testing of goodwill, the
total amount is allocated to each of the Group's cash-generating
units expected to benefit from the synergies of the combination.
Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount
of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of
the units pro-rata on the basis of the carrying amount of each
asset in the unit. Impairment losses on goodwill are not reversed.
Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose
of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are
expected to benefit from the business combination in which the
goodwill arose identified according to operating segment.
b) Capitalized expenditure for development
Research expenditure is recognized as an expense as incurred.
Costs incurred on development projects (relating to the design and
testing of new or improved products) are recognized as intangible
assets when the following criteria are fulfilled:
- it is technically feasible to complete the intangible asset so
that it will be available for use;
- management intends to complete the intangible asset and use or
sell it;
- there is an ability to use or sell the intangible asset;
- it can be demonstrated how the intangible asset will generate
probable future economic benefits;
- adequate technical, financial and other resources to complete
the development and to use or sell the intangible asset are
available; and
- the expenditure attributable to the intangible asset during
its development can be reliably measured.
Other development expenditures that do not meet these criteria
are recognized as an expense as incurred. Development costs
previously recognized as an expense are not recognized as an asset
in a subsequent period. Capitalized development costs are recorded
as intangible assets and amortized from the point at which the
asset is ready for use on a straight-line basis over its useful
life. Intangible assets are not yet available for use and are not
subject to amortisation and are tested annually for impairment, in
accordance with IAS 36.
All development costs arose from internal development. R&D
contribution from other companies is capitalized parallel to the
capitalized expenditures that the contribution is financing. This
is how the R&D contribution from Artemis is treated, see note
6.1.
c) Patents
Patent rights are reported at their acquisition value and
subject to straight-line amortisation over the assets' 10-year
estimated period of use.
d) Technology
Technology are reported at their acquisition value and subject
to straight-line amortisation over the assets' 10-year estimated
period of use. This part regards the calculated Purchase Price
Allocation value for existing Technology at acquisition of Oy AJAT
Ltd in May 2009.
e) Intellectual property/R&D
Intellectual property/R&D are reported at their acquisition
value and subject to straight-line amortisation over the assets'
10-year estimated period of use. This part regards the calculated
Purchase Price Allocation value for Intellectual property / R&D
at acquisition of Oy AJAT Ltd in May 2009.
f) Other intangible assets
Other intangible assets are reported at their respectively
acquisition values and subject to straight-line amortisation over
the assets' 3 to 10-year estimated period of use depending on
category. This part regards the calculated Purchase Price
Allocation values for; Customer base, Trade name and Non-compete at
acquisition of Oy AJAT Ltd in May 2009.
2.8 Impairment of assets
Goodwill and intangible assets not yet available for use are not
subject to amortization but are tested annually for impairment.
Assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by
which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identi able cash ows (cash-generating units).
An impairment loss is reversed if there has been a change in the
assumptions underlying the calculation of recoverable amount and
the recoverable amount is higher than the reported value. An
impairment loss is reversed only to the extent that the asset's
carrying amount after the reversal does not exceed the carrying
amount the asset would have had if no impairment loss had been
made, with regard to the amortization that would have been
made.
2.9 Financial instruments
The Group classifies its financial instruments in the following
categories: financial instruments measured at fair value through
profit or loss, loans and receivables and other liabilities. The
classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of
its financial assets at initial recognition.
Financial assets and nancial liabilities are recognized on
XCounter's balance sheet when XCounter becomes a party to the
contractual provisions of the instrument.
Regular purchases and sales of financial assets are recognized
on the trade-date - the date on which the Group commits to purchase
or sell the asset. Loans and receivables are initially recognized
at fair value plus transaction costs. Financial assets are
derecognized when the rights to receive cash flows from the
investments have expired or have been transferred and the Group has
transferred substantially all risks and rewards of ownership. The
group derecognizes a financial liability when its contractual
obligations are dis-charged, cancelled or expire.
The Group assesses at each balance sheet date whether there is
objective evidence that a financial asset or a group of financial
assets is impaired.
a) Financial instruments at fair value through profit or loss
(FVTPL)
Financial assets and liabilities are classified as at FVTPL when
the financial asset or liability is either held for trading or it
is designated as at FVTPL. Derivative instruments are classified as
held for trading, that are not designated and effective as hedging
instruments.
Derivatives
Derivatives are initially recognized at fair value at the date
at initial recognition and are subsequently measured at fair value
at the end of each reporting period. The resulting gain or loss is
recognized in profit or loss immediately unless the derivative is
designated and effective as a hedging instrument, in which event
timing of the recognition in profit or loss depends on the nature
of the hedge relationship.
A derivative is presented as non-current asset or a non-current
liability if the remaining maturity is more than 12 months and it
is not expected to be realised or settled within 12 months. Other
derivatives are presented as current assets or current
liabilities.
Embedded derivatives
Derivatives embedded in other financial instruments or other
host contracts are treated as separate derivatives when risks and
characteristics are not closely related to those of the host
contracts and the host contracts are not measured at fair value
through profit or loss.
An embedded derivative is presented as a non-current asset or a
non-current liability if the remaining maturity of the hybrid
instrument to which the embedded derivative relates is more than 12
months and it is not expected to be realised or settled within 12
months. Other embedded derivatives are presented as current assets
or current liabilities.
b) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are
classified as non-current assets. Loans and receivables are
initially recognized at fair value and subsequently measured at
amortized cost using the effective interest method, less provision
for impairment. Trade receivables, other receivables and bank
deposits are classified as loans and receivables. The carrying
value of these items is assumed to approximate their fair value due
to their short term nature.
c) Other liabilities
Other liabilities are recognized initially at fair value and
subsequently measured at amortized cost using the effective
interest method. Trade payables and borrowings are categorised as
other liabilities. The carrying value of trade payables is assumed
to approximate their fair values due to their short term
nature.
2.10 Inventories
Inventories are reported at the lower of historical cost
according to the FIFO method or net realisable value. Estimated
obsolescence has thus been taken into account. Costs for internally
manufactured semi-finished and finished goods consist of direct
production costs plus a reasonable surcharge for indirect
production costs.
2.11 Trade receivables
Trade receivables are reported at the expected amount to be
collected, based on individual assessment. Only 6% of outstanding
receivables end of December 2010 was older than 1 month, all of
those were considered recoverable.
2.12 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks.
2.13 Share capital
Ordinary shares are classi ed as equity.
Incremental costs directly attributable to the issue of new
shares or warrants are shown in equity as a deduction, net of tax,
from the proceeds.
The Group presents basic and diluted earnings per share data for
its ordinary shares. Basic earnings per share is calculated by
dividing the profit or loss attributable to ordinary shareholders
of the Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted
earnings per share is determined by adjusting the profit or loss
attributable.
2.14 Borrowings
Borrowing costs are reported in the income statement during the
period to which they pertain. Costs arising from the raising of the
loan are distributed over the term of the loan if the costs are
significant in relation to the amount borrowed.
Borrowings are classified as current liabilities unless the
group has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Loans that are determined to be "capital loans" based on the
Finnish companies Act, are classified as non-current liabilities.
Based on legislation capital loans and capitalized interest or
other remuneration are subordinated to all the other debts upon
dissolution and bankruptcy of the borrower. In addition, repayment
of capital loans or payment of interest is only possible when the
borrowing company has a positive unrestricted equity as determined
in accordance with Finnish GAAP.
Borrowing costs that are attributable to the construction of
so-called qualifying assets are capitalized as part of the
qualifying asset. A qualifying asset is an asset that necessarily
takes a substantial period of time to get ready. First, borrowing
costs incurred on loans that are specific to the qualifying asset.
Second, borrowing costs incurred on general loans, which are not
specific to any other qualifying asset. Capitalization of borrowing
costs for the Group is primarily relevant in the construction of
the house of warehouse and production buildings, and paper
machines.
2.15 Income tax
Corporate income tax rate in Sweden is 26.3% and in Finland
26.0%.
Income tax expense comprises current and deferred tax. Current
tax and deferred tax is recognized in profit or loss except to the
extent that it relates to a business combination, or items
recognized directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to
tax payable in respect of previous years. Current tax payable also
includes any tax liability arising from the declaration of
dividends.
Deferred tax is recognized in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognized for:
-- temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss;
-- temporary differences related to investments in subsidiaries
and jointly controlled entities to the extent that it is probable
that they will not reverse in the foreseeable future; and
-- taxable temporary differences arising on the initial
recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to
be applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be realized
simultaneously.
A deferred tax asset is recognized for unused tax losses, tax
credits and deductible temporary differences, to the extent that it
is probable that future taxable profits will be available against
which they can be utilized. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realized.
2.16 Employee bene ts
a) De ned bene t plan
Commitments for old-age pensions and family pensions in Sweden
are insured on the basis of pension insurance with Alecta/Collectum
(in accordance with the statement UFR 3 issued by the Swedish
Financial Reporting Board) and are classi ed as multi-employer de
ned bene t plans. As regards the nancial years presented, the
Company has not had access to the type of information which would
make it possible to report these plans as de ned bene t plans. The
pension plans according to ITP, which are secured on the basis of
insurance with Alecta/Collectum, are, therefore, reported as de ned
contribution plans. Fees for pensions insured with Alecta/Collectum
amount to kSEK 304 (2009: kSEK 359) for the year. Refunds from
Alecta/Collectum can be distributed to the insurance holders and/or
the assured. At 31 December 2010 the total amount of refunds from
Alecta/Collectum due to information from Alecta/Collectum, in the
form of a collective consolidation level, amounted to 146% (2009:
141%) per cent. This collective consolidation level is comprised of
the market value of the assets managed by Alecta/Collectum as a
percentage of insurance commitments, calculated according to
Alecta/Collectum's actuarial assumptions, which is not in
accordance with IAS 19.
b) Defined contribution plan
For de ned contribution plans, XCounter pays contributions to
publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. XCounter has no further
payment obligations once the contributions have been paid. The
contributions are recognized as employee bene t expense when they
are due. Prepaid contributions are recognized as an asset to the
extent that a cash refund or a reduction in the future payments is
available.
c) Share-based payments
The Group issues equity-settled share-based payments to certain
employees which must be measured at fair value and recognized as an
expense in the income statement. XCounter has no legal or
constructive obligation to repurchase or settle the options in cash
and does not intend to do this. The fair values of these payments
are measured at the dates of grant using option pricing models,
taking into account the terms and conditions upon which the awards
are granted. The fair value is recognized over the period during
which employees become unconditionally entitled to the awards,
subject to the Group's estimate of the number of awards which will
lapse, either due to employees leaving the Group prior to vesting
or due to non-market based performance conditions not being met.
Where an award has market-based performance conditions, the fair
value of the award is adjusted at the date of grant for the
probability of achieving these via the option pricing model. The
total amount recognized in the income statement as an expense or
capitalized as development cost is adjusted to reflect the actual
number of awards
that vest, except where forfeiture is due to the failure to meet
market-based performance measures. The proceeds received net of any
directly attributable transaction costs are credited to share
capital (nominal value) and other contributed capital, when the
options are exercised.
For each outstanding programme, XCounter makes an allocation for
social security expenses at each reporting period. Allocations for
social security expenses are calculated according to UFR 7, IFRS 2
and social security contributions for listed enterprises, with
application of the same valuation utilized when the options were
issued. The allocation is re-valued at every reporting occasion on
the basis of a calculation of the fees that may be paid when the
instruments are redeemed. Valuation in XCounter is carried out
according to the Black & Scholes model, with consideration
taken of the share price, remaining time until redemption,
volatility, strike-price, dividend and risk-free interest. Payments
of social security contributions in connection with employee
redemption of options are offset against the allocation made
according to the above. In order to cover the social security
contributions payments in the staff options programme, XCounter has
access to a number of options designated for conversion to shares
and subsequent sale to finance the payment of the social security
contributions. As a preferential value arises (the difference
between exercise price/conversion rate and the market value of the
share) at the date the staff options are utilized, XCounter can
cover the social security contributions payments of this
preferential value by converting a portion of the held options to
shares and then selling these.
However, personnel costs arising in the income statement, which
are allocated continuously in accordance with UFR 7, will not be
met by a cost reduction (revenue). Instead, the effect only arises
in terms of cash flow.
d) Termination bene ts
Termination bene ts are payable when employment is terminated
before the normal retirement date, or whenever an employee accepts
voluntary redundancy in exchange for these bene ts. XCounter
recognizes termination bene ts when it is demonstrably committed to
either: terminating the employment of current employees according
to a detailed formal plan without possibility of withdrawal; or
providing termination bene ts as a result of an offer made to
encourage voluntary redundancy. Bene ts falling due more than 12
months after balance sheet date are discounted to present
value.
2.17 Provisions
Provisions for restructuring and other costs are recognized
when:
XCounter has a present legal or constructive obligation as a
result of past events; it is more likely than not that an out ow of
resources will be required to settle the obligation; and the amount
has been reliably estimated.
Social security contributions related to share-based payments to
employees for services rendered are recognized as an expense
allocated to the periods in which the employee render the services.
The provision for social security contributions are based on the
fair value of the options at the balance sheet date.
2.18 Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the group's activities. Revenue is shown net of
value-added tax, returns, rebates and discounts and after
eliminating sales within the group.
The group recognizes revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met
for each of the group's activities as described below. The amount
of revenue is not considered to be reliably measurable until all
contingencies relating to the sale have been resolved. The group
bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the
specifics of each arrangement.
The Group's revenues mainly derive from fixed-price projects,
sales of products and consulting work. Project-based income is
reported on the projects degree of completion at the balance sheet
date. The degree of completion is calculated as the ratio between
the expenses paid at the balance sheet date and the estimated total
expenses. In cases where a loss is expected to occur on an
uncompleted project, the entire anticipated loss is applied against
earnings for the year. Revenues from sales of products are
recognized as income at the time of delivery unless significant
risks or obligations remain after delivery. Product sales that are
delivered in project form are recognized as revenue in accordance
with the degree of completion based on the accrued hours. Ongoing
consulting services are recognized as revenue as the work is
executed.
2.19 Leases
Leases in which a signi cant portion of the risks and rewards of
ownership are retained by the lessor are classi ed as operating
leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to the income statement on a
straight-line basis over the period of the lease.
XCounter only has operating lease agreements.
2.20 Accounting standards, interpretations and amendments to
published standards not yet effective
The following standards and amendments to existing standards
have been published and are mandatory for the group's accounting
periods beginning after 1 January 2010 or later periods. XCounter
has not early adopted them:
Standards Will be applied
for financial years
beginning:
Amendment to IAS 32 Financial Instruments: 1 February 2010
Presentation or later
Amendment to IAS 24 Related Party Disclosures 1 January 2011 or
(Revised definition of related parties)* later
Amendment to IFRS 7 Financial Instruments: Disclosures 1 July 2011 or later
Amendment to IFRS 9 Financial Instruments (New 1 January 2013 or
standard)* later
* Not yet endorsed by EU
International FinanciaI Reporting Interpretations Committee
(IFRIC) has issued the following new and amended interpretations
with effective date after 1 July 2010:
Interpretations Will be applied
for financial years
beginning:
Amendment to IFRIC 14 The Limit on a Defined 1 January 2011 or
Benefit Asset, Minimum Funding Requirements and later
their Interaction
IFRIC 19 issued by IASB in May 2010, Extinguishing 1 July 2010 or later
Financial Liabilities with Equity Instruments
The management is assessing in what way new standards will have
any effect on the financial position or results of the Group or the
Parent Company according to new or revised IFRS standards.
2.21 Contingent liability
A contingent liability is recognized when there is a possible
obligation that arises from past events and whose existence will be
confirmed only by one or more uncertain future events, or when
there is a commitment that is not recognized as a liability or
provision because it is unlikely that a outflow of resources will
be required.
2.22 Parent company accounting policies
Subsidiary investments include shares in the Subsidiary XCounter
Securities AB and Oy AJAT Ltd., which in the separate financial
statements for the Parent company, is carried at cost less any
impairment losses.
The parent company applies the same accounting principles as the
group.
3 Financial risk management
3.1 Financial risk factors
The Company's activities expose it to a variety of nancial
risks: market risk (including currency risk), liquidity risk and
cash ow interest-rate risk. The Company's overall risk management
programme focuses on the unpredictability of nancial markets and
seeks to minimize potential adverse effects on the Company's
nancial performance. Risk management is carried out by the
Company's corporate accounting department under policies approved
by the Board of Directors. The Board provides written principles
for overall risk management, as well as written policies covering
speci c areas, such as foreign exchange risk, interest-rate risk,
use of non-derivative nancial instruments, and investing excess
liquidity.
a) Currency exchange risks
Exchange rate exposure within the Company occurs primarily when
the Group enters into transactions which are not denominated in the
functional currency of the entity. The largest foreign currency
exposure is due to AJAT's loan from its collaboration partner and
shareholder, Acrorad, from JPY to EUR. The loan for the capital
stipulates a currency cap/floor of +/- 15 per cent of the currency
relation between JPY and EUR based on the situation as at 30 August
2002, the date the loan was entered into by the parties.
XCounter's group policy is not to use hedging arrangements
(except for the Acrorad loan) as the potential gains to be derived
from managing such arrangement are not considered to be
significant. The Company continuously monitors the currency
exposure in net flows and is ready to implement hedge contracts if
the gains derived from such exchange rate contracts are estimated
to be significant.
At December 2010 if the currency rate had weakened/strengthened
by 10% against EUR with all other variables held constant, post-tax
loss for the year would have been SEK 0.3m higher/lower (2009: SEK
1.7m). This is mainly a result of currency exchange gains/losses on
translation differences for the AJAT acquisition on one side and on
the other side currency gain/loss for purchases from Acrorad and
the capital loan from Acrorad.
b) Liquidity risk
In the boards opinion prudent liquidity risk management implies
maintaining sufficient cash and cash equivalents. Prior to making
any short term investments management considers the working capital
requirements of the business and only invests cash in excess of
these requirements. It has not been any short term investments
during the periods presented in these financial statements.
It cannot be ruled out that additional funding may be required
to finance XCounter's continued operations. This can take place in
a less favourable market situation and on terms which are less
favourable than what the directors consider these to be today. Such
external financing may have a negative impact on XCounter's
operations or the rights of the shareholders. If shares or other
securities are issued, shareholders may experience dilution and
debt financing may contain terms which limit the company's
flexibility. There is no assurance that financing at such time can
be secured at all or on terms acceptable to the Company.
Management monitors rolling forecasts of the Company's liquidity
reserve (comprises cash and cash equivalents) on the basis of
expected cash flow.
The Company's financial liabilities, trade and other payables,
are grouped into relevant maturity groupings based on the remaining
period at the balance sheet to the contractual maturity date. All
balances equal their carrying balances as the impact of discounting
to net present value is not estimated as significant.
The table below analyses the group's financial liabilities into
relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash
flows.
Between Between
At 31 December 2010 Less than 1 and 2 2 and 5
kSEK 1 year years years Over 5 years
---------------------------- --------- ---------- --------- --------------
Borrowings - - 21,013 -
---------------------------- --------- ---------- --------- --------------
Trade and other
payables 16,746 - - -
---------------------------- --------- ---------- --------- --------------
Total 16,746 - 21,013 -
---------------------------- --------- ---------- --------- --------------
The Group's current cash resources will fund the Group's
operations until end of Q3 2011 at a sufficient level. The Board
and management believes based on its current liquidity that if
agreements and OEM initiatives currently under consideration should
fail to secure sufficient cash flow, it is the assessment of the
Board of Directors that the Company would need to raise additional
capital in order to continue the business operations in their
current form under the going-concern assumption.
At the moment cash is a limited resource for the Group and the
cash generated from AJAT is not sufficient to cover the cash needed
for the business of XCounter in Danderyd. Until the Group reaches
sustainable profitability and is cash positive there will not be a
particular policy regarding cash and capital handling. Once the
Group reaches the phase just mentioned and all Capital loans have
been repaid, a policy included targets and objectives is to be
established.
c) Credit risk management
Credit risk is managed by each legal entity within XCounter.
Credit risk arises from cash and cash equivalents, and deposits
with banks and financial institutions as well as credit exposures
to customers, including outstanding receivables and committed
transactions. For banks and financial institutions, only
independently rated parties are accepted. New customers are in
general required to pre-pay for product or services or issue
irrevocable letters of credit.
d) Cash ow and fair value interest rate risk
Interest rate risk pertains to the risk that changes in interest
rates may adversely affect XCounter's earnings. A majority of the
Company's borrowing relates to the capital loan from Acrorad,
described in note 13. The interest rate on this loan is fixed at 3%
and accordingly XCounter does not assess the exposure related to
changes in interest rates as significant for the Company's result
and financial position.
For further information, see note 13.
3.2 Capital risk management
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the
Company may issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Company monitors
capital on a cash basis assuring that the Company has sufficient
working capital to maintain its business.
The Company monitors capital on a basis of total equity. The
Company invests its capital in research and development
activities.
3.3 Fair value estimation
The carrying value less impairment provision of trade
receivables, other receivables, borrowings and trade payables are
assumed to approximate their fair values due to their shore term
nature, with the exception of long term debt which is disclosed in
note 13. The fair value for derivative financial instruments
measured at fair value trough profit or loss, are derived from
valuation techniques that include inputs for the instrument that
are not observable market data (unobservable inputs), see note
13.
4 Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
4.1 Critical accounting estimates and assumptions
XCounter makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by de nition, seldom equal
the related actual results. The estimates and assumptions that have
a signi cant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next nancial year are
discussed below.
a) Intangible assets
Capitalized development costs are recorded as intangible assets
and amortized from the point at which the asset is ready for use on
a straight-line basis over its useful life. Intangible assets not
yet available for use are not subject to amortisation and are
tested annually for impairment.
As the intangible assets have not yet been put in use, the Group
performs an annual impairment test in accordance with IAS 36. This
test is performed by comparing the carrying value of the asset with
its recoverable amount. The recoverable amount is considered to be
the present value of future net cash flows related to the asset.
The cash flow projection used by the Group in the 2010 impairment
assessment extends over the period from 2011 to 2018. Expected
revenue is based on deliveries of hardware and software supplies
and components and co-financing of R&D projects. Costs related
to the sale of these goods are also included in these projections,
as well as the strategy for manufacturing via significant
outsourcing to qualified and selected suppliers.
The other critical assumption in the impairment test is the
discount rate before tax of 17.2 % (2009: 17.2%) applied to the
forecasts. Increasing the discount rate to 20.0% would reduce the
total discounted cash flow with approx. SEK 9.3m.
b) Goodwill
The acquisition of AJAT resulted in recognition of goodwill
amounting to kSEK 22,376 at closing day.
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash-generating units to which goodwill
has been allocated. The value in use calculation requires an
estimation of the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to
calculate present value. Key assumptions used in this include a
weighted average cost of capital, ("WACC"), and future estimated
cash flows. The WACC assumed was 17.2 % before tax, which is the
same discount rate used in the impairment of indefinite lived
intangible assets. The estimates of cash flows for 2011-2015 are
specified in a business plan approved by the board at the time for
the acquisition, which management has adjusted the sales figures,
cost of goods and other expenses after considered new facts and the
growth between years. AJAT is expected to keep a high growth the
coming 5 years by increased sales efforts and marketing activities,
combined with long term customer agreements. The growth rate from
2016 and future on is assumed to 2%.
Based on the impairment test, no impairment was recorded during
2010.
c) Deferred tax
Management considers the recoverability of its deferred tax
assets relating to accumulated deductable temporary differences and
unused tax losses of kSEK 706,020 (2009: kSEK 685,413). Deferred
income tax assets are recognized for tax loss carry-forwards to the
extent that the realisation of the related tax benefit through the
future taxable profits is probable. The Group has not recorded any
deferred tax for tax loss carry-forward related to XCounter AB due
to its history of recent losses and there is not convincing
evidence that sufficient taxable profit will be available against
which the unused tax losses can be utilised by the entity. The
Group has recorded deferred tax assets related to AJAT in the
amount of kSEK 5,024 (kEUR 558) (2009: kSEK 6,500 (kEUR 628)) due
to the history of profits, and the assessment it is probable that
the Group will utilize the deferred tax assets. Changes in the
business resulting in increases or decreases in future results
compared to the Group's current expectations could lead to the
Company recognising deferred tax assets that have not yet been
recognized, or de-recognising deferred tax assets that have
already been recognized.
d) Share based payments
The 2007 employee stock option program and the 2009 employee
stock option program are subject to market conditions. Management
has factored into the calculation of the fair value of these stock
options, the probability of these vesting criteria being achieved.
The fair value determination of the options according to IFRS 2 for
this employee stock option program includes the management's best
estimate of the fulfilment of the market based vesting criteria.
Similarly, management estimate at each balance sheet date the
expected number of options that will vest based on their
expectation of employees with options that will still be in
employment at the end of the vesting period.
For further information , see note 11.1.
e) Social security provisions
Social security provisions related to share based payments are
estimated at each balance sheet date. Management estimate the
provisions based on their expectation of the probability that share
options will be exercised. Social security provisions are therefore
subject to uctuation according to the accuracy of managements
estimations.
f) Going concern
The Group closely monitors its liquidity needs and has developed
detailed cash flow projections for the upcoming year. These
forecasts include assumptions about research and development
activities, market growth and supplier co-operation. These cash
flow projections are based on numerous assumptions and a change in
such assumptions could have a material impact on the projects. The
Board and management believes based on its current liquidity that
if agreements and OEM initiatives currently under consideration
should fail to secure sufficient cash flow, it is the assessment of
the Board of Directors that the Company would need to raise
additional capital in order to continue the business operations in
their current form under the going-concern assumption.
5 Segment information
Management has determined the operating segments based on the
reports reviewed by the strategic steering committee that are used
to make strategic decisions. XCounter manage and reports its
operations as a single segment - development, manufacturing and
marketing of dedicated X-ray detector technologies. The reportable
operating segment derives its revenue primarily from sales of X-ray
detectors. There is a major established customer in each product
category each with more than 10% of the total revenues:
- Dental sensors: Customer A stands for approx. 29% of total
revenues
- Industrial sensors: Customer B stands for approx. 23% of total
revenues
- Dental systems: Customer C stands for approx. 13% of total
revenues
kSEK
Group Sweden Finland Total
Revenues:
----------------------------- ------- -------- -------
- Systems - 9,199 9,199
----------------------------- ------- -------- -------
- Sensors - 25,333 25,333
----------------------------- ------- -------- -------
- Other 309 - 309
----------------------------- ------- -------- -------
Total revenue from external
customers 309 34,532 34,841
----------------------------- ------- -------- -------
kSEK Group
Non current assets Sweden Finland Total
------------------------- ------- -------- --------
Intangible fixed assets 38,865 60,188 99,053
------------------------- ------- -------- --------
Tangible fixed assets 691 878 1,569
------------------------- ------- -------- --------
Total 39,556 61,066 100,622
------------------------- ------- -------- --------
6 Non-current assets
6.1 Intangible assets
kSEK Group Parent
------------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
------------------------- ------------ ------------ ------------ ------------
Capitalized
expenditure for
development
------------------------- ------------ ------------ ------------ ------------
Opening accumulated
cost 86,132 83,667 83,667 83,667
------------------------- ------------ ------------ ------------ ------------
Changes during the
year:
------------------------- ------------ ------------ ------------ ------------
- Internally
generated assets 3,230 2,493 2,071 -
------------------------- ------------ ------------ ------------ ------------
- Translation
differences -387 -28 - -
------------------------- ------------ ------------ ------------ ------------
- R&D
contribution/income -1,873 - -1,873 -
------------------------- ------------ ------------ ------------ ------------
Closing accumulated
cost 87,102 86,132 83,865 83,667
------------------------- ------------ ------------ ------------ ------------
Opening accumulated
amortization
------------------------- ------------ ------------ ------------ ------------
Changes during the
year:
------------------------- ------------ ------------ ------------ ------------
- Amortization -104 - - -
------------------------- ------------ ------------ ------------ ------------
Closing accumulated
cost -104 - - -
------------------------- ------------ ------------ ------------ ------------
Opening accumulated
impairment -45,000 -45,000 -45,000 -45,000
------------------------- ------------ ------------ ------------ ------------
Changes during the
year:
------------------------- ------------ ------------ ------------ ------------
- Impairment loss - - - -
------------------------- ------------ ------------ ------------ ------------
Closing accumulated
impairment -45,000 -45,000 -45,000 -45,000
------------------------- ------------ ------------ ------------ ------------
Closing capitalized
expenditure for
development 41,998 41,132 38,865 38,667
------------------------- ------------ ------------ ------------ ------------
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Patents
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated cost 1,550 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Additions * 1,884 1,550 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences -309 - - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
cost 3,125 1,550 - -
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated
amortization -181 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Amortization -270 -181 - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
amortization -451 -181 - -
---------------------- ------------ ------------ ------------ ------------
Closing patents 2,674 1,369 - -
---------------------- ------------ ------------ ------------ ------------
*) In the Consolidated Cash flow statement the amount of kSEK
830 regards Additions May - December 2009, the amount here of kSEK
1,550 regards the full year 2009.
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Technology
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated cost 32,571 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Acquisition of
subsidiary - 33,358 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences -4,242 -787 - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
cost 28,329 32,571 - -
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated
amortization -2,164 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Amortization -3,002 -2,197 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences 445 33 - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
amortization -4,722 -2,164 - -
---------------------- ------------ ------------ ------------ ------------
Closing
technology 23,608 30,407 - -
---------------------- ------------ ------------ ------------ ------------
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Intellectual
property/R&D
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated cost 8,729 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Acquisition of
subsidiary - 8,946 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences -1,159 -217 - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
cost 7,570 8,729 - -
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated
amortization -621 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Amortization -854 -625 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences 124 4 - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
amortization -1,352 -621 - -
---------------------- ------------ ------------ ------------ ------------
Closing
Intellectual
property/R&D 6,218 8,108 - -
---------------------- ------------ ------------ ------------ ------------
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Other intangible
assets
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated cost 8,113 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Acquisition of
subsidiary - 8,310 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences -1,057 -197 - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
cost 7,054 8,113 - -
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated
amortization -932 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Amortization -1,288 -942 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences 195 10 - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
amortization -2,024 -932 - -
---------------------- ------------ ------------ ------------ ------------
Closing other
intangible
assets 5,033 7,181 - -
---------------------- ------------ ------------ ------------ ------------
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Goodwill
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated cost 22,376 - - -
---------------------- ------------ ------------ ------------ ------------
Changes during
the year:
---------------------- ------------ ------------ ------------ ------------
- Acquisition of
subsidiary - 22,376 - -
---------------------- ------------ ------------ ------------ ------------
- Translation
differences -2 855 - - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
cost 19 521 22,376 - -
---------------------- ------------ ------------ ------------ ------------
Opening
accumulated
depreciation and
impairment
losses - - - -
---------------------- ------------ ------------ ------------ ------------
Closing
accumulated
impairment - - - -
---------------------- ------------ ------------ ------------ ------------
Closing goodwill 19 521 22,376 - -
---------------------- ------------ ------------ ------------ ------------
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Summary of net
intangible
assets
---------------------- ------------ ------------ ------------ ------------
Capitalized
expenditure for
development 41,998 41,132 38,865 38,667
---------------------- ------------ ------------ ------------ ------------
Patents 2,674 1,369 - -
---------------------- ------------ ------------ ------------ ------------
Technology 23,608 30,407 - -
---------------------- ------------ ------------ ------------ ------------
Intellectual
property/R&D 6,218 8,108 - -
---------------------- ------------ ------------ ------------ ------------
Other intangible
assets 5,033 7,181 - -
---------------------- ------------ ------------ ------------ ------------
Goodwill 19,521 22,376 - -
---------------------- ------------ ------------ ------------ ------------
Total net
intangible
assets 99,053 110,573 38,865 38,667
---------------------- ------------ ------------ ------------ ------------
6.2 Tangible fixed assets
kSEK Group Parent
------------------------ ------------------------
31 Dec 31 Dec 31 Dec 31 Dec
2010 2009 2010 2009
-------------------------- ----------- ----------- ----------- -----------
Leasehold
improvements
-------------------------- ----------- ----------- ----------- -----------
Opening accumulated
cost 299 299 299 299
-------------------------- ----------- ----------- ----------- -----------
Changes during the
year
-------------------------- ----------- ----------- ----------- -----------
- Additions - - - -
-------------------------- ----------- ----------- ----------- -----------
Closing accumulated
cost 299 299 299 299
-------------------------- ----------- ----------- ----------- -----------
Opening accumulated
depreciation -299 -299 -299 -299
-------------------------- ----------- ----------- ----------- -----------
Changes during the
year
-------------------------- ----------- ----------- ----------- -----------
- Depreciation - - - -
-------------------------- ----------- ----------- ----------- -----------
Closing accumulated
depreciation -299 -299 -299 -299
-------------------------- ----------- ----------- ----------- -----------
Closing net book - - - -
value
-------------------------- ----------- ----------- ----------- -----------
Equipment and tools
------------------------------------- -------- --------- -------- --------
Opening accumulated cost 30,404 30,145 18,966 30,145
------------------------------------- -------- --------- -------- --------
Changes during the year
------------------------------------- -------- --------- -------- --------
- Additions 29 - 15 -
------------------------------------- -------- --------- -------- --------
- Accumulated costs, acquired
subsidiary - 11,438 - -
------------------------------------- -------- --------- -------- --------
- Disposals -1,615 -11,179 -1,615 -11,179
------------------------------------- -------- --------- -------- --------
Closing accumulated cost 28,817 30,404 17,366 18,966
------------------------------------- -------- --------- -------- --------
Opening accumulated depreciation -26,703 -19,523 -16,736 -19,523
------------------------------------- -------- --------- -------- --------
Changes during the year
------------------------------------- -------- --------- -------- --------
- Acc. depreciation, acquired
subsidiary - -9,909 - -
------------------------------------- -------- --------- -------- --------
- Depreciation -1,448 -3,024 -960 -3,147
------------------------------------- -------- --------- -------- --------
- Disposals 1,021 5,753 1,021 5,934
------------------------------------- -------- --------- -------- --------
Exchange translation difference -118 - - -
------------------------------------- -------- --------- -------- --------
Closing accumulated depreciation -27,249 -26,703 -16,675 -16,736
------------------------------------- -------- --------- -------- --------
Closing net book value 1,569 3,701 691 2,230
------------------------------------- -------- --------- -------- --------
Tangible fixed assets closing
net book value 1,569 3,701 691 2,230
------------------------------------- -------- --------- -------- --------
7 Participation in Group Companies
2010
Company's name Reg. No. Location Equity Net result
--------------------- ------------ -------------- -------- ------------
XCounter Securities
AB 556632-6137 Stockholm 100 -2
--------------------- ------------ -------------- -------- ------------
Oy AJAT Ltd 1735843-9 Espoo,Finland -2,513 -344
--------------------- ------------ -------------- -------- ------------
2009
Company's name Reg. No. Location Equity Net result
--------------------- ------------ -------------- -------- ------------
XCounter Securities
AB 556632-6137 Stockholm 103 1
--------------------- ------------ -------------- -------- ------------
Oy AJAT Ltd 1735843-9 Espoo,Finland -2,595 1,760
--------------------- ------------ -------------- -------- ------------
2010 Scope of holding Value of holding
----------------- --------------------------- ------------------------------
No of Share of capital
Company's name shares % Book value
----------------- -------- ----------------- ------------------------------
XCounter
Securities AB 1,000 100 100
----------------- -------- ----------------- ------------------------------
Oy AJAT Ltd 14,801 100 57,104
----------------- -------- ----------------- ------------------------------
Total 57,204
----------------- -------- ----------------- ------------------------------
2009 Scope of holding Value of holding
----------------- --------------------------- ------------------------------
No of Share of capital
Company's name shares % Book value
----------------- -------- ----------------- ------------------------------
XCounter
Securities AB 1,000 100 100
----------------- -------- ----------------- ------------------------------
Oy AJAT Ltd 7,371 49.80 43,779
----------------- -------- ----------------- ------------------------------
Total 43,879
----------------- -------- ----------------- ------------------------------
XCounter acquired Oy AJAT Ltd on 7 May 2009, when it also
achieved board and voting control.
kSEK Group Parent
-------------------- ---------------------------- --------------------------
Participation
in Group 31 Dec. 31 Dec. 31 Dec. 31 Dec.
Companies 2010 2009 2010 2009
-------------------- ------------- ------------- ------------ ------------
Opening
accumulated
cost - - 43,879 100
-------------------- ------------- ------------- ------------ ------------
Changes during
the year:
-------------------- ------------- ------------- ------------ ------------
- Acquisition
of subsidiary - - 13,325 43,779
-------------------- ------------- ------------- ------------ ------------
Closing
accumulated
cost - - 57,204 43,879
-------------------- ------------- ------------- ------------ ------------
Closing net
book value - - 57,204 43,879
-------------------- ------------- ------------- ------------ ------------
8 Inventories
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Raw material 89 65 - -
---------------------- ------------ ------------ ------------ ------------
Work in progress 4,715 4,338 - -
---------------------- ------------ ------------ ------------ ------------
-
---------------------- ------------ ------------ ------------ ------------
Total 4,804 4,403 - -
---------------------- ------------ ------------ ------------ ------------
9 Other receivables, prepaid expenses and accrued income
Other receivables, prepaid expenses and accrued income are as
follows:
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
VAT recoverable 1,368 513 575 212
---------------------- ------------ ------------ ------------ ------------
Other short term
receivables 1,611 8 1 8
---------------------- ------------ ------------ ------------ ------------
Total other
receivables 2,980 521 576 220
---------------------- ------------ ------------ ------------ ------------
Accrued interest - 2 - -
---------------------- ------------ ------------ ------------ ------------
Prepaid pensions - 135 - 135
---------------------- ------------ ------------ ------------ ------------
Prepaid costs
fundraising 616 2,883 616 2,883
---------------------- ------------ ------------ ------------ ------------
Other prepaid
expenses 2,031 578 1,080 558
---------------------- ------------ ------------ ------------ ------------
Total prepaid
expenses and
accrued income 2,647 3,598 1,696 3,576
---------------------- ------------ ------------ ------------ ------------
The total carrying value for assets categorized as Loans and
receivables amounts to kSEK 13,959 (2009: kSEK 15,206), and relates
to trade receivables, other receivables and bank deposits.
10 Cash and cash equivalents
kSEK Group Parent
---------------------- -------------------------- --------------------------
31 Dec. 31 Dec. 31 Dec. 31 Dec.
2010 2009 2010 2009
---------------------- ------------ ------------ ------------ ------------
Cash at bank and
in hand 7,484 13,287 255 3,535
---------------------- ------------ ------------ ------------ ------------
Total 7,484 13,287 255 3,535
---------------------- ------------ ------------ ------------ ------------
Bank deposits are categorised as Loans and receivables.
11 Share capital
Additional paid in
Group & Parent Capital
----------------- ----------------- --------------- -----------------------
No. of ordinary Share Share-based
shares Share capital premium payment
----------------- ----------------- --------------- --------- ------------
Balance at 1
January 2010 43,552,598 21,776 665,981 9,407
----------------- ----------------- --------------- --------- ------------
Share issues 68,840,808 6,884 18,978 -
----------------- ----------------- --------------- --------- ------------
Share capital
change - -17,421 - -
----------------- ----------------- --------------- --------- ------------
Non-cash
consideration
for
Acquisition - - 10,857 -
----------------- ----------------- --------------- --------- ------------
Share based
payments - - - 485
----------------- ----------------- --------------- --------- ------------
Balance at 31
December 2010 112,393,406 11,239 695,816 9,892
----------------- ----------------- --------------- --------- ------------
The number of shares for the parent company equals the number of
shares disclosed in the table for the group above. The Company has
only one class of shares and all shares carry the same voting
rights.
The share issues during 2010; 47,033,827 in Placing completed 14
January 2010, 21,696,145 as Non-cash Consideration Settlement for
acquisition of remaining 50.2% of Oy AJAT Ltd. and 110,836 in
earn-out shares to some of the sellers of AJAT. In total 68,840,808
shares issued during 2010.
The par value is SEK 0.10.
Restricted funds
Restricted funds may not be reduced through dividends.
Revaluation reserve, the amount by which a material or financial
holding revaluation amount to and is accounted to a revaluation
reserve.
Reserve fund, the aim has been to ensure that a proportion of
net profit, which is not needed to cover an accumulated deficit.
Amounts prior to 1 January 2006 to the share premium reserve has
been transferred to and included in the reserve fund.
Unrestricted equity
The following funds, along with net income equity, are the
amount available for distribution to shareholders.
Share premium reserve, where shares are issued at a premium,
that is, for the shares to be paid more than the shares' par value,
an amount equal to the amount above the shares' par value is
transferred to share premium. Amount of the share premium reserve
from January 1, 2006 are included in unrestricted equity. Retained
earnings, consisting of the previous year's retained earnings and
profit after deduction of dividends during the year left.
11.1 Warrants, stock options programs (share-based payments)
The Group has previously granted stock options under the 2003
Employee Stock Option Program ("ESOP"), 2005 ESOP, 2006 ESOP, 2007
ESOP, and 2009 ESOP. The terms of options granted under these plans
are as follows:
2003 ESOP
The Company previously granted 424,000 options this under this
plan, which have vested over three years, with one third of the
options vesting at each anniversary of the grant date. As of 31
December 2010, all options have vested, and any compensation
expense recognized during 2009 and 2010, as well as future periods
will relate only to social security contributions. These options
expire on 31 August 2012.
2005 ESOP
The Company previously granted 390,000 options under this plan,
which has vested over three years, with one third of the options
vesting at each anniversary of the grant date. As of 31 December
2010, all options have vested, and remaining charges relate only to
social security contributions. These options expire on 30 November
2015.
2006 ESOP
The Company previously granted 920,000 options under two
separate plans, which generally vest over three years, with one
third of the options vesting at each anniversary of the grant date.
In addition, 800,000 of the options granted in 2006 also included
market-based vesting conditions which were cancelled during 2009
due to these vesting conditions not being met as of 23 October
2009. The remainder of the options expire on 31 December 2015. The
market based performance criteria included two targets of which 50%
was measured against the absolute development of the XCounter share
price (+15 % per annum) and 50% against the relative development of
the XCounter share in comparison to the TechMARK Medscience
index.
2007 ESOP
Options were granted in 2007 to key individuals, including the
chairman of the Company, Lothar Koob (525,000 options), and
directors, Jacques Souquet and Daniel Kerpelman (20,000 options
each). Twenty percent of these options vested immediately upon
grant, and the remaining 80% of the options vest in equal portions
over the following 36 months from the date of grant. These options
expire on 30 November 2017.
Once vested, the options will be exercisable to the extent that
the following share price targets are met.
Percentage of vested options which become
Share price target exercisable
-------------------- ------------------------------------------
194.4p 25%
-------------------- ------------------------------------------
210.6p 50%
-------------------- ------------------------------------------
226.8p 75%
-------------------- ------------------------------------------
243.0p 100%
-------------------- ------------------------------------------
A share price target shall only be treated as having been met if
the average price of the Company's shares is at the required level
over any 30 day rolling period between the date of grant (i.e. 12
October 2007) and 7 June 2011. The probability of reaching the
share price targets is factored into the grant date fair value, and
expenses recognized are not adjusted due to market conditions not
being met.
2009 ESOP
The Company granted 2,200,000 options during 2009, which are
subject to a three year vesting schedule and shall require the
continued service of the option holder (as employee or director, as
the case may be). 1/36 of the options will vest monthly at the end
of each calendar month, the first time on 31 January 2010. These
options expire on 31 December 2019.
Vested options shall only be exercisable to the extent that the
following share price targets are met:
Percentage of vested options which become
Share price target exercisable
-------------------- ------------------------------------------
7.80p 25%
-------------------- ------------------------------------------
8.45p 50%
-------------------- ------------------------------------------
9.10p 75%
-------------------- ------------------------------------------
9.75p 100%
-------------------- ------------------------------------------
A share price target shall only be treated as having been met if
the average price of the Company's shares is at the required level
over any 30 day rolling period within three years of the date of
grant. The probability of reaching the share price targets is
factored into the grant date fair value, and expenses recognized
are not adjusted due to market conditions not being met.
Additionally, one-half of the options granted during 2009 are
replacement options to the chairman and other executives for the
options granted in 2007, which were deemed unlikely to be
exercisable due to the share price targets. These were treated as
modifications, and the Company recognized an incremental expense
related to these options as the difference between the fair value
of the original options on the date of modification, and the fair
value of the new options on the date of modification.
The assumptions used in the Black-Scholes valuation model for
each of the option grants described above are as follows:
2003 2005 2006 2007
ESOP ESOP ESOP ESOP 2009 ESOP
---------------------------- ----- ----- ----- ----- ---------
Exercise price SEK 6.00 12.00 20.93 22.29 0.69
Volatility (%) 45.0% 35.0% 35.0% 35.0% 42.7%
Risk-free rate (%) 4.90% 3.45% 2.82% 4.26% 3.28%
Expected dividends nil nil nil nil nil
Estimated life 9.42 10.01 9.92 10.14 9.92
Fair value per option (SEK) 3.67 9.71 10.84 6.81 0.0076
---------------------------- ----- ----- ----- ----- ---------
The volatility for the share is based on closing prices/day from
February 2006 to December 2010.
Total expenses related to each of the plans above were
recognized as follows during 2010 and 2009:
2003 2005 2006 2007 2009
SEK ESOP ESOP ESOP ESOP ESOP Total
------------------ ------- ------ ------- ------- ----- ---------
2010
Vesting Charge - - - 479,540 5,563 485,103
Social Security - - - - 1,757 1,757
------- ------ ------- ------- ----- ---------
Total Expense - - - 479,540 7,320 486,860
------------------ ------- ------ ------- ------- ----- ---------
2003 2005 2006 2007 2009
ESOP ESOP ESOP ESOP ESOP Total
2009
Vesting Charge - - 391,184 715,050 - 1,106,234
Social Security -10,421 -3,476 -136 - - -14,033
------- ------ ------- ------- ----- ---------
Total Expense -10,421 -3,476 391,048 715,050 - 1,092,201
------------------ ------- ------ ------- ------- ----- ---------
Warrants
In 2005 150,000 warrants were issued to the former Chairman of
the Company entitling subscription for 150,000 new ordinary shares
at an exercise price of SEK 12 per share with a subscription period
through 31 August 2010. The warrant price paid was SEK 4.00, and
the warrants vested immediately. The fair value of the warrants
which was determined based on the Black-Scholes valuation model was
SEK 3.79 per warrant, and included inputs into the Black-Sholes
valuation model of grant date share price of SEK 11.34 at the issue
date, exercise price of SEK 12, volatility of 35 per cent, expected
dividend 0 and risk-free interest rate of 2.85 per cent. As at 31
December 2010 no warrants had been exercised. The fair value of the
warrants is included in equity (other contributed capital).
In 2005 40,000 warrants were issued to the former VP Marketing
& Sales of the Company entitling subscription for 40,000 new
ordinary shares at an exercise price of SEK 12 per share with a
subscription period through 31 August 2010. The warrant price paid
was SEK 7.50 and the warrants vested immediately. The fair value of
the warrants which was determined based on the Black-Scholes
valuation model was SEK 7.42 per option. The significant inputs
into the model to determine fair value were share price of SEK
16.12 at the issue date, exercise price of SEK 12, standard
deviation of expected share price returns of 35 per cent, expected
dividend 0 and annual risk-free interest rate of 3.10 per cent. As
at 31 December 2010 no warrants had been exercised. The fair value
of the warrants is included in equity (other contributed
capital).
Movements in the number of share options and warrants
outstanding, and their related weighted average exercise prices are
as follows:
2010 2009
--------------- -------------- ------------- -------------- --------------
Average Average
exercise Warrants exercise Warrants
price in SEK /Options price in SEK /Options
per share (thousands) per share (thousands)
--------------- -------------- ------------- -------------- --------------
At 1 January 3.00 2,847 20 1,662
--------------- -------------- ------------- -------------- --------------
Granted - - 1 2,200
--------------- -------------- ------------- -------------- --------------
Forfeited - - 30 -470
--------------- -------------- ------------- -------------- --------------
Expired 12.00 -190 - -
--------------- -------------- ------------- -------------- --------------
Exercised - - - -
--------------- -------------- ------------- -------------- --------------
Cancelled - - - -
--------------- -------------- ------------- -------------- --------------
Replaced - - 22 -545
--------------- -------------- ------------- -------------- --------------
At 31 December 2.33 2,657 2.97 2,847
--------------- -------------- ------------- -------------- --------------
Outstanding options and warrants
Number of
Expiry date Exercise price Number of options options
------------------ ---------------- ------------------ ----------
2010 2009
----------------------------------- ------------------ ----------
31 August 2012 6.00 SEK 215,000 215,000
------------------ ---------------- ------------------ ----------
30 November 2015 12.00 SEK 190,000 190,000
------------------ ---------------- ------------------ ----------
31 August 2010 12.00 SEK - 150,000
------------------ ---------------- ------------------ ----------
31 August 2010 12.00 SEK - 40,000
------------------ ---------------- ------------------ ----------
31 December 2015 20.93 SEK 40,000 40,000
------------------ ---------------- ------------------ ----------
1 October 2016 30.65 SEK - -
------------------ ---------------- ------------------ ----------
30 November 2017 22.29 SEK - -
------------------ ---------------- ------------------ ----------
30 November 2017 22.29 SEK 11,667 11,667
------------------ ---------------- ------------------ ----------
31 December 2019 0.69 SEK 2,200,000 2,200,000
------------------ ---------------- ------------------ ----------
Total 2,656,667 2,846,667
------------------------------------ ------------------ ----------
Out of the 2,656,667outstanding warrants/options 445,000 (2009:
635,000) were exercisable. The average price of the outstanding
warrants/options is SEK 2.33. The exercise price of options
outstanding at 31 December 2010 ranged from SEK 0.69 to SEK 30.65.
The weighted average remaining contractual life of the outstanding
options which were outstanding at 31 December 2010 was 8.1 years
(2009: 8.5 years).
Outstanding option program in Oy AJAT Ltd.
Terms for the outstanding program in AJAT are consistent with
those described in the interim financial statements for the period
ended 30 June 2010. As of 31 December 2010, the following option
program is still outstanding in AJAT.
2007 A
The 2007A option program consists of 710 stock options
representing rights to subscribe for shares in the Oy AJAT Ltd, at
a subscription price of EUR 500 per share, during the period 1 June
2009, up to and including 30 May 2012. One option entitles to one
share. The options were given free of charge to employees of Oy
AJAT Ltd. As at 31 December 2010 all options were exercisable.
To be noted, if options are turned to shares in AJAT they
immediately turn to shares in XCounter according to agreements with
all holder of options to maintain the 100% ownership of AJAT for
XCounter. If the 710 options would we exercised they would turn
into 2,782,885 XCounter shares which would lead to a dilution of
2.5% calculated on outstanding shares end December 2010.
12 Trade and other payables
Non-current Group Parent
liabilities
---------------------- -------------------------- --------------------------
31 Dec.2010 31 Dec.2009 31 Dec.2010 31 Dec.2009
---------------------- ------------ ------------ ------------ ------------
kSEK
---------------------- ------------ ------------ ------------ ------------
Trade payables - 815 - -
---------------------- ------------ ------------ ------------ ------------
Total non-current - 815 - -
liabilities
---------------------- ------------ ------------ ------------ ------------
Current liabilities Group Parent
---------------------- -------------------------- --------------------------
31 Dec.2010 31 Dec.2009 31 Dec.2010 31 Dec.2009
---------------------- ------------ ------------ ------------ ------------
Trade payables 4,743 2,392 2,619 1,821
---------------------- ------------ ------------ ------------ ------------
Intercompany short
term loan - - 1,814 -
---------------------- ------------ ------------ ------------ ------------
Payroll related
liabilities 429 754 291 585
---------------------- ------------ ------------ ------------ ------------
Social security and
other taxes 1,301 1,173 1,114 1,107
---------------------- ------------ ------------ ------------ ------------
Accrued payroll
expense 1,302 1,422 1,302 1,102
---------------------- ------------ ------------ ------------ ------------
Accrued board fee 266 276 266 276
---------------------- ------------ ------------ ------------ ------------
Holiday pay liability 2,092 2,337 1,132 1,282
---------------------- ------------ ------------ ------------ ------------
Accrued expenses 6,615 4,880 2,637 4,766
---------------------- ------------ ------------ ------------ ------------
Other liabilites 12,004 10,842 6,742 9,118
---------------------- ------------ ------------ ------------ ------------
Total current
liabilites 16,747 13,234 11,175 10,939
---------------------- ------------ ------------ ------------ ------------
13 Borrowings
The Group's borrowing of kSEK 24,431 in nominal value, included
kSEK 4,374 of accrued interest and principle amounts due of kSEK
20,057. Carrying value at 31 December 2010 amounted to kSEK 21,013
(2009: kSEK 22,606). The borrowings, all of which were assumed in
connection with the acquisition of AJAT, are comprised of the
following:
-- Loan with Acrorad Co., Ltd ("Acrorad"), a collaboration
partner to and shareholder in AJAT. The loan is denominated in
Japanese Yen (JPY) and bears interest at a fixed rate of 3%. The
agreement stipulates a currency cap/floor of +/- 15 % of the
currency relation between JPY and EUR based on the exchange rate in
place on 30 August 2002. The amount outstanding in nominal value
was kSEK 20,368 (kJPY 254,836) at 31 December 2010. The currency
cap/floor is determined to be an embedded derivative and is treated
separately from the host contract, see information below "Embedded
derivative - fair value".
-- Loan with TEKES, the main public funding organisation for
research, development and innovation in Finland. The loan bears
interest at prime rate less 1% (Finnish government interest for
these types of loans) and a minimum interest level of 3%. The prime
rate during the period from 1 January to 31 December 2010 was 3%.
The nominal amount outstanding at 31 December 2010 was kSEK 2,871
(2009: kSEK 3,219).
-- A group of loans from previous shareholders in AJAT that bear
interest at a fixed rate of 3%. The nominal amount outstanding at
31 December 2010 was kSEK 1,191 (2009: kSEK 1,325).
These borrowings are deemed to be capital loans in accordance
with Chapter 5 of the Finnish Companies Act. Based on the Finnish
companies Act, capital loans and associated interest or other
remuneration are subordinated to all the other debts upon
dissolution and bankruptcy of the borrower. In addition, repayment
of capital loans or associated interest is only possible when
borrowing company has a positive unrestricted equity calculated
based on Finnish GAAP. The deficit in AJAT's unrestricted equity at
31 December 2010 amounted to kSEK -19,417 (kEUR -2,157).
The capital loans carry fixed interest rate of 3%. At the date
of acquisition an interest rate of 3% was considered to be below
market interest rates. The market rate for the capital loans was
estimated at 10%. At the date of acquisition the capital loans were
measured at fair value by discounting expected future cash flows
with the estimated market interest rate of 10%. The difference
between the initial fair value and the nominal amount of the loans
are amortized through profit and loss over the estimated duration
of the loans, using the effective interest rate.
The carrying value of the capital loans was kSEK 15,819 as of 31
December 2009 and kSEK 16,716 as of 31 December 2010.
Embedded derivative - fair value
The currency cap/floor is determined to be an embedded
derivative and is treated separately from the host contract and the
measured value goes through profit or loss. The value of the
currency cap/floor is determined by using a valuation technique
that includes inputs that are not observable market data
(unobservable inputs) which according to IFRS 7.27 is categorized
as level 3. The input used in the valuation technique is primarily
EUR/JPY-rates and an assumption about the cash flows of the
contract.
Currency cap, derivative (kSEK) Group 2010
--------------------------------- -----------
Opening balance (2010-01-01),
liability 1,809
--------------------------------- -----------
Change in value -1,557
--------------------------------- -----------
Closing balance 252
--------------------------------- -----------
14 Income tax
The percentage of tax losses carried forward, tax effect for
which no deferred tax asset has been recognized compared to loss
before tax from continuing operations for the year (26.3%) is lower
than the standard rate of corporation tax in Sweden (26.3 %)
applied to loss before tax. The differences are explained
below:
kSEK Group Parent
------------------------------------- ------------------ -------------------
2010 2009 2010 2009
------------------------------------- -------- -------- --------- --------
Loss before tax from continuing
operations -29,961 -57,342 -24,643 -53,678
------------------------------------- -------- -------- --------- --------
Tax at Swedish corporation tax
rate of 26,3% 7,850 15,707 6,481 14,117
------------------------------------- -------- -------- --------- --------
Tax at Finnish corporation tax
rate of 26% 550 -619 - -
------------------------------------- -------- -------- --------- --------
Effects of:
------------------------------------- -------- -------- --------- --------
Deductible expenses not included
in the income statement (share
issue costs) - -137 - -137
------------------------------------- -------- -------- --------- --------
Deferred tax * 1,700 952 - -
------------------------------------- -------- -------- --------- --------
Expenses not deductible for
tax purposes - 820 - 820
------------------------------------- -------- -------- --------- --------
Tax losses carried forward, tax
effect for which no deferred
tax asset has been recognized -8,400 -15,771 -6,481 -14,800
------------------------------------- -------- -------- --------- --------
Tax expense for financial year 1,700 952 - -
------------------------------------- -------- -------- --------- --------
* Deferred income tax with 26% at the amortization of acquired
intangible assets for AJAT with the headlines Technology,
Intellectual property/R&D and Other intangible assets at not
6.1
The Group has approximately kSEK 706,020 as at 31 December 2010
(2009: kSEK 685,413) of tax deductable losses, of which amounts
associated with AJAT are kSEK 19,070 (kEUR 2,118), (2009: kSEK
23,193 (kEUR 2,240)).
Deferred income tax assets are recognized for tax loss
carry-forwards to the extent that the realisation of the related
tax benefit through the future taxable profits is probable. The
deferred tax assets related to XCounter have not been recorded as
based on the history of recent losses and it is not probable that
they will ultimately be utilized. The Group has recorded the
deferred tax assets associated with AJAT as it is probable that
they will be realized.
In Sweden, the unused tax losses can be used without any time
limitation. For Finland, the tax deficit must be used within ten
years from the year when the deficit occurred.
Specification of deferred tax
kSEK Group
---------------------------------------- ------------------------------------
31 Dec. 2010 31 Dec. 2009
---------------------------------------- ----------------- -----------------
Deferred income tax assets
---------------------------------------- ----------------- -----------------
Oy AJAT Ltd tax loss from
operations 4,958 6,030
---------------------------------------- ----------------- -----------------
Other 66 470
---------------------------------------- ----------------- -----------------
5,024 6,500
---------------------------------------- ----------------- -----------------
Deferred income tax liabilities
---------------------------------------- ----------------- -----------------
Tax liabilities related to
acquisition * -10,022 -13,910
---------------------------------------- ----------------- -----------------
-10,022 -13,910
---------------------------------------- ----------------- -----------------
Net value Tax assets and
liabilities -4,999 -7,410
---------------------------------------- ----------------- -----------------
* Deferred income tax with 26% at the gross amounts/values of
the acquired intangible assets for AJAT with the headlines
Technology, Intellectual property/R&D and Other intangible
assets at not 6.1
15 Provisions for other liabilities and charges
Group/Parent
--------------------------- -------------- ------------
kSEK Restructuring Share-based
payments
--------------------------- -------------- ------------
At 1 January 2010 3,200 -
--------------------------- -------------- ------------
Change during the year -3,050 -
--------------------------- -------------- ------------
At 31 December 2010 150 -
--------------------------- -------------- ------------
Analysis of total provisions
2010 2009
----------------- ----- ------
Non-current 150 200
----------------- ----- ------
Current - 3,000
----------------- ----- ------
Total 150 3,200
----------------- ----- ------
Provisions for restructuring are related to XCounter AB
cancelling a lease contract prematurely. Provisions for employee
share based payments relate to social security costs, which will
become payable upon exercise of share options by employees.
16 Revenues
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
Revenue from operations: 2010 2009 2010 2009
------------------------------ --------- --------- --------- ---------
System sales 9,199 7,214 - -
------------------------------ --------- --------- --------- ---------
Sensor sales 25,332 10,747 - -
------------------------------ --------- --------- --------- ---------
Other sales 310 536 1,686 306
------------------------------ --------- --------- --------- ---------
Total 34,841 18,497 1,686 306
------------------------------ --------- --------- --------- ---------
17 Other operating income
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
------------------------------
2010 2009 2010 2009
------------------------------ --------- --------- --------- ---------
Disposal of fixed assets 309 372 309 372
------------------------------ --------- --------- --------- ---------
EU-grant - 624 - -
------------------------------ --------- --------- --------- ---------
Other -33 519 -120 -
------------------------------ --------- --------- --------- ---------
Total 277 1,515 189 372
------------------------------ --------- --------- --------- ---------
18 Auditors remuneration
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
---------------------------- --------- --------- --------- ---------
Deloitte AB (1/1-28/4)
---------------------------- --------- --------- --------- ---------
- Audit 263 653 263 653
---------------------------- --------- --------- --------- ---------
- Non audit 8 41 8 41
---------------------------- --------- --------- --------- ---------
KPMG AB (28/4-31/12)
---------------------------- --------- --------- --------- ---------
- Audit 401 - 384 -
---------------------------- --------- --------- --------- ---------
- Non audit 91 - 91 -
---------------------------- --------- --------- --------- ---------
PWC
---------------------------- --------- --------- --------- ---------
- Non audit 40 - 40 -
---------------------------- --------- --------- --------- ---------
BDO
---------------------------- --------- --------- --------- ---------
- Audit 38 15 - -
---------------------------- --------- --------- --------- ---------
Total - Audit 702 668 647 653
---------------------------- --------- --------- --------- ---------
Total - Non audit 139 41 139 41
---------------------------- --------- --------- --------- ---------
Total 842 709 787 694
---------------------------- --------- --------- --------- ---------
An audit assignment includes the audit of the annual accounts,
the accounting records and the administration of the board of
directors and the managing director. The audit assignment includes
additional work given by the Company to the auditors and
consultations or other assistance resulting from observations made
during the audit or completion of such additional work. Everything
else is considered as non-audit assignments.
19 Employee benefit expense
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
--------- --------- --------- ---------
Wages and salaries (1) 18,631 25,234 10,655 19,360
---------------------------------- --------- --------- --------- ---------
Staff restructuring costs (2) - -5,735 - -5,735
---------------------------------- --------- --------- --------- ---------
Social security costs 4,147 7,006 3,922 6,879
---------------------------------- --------- --------- --------- ---------
Share based payments to
directors and employees 485 1,106 485 1,106
---------------------------------- --------- --------- --------- ---------
Pension costs - defined
contribution plans 3 2,838 4,217 2,045 3,046
---------------------------------- --------- --------- --------- ---------
Total 26,101 31,828 17,107 24,656
---------------------------------- --------- --------- --------- ---------
( )
(1) Include salaries and fees to The Board of Directors and the
Chief Executive Officers in the group amounting to kSEK 5,734
(2009: kSEK 5,988), whereof for the Parent kSEK 4,646 (2009: kSEK
3,917).
(2) Staff restructuring costs includes: Estimated salaries,
social security expenses, pensions and work time account. A
negative sign indicates an accumulated credit balance is at
hand.
(3) Include pension costs for the Chief Executive Officers
amounting to kSEK 1,100 (2009: kSEK 1,047), whereof for the Parent
kSEK 844 (2009: kSEK 838).
XCounter observes a period of notice of twelve (12) months in
the event of termination and six (6) months in the event of
termination by the CEO of XCounter AB and six (6) months for both
parties for the CEO of AJAT. Fees to the Board of Directors except
for the Chairman are accounted for as other external costs in the
income statement. Fees to the Chairman are accounted for as
personnel costs in the income statement.
Remunerations to the Board of Directors and Key management
personnel are further disclosed in note 26.4.
19.1 Average number of employees
Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
------------------------------- --------- --------- --------- ---------
Average number of
employees with
proportion of women and
men amounted to
------------------------------- --------- --------- --------- ---------
Women 5.0 9.0 2.0 6.0
------------------------------- --------- --------- --------- ---------
Men 19.0 26.5 7.0 12.5
------------------------------- --------- --------- --------- ---------
Total 24.0 35.5 9.0 18.5
------------------------------- --------- --------- --------- ---------
The average number of employees in Sweden for the year ended 31
December 2010 amounted to 9.0 whereof two was women. The average
number of employees in Finland for the same period amounted to 15
whereof three was women.
19.2 Directors of the board and management
Group Parent
------------------------------------ ------------------------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
----------------- ----------------- ----------------- -----------------
Number Number Number Number
at at at at
year Whereof year Whereof year Whereof year Whereof
end men end men end men end men
------------------ ------- -------- ------- -------- ------- -------- ------- --------
Directors
of the
Board 5 100% 4 100% 5 100% 4 100%
------------------ ------- -------- ------- -------- ------- -------- ------- --------
Chief
Executive
Officer
and
Management 6 100% 5 60% 4 100% 5 60%
------------------ ------- -------- ------- -------- ------- -------- ------- --------
19.3 Absence of illness
Parent
--------------------
January- January-
December December
--------- ---------
2010 2009
------------------------------- --------- ---------
Total absence for illness 5.19% 2.37%
------------------------------- --------- ---------
- absence for illness of
men N/A 1.77%
------------------------------- --------- ---------
- employees 30 - 49 years N/A 3.45%
------------------------------- --------- ---------
- employees 50 years or
older N/A 0.59%
------------------------------- --------- ---------
20 Net foreign exchange gains/losses
The exchange differences are charged to other external costs in
the income statement and reported as follows:
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
---------------------------------- --------- --------- --------- ---------
Net foreign exchange
gains/losses 36 46 36 -105
---------------------------------- --------- --------- --------- ---------
Total 36 46 36 -105
---------------------------------- --------- --------- --------- ---------
21 Loss per share
21.1 Basic
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
Group
------------------------------------
January-December January-December
2010 2009
---------------------------------------- ----------------- -----------------
Loss attributable to equity holders
of the Company -28,261 -55,030
---------------------------------------- ----------------- -----------------
Weighted average number of ordinary
shares before dilution 96,386,986 43,552,598
---------------------------------------- ----------------- -----------------
Loss per share before dilution -0.29 -1.26
---------------------------------------- ----------------- -----------------
All shares are ordinary shares.
21.2 Diluted
Potential shares are not treated as dilutive as they would
decrease loss per share.
22 Dividends per share
No dividends have been paid in 2010 and 2009. The Board has not
proposed any dividend with respect to fiscal year 2010.
23 Cash used in operations
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
-------------------------------- --------- --------- --------- ---------
Loss for the year before
taxes -29,961 -57,342 -24,643 -53,678
-------------------------------- --------- --------- --------- ---------
Interest received 216 393 33 364
-------------------------------- --------- --------- --------- ---------
Interest paid -38 -363 -5 -21
-------------------------------- --------- --------- --------- ---------
Adjustments for:
-------------------------------- --------- --------- --------- ---------
- Amortization 5,566 3,923 - -
-------------------------------- --------- --------- --------- ---------
- Depreciation 1,400 3,046 960 3,147
-------------------------------- --------- --------- --------- ---------
- Disposal 539 4,726 539 4,726
-------------------------------- --------- --------- --------- ---------
- Net change in provisions -3,050 3,200 -3,050 3,200
-------------------------------- --------- --------- --------- ---------
- Currency exchange gain 3,211 -285 - -2
-------------------------------- --------- --------- --------- ---------
- Interest income -117 -390 -29 -362
-------------------------------- --------- --------- --------- ---------
- Interest expense 727 1,222 13 2
-------------------------------- --------- --------- --------- ---------
- Other financial expenses 105 1,849 105 19
-------------------------------- --------- --------- --------- ---------
- Share-based payments 485 1,106 485 1,106
-------------------------------- --------- --------- --------- ---------
- Tax paid -15 - - -
-------------------------------- --------- --------- --------- ---------
Changes in working capital:
-------------------------------- --------- --------- --------- ---------
- Change in inventories -1,034 655 - -
-------------------------------- --------- --------- --------- ---------
- Other receivables -2,349 92 286 -744
-------------------------------- --------- --------- --------- ---------
- Current liabilities 3,028 -10,584 1,547 -10,399
-------------------------------- --------- --------- --------- ---------
Cash used in operations -21,289 -48,752 -23,759 -52,643
-------------------------------- --------- --------- --------- ---------
24 Commitments
24.1 Operating lease commitments
XCounter leases various plant, machinery and equipment under
cancellable operating lease agreements. These lease agreements can
be cancelled with 6 to 48 months notice. Amounts for 2009 have been
changed and now includes AJAT lease commitments as well since in
2009 Annual report it was missing.
Lease charges for operational leasing agreements during the year
ended 31 December amounted to:
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
------------------------------- --------- --------- --------- ---------
Minimum lease pay 6,003 9,432 4,995 8,456
------------------------------- --------- --------- --------- ---------
Variable contingent lease
pay 67 362 67 362
------------------------------- --------- --------- --------- ---------
Total 6,070 9,794 5,062 8,818
------------------------------- --------- --------- --------- ---------
The minimum lease rentals to be paid under non-cancellable
operating leases at 31 December are as follows:
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
-------------------------------- --------- --------- --------- ---------
Within one year 2,872 5,836 1,993 4,884
-------------------------------- --------- --------- --------- ---------
Between one and five years 5,996 7,458 5,856 7,458
-------------------------------- --------- --------- --------- ---------
Total 8,868 13,295 7,849 12,342
-------------------------------- --------- --------- --------- ---------
25 Business Combinations
On 7 May 2009, XCounter AB acquired a Non-controlling stake
holding of 49.8% of the share capital of Oy AJAT Ltd. ("AJAT"), a
Finnish company developing and manufacturing cutting-edge radiation
imaging devices for medical and industrial applications. As a part
of the acquisition, XCounter obtained board control of AJAT and
also entered into a voting agreement with the selling shareholders
pursuant to which XCounter also gained voting control over AJAT and
was recognized as a subsidiary from 7 May 2009. End of June 2010
the remaining 50.2% was acquired and the company now holds 100% of
the shares for AJAT.
The acquired business contributed revenues of kSEK 34,593 (2009:
kSEK 18,191) and net loss of kSEK
-344 (2009: kSEK 1,760 profit) to the group 2010. Accumulated
AJAT's contribution to group result is kSEK 533 before group
adjustments. After group adjustments the contribution is negative
and amounting to kSEK -7,288. AJAT is treated as a fully owned
subsidiary since June 2010.
These amounts have been calculated using the group's accounting
policies and by adjusting the result of the subsidiary to reflect
the additional depreciation and amortization that would have been
charged assuming the fair value adjustments to property, plant and
equipment and intangible assets had applied from 1 January 2009,
together with the consequential tax effects.
Details of net assets acquired and goodwill are as follows:
Purchase consideration (amounts in kSEK):
Cash paid 36,781
Non-cash consideration settlement 13,027
Direct costs relating to the acquisition 3,176
Earn-out payments 4,120
------------------------------------------ -------
Purchase consideration 57,104
In addition to the above earn-out value of kSEK 4,120, there was
a supplementary performance-based earn-out purchase price of kSEK
8,748 if certain performance conditions for AJAT were met over the
period up to February 2011. These targets were not met as concluded
already per end 2010.
As payment for the acquisition of the remaining 50.2% of Oy AJAT
Ltd a Non-cash Consideration Settlement was made by issue of
21,696,145 new shares per end of June 2010. By 26 July 2010 the new
shares were registered and the total outstanding shares are from
then 112,282,570. The affirmed value of the Non-Cash Consideration
Settlement is kSEK 13,027 and based on the revised IFRS 3 from
2010. The fair value of the shares issued was based on the
published mid share price 30 June 2010: 5.25pence (GBP).
A final analysis of the assets and liabilities arising from the
acquisition are as follows:
Carrying
kSEK Fair value amount
--------------------------------------------------- ----------- ---------
Intangible fixed asset excluding goodwill 51,273 348
Tangible fixed assets 1,141 3,636
Deferred tax assets 7,288 -
Inventory 5,951 5,172
Operating receivables 2,211 2,211
Cash and cash equivalents 10,257 10,257
Deferred tax liabilities -14,957 -
Operating liabilities -3,370 -3,370
Non-current interest-bearing liabilities -21,564 -23,108
Derivate -252 -
Re-valuation of Non-cash consideration -3,250 -
Goodwill 22,376 -
--------------------------------------------------- -----------
Total value with cash and cash equivalents 57,104
Acquisition costs included in working capital
at 31 December 2010 -672
--------------------------------------------------- -----------
Purchase price settled in cash 43,405
Cash and cash equivalent in Oy AJAT Ltd
at 7 May 2009 -10,257
--------------------------------------------------- -----------
Effect on the Company's cash and cash equivalents 33,148
In the accounting for fair values to the acquired company's
identifiable assets and liabilities, intangible fixed assets
including goodwill have been valued at kSEK 54,380. The intangible
fixed assets consist primarily of developed technology and
know-how, including thereto related deferred tax liability and
goodwill where goodwill refers to future synergy effects related to
AJAT's X-ray sensor technology. Other preliminary fair values
related to intangible fixed assets in connection with the
acquisition consist of internal research and development work,
customer relationship, trademark and non-compete agreement.
Amortization period for technology, internal research and
development work and trademark is ten years whereas customer
relationship and non-compete agreements are amortized over eight
and three years, respectively.
26 Related-party transactions
Related parties identified include; Management transactions,
Extera Partners LLC ("Extera"), Acrorad Co., Ltd ("Acrorad"), and
Abingworth Ltd.
The Company purchases management consultancy services from
Extera, of which the Chairman of the Board, Lothar Koob is a
partner. XCounter purchases material from and sells products to
Acrorad, a Company with a shareholding in XCounter. There is also a
capital loan from the management of AJAT to AJAT. All transactions
are made at market conditions.
26.1 Sales to related companies and group companies
kSEK Group Parent
------------- ---------------------- ----------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
------------- ---------- ---------- ---------- ----------
AJAT - - 1,377 -
------------- ---------- ---------- ---------- ----------
Acrorad 1,789 1,861 - -
------------- ---------- ---------- ---------- ----------
Total sales 1,789 1,861 1,377 -
------------- ---------- ---------- ---------- ----------
26.2 Purchases from related companies and group companies
kSEK Group Parent
----------------- ---------------------- ----------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
----------------- ---------- ---------- ---------- ----------
AJAT - - 65 -
----------------- ---------- ---------- ---------- ----------
Extera Partners 504 1,451 504 1,451
----------------- ---------- ---------- ---------- ----------
Acrorad 5,265 691 - -
----------------- ---------- ---------- ---------- ----------
Total sales 5,769 2,142 569 1,451
----------------- ---------- ---------- ---------- ----------
26.3 Other related party transactions
kSEK Group Parent
------------------------------ ---------------------- ----------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
------------------------------ ---------- ---------- ---------- ----------
Capital loan from management
* 728 810 - -
------------------------------ ---------- ---------- ---------- ----------
Total other related party
transactions 728 810 - -
------------------------------ ---------- ---------- ---------- ----------
* value change between 2010 and 2009 only due to exchange rate
per end of fiscal year - euro amounts the same in both years.
26.4 Remuneration to the Board of Directors and Management
Group & Parent
For the year ended Salary Share
31 December 2010 /Board based Other/variable
kSEK fee Pension payments compensation Total
-------------------- -------- -------- ---------- --------------- -------
Parent
-------------------- -------- -------- ---------- --------------- -------
Lothar Koob,
Chairman 267 - 482 - 749
-------------------- -------- -------- ---------- --------------- -------
Mikael Strindlund,
CEO 2,964 844 3 835 4,646
-------------------- -------- -------- ---------- --------------- -------
Tim Haines,
Non-Executive
Director of
XCounter AB - - - - -
-------------------- -------- -------- ---------- --------------- -------
Dan Kerpelman,
Non-Executive
Director of
XCounter AB 133 - - - 133
-------------------- -------- -------- ---------- --------------- -------
Yngvar
Hansen-Tangen,
Non-Executive
Director of
XCounter AB - - - - -
-------------------- -------- -------- ---------- --------------- -------
Other key
management
personnel (5) 3,986 769 - - 4,755
-------------------- -------- -------- ---------- --------------- -------
Subsidiary
-------------------- -------- -------- ---------- --------------- -------
Mikael Strindlund,
Chairman of Oy AJAT
Ltd. - - - - -
-------------------- -------- -------- ---------- --------------- -------
Konstantinos
Spartiotis, CEO of
Oy AJAT Ltd. 1,211 256 - 296 1,763
-------------------- -------- -------- ---------- --------------- -------
Fredrik Henckel,
deputy Director of
Oy AJAT Ltd. - - - - -
-------------------- -------- -------- ---------- --------------- -------
Other key
management
personnel (3) 2,097 356 - - 2,453
-------------------- -------- -------- ---------- --------------- -------
Total 10,658 2,226 485 1,131 14,500
-------------------- -------- -------- ---------- --------------- -------
Group and Parent
For the year
ended 31 Salary
December 2009 / Board Share based Other/variable
kSEK fee Pension payments compensation Total
--------------- --------- -------- -------------- --------------- -------
Parent
--------------- --------- -------- -------------- --------------- -------
Lothar Koob,
Chairman 548 - 715 - 1,263
--------------- --------- -------- -------------- --------------- -------
Mikael
Strindlund,
CEO 2,848 838 - 231 3,917
--------------- --------- -------- -------------- --------------- -------
Tim Haines,
Non-Executive
Director of
XCounter AB - - - - -
--------------- --------- -------- -------------- --------------- -------
Dan Kerpelman,
Non-Executive
Director of
XCounter AB 140 - - - 140
--------------- --------- -------- -------------- --------------- -------
Staffan
Lindstrand,
Non-Executive
Director
until
2009-05-08 48 - - - 48
--------------- --------- -------- -------------- --------------- -------
Jacques
Souquet,
Non-Executive
Director
until
2009-05-08 48 - - - 48
--------------- --------- -------- -------------- --------------- -------
Jean-Charles
Piguet,
Non-Executive
Director
until
2009-05-08 48 - - - 48
--------------- --------- -------- -------------- --------------- -------
Other key
management
personnel
(5) 3,566 698 246 - 4,510
--------------- --------- -------- -------------- --------------- -------
Subsidiary
--------------- --------- -------- -------------- --------------- -------
Lothar Koob,
Chairman of Oy
AJAT Ltd - - - - -
--------------- --------- -------- -------------- --------------- -------
Mikael
Strindlund,
Director of Oy
AJAT Ltd - - - - -
--------------- --------- -------- -------------- --------------- -------
Konstantinos
Spartiotis,
CEO of Oy
AJAT Ltd. 904 209 - - 1,113
--------------- --------- -------- -------------- --------------- -------
Tero
Nummenpaa,
Director of Oy
AJAT Ltd. - - - - -
--------------- --------- -------- -------------- --------------- -------
Other key
management
personnel
(3) 1,425 242 - - 1,667
--------------- --------- -------- -------------- --------------- -------
Total 9,575 1,987 961 231 12,754
--------------- --------- -------- -------------- --------------- -------
Other/variable compensation:
For the CEO of XCounter bonus terms are subject to
XCounter's policy from time to time. The maximum bonus
is 60% of the annual salary; with 30% of the salary
in gross bonus to be paid in cash and the other 30%
of the salary gives the right to subscribe for shares
12 months after receipt of annual bonus. The bonus
in 2010 equaled 30% of the salary as gross bonus (2009:
8.75%) and refers to performance in previous fiscal
year.
Bonus for other key management of XCounter are based
on both individual as company & group targets. The
range depending on role is 10-25% of the annual salary.
For the CEO of AJAT the XCounter bonus terms are subject
to XCounter's policy from time to time. The maximum
bonus is 40% of the annual salary, whereof the CEO
are obliged to purchase shares in XCounter for 50%
of the after-tax bonus each year. The bonus in 2010
equaled 31% of the salary and refers to performance
in previous fiscal year.
Bonus for other key management of AJAT are in progress
but not yet finalized.
------------------------------------------------------------------------------
26.5 Year-end balances to/from related parties arising from
sales/purchase of goods/services
kSEK Group Parent
-------------------- --------------------
January- January- January- January-
The amounts regards payables
balances December December December December
2010 2009 2010 2009
---------------------------------- --------- --------- --------- ---------
AJAT - - 61 -
---------------------------------- --------- --------- --------- ---------
Acrorad 680 - - -
---------------------------------- --------- --------- --------- ---------
Extera Partners 24 243 24 243
---------------------------------- --------- --------- --------- ---------
Total 704 243 85 243
---------------------------------- --------- --------- --------- ---------
27 Research and development costs
Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
--------------------------------- --------- --------- --------- ---------
R&D costs included in Other
external costs 1,567 4,164 1,567 4,164
--------------------------------- --------- --------- --------- ---------
Total 1,567 4,164 1,567 4,164
--------------------------------- --------- --------- --------- ---------
28 Financial items
28.1 Financial income
Group Parent
-------------------- --------------------
January- January- January- January-
--------- --------- --------- ---------
December December December December
--------------------------------- --------- --------- --------- ---------
2010 2009 2010 2009
--------------------------------- --------- --------- --------- ---------
Exchange gain 120 287 - 5
--------------------------------- --------- --------- --------- ---------
Interest on bank deposits 73 391 - 363
--------------------------------- --------- --------- --------- ---------
Other interest income 34 - 63 -
--------------------------------- --------- --------- --------- ---------
Total 227 678 63 368
--------------------------------- --------- --------- --------- ---------
28.2 Financial expenses
Group Parent
-------------------- --------------------
January- January- January- January-
December December December December
2010 2009 2010 2009
---------------------------------- --------- --------- --------- ---------
Exchange loss -3,468 -135 -138 -3
---------------------------------- --------- --------- --------- ---------
Other interest expenses -1,522 -1,259 -18 -
---------------------------------- --------- --------- --------- ---------
Other financial expenses -12 -255 -11 -21
---------------------------------- --------- --------- --------- ---------
Revaluation of derivatives 1,557 -1,557 - -
---------------------------------- --------- --------- --------- ---------
Total -3,445 -3,206 -167 -24
---------------------------------- --------- --------- --------- ---------
29 Other information and events after the balance sheet date
-- On 18 January 2011 XCounter successfully completed a
fundraising of SEK 19.1m (GBP1.8m) by placing 77,470,412 new
ordinary shares
-- In addition to the EGM, on 18 January 2011, Yngvar
Hansen-Tangen joined the Board of XCounter as a Non-executive
Director. Hansen-Tangen is a part time medical doctor and is a
director of and significant shareholder in Viking Holding AS, a
company which holds 2.31% of the issued share capital of
XCounter.
-- On 21 February 2011 XCounter successfully completed a minor
fundraising of SEK 1.5m (GBP0.14m) by issue of 5,619,670 new
ordinary shares
-- On 28 March 2011 XCounter announced a Proposed Delisting from
AIM, a simultaneously Relisting on NASDAQ OMX First North and
proposed Share Consolidation
30 Approval of financial statements
The Board of Directors and the CEO declare that the consolidated
financial statements have been prepared in accordance with IFRS as
adopted by the EU and give a true and fair view of the Group's
financial position and results of operations. The financial
statements of the Parent Company have been prepared in accordance
with generally accepted accounting principles in Sweden and give a
true and fair view of the Parent Company's financial position and
results of operations.
The statutory Administration Report of the Group and the Parent
Company provides a fair review of the development of the Group's
and the Parent Company's operations, financial position and results
of operations and describes material risks and uncertainties facing
the Parent Company and the companies included in the Group.
Danderyd, 30 March, 2011
Lothar Koob Mikael Strindlund
Chairman of the Board CEO
Timothy Haines Daniel Kerpelman
Director Director
Yngvar Hansen-Tangen
Director
Our Audit report diverges from standard format and was submitted
on 31 March, 2011
KPMG AB
Magnus Jacobsson
Authorized Public Accountant
AUDIT REPORT
To the annual meeting of the shareholders of XCounter AB
(publ)
Corporate identity number 556542-8918
We have audited the annual accounts, the consolidated accounts,
the accounting records and the administration of the board of
directors and the managing director of XCounter AB (publ.) for the
year 2010. The annual accounts and the consolidated accounts of the
company are included in the printed version of this document on
pages 10-62. The board of directors and the managing director are
responsible for these accounts and the administration of the
company as well as for the application of the Annual Accounts Act
when preparing the annual accounts and the application of
international financial reporting standards IFRSs as adopted by the
EU and the Annual Accounts Act when preparing the consolidated
accounts. Our responsibility is to express an opinion on the annual
accounts, the consolidated accounts and the administration based on
our audit.
We conducted our audit in accordance with generally accepted
auditing standards in Sweden. Those standards require that we plan
and perform the audit to obtain reasonable assurance that the
annual accounts and the consolidated accounts are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the accounts. An
audit also includes assessing the accounting principles used and
their application by board of directors and the managing director
and significant estimates made by the board of directors and the
managing director when preparing the annual accounts and the
consolidated accounts as well as evaluating the overall
presentation of information in the annual accounts and the
consolidated accounts. As a basis for our opinion concerning
discharge from liability, we examined signi-ficant decisions,
actions taken and circumstances of the company in order to be able
to determine the liability, if any, to the company of any board
member or the managing director. We also examined whether board
member or the managing director has, in any other way, acted in
contravention of the Companies Act, the Annual Accounts Act or the
Articles of Association. We believe that our audit provides a
reasonable basis for our opinion set out below.
The annual accounts have been prepared in accordance with the
Annual Accounts Act and give a true and fair view of the company's
financial position and results of operations in accordance with
generally accepted accounting principles in Sweden. The
consolidated accounts have been prepared in accordance with
international financial reporting standards IFRSs as adopted by the
EU and the Annual Accounts Act and give a true and fair view of the
group's financial position and results of operations. The statutory
administration report is consistent with the other parts of the
annual accounts and the consolidated accounts.
We recommend to the annual meeting of shareholders that the
income statements and balance sheets of the parent company and the
group be adopted, that the loss of the parent company be dealt with
in accordance with the proposal in the statutory administration
report and that the board of directors and the managing director be
discharged from liability for the financial year.
Without qualifying our statement above, we draw attention to the
Board of directors report indicating, on page 12 in the annual
report, that the current cash resources will fund the Groups
operation until the end of September 2011 and that should
agreements and OEM initiatives currently under consideration fail
to secure sufficient liquid resources the Company would need to
raise additional capital in order to continue the business. These
conditions indicate the existence of an uncertainty that may cast
doubt about the Company's ability to continue as a going
concern.
Stockholm 31 March 2011 KPMG AB
Magnus Jacobsson
Authorized Public Accountant
This information is provided by RNS
The company news service from the London Stock Exchange
END
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