Significant events after the end of the period
After the period end, an agreement has been reached with the landlord regarding maintenance of the warehouse in Malmö. As part of this, a new agreement with reduced rent is signed. The content of the agreement means that approximately SEK 4 M of the provision booked at the end of 2017 can be released in the fourth quarter of 2018.
No other significant events have taken place after the end of the period.
Transactions with related parties
No transactions took place between BE Group and related parties that had a material impact on the company’s financial position and results.
Annual General Meeting 2019
BE Group´s Annual General Meeting will take place on April 25, 2019, at 3:00 p.m. in Malmö, Sweden. Further information will be published on the company’s website.
Significant risks and uncertainties
The financial risk exposure is explained in the 2017 Annual Report, which was published in March 2018. No new significant risks or uncertainties have arisen since that date.
The interim report was prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The Parent Company’s interim report is prepared in compliance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2 Accounting for Legal Entities.
Refer to the 2017 Annual Report for details of the Group’s accounting principles and definitions of certain terms. The principles applied are unchanged in relation to the Annual Report with addition of the new accounting principles IFRS 9 and IFRS 15 that have entered into effect on January 1, 2018. These have been applied and in accordance with the assessment done during 2017 they have not had any major impact on the financial reporting. The information in the interim report have been adapted to the new standards.
In January 2016, IASB published a new leasing standard that will replace IAS 17 Leases and the associated interpretations IFRIC 4, SIC-15 and SIC-27. The standard requires that assets and liabilities attributable to all leases, with a few exceptions, are recognised in the balance sheet. The standard is applicable to financial years that begin on or after January 1, 2019.
As a lessee, the Group can choose to apply the standard either:
– retroactively; or
– with a modified retroactive approach
The selected method is applied to all leases.
The Group plans to apply the modified retroactive approach, which means that the accumulated effect of the transition to IFRS 16 will be recognized in the retained earnings in the opening balance at 1 January 2019. No comparative figures will be restated.
The Group plans to apply the following relief rules:
– The definition of what is viewed as leases according to IAS 17 and IFRIC 4 is used for all leases entered into before 1 January 2019
– Leases with a leasing term of 12 months or less and leases for which the underlying asset has a low value have not been included in the leasing liability and leasing asset
– Non-leasing components in all leases have been included in the leasing fee
A preliminary analysis shows that premises rental agreements contracted by the Group’s subsidiaries will reach an essential part of the total leasing asset.
In addition, the preliminary analysis indicates that the transition to IFRS 16 has a significant effect on the Group’s total assets. As at 31 December 2017, the Group’s future undiscounted minimum lease payments and non-cancellable operating leases amount to approximately SEK 700 M.
In 2019, the transition to IFRS 16 is expected to affect EBITDA and EBIT positively at the same time that the effect on result after tax is expected to be negative.