Axactor Annual Report 2016

Environment Axactor’s debt collection business is non-polluting. The company is committed to ensuring that its operations are safe and do not harm either its staff or the natural environment. The company also strives to provide all employees with a healthy and safe working environment. Quality, health, safety and the environment are integral aspects of the company’s business, and systems are in place to monitor and follow up any accident and incident. Corporate governance The board and management of Axactor are committed to maintaining high ethical standards and promoting good corporate governance. The company believes that good corporate governance builds confidence among shareholders, customers and other stakeholders, and thereby supports maximal value creation over time. As Axactor is a Swedish private limited liability company listed on the Oslo Stock Exchange, the Norwegian Recommendation for Corporate Governance (the “Recommendation”) does not apply directly to the Company. However, with due regard to the fact that the Company is listed in Norway and to a substantial degree approaches the Norwegian investor market, and further considering that Axactor wishes to place emphasis on sound corporate governance, the Company has prepared this policy document on the basis of the Norwegian Code of Practice for Corporate Governance dated 30 October 2014, but made certain neces- sary adjustments given the Company’s Swedish domicile. Axactors policy regarding corporate governance can be found on pages 76-80 of this annual report and on the company’s website. Corporate social responsibility The board and management of Axactor have implemented guidelines on values and ethics. The objective is to create a sound corporate culture and preserve Axactor’s integrity by helping employees to follow good business standards. Raising awareness of the guidelines has been the company’s main action in this area. The company is not aware of any breach of the guidelines. Shareholders and financing At the end of 2016, Axactor had 1 226 million outstanding shares, held by 9 700 shareholders. The nominal value of the AXA share is SEK 0.50 per share. The company’s EGM, held on 26 May 2016, authorised the board of directors to approve new issues of shares or other financial instruments irrespective of whether such an issue entails variation of shareholders’ preferential rights. The maximum dilution permitted under this authorisation was 34%, which translates into 400,000,000 new shares based on the new number of outstanding shares post the issue in kind to the sellers of IKAS company and post full exercise of outstanding Employee Stock Options. The authorisation is valid until the AGM to be held in May 2017. The company estimates that it has sufficient working capital for the 12 months following the balance sheet date. The board of directors therefore confirms that the going-concern assumption is met and that the annual accounts have been prepared in accordance with this assumption. The company has given considerable emphasis to providing shareholders and investors with timely, relevant new information on the company and its activities in compliance with applicable laws and regulations. Axactor is committed to increasing awareness of its shares in all relevant markets. The list of shareholders includes a substantial number of institutional investors outside the Nordic countries. Income and operating costs Full year income/gross collection was MSEK 387.2 (MSEK 4.4). where MSEK 144.7 came from collections on own portfolios (NPL) and MSEK 237.0 came from third party collection (3PC). Other Revenue accounted for MSEK 5.6. The NPL revenue is split with 24% and 56% coming from Spain and Germany respectively while the remaining 20% is generated from the Italian portfolios. Full year income from 3PC reached MSEK 237.0, and 30% of this was generated by the Spanish company ALD which we acquired in 2015, while the remaining income was generated by the 4 companies that were acquired during 2016. Operating earnings (EBITDA) for the year is negative by MSEK -61.0 (MSEK -30.6). Accumulated amortization of NPL portfolios for 2016 amounts to MSEK -32.8. Depreciation and Amortization excluding portfolio amortization was MSEK -29.8 (MSEK 0.8) and is primarily related to depreciation of intangible fixed assets pertaining to the company acquisitions made in Spain, Italy, Germany and Norway over the last year. Axactor AB | Annual report 2016 18