Financial information

Orio reports its financial results on a quarterly basis, while the annual report and sustainability report is published in March. Financial information will be submitted at the following occasions:

Summary of significant accounting policies


(a) Subsidiaries

Subsidiaries are all entities over which the Parent company has the power to govern the financial and operating policies generally accompanying a shareholding of more than 50 % of the voting power.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquire on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and eviously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies.

(b) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group’s share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit/(loss) of associates in the income statement.

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.

Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Swedish Kronor (SEK), which is the Group’s presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the 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 the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised 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 ‘financial items’. All other foreign exchange gains and losses are presented in the income statement within ‘Other operating income and expenses’.

(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 presentation currency are translated into the presentation currency as follows:

  • assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
  • income and expenses for each income statement are translated at average exchange rates; and
  • all resulting exchange differences are recognised in other comprehensive
  • 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. Exchange differences arising are recognised in other comprehensive income.

Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. 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 recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:

  • Buildings 10-40 years
  • Eqpuipment, machinery and installations 3-15 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. 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.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other operating income and expenses’ in the income statement.

Intangible assets

(a) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs, or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(b) Licenses

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of three to five years.

(c) Computer software

Costs associated with maintaining computer software programmes are recognized as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:

– it is technically feasible to complete the software product so that it will be available for use;
– management intends to complete the software product and use or sell it;
– there is an ability to use or sell the software product;
– it can be demonstrated how the software product will generate probable future economic benefits;

adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and the expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred.Computer software development costs recognised as assets are amortised over their estimated useful lives, which does not exceed five years.

Impairments of non-financial assets

Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised 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 of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). Prior impairments of non- financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.

Financial assets and liabilities


The Group’s financial assets are classified as ’Loans and receivables’.

Loans and receivables are non-derivative and financial assets with fixed payments or payments whose amounts can be determined. They are not traded on an active market. They are recognized as current assets except for items with duration with more than twelve months from balance sheet date, which are classified as non-current assets. In the balance sheet, the Group’s ’Loans and receivables’ comprise ’Other non-current receivables’, ’Accounts receivables’. ‘Other current receivables’ and ‘Liquid assets’.

The Group’s financial liabilities are classified as ’Financial liabilities at amortised cost’. In the balance sheet, the category comprise ’Accounts payable’, and ’Other current liabilities’.

Recognition and valuation

A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party to such in accordance with the terms of the instrument’s contract. A trade receivable is recognized in the balance sheet when an invoice has been sent. A trade payable is recognized when an invoice has been received. A financial asset is derecognized from the balance sheet when the rights under the contract are sold, expire, or when the Group loses control over them. The same applies to parts of a financial asset. A financial liability is derecognised from the balance sheet when the contractual obligation has been fulfilled or in some other way extinguished. The same applies to part of a financial liability.

Purchase or sale of a financial instrument is recognised on the trade date, which is the date when the Group is committed to buy or sell the asset. Financial instrument are initially reported at cost, corresponding to the instrument’s fair value plus transaction costs. Thereafter the recognition is depending on the classification of the financial instrument.

Loans and receivables

Loans and receivables arise when the company provides money, goods or services directly to the debtor without the intention of trading in the receivable rights. Loans and receivables are measured at amortised cost.

At every balance sheet date the Group evaluates whether there is any objective indications on impairment of a financial asset or group of financial assets due to recent events. Objective indications may comprise breach of contract, such as late or default of payment of interest or nominal amount, significant financial difficulties for the debtor and downgrading of the creditworthiness of customers. The impairment is calculated as the difference between the asset’s book value and the present value of estimated cash flows discounted at the original effective interest rate of the financial instrument. The impairment of the asset is recognised in the Group’s income statement.

If the need for impairment decreases in a following period and the decrease could objectively be referred to an event that occured after the recognition of the impairment (such as improvement in the creditworthiness of the debtor), the carry back of the earlier recognised impairment is recognised in the Group’s income statement.

Financial liabilities valued at amortised cost

Loans and other financial liabilities, including accounts payables, are measured at amortised cost.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.


Inventories comprise raw material, work-in-progress and finished goods and is measured at the lower of acquisition costs and net realisable value. The cost of inventories is estimated through the application of

the first-in first-out method (FIFO) and is calculated using weighted average prices and includes costs for bringing the inventories in place. Borrowings costs are not included.

Net realisable value is the estimated sales price in operating activities, less estimated costs for completion and to bring about a sale.

At the end of each reporting period the Group evaluates whether there are any indications on decreased value, in accordance with the described valuation method.

Cash and cash equivalents

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.

Share capital

Ordinary shares are classified as equity.

Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Employee benefits

(a) Pension obligations

The Group operates both defined benefit and defined contribution pension plans.

Defined benefit plans define an amount of pension benefit that an employee will receive on retirement. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

The Group operates the defined benefit ITP pension plan for its white collar employees in Sweden. Benefits under this plan are insured and funded through regular premiums to the mutual insurance company Alecta. The plan insured by Alecta is a multi employer plan and therefore accounted and presented as a defined contribution plan in accordance with IAS 19.20.

(b) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer.


Provisions for environmental restoration, restructuring costs and legal claims are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Revenue recognition

(a) Sales of goods

Revenues from sales of goods are recognised when the revenue can be reliably calculated and when all risks and rights adhered to the ownership has been transferred to the buyer. Revenues are recognized net of deductions for discounts, campaigns, market contributions and VAT.

(b) Sales of services

Sales of services include service, storing and distribution of spare parts.For sales of services, revenue is recognised in the accounting period in which the services are rendered, by reference to stage of completion of the specific transaction and assessed on the basis of the actual service provided as a proportion of the total services to be provided.

(c) Interest income

Interest income is recognised using the effective interest method.

Recognition of expenses

In the Group’s income statement presented by function, direct material and distribution is included in the item Costs of goods sold. Salaries, remunerations and other personnel related expenses are allocated to either Sales expenses or Administration expenses.

In the Parent company’s income statement, costs for commission attributable to services provided by the subsidiaries of the Group is recognised as Costs of goods sold.


Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified 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.

The Group leases certain property, plant and equipment. Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

As per 2013-12-31 the Group had only one lease contract identified as financial lease. All other were classified as operational lease contracts.As per 2012-12-31 all lease contracts were classified as operational lease contracts.

Dividend distribution

Dividend distribution to the company’s shareholder is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the company’s shareholder.

Accounting principles of the Parent

The Parent Company’s accounts are prepared in accordance with Swedish law, and with application of the Swedish Financial Reporting Board’s recommendation RFR 2 Reporting for legal entities. This means that the Parent Company shall comply with IFRS as much as possible. Any deviations that arise between the accounting principles of the Parent Company and the Group are due to restrictions to apply IFRS in the Parent Company due to the Annual Accounts Act and the Pension Obligations Vesting Act and in some instances for tax reasons.