Source: https://www.ivx.com/investors/financial-reports/group-management-report-2014/
Timestamp: 2019-12-07 06:45:26
Document Index: 273850231

Matched Legal Cases: ['§ 315', '§ 315', '§ 175', '§ 4', '§ 186', '§ 203', '§ 186', '§ 71', '§ 71', '§ 84', '§ 6', '§ 6']

Group Management Report 2014 | InVision AG
of InVision AG for the Financial Year 2014
The following management report was prepared in accordance with the requirements under § 315 of the German Commercial Code (HGB) and contains information about InVision AG, Ratingen (hereinafter also referred to as “AG” or “Company”), and its consolidated subsidiaries (hereinafter together with the Company also collectively referred to as “InVision”, “InVision Group” or “the Group”). As the Group’s parent company, InVision AG performs group management functions and, at the same time, is the key member of the InVision Group. The explanations below generally relate to the Group, unless there has been an express reference to the Company itself.
The InVision Group develops and markets products and services for optimising workforce management, increasing the productivity, improving the quality of work, and reducing costs.
On 31 December 2014, InVision employed 100 employees worldwide (including the Executive Board members). Compared to the end of the previous year, the number of employees declined by 15 percent (31 December 2013: 118 employees). At the end of the year, 65 employees (31 December 2013: 66 employees) were employed in Germany, while 35 employees (31 December 2013: 52 employees) were employed in foreign subsidiaries.
The research and development costs in the fiscal year totalled TEUR 4,970 and increased by 11 percent (previous year: TEUR 4,490). Research and development costs as a percentage of revenues are 37 percent (previous year: 33 percent).
Information pursuant to § 315 (4) HGB and § 175 (2) AktG
Pursuant to a resolution adopted by the Company’s Shareholders’ Meeting on 24 August 2010, the Executive Board was authorised in accordance with § 4 (4) of the Company’s articles of association but subject to the consent of the Company’s Supervisory Board, to increase the Company’s registered share capital one or more times by a total of up to EUR 1,117,500 on or before 23 August 2015 and to do so by issuing new, no-par bearer shares in exchange for cash and/or non-cash capital contributions (Authorised Capital Account 2010). Shareholders must generally be granted a pre-emptive right, which gives them an indirect option to subscribe shares (§ 186 (5) AktG). The Executive Board is authorised, however, with the consent of the Supervisory Board, to exclude the shareholders’ pre-emptive right to subscribe shares in the following cases:
if the capital increase is carried out against cash capital contributions and the pro rata amount of registered share capital attributable to the new shares, for which the pre-emptive right is excluded, does not exceed 10 percent of the registered share capital available on the date that the new shares are issued and, in accordance with §§ 203 (1) and (2), 186 (3) sentence 4 AktG, the issue price of the new shares is not significantly lower than the stock market price of the same class of existing publicly listed shares (with the same features) at the time that the Executive Board definitively sets the issue price. Included in this maximum threshold amount for a pre-emptive right’s exclusion is the pro rata amount of the registered share capital that is attributable to shares, which had already been issued since 24 August 2010 from the authorised capital account or which could be subscribed on the basis of the option and conversion rights granted since 24 August 2010 or on the basis of conversion duties also established since that time, if - upon utilising the authorised capital account or upon the granting of the warrant-linked and/or convertible bonds, the shareholder’s pre-emptive rights would be excluded pursuant to or consistently with § 186 (3) sentence 4 AktG. Also added to the maximum threshold is the pro rata amount of the registered share capital attributable to treasury (own) shares, which the Company has bought back since 24 August 2010 on the basis of the authorisation granted pursuant to § 71 (1) no. 8 AktG and have been sold to third parties in exchange for a cash payment without having granted a shareholder pre-emptive right, unless the sale was carried out either on the open stock market or based on a public offer made to the shareholders;
for capital increases in exchange for the non-cash capital contributions, specifically for purposes of acquiring companies, divisions of companies and equity holdings;
the new shares may also be underwritten by financial institutions, which are designated by the Executive Board but which are subject to the obligation that they offer the shares to the shareholders (indirect subscription right).
Pursuant to a shareholder resolution adopted on 24 August 2010, the registered share capital was increased conditionally by up to EUR 1,117,500 (Conditional Capital Account 2010). The conditional capital increase must carried out only to the extent that the creditors, to whom convertible or warrant-lined bonds were issued by the Company on the basis of the authorising resolution of the Shareholders’ Meeting on 24 August 2010, exercise their conversion rights on or before 23 August 2015 and the Company has not satisfied the conversion claim in some other manner. The new shares will be entitled to draw dividends as of the beginning of the fiscal year in which they are issued. The Executive Board is authorised, with the consent of the Supervisory Board, to stipulate the details concerning the implementation of the respective conditional capital increase.
Pursuant to the shareholder resolution adopted on 24 August 2010, the Company was authorised to buy back its own shares in an amount representing a 10 percent pro rata amount of the registered share capital of EUR 223,500. The repurchased shares, together with the other treasury shares, which the Company has previously acquired and still holds or which must be attributed to the Company under § 71a et seq. AktG, cannot exceed 10 percent of the Company’s registered share capital. The authorisation is in effect until 23 August 2015. The shares purchased on the basis of the authorisation may be used for all legally permissible purposes.
To the Company’s knowledge, as of 31 December 2014, the following shareholders held more than 10 percent of the Company’s registered share capital:
InVision Holding GmbH, Ratingen (21.9%)
Peter Bollenbeck, Düsseldorf (17.0%)
Armand Zohari. Bochum (17.0%)
Matthias Schroer, Mülheim an der Ruhr (11.3%)
Executive Board members are appointed and dismissed in accordance with §§ 84 et seq. of the AktG. Pursuant to § 6 (1) of the articles of association, the Executive Board consists of at least two persons. Alternative members of the Executive Board may be appointed. Pursuant to § 6 (2) of the articles of association, the Supervisory Board is responsible for determining the number of, and appointing the regular Executive Board members and alternate Executive Board members and has the authority to revoke such appointments. The Supervisory Board is also responsible for selecting a member of the Executive Board to serve as that body’s chairman and for selecting other Executive Board members to serve that body’s deputy chairmen.
According to the International Monetary Fund, the economic output in the euro area increased by 0.8 percent in 2014, whereas the economic output in the United States increased by 2.4 percent.
Consolidated revenues during the reporting year equalled TEUR 13,409 (previous year: TEUR 13,557) and therefore decreased by 1 percent. Revenues from subscriptions increased by 25 percent to TEUR 9,467 (previous year: TEUR 7,596). Project revenues decreased by 34 percent to TEUR 3,942 (previous year: TEUR 5,961).
Revenues in the region of Germany, Austria and Switzerland decreased by 4 percent to TEUR 6,719 (previous year: TEUR 7,000), which represents a share of 50 percent (previous year: 52 percent). Revenues generated in other foreign countries increased by 2 percent to TEUR 6,690 (previous year: TEUR 6,557). Revenues from other foreign countries as a percentage of total revenues therefore equal 50 percent (previous year: 48 percent).
Personnel expenses declined in the reporting year to TEUR 6,547 (previous year: TEUR 7.624).
Other operating expenses decreased by 21 percent to TEUR 2,927 (previous year: TEUR 3,711). Office space expenses increased by 5 percent to TEUR 709 (previous year: TEUR 675). For the post-contractual handling of the sale of the consulting brand “Core Practice” an expense of EUR 422 and a corresponding other operating income in the same amount are incurred (previous year: TEUR 0). Consulting expenses declined by 30 percent to TEUR 306 (previous year: TEUR 435). Miscellaneous expenses increased by 10 percent to TEUR 493 (previous year: TEUR 448). The income from reversing the provisions increased to TEUR 424 (previous year: TEUR 27).
The operating result (EBIT) enhanced in the reporting period by 135 percent up to TEUR 4,124 TEUR (previous year: TEUR 1,754). The EBIT margin increased in the reporting period up to 31 percent (previous year: 13 percent).
Interest income increased to TEUR 24 (previous year: TEUR 16) and the interest expense also increased to TEUR 56 (previous year: TEUR 7).
In fiscal year 2014, consolidated net profit equalled TEUR 4,203 (previous year: TEUR 1,552).
Overall, business development in the fiscal year of 2014 was in line with expectations.
Earnings per share were EUR 1.94 (previous year: EUR 0.71), in 2014 based on an average of 2,208,515 shares (previous year: 2,176,806 shares).
Primarily due to significantly increased payments made for investing activities and payments to shareholders liquid funds decreased to TEUR 3,388 (previous year: TEUR 4,576) as of the end of the fiscal year. The Company owns securities valued at TEUR 1,000 (previous year: TEUR 0).
Trade receivables increased by 30 percent to TEUR 2,033 (previous year: TEUR 1,563). The income tax claims rose to TEUR 124 (previous year: TEUR 87). The prepaid expenses and other short-term assets remained almost unchanged at TEUR 185 (previous year: TEUR 180). During the reporting year, intangible assets decreased to TEUR 703 (previous year: TEUR 852) due to depreciation. Due to the purchase of a commercial property for own use tangible assets amount to TEUR 6,806 (previous year: TEUR 697). Deferred tax assets increased by 14 percent to TEUR 962 (previous year: TEUR 845).
Trade payables declined by 63 percent to TEUR 137 (previous year: TEUR 372). The provisions decreased by 37 percent to TEUR 917 (previous year: TEUR 1,467). The tax reserves decreased to TEUR 23 (previous year: TEUR 126). The short-term share of the deferred income and other short-term liabilities increased by 4 percent to TEUR 1,707 (previous year: TEUR 1,638).
The Company has raised a long-term bank loan in the amount of TEUR 4,000 in order to finance a commercial property for own use.
During the reporting year, the share capital was increased from company funds without issuing new shares by an amount of EUR 5,587,500, and subsequently reduced to the previous share capital in the amount of EUR 2,235,000. As a result, this led to a reduction of the capital reserve by the amount of EUR 5,587,500 with an unchanged share capital in comparison of the current reference date with the reference date of the previous year.
The balance sheet total as of 31 December 2014 equalled TEUR 15,239 (previous year: TEUR 8,853). Equity capital is now at TEUR 8,455 (previous year: TEUR 5,249), and the equity ratio equals 55 percent (previous year: 59 percent).
Cash flow from operating activities reached TEUR 3,089 in the reporting period (previous year: TEUR 3,026) and corresponds to a share of 23 percent of the Group revenues (previous year: 22 percent). The cash flow was affected significantly by the positive consolidated result.
On 18 April 2014, bankruptcy proceedings were initiated on the assets of InVision Software S.r.l.i.l., Milan. On the same date, this company was removed from the group of consolidated companies with a deconsolidation profit of TEUR 56.
In addition to the reimbursement of expenditures which they incurred in discharging their official duties, the members of the Company’s Supervisory Board are paid a fixed fee of EUR 5,000. The Chairman of the Supervisory Board receives twice that amount, and the Deputy Chairman receives one and one-half times that amount. The fee is paid after the fiscal half-year has ended. Any value added tax charged on the costs for reimbursement and fees is reimbursed.
The Executive Board compensation consists of a fixed-base salary, which increases if contractually defined revenue thresholds are met. Executive Board members also have a right to use a car leased by the Company. Furthermore, the Executive Board members will be paid an allowance to cover their costs for health insurance and long-term care insurance. The Company has also taken out private liability insurance to cover the Executive Board members, if those members do not have their own personal liability insurance protection. Moreover, the Company has executed a D&O insurance policy with a deductible.
The risk management is described and stipulated in a group risk management policy and its suitability and functionality is reviewed each year in connection with the audit of the annual financial statements.
Since 2011, InVision increasingly offers cloud-based services. If customers do not accept this offering, due to data security issues or any other considerations in principle, revenues of the InVision Group could permanently decrease accordingly.
After the end of the fiscal year, there was no special transaction which would be of material importance to the annual financial statements.
Forecast Report and Opportunities
According to the forecasts made by the International Monetary Fund, the economic output in the euro area will increase by 1.2 percent in 2015, whereas the economic output in the United States will increase by 3.6 percent.
InVision expects an increase in subscription revenues, a decrease in project revenues and an EBIT margin between 20 and 30 percent.
Ratingen, 11 March 2015 Peter Bollenbeck Armand Zohari