ANNUAL REPORT 2012/131ij5r73z81m72a9uqy1agofi.wpengine.netdna-cdn.com/wp-content/up… · MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS 3 * This announcement is

A N N UA L R E P O R T 2012 /13

IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARYB

MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS 1

2 MANAGEMENT LETTER

5 FINANCIAL HIGHLIGHTS AND KEY RATIOS

6 STRATEGY AND CAPITAL STRUCTURE

11 OUTLOOK

12 PERFORMANCE OF BUSINESS SEGMENTS

20 PERFORMANCE OF GROUP

24 RISK MANAGEMENT

28 CORPORATE RESPONSIBILITY

34 CORPORATE GOVERNANCE

38 EXECUTIVE BOARD AND BOARD OF DIRECTORS

40 SHAREHOLDER INFORMATION AND SHARE PERFORMANCE

45 CONSOLIDATED FINANCIAL STATEMENTS

77 PARENT FINANCIAL STATEMENTS

91 DEFINITION OF KEY RATIOS

92 STATEMENTS

94 GROUP STRUCTURE

95 FINANCIAL HIGHLIGHTS AND KEY RATIOS, QUARTERLY

FOR 2012/13 (UNAUDITED)

Strategy and organisation finalisedThe financial year 2012/13 was a significant year for IC

Companys. Efforts of adjusting the corporate structure and de-

veloping a clear portfolio strategy for the Group during the past

few years have resulted in IC Companys now having an even

more transparent, simple and flexible structure and with a clear

plan for the future – to generate growth and boost earnings in

the Group’s Premium brands, and to strengthen the earnings

capacity of the Group’s Mid Market brands.

New segmentation and stronger focusDuring the financial year under review the main focus area has

been to reduce the complexity of the corporate structure and

create transparency in all parts of the business. As a conse-

quence of the adopted new portfolio strategy, a new segmenta-

tion of the Group’s activities and changes to the responsibilities

of the Group Management were implemented. This new seg-

mentation of the Group’s operations into three core segments

and one non-core segment has provided the Group with the

opportunity to focus even more on the clearly defined strategic

targets.

Premium brands deliver satisfactory resultsThe Group therefore finds it very satisfactory that its two

Premium segments have generated profits for the financial

year 2012/13 in accordance with the defined strategies which

confirms the potential of the three Premium brands Peak Perfor-

mance, Tiger of Sweden and By Malene Birger.

Foundation of The Original GroupWith the segmentation of the Group’s operations, a new busi-

ness unit in the Mid Market Contemporary segment came into

existence under the name The Original Group. The foundation

of The Original Group, which was announced in Q3 2012/13, is

well under way and with the latest restructurings, the first im-

portant steps have been taken towards improving this business

unit’s long-term earnings capacity under a less complex struc-

ture. The financial performance of this segment is expected to

improve already in 2013/14.

A YEAR MARKED BY ESSENTIAL CHANGES FOR IC COMPANYS

IC COMPANYS • ANNUAL REPORT 2012/13 • MANAGEMENT COMMENTARY2

Adjusted capacityThe corporate shared service functions have continuously been

adjusted during the financial year under review which has resul-

ted in improved profit margins for Group brands. This has also

made it possible to better and quicker adjust the capacity of the

shared service functions to the future activity level of the Group.

Finally, this adjustment has rendered it possible to eliminate the

excess capacity arising after the sale of the two Group brands

Jackpot and Cottonfield.

Important strategic divestment of Jackpot and CottonfieldThe sale of Jackpot and Cottonfield to COOP in May 2013 mark-

ed an important mile stone in the process of achieving a less

complex business model. The two brands in question, which

have generated declining revenues and operating losses during

a longer period of time, added complexity to the overall Group

perspective as their business operations to a large extent were

based on retail in Eastern Europe, which is considered far from

the Group’s core competence. After having concluded this sale,

the Group may now focus more on its profit-earning activities.

Sale of headquartersThe divestment of the two brands, several restructurings as well

as the relocation of The Original Group into one of the Group’s

other leases have in combination heavily reduced the utilisation

of the corporate headquarters. The Group therefore decided

to sell the property located Raffinaderivej, Denmark. The sales

process has been commenced and a clarification of the process

is expected by the end of the calendar year 2013.

High free cash flow and solid capital structureWith the expected sale of the headquarters, another of the

Group’s important targets will be accomplished which is a total

net interest-bearing debt of zero. During the past years the

Group has continuously employed its free cash flow to reduce

its net interest-bearing debt, and during Q4 2012/13 the short-

term net interest-bearing debt was turned into a net deposit.

Consequently, the Group now has a far more solid and flexible

capital structure which will support the need for potential invest-

ments in the Group’s Premium segments.

As the Group’s activities are expected to continue genera-

ting positive cash flow from operations, the improved capital

structure will thus imply that the Group will distribute any future

surplus liquidity to the shareholders through a combination of

dividends and share buy-back.

New Group CEOImmediately after the end of the financial year 2012/13 Mads

Ryder was appointed Group CEO of IC Companys A/S. Mads

Ryder joined the Group on 1 August 2013 and now that the

Group’s strategy and organisation have been finalised, he will

be heading the execution plans.

The Group reported mixed results, but the total perfor-mance was disappointingThe Group’s important Premium segments realised satisfactory

results for the financial year 2012/13 whereas the disappoin-

ting performance of the Mid Market Contemporary segment and

the discontinued operations had a negative impact on the total

Group performance for 2012/13. Revenue of continuing ope-

rations for the financial year 2012/13 amounted to DKK 3,314

million and the operating profit for the year after tax merely

amounted to DKK 6 million which is unsatisfactory.

Profit of continuing operations as expectedAfter having adjusted for total non-recurring costs of DKK 53

million for 2012/13, the operating profit for the year of continu-

ing operations amounted to DKK 210 million (DKK 209 million)

which is in line with the Management’s expectations.

A stronger IC CompanysThe Management looks back on a year marked by essential

changes which all have been implemented to ensure a stronger

IC Companys. The strategy is clear. The organisation and capa-

city have been adjusted. The cost and capital structures have

been optimised. The top priority is now to execute in order to

generate higher revenues and earnings growth for the Group.


**

This announcement is a translation from the Danish language. In the event of any discrepancy between the Danish and English versions, the Danish version shall prevail.

* EBITDA margin, adjusted for non-recurring itemsAll the above key ratios are based on continuing operations


DKK million 2012/13 2011/121) 2010/111) 2009/101) 2008/091)

INCOME STATEMENT Revenue 3,314.2 3,292.5 3,297.5 2,904.3 2,966.1 Gross profi t 1,868.9 1,834.6 1,925.2 1,730.3 1,738.8 Operating profi t before depreciation and amortisation (EBITDA) 248.5 290.5 415.0 346.3 250.2Operating profi t before depreciation and amortisation,

adjusted for non-recurring costs 301.5 304.5 443.0 354.3 365.2 Operating profi t (EBIT) 157.0 195.2 318.2 242.2 140.5 Net fi nancials (13.1) (0.7) (13.4) (5.2) (10.8)Profi t for the year before tax 143.9 194.5 304.8 237.0 129.7Profi t for the year of continuing operations 111.5 134.1 243.1 201.5 93.6 Profi t/loss for the year of discontinued operations (105.7) (44.7) 3.2 34.3 15.6Profi t for the year 5.8 89.4 246.3 235.8 109.2 Comprehensive income (3.8) 157.4 186.0 249.1 113.9

STATEMENT OF FINANCIAL POSITION Total non-current assets 520.3 722.9 770.7 793.3 803.7 Total current assets 1,502.0 1,284.6 1,155.7 1,010.5 981.0Assets classifi ed as held-for-sale 144.3 - - - -Total assets 2,022.3 2,007.5 1,926.4 1,803.8 1,784.7Share capital 169.4 169.4 169.4 169.4 169.4 Total equity 808.8 830.6 742.7 747.2 509.1 Total non-current liabilities 82.5 246.8 246.1 196.6 222.8Total current liabilities 1,131.0 930.1 937.6 860.0 1,052.8Liabilities concerning assets classifi ed as held-for-sale 140.0 - - - -Total equity and liabilities 2,022.3 2,007.5 1,926.4 1,803.8 1,784.7

STATEMENT OF CASH FLOWS Cash fl ow from operating activities 232.1 258.4 179.7 424.4 335.1 Cash fl ow from investing activities (66.3) (108.2) (103.2) (122.5) (135.8)Cash fl ow from investments in property, plant and equipment (58.2) (71.5) (79.3) (92.1) (129.5)Cash fl ow from operating and investing activities of

continuing operations 182.5 135.9 64.3 231.3 185.2Cash fl ow from operating and investing activities of

discontinued operations (16.7) 14.3 12.2 70.6 14.1Cash fl ow from fi nancing activities (34.8) (86.7) (142.8) (44.3) (83.0)Net cash fl ow for the year 131.0 63.5 (66.3) 257.6 116.3

KEY RATIOS - CONTINUING OPERATIONS Gross margin (%) 56.4 55.7 58.4 59.6 58.6 EBITDA margin (%) 7.5 8.8 12.6 11.9 8.4 EBITDA margin, adjusted for non-recurring items (%) 9.1 9.2 13.4 12.2 12.3 EBIT margin (%) 4.7 5.9 9.6 8.3 4.7 Return on equity (%) 13.6 17.0 32.7 32.1 19.1 Equity ratio (%) 40.0 41.4 38.6 41.4 28.5 Average invested capital including goodwill 1,402.1 1,320.7 1,209.2 1,173.5 1,162.1 Return on invested capital (%) 11.2 14.8 26.3 20.6 12.1 Net interest-bearing debt, end of year 118.2 248.1 310.9 243.4 533.1 Financial gearing (%) (2.7) 29.9 41.9 32.6 104.7

SHARE-BASED RATIOS* Average number of shares excluding

treasury shares, diluted (thousands) 16,402.1 16,406.3 16,519.9 16,549.3 16,524.4 Share price, end of year, DKK 122.0 97.5 221.0 176.0 103.0 Earnings per share, DKK 0.2 5.4 14.8 13.9 6.1Diluted earnings per share, DKK 0.2 5.4 14.7 13.9 6.1 Diluted cash fl ow per share, DKK 14.2 15.8 11.0 25.9 20.3 Diluted net asset value per share, DKK 49.1 50.5 44.7 44.7 30.0 Diluted price/ earnings, DKK2) 610.0 18.2 15.1 12.7 16.8

EMPLOYEES Number of employees, full-time equivalent at end of the year (continuing operations) 1,615 1,720 1,702 1,750 1,761

1) The comparative figures in the income statement have been adjusted in order to reflect that the brands Jackpot and Cottonfield have been separated as discontinued operations.

2) Diluted price/earnings for 2012/13 based on continuing operations amounted to 18.2.

* The effect of IC Companys’ programmes for share options and warrants has been included in the diluted values.

The key ratios and share data have been calculated according to the recommendations in “Recommendations and Ratios 2010” issued by the Danish Society of Financial Analysts. Please see definition of key ratios on page 91.

FINANCIAL HIGHLIGHTS AND KEY RATIOS


A CLEAR STRATEGY FOR IC COMPANYSIC Companys’ vision is to be one of the best developers of fashion and sports brands. The Group brands are de-

veloped by means of a well-defined business model and an efficient shared service platform which constitute the

framework for the Group’s mission of building successful brands by uniting business expertise with creativity and

innovation. It is IC Companys’ ambition that an increasing part of the Group’s total revenues and earnings derive

from brands in the Premium segment.

The market of fashion and sportswear

IC Companys operates within the market of fashion and sports-

wear which constitutes one of the world’s largest consumer

goods markets. Nevertheless, this market is highly fragmented

and regionally divided where even the biggest international

market players only account for small market shares. The mar-

ket of fashion and sportswear may roughly be divided into four

segments based on factors such as price, brand perception

and distribution chain. These four segments are as follows:

• Luxury segment comprising brands such as Gucci, Louis

Vuitton, Prada and Burberry.

• Premium segment comprising brands such as Peak Per-

formance, Tiger of Sweden, By Malene Birger, Hugo Boss,

Filippa K and Acne.

• Mid Market segment comprising brands such as InWear,

Matinique, Part Two, Soaked in Luxury, Esprit, GAP and

French Connection.

• Fast Fashion segment comprising brands such as H&M,

ZARA, Topshop and Mango

Then there is also a large mass-market for non-branded pro-

ducts as well as private labels.

IC Companys’ core business operates within the Premium and

Mid Market segments.

IC Companys’ business segments

IC Companys is one of the largest companies within fashion and

sportswear in the Nordic region with a core business comprising

seven brands within the two market segments – Premium (Out-

door and Contemporary) and Mid Market (Contemporary).

Five years ago the Premium segment constituted less than 60%

of the Group’s revenue, however, this segment has generated

an average annual growth rate of 5% during the last five years.

Today the Premium segment’s revenue share accounts for 70%.

The Mid Market segment, in contrast, has suffered an average

annual setback of 5% during the same period of time.

MARKET SEGMENTS Market for fashion and sportswear

LUXURY

PREMIUM

MID MARKET

FAST FASHION


The highest earnings level is generated by the Group’s Premium

segment which has realised an EBIT margin of approx. 8-10%

during the past few years whereas the Mid Market segment has

been under pressure generating an EBIT margin below 5%.

A focused portfolio strategy providing clear targets

IC Companys has set out a clear portfolio strategy comprising a

portfolio of brands within the Premium and Mid Market segments

as well as a matching set of key competences needed for opera-

ting successfully within these two segments.

The Group’s Premium segment comprising the three brands Tiger

of Sweden, By Malene Birger and Peak Performance operates in

attractive markets holding significant growth opportunities. The

Group’s Mid Market brands operate in a market characterised by

highly challenging market conditions.

While all of the Group’s business segments are operated with

strong focus on earnings, the Premium segments (Contemporary

and Outdoor) are also pursuing revenue growth. Consequently, in

the future these segments are thus expected to account for an in-

creasing share of the core business resulting in capital and other

resources primarily to be allocated for generating growth in these

business segments. The Group will strive at generating organic

growth in these segments. In the long-term, growth through acqui-

sitions may also prove to be an option in the Premium segment.

Both organic growth and improved earnings in the Premium seg-

ments are expected to be realised through higher market shares

in existing markets as well as internationalisation in new markets.

At present no actual acquisition plans have been formulated.

The Group’s Mid Market segment will focus on strengthening its

position in the Nordic core markets as well as harvesting the sy-

nergy potential between the four brands in the segment in order

to improve earnings.

Non-core businessThe two brands Saint Tropez and Designers Remix are conside-

red non-core business. Saint Tropez is a Fast Fashion brand and

is thus operating in a market positioned outside the corporate

strategic focus. IC Companys exercises active ownership but

the brand is not integrated into the corporate shared service

platform. Saint Tropez will continue its operations independently

and may in the long-term be divested. Designers Remix is a

Premium brand only partly owned by IC Companys which makes

it non-core business.

The corporate business model

The corporate business model seeks to maximise the value of

the Group’s portfolio of Premium and Mid Market brands while

recognising their different potentials. Focus is on boosting

performance of the individual brands through a combination of

strategic development, business support and shared service

functions.

With great respect for the individual brands, the fundamental

management philosophy for the Group’s Premium brands is that

each brand should have full ownership of those parts in the va-

lue chain being most important for ensuring a strong position in

the market. For the Group’s Mid Market brands the fundamental

management philosophy is rooted in sharing as much as pos-

sible in order to optimise the utilisation of the synergy potential.

IC COMPANYS BUSINESS UNITS Group brands divided into market segments

PREMIUM MID MARKET

Outdoor Contemporary Contemporary


Both the Premium and Mid Market brands share best practice in

key areas within the value chain as well as the corporate shared

service platform.

The corporate business model is based on three elements which

are as follows:

• Strategy, business development and support

• Corporate shared service functions

• People and culture

Strategy, business development and supportIC Companys has predefined frames for how to do business. This

includes well-defined structures and processes for development,

implementation and follow-up on brand strategies for all Group

brands.

It also includes principles, guidelines and tools on how to

practise the key business disciplines such as retail, franchise,

e-commerce and wholesale excellence, collection development

and sourcing of collections as well as marketing and brand-

building.

These frames have been developed in co-operation between

brands and the Executive Board and supported by Corporate

Business Development.

Corporate shared service functionsCorporate shared service functions have been set up in those

areas in which significant operational as well as knowledge

synergies have been identified.

The corporate shared service functions consist of the depart-

ments Finance, Global Sourcing, HR, IT, Legal & Real Estate and

Logistics. These service functions are shared by all brands to

simplify the day-to-day operations and to provide scale advanta-

ges in respect of costs/competences or control at Group level.

The shared service functions provide the Group brands with a

more efficient and service-minded set-up than they could obtain

on their own or source outside the Group. Efficient refers to a

set-up which is transparent and lean and consequently offers

services at competitive prices. In addition to this, it also offers

counselling which is competent, relevant and concrete. Service-

minded refers to a pro-active set-up which is customer-focused,

business-oriented and reliable.

The corporate shared service functions allow the brands to focus

on their core business – brand building and generating revenue

and earnings growth.

People and cultureIn IC Companys people play an important role in the Group’s

strategy execution. Differences are acknowledged and respected

– both between people and the different brands and their indivi-

dual cultures - however, a common set of beliefs throughout the

organisation is of vital importance.

This common set of beliefs is referred to as ”Leadership Beliefs”

and comprises competences and characteristics which are

particularly important for retaining a high performance culture

throughout the entire organisation and in the way the business

is operated.

The Group’s Leadership Beliefs form the framework as to how

people work in IC Companys and how IC Companys attracts, re-

tain and develop excellent employees who contribute in realising

the Group’s strategic targets.

Investments in the Premium segment supported by a strong capital structure

Growth strategy and the basis for future investments The expected future revenue development is based on the

growth and internationalisation strategy pursued in the Group’s

Premium segments. Since this strategy is highly driven by distri-

butor or franchise partners, investments in the Group’s Premium

brands will primarily include selected concept stores or particu-

larly important locations in key markets as well as brand-building

initiatives. Investments in the Group’s Mid Market segment

which is focusing on earnings will almost merely be limited to

retaining and adjusting the activities in the core markets. This

means that investments will primarily be implemented in the

Premium segment.

A well-functioning service platform on Group level means that

only limited investments are required in order to support a

growing business. In the future the Group aims at keeping the

annual investments level at roughly the same level as the annual

depreciation and amortisation. The Group’s future investment

level is expected to attain a level of 3% of the annual revenue.

The working capital is still expected to constitute approx. 12% of

the annual revenue and consequently it will gradually increase in

line with the activity level in the long-term.

Cash flow and debt levelThe Group still expects to generate a high level of cash flow from

operating activities. During the year under review the accumu-

lated surplus cash has been employed to reduce the Group’s

net interest-bearing debt. During Q4 2012/13 the short-term

net interest-bearing debt was turned into a net deposit, and with

the expected sale of the headquarters located Raffinaderivej,

Denmark, during 2013 the total net interest-bearing debt will be

converted into a net deposit.

As the Group’s total cash flow development is expected to be

positive in the coming years, the Group expects to accumulate

considerable surplus cash by 2013/14.

To maintain the highest possible flexibility in the future and

thereby support the growth strategies pursued in the Premium

segments in the best way possible, the Group has decided to


retain the level of net interest-bearing debt to zero. The Group’s

credit facilities will then primarily be employed to cover for seaso-

nal fluctuations of the cash outflows. As at 30 June 2013 the net

interest-bearing debt amounted to DKK 118 million.

The Group has furthermore decided that in the future the net

interest-bearing debt, including its lease commitments, may only

as a maximum be increased to a level three times higher than

EBITDA should such measures be necessary. At present the

Group has no plans of employing gearing to the maximum level.

Dividend policyAs a minimum, 30% of the consolidated profit after tax will be

distributed as an ordinary dividend.

After having paid ordinary dividends and with respect of the

zero net interest-bearing debt level as at 30 June, any additional

surplus liquidity will be distributed to the shareholders through

share buy-back or extraordinary dividend.

Based on the profit for the year of continuing operations,

Management will propose at the Annual General Meeting 2013

that a resolution recommending DKK 2.00 per ordinary share,

corresponding to a total dividend of DKK 33 million, in respect of

the financial year 2012/13 to be distributed as dividend to the

shareholders.

Furthermore, during the financial year 2013/14 Management

expects to distribute DKK 100 million through a combination of

share buy-back and extraordinary dividend.


OUTLOOK

Outlook for 2012/13 realised

Consolidated revenue of continuing operations for the financial

year 2012/13 amounted to DKK 3,314 million (DKK 3,293

million) corresponding to an increase of 1%. The last reported

outlook for continuing operations stated an expected level of

DKK 3,250-3.300 million.

In the Group’s interim report for Q3 2012/13 Management

specified the outlook of the operating profit for 2012/13 of

continuing operations. The consolidated operating profit for

2012/13 was expected to attain a level of DKK 170-200 mil-

lion excluding non-recurring costs for Q4 2012/13. During Q4

the Group recognised non-recurring costs of DKK 38 million.

Operating profit for 2012/13 of continuing operations amounted

to DKK 157 million. After having adjusted for the non-recurring

costs recognised in Q4 2012/13, the operating profit amounted

to DKK 195 million and was consequently in line with the last

announced outlook for the financial year 2012/13.

During the year under review the Group incurred total non-recur-

ring costs of DKK 53 million relating to the continuing operati-

ons. After having adjusted for these, the consolidated operating

profit for the year of continuing operations amounted to DKK

210 million (DKK 209 million) corresponding to an EBIT margin

of 6.3%.

Investments of continuing operations for the financial year

2012/13 amounted to DKK 66 million (DKK 108 million) which

is lower than expected (the last reported outlook indicated an in-

vestment level of the same level as the financial year 2011/12).

These investments were primarily attributable to the Group’s

Premium segments.

Outlook for 2013/14

The Group’s Premium brands are expected to continue the posi-

tive development and generate solid growth rates for 2013/14.

As a consequence of the challenges in the Group’s Mid Market

segment, which is expected to suffer a revenue setback, the

total consolidated revenue growth for 2013/14 is expected to be

modest.

However, earnings are expected to be improved in all segments

and the total consolidated earnings are consequently expected

to increase significantly compared to DKK 157 million realised in

2012/13.

Investments for the financial year 2013/14 are expected to

attain a level of DKK 70-90 million primarily for an expansion of

the distribution in the two Premium segments.

Management will propose at the Annual General Meeting 2013

that a resolution recommending DKK 2.00 per ordinary share,

corresponding to a total dividend of DKK 33 million, in respect of

the financial year 2012/13 to be distributed as dividend to the

shareholders. Furthermore, during the financial year 2013/14

Management expects to distribute DKK 100 million through a

combination of share buy-back and extraordinary dividend.


PREMIUM OUTDOOR Peak Performance constitutes the Group brand in the Premium Outdoor segment. The target is to improve reve-

nue and earnings supported by the new strategy plan where focus on product development and sale to the end

customers are key elements. During the financial year under review the organisation has been strengthened by a

new brand CEO.

Premium Outdoor

The main target of the brand is to generate growth through

enhanced market penetration and internationalisation and

thereby boost both revenue and earnings.

Peak Performance forms the largest brand in Scandinavia

regarding tecnical and fashion sportswear. The brand was

originally founded within the skiing community in 1986 by pas-

sionate skiers. Since then, Peak Performance has been among

the world’s leading producers when it comes to technical,

performance sportswear.

The Nordic home markets account for the majority of Peak

Perfomance’s revenue with Sweden as the largest market.

During the financial year 2012/13 the four Nordic countries

accounted for 67% of the total revenue. The brand has gained

a strong foothold in Europe with the markets in the Alps being

particurlarly important. The market segment Rest of Europe

thus accounted for 29% of revenue in 2012/13 whereas

the market segment Rest of the world accounted for 4% of

revenue.

The brand’s products are sold through 2,065 selling points of

which 86 are branded stores divided between 46 franchise

stores and 40 own retail stores. The wholesale customers repre-

sent 1,979 selling points. Furthermore, Peak Perfomance is sold

through own as well as third party e-commerce channels.

To read more about Peak Performance please visit their web

page at www.peakperformance.com.

Development in 2012/13

During the financial year under review Peak Performance imple-

mented a new and well-defined strategy. This new strategy plan

forms an important foundation for the efforts of capitalising on

the brand’s large potential. Peak Performance’s strategic target

is to be the number one brand for skiers and the lifestyle they

love to live focusing especially on product development and sale

to the end customer. The strong focus on product development,

which distinguishes Peak Perfomance positively from other

2012/132011/122010/11 2012/132011/122010/11

1,200

1,000

800

600

400

200

0

36

30

24

18

12

6

0

180

150

120

90

60

30

0

Revenue developmentDKK million

EBIT development and EBIT margin DKK million %

Geographic breakdown of revenue

Nordic region 67%

Rest of the world 4%

Rest of Europe 29%

EBIT EBIT margin

PREMIUM OUTDOOR Financial highlights and key ratios


brands within the same segment, and the increased focus on

winning the end customers, where they do their shopping, are

both key elements of the strategy plan.

Headed by a new brand CEO, efforts have been made during the

year to strengthen the organisation by recruiting key employees

and managers – e.g. within sale, marketing and product develop-

ment. A strong team is now in place and with a revitalisation of

the strong culture, which has always lived in Peak Performance,

the organisation has a solid foundation with a clear focus on the

brand’s targets.

The increased focus on product development takes its outset

within technical performance sportswear which has always been

the brand’s core competence with especially outerwear being an

important product segment. With development projects such as

the highly innovative “Project 9” and the re-launch of the “R&D”

concept it is Peak Performance’s target to be among the leading

producers within this type of clothes as well as to transfer

these innovative features to the Casual collection. An optimised

Outdoor collection for this segment has been launched and also

in this segment the ambition is that Peak Performance must dif-

ferentiate distinctively from its peers.

During 2012/13 Peak Performance has taken decisive steps

towards a larger internationalisation. The brand has entered

into distributor agreements in Eastern Europe, China and Hong

Kong. These agreements are not considered to contribute much

to revenues in the short-term, however, these markets are ex-

pected to boost the brand’s growth significantly in the long-term

perspective.

Earnings development

Peak Performance realised a revenue of DKK 931 million for the

financial year 2012/13 (DKK 976 million) corresponding to a

setback of 5% which is primarily attributable to the brand’s who-

lesale customers generally being under pressure – particularly

in the large Swedish home market. Revenue for Q4 2012/13

amounted to DKK 99 million (DKK 80 million) corresponding to a

growth rate of 24%.

The wholesale customers have been under pressure during

the financial year 2012/13 which is reflected in a wholesale

revenue setback of 9%. Sales through own sales channels

(retail, e-commerce and outlets) increased by 6% compared to

2011/12 which was primarily attributable to high e-commerce

sales as well as sales through outlets. However, the brand suf-

fered a minor retail same-store setback of 0.2% which includes

a reported decline in sales in physical stores and an increase

within e-commerce.

The oprating profit increased by 25% to DKK 69 million (DKK 55

million) corresponding to an EBIT margin of 7.4% (5.6%). Even

though this marks a significant improvement, Peak Perfor-

mance’s profit margin is still expected to improve. The positive

development of the EBIT margin is primarily attributable to a

significant improvement of the gross margin as a consequence

of improved purchasing and sourcing as well as lower inven-

tory write-downs. Lower capacity costs also contributed to the

improved earnings in spite of lower revenues compared to the

financial year 2011/12.

Q4 Q4 Year YearDKK million 2012/13 2011/12 2012/13 2011/12

Revenue 99.0 79.8 930.5 975.5 Wholesale and franchise 49.4 30.7 625.2 686.6 Retail, e-commerce and outlet 49.6 49.1 305.3 288.9

Operating profi t before depreciation, amortisation and net fi nancials (EBITDA) (44.1) (47.1) 95.5 85.4Depreciation, amortisation and impairment losses (6.4) (9.5) (26.6) (30.6)

Operating profi t (EBIT) (50.5) (56.6) 68.9 54.8

EBIT margin (%) (51.0) (70.9) 7.4 5.6

PREMIUM OUTDOOR Earnings overview


PREMIUM CONTEMPORARY The Premium Contemporary segment comprises the two brands Tiger of Sweden and By Malene Birger which both

realised growth and had success with the international expansion during the year under review.

Premium Contemporary

The Premium Contemporary segment comprises the two

brands Tiger of Sweden and By Malene Birger and the main

target for these two brands is to generate growth through

enhanced market penetration and internationalisation thereby

boosting both revenue and earnings.

Tiger of Sweden was established in 1903 in Sweden and has

its foundation in the strong menswear confection tradition

and solid tailoring skills, refined for 110 years. Today, Tiger of

Sweden is a modern, unisex brand which distinguishes itself by

offering a design characterised by ”a different cut”.

By Malene Birger is a high-profile, Danish designer brand for

women which offers luxury at affordable prices. Having enjoyed

10 years of success and continuous progress, the brand has

achieved great recognition on the international fashion scene.

Geographically, the Nordic home markets acount for the ma-

jority of the segment’s revenue. Consequently, Denmark, Swe-

den, Norway and Finland accounted for 78% of the segment’s

revenue in 2012/13. The market segment Rest of Europe

accounted for 15% of revenue whereas 7% of the segment’s

revenue derived from markets positioned outside Europe.

In total the segment has 2,032 selling points which are divided

between 1,967 wholesale customers, 29 franchise stores,

18 own retail stores and 18 concessions. Furthermore, the

segment’s products are sold through own as well as third party

e-commerce channels.

To read more about Tiger of Sweden and By Malene Birger

please visit their web pages at:

www.tigerofsweden.com

www.bymalenebirger.com


Tiger of Sweden All of Tiger of Sweden’s geographical markets and all sales

channels reported progress and growth for the financial year

2012/13 which is considered very positive. The brand has

experienced a breakthrough in the important strategic markets

Great Britain and Germany. Tiger of Sweden ranked among the

best-selling menswear brands at the internationally recognised

department store Selfridges in London and in August 2013 a

new Tiger of Sweden flagship store is scheduled to open at St.

James, London – a very important event toward supporting

the brand’s continued expansion in Great Britain as well as

2012/132011/122010/11 2012/132011/122010/11 Nordic region 78%


Rest of Europe 15%

1,200

1,000

800

600

400

200

0

36

30

24

18

12

6

0

180

150

120

90

60

30

0



EBIT EBIT margin


PREMIUM CONTEMPORARY Financial highlights and key ratios


internationally. The brand has also performed well in Germany

with newly opened shop-in-shops in the recognised department

stores such as Oberpollinger in Munich and Galleries Lafayette in

Berlin. Finally, during the year under review Tiger of Sweden has

expanded its position in the Nordic home markets through both

store openings and increased sales to wholesale customers.

Tiger of Sweden has enjoyed great success with different

branding initiatives such as the marketing campaigns “Dressing

Room Sessions”, “Working 9 to 5” and the Tiger Jeans campaign

“Paint it Black” which all differentiate the brand significantly

from its peers. Consequently, this emphasises Tiger of Sweden’s

strong brand DNA which is rooted in “a different cut”.

During the financial year under review Tiger of Sweden have com-

pleted the insourcing of its accessories collection. The effect of this

insourcing is expected to lead to a significant future revenue growth

deriving from accesories which previously only constituted revenue

from royalties. At the same time the sourcing and capacity costs will

increase as Tiger of Sweden will be fully responsible for the entire

value chain in the future.

By Malene Birger With a new brand CEO in place By Malene Birger experiences

strong growth in the Nordic home markets and makes great

progress of the internationalisation process which is a key focus

area. The brand has worked on opening a new store in the well-

known department store Galleries Lafayette as well as its own

retail store in Palais Royal in Paris – both with scheduled grand

openings in August 2013. In addition, agreements have been

entered into with selected distributors in Japan and in the Middle

East – markets which are both characterised by high purchasing

power and a high demand for consumer goods and thereby

important markets for By Malene Birger.

In January 2013 By Malene Birger hosted one of the most

spectacular fashion shows in Denmark seen in a long time. The

scene of the Royal Danish Theater was used for the brand’s

10-year anniversary show – a show which subsequently received

good publicity on both the Danish and international fashion

scene and a show which particularly emphasised By Malene

Birger as a strong international fashion brand.


The Premium Contemporary segment realised a revenue of

DKK 1,064 million, corresponding to an increase of 18% compa-

red to last financial year. Both brands contributed to the positive

revenue development, however, Tiger of Sweden accounted for

the highest growth rate of the two brands. Revenue for this seg-

ment in Q4 2012/13 amounted to DKK 243 milllion correspon-

ding to an impressive growth rate of 33%.

The segment reported revenue growth in the wholesale channel

as well as higher sales through own stores and e-commerce. In

particular, the wholesale channel reported strong progress with

a growth rate as high as 19%. Tiger of Sweden contributed most

to this positive development. Both brands contributed equally to

the growth rate of 14% reported in the retail channel which is at-

tributable to new stores and higher sales through existing stores.

The retail operations generated a same-store increase of 13%

driven by both own stores as well as e-commerce.

The operating profit for this segment amounted to DKK 95 million

(DKK 98 million) and thereby realised an EBIT margin of 8.9%

compared to an EBIT margin of 10.8% for 2011/12. Investments in

future growth and the continued international expansion have af-

fected the operating profit due to higher operating costs as well as

increased costs for the mentioned insourcing of Tiger of Sweden’s

accessories. The gross margin for the Premium Contemporary seg-

ment for 2012/13 was at the same level as last financial year.

Depreciation and amortisation were higher in 2012/13 compa-

red to last financial year. As expected, they reflect the signifi-

cant investments in growth and expansion implemented in this

segment during the past few years.


Revenue 242.6 182.2 1,063.6 905.1 Wholesale and franchise 137.5 90.9 676.7 566.8 Retail, e-commerce and outlet 105.1 91.3 386.9 338.3

Operating profi t before depreciation, amortisation and net fi nancials (EBITDA) 14.0 11.8 120.9 119.7Depreciation, amortisation and impairment losses (7.0) (5.3) (25.9) (21.9)

Operating profi t (EBIT) 7.0 6.5 95.0 97.8

EBIT margin (%) 2.9 3.6 8.9 10.8

PREMIUM CONTEMPORARY Earnings overview


MID MARKET CONTEMPORARY The Mid Market Contemporary segment comprises four brands organised under the independent division named

The Original Group. Since the division was founded in the spring 2013 it has initiated a number of restructurings

which are expected to contribute to an improved earnings capacity.

Mid Market Contemporary

The Group’s Mid Market segment comprises four brands orga-

nised under one division named The Original Group. The three

brands InWear, Part Two and Soaked in Luxury are women’s

fashion brands whereas Matinique exclusively produces me-

answear. Besides the four brands the division also includes the

multi-brand store concept Companys.

The main targets for The Original Group are to harvest the syner-

gies between the four brands, to improve the earnings capacity

as well as to strengthen the market position in the Nordic core

markets.

Geographically, the majority of the segment’s revenue in

2012/13 is divided between the Nordic home markets

Denmark, Sweden, Norway and Finland which accounted for

63% whereas the market segment Rest of Europe accounted

for 30% of revenue. In particular, a large part of Matinique’s

revenue derived from the market segment Rest of Europe. The

market segment Rest of the world accounted for the remaining

7% of revenue.

The Original Group has 3,879 selling points of which 3,737 are

wholesale customers. The segment has 71 franchise stores of

which 40 are Companys stores. Finally, products from the four

brands are sold through 24 own retail stores, 47 concessions

as well as through own third party e-commerce channels.

To read more about the four brands of this segment please

visit their home pages at:

www.inwear.com

www.matinique.com

www.parttwo.com

www.soakedinluxury.com


As a consequence of the Group’s new segmentation of its

brand portfolio, the four Mid Markets brands, together with the

Companys concept, were united in February 2013 under one

division with a shared management team. This division was

named The Original Group. During spring 2013 the division

moved into separate headquarters at one of the Group’s other

leases. During Q3 2012/13 non-recurring costs of DKK 8 million

were realised in connection with establishing the division, the

initial restructurings and the relocation.

The Original Group still faces serious challenges due to its very

complex business – in particular, the number of distribution

channels and geographical markets. Consequently, this business

unit is now working on simplifying the complex business by

focusing on the Nordic core markets with wholesale customers,

concessions, outlets and the Companys store concept as its

primary distribution channels.

2012/132011/122010/11 2012/132011/122010/11 Nordic region 63%


Rest of Europe 30%

1,200

1,000

800

600

400

200

0

12

8

4

0

(4)

(8)

60

40

20

0

(20)

(40)



EBIT EBIT margin


MID MARKET CONTEMPORARY Financial highlights and key ratios


The largest and most profitable distributor agreements in the

other geographical markets are retained and the segment’s

e-commerce solution will be optimised. In the retail channel the

focus will be on concessions and the Companys concept stores,

and on certain geographical wholesale markets the sales set-up

will be changed into a more flexible one. Adjusting the number

of geographical markets and distribution channels is expected to

lead to a significant reduction in the division’s total revenue and

cost base in the coming financial year.

According to the plan, the business model will be simplified with

focus on improving the earnings capacity. A more commercial ap-

proach towards collection development with smaller collections

and improved price points, realisation of sourcing synergies, less

expensive logistic solutions as well as focus on the marketing ef-

forts in the Nordic core markets are some of the initiatives which

are expected to contribute to improved earnings in the future.

Part of the expected savings arising from the restructurings will

be re-invested in the Nordic core business by means of more

competitive price points as well as enhanced marketing efforts.

As a consequence of the restructuring plan, The Original Group

has implemented structural organisational changes in Q4

2012/13 resulting in staff reductions – both in the sales organi-

sation and in the division’s headquarters.

In total the implemented initiatives in Q4 2012/13 led to non-re-

curring costs attributable to, e.g., closure of showrooms and retail

stores as well as staff reductions. The total non-recurring costs

for Q4 2012/13 of DKK 38 million are distributed as follows;

• closure of showrooms and retail stores DKK 19 million;

• staff reductions DKK 14 million; and

• other costs in connection with the restructuring plan

DKK 5 million.


The segment realised a revenue of DKK 891 million (DKK 995

million) corresponding to a decline of 11% which is equally

driven by reported setbacks in retail, wholesale and franchise.

The segment’s same-store development reflected a decrease of

7% driven by lower sales through own stores.

The operating loss for this segment amounted to DKK 37 mil-

lion (profit of DKK 40 million) corresponding to a negative EBIT

margin of 4.2% compared to a positive EBIT margin of 4.0% in

2011/12. However, the financial performance was significantly

affected by total non-recurring costs of DKK 46 million for the

financial year under review. After having adjusted for non-

recurring costs, the segment realised an operating profit of DKK

9 million.

The unsatisfactory results are attributable to a revenue setback

which has not been offset sufficiently by adjustments of the ca-

pacity costs. Furthermore, a deteriorated gross margin also had

a negative impact on earnings.

During the next two financial years the mentioned initiatives are

expected to have a total negative revenue impact of approx. DKK

80-100 million whereas a positive effect of approx. DKK 30-50

million is expected on earnings when the initiatives are fully

implemented.



Operating profi t before depreciation, amortisation and net fi nancials (EBITDA) (51.1) 8.5 (9.1) 71.8Depreciation, amortisation and impairment losses (7.6) (7.2) (28.0) (31.7)

Operating profi t (EBIT) (58.7) 1.3 (37.1) 40.1

EBIT margin (%) (32.8) 0.6 (4.2) 4.0

MID MARKET CONTEMPORARY Earnings overview


NON-CORE BUSINESS A part of the Group’s brand portfolio is defined as non-core business due to these operations lying either

outside the Group’s core competences or because they are not wholly owned by IC Companys.

Non-core business

The Group’s operations comprise two brands classified as non-

core business. These two brands; Saint Tropez and Designers

Remix are both profitable.

Saint Tropez is a Fast Fashion brand which has not been inte-

grated into IC Companys’ shared service platform. The brand

will continue its operations independently and may in the long-

term be divested.

Designers Remix is a Premium brand which has developed

well during the past few years. IC Companys holds 51% of the

brand and the founders Niels and Charlotte Eskildsen hold the

remaining 49%. The future ownership of the brand remains to

be resolved.


The segment reported a revenue of DKK 430 million (DKK

417 million) corresponding to a 3% increase. New stores in the

segment’s retail channel contributed to the positive develop-

ment whereas sales to the segment’s wholesale and franchise

customers have almost been on the same level as last financial

year. The segment experienced a minor same-store setback, yet,

e-commerce reported growth.

During the year 2012/13 Saint Tropez, which accounts for the

majority of the segment, increased its focus on improving ear-

nings after the disappointing earnings performance in 2011/12.

This higher focus has resulted in significantly improved earnings

which contribute substantially to the segment’s operating profit

of DKK 30 million (DKK 3 million) corresponding to an EBIT

margin of 7.0% (0.6%). The satisfactory earnings growth is at-

tributable to an improved gross margin and lower capacity costs.

Saint Tropez has consequently regained its strong earnings

capacity documented over the past couple of years.



Operating profi t before depreciation, amortisation and net fi nancials (EBITDA) 7.3 (0.9) 41.1 13.6Depreciation, amortisation and impairment losses (2.8) (2.8) (10.9) (11.0)

Operating profi t (EBIT) 4.5 (3.7) 30.2 2.5

EBIT margin (%) 4.4 (3.5) 7.0 0.6

NON-CORE BUSINESSEarnings overview


RESTRUCTURINGS AFFECT THE TOTAL CONSOLIDATED OPERATING PROFIT Consolidated revenue for 2012/13 of continuing operations amounted to DKK 3,314 million corresponding to a

minor increase of 1%. In total, the Group’s Premium segments and non-core business contributed to the improved

earnings, but the non-recurring costs for restructurings, primarily attributable to the Group’s Mid Market Contem-

porary segment, affected the profit for the year significantly. However, a reduction in the Group’s working capital

and the total interest-bearing debt ensured that the Group once again reported a significantly improved cash flow.


Revenue developmentConsolidated revenue of continuing operations for the financial

year 2012/13 amounted to DKK 3,314 million (DKK 3,293 mil-

lion) corresponding to a setback of 1%. Revenue was positively

affected by foreign currency translation of DKK 94 million.

Consolidated revenue of continuing operations for Q4 2012/13

amounted to DKK 624 million (DKK 568 million) corresponding

to a growth rate of 10%. Revenue was positively affected by

foreign currency translation of DKK 6 million.

Minor improvement of gross marginConsolidated gross profit for the financial year 2012/13

amounted to DKK 1,869 million (DKK 1,835 million) correspon-

ding to an improvement of 2%.

The gross margin for 2012/13 amounted to 56.4% (55.7%)

which reflects an improvement of 0.7 percentage points com-

pared to last financial year. The higher gross margin is primarily

attributable to an improved inventory situation compared to last

financial year. When adjusted for new products, the volume of

products was significantly lower at the end of the season resul-

ting in lower inventory write-downs. Furthermore, the Group has

experienced an improved control of its sourcing activities. On the

other hand the market pressure throughout 2012/13 has been

fierce and the expected reduction in customer discounts was not

fully feasible.

Consolidated gross profit for Q4 2012/13 amounted to DKK 336

million (DKK 327 million) corresponding to an increase of 3%.

The gross margin for Q4 2012/13 amounted to 53.9% (57.6%)

corresponding to a setback of 3.7 percentage points compared

to Q4 2011/12. The lower gross margin is primarily attributable

to the temporary changes between Q3 and Q4 2012/13 where

the gross margin was realised by an improvement of 3 percen-

tage points in Q3 2012/13.

Non-recurring costs incurred for restructurings imple-mented in the Mid Market Contemporary segmentConsolidated costs including other operating income and costs

for 2012/13 amounted to DKK 1,712 million (DKK 1,639 mil-

lion) corresponding to an increase of 4%. The costs were negati-

vely affected by foreign currency translation of DKK 45 million.

The cost rate for the year under review amounted to 51.7%

(49.8%) and thus increased by 1.9 percentage points.

Consolidated costs for Q4 2012/13 were negatively affected by

non-recurring costs of DKK 38 million primarily attributable to

provisions for restructurings in the Mid Market Contemporary

segment covering closures of showrooms and retail stores,

severance payments as well as a number of other implemented

measures.

Total consolidated non-recurring costs of continuing operations

amounted to DKK 53 million compared to DKK 14 million in

2011/12.

After having adjusted for non-recurring costs and foreign cur-

rency translation in both 2012/13 and 2011/12, consolidated

costs were reduced by DKK 11 million compared to last financial

year. This cost reduction was achieved in spite of higher costs

in the Premium Contemporary segment needed for boosting

present and future growth.

Consolidated costs for Q4 2012/13 amounted to DKK 435 mil-

lion (DKK 380 million) which constitutes an increase of 14%. The

costs were negatively affected by foreign currency translation of

DKK 5 million.

After having adjusted for non-recurring costs and foreign cur-

rency translation in Q4 for both 2012/13 and 2011/12, consoli-

dated costs rose by DKK 12 million driven by higher costs in the

Premium Contemporary segment due to the realised growth and

investments in future growth.


Operating profit at the same level as last financial year after having adjusted for non-recurring costsConsolidated operating profit of continuing operations for

2012/13 amounted to DKK 157 million (DKK 195 million) corre-

sponding to a setback of 19% and an EBIT margin of 4.7% (5.9%).

After having adjusted for non-recurring costs in both 2012/13

and 2011/12, the operating profit of DKK 210 million was rea-

lised at the same level as last financial year (DKK 209 million).

Consolidated operating loss for Q4 2012/13 amounted to DKK

98 million (loss of DKK 53 million) corresponding to a deteriora-

tion of DKK 45 million.

Net financialsNet financials totalled costs of DKK 13 million which constitutes

an increase of DKK 12 million (costs of DKK 1 million). This

increase is attributable to realised loss on derivative financial

instruments of DKK 4 million (gain of DKK 4 million). Interest on

liabilities to credit institutions for 2012/13 was lower compared

to 2011/12 due to a lower debt level during the year.

Net financials for Q4 2012/13 totalled costs of DKK 4 million

(income of DKK 4 million). This decrease is attributable to a posi-

tive impact from realised gain on derivative financial instruments

in 2011/12.

Tax on profit for the yearTax expense for 2012/13 amounted to DKK 8 million (DKK 40

million) which constitutes 56% (31%) on profit before tax.

The higher tax rate compared to last financial year is primarily

due to the fact that the Group reassessed its tax assets in

2012/13 and the tax carried in the income statement was thus

affected negatively by DKK 9 million.

Tax payable amounted to DKK 40 million (DKK 39 million) after

having utilised losses carried forward from previous years. An

amount of DKK 55 million of the tax assets recognised in previous

years was utilised corresponding to a tax value of DKK 14 million.

Profit for the year of continuing operationsProfit for the year of continuing operations declined by 16% to

DKK 112 million (DKK 134 million).

Loss for the year of discontinued operationsLoss for the year of discontinued operations amounted to DKK

106 million (loss of DKK 45 million) corresponding to a setback

of 136%.

This loss for the year is attributable to the fact that the proceeds

received from the sales transaction with COOP do not exceed the

provisions and impairment losses recognised for the disconti-

nued operations.

Profit for the yearConsolidated profit for the year amounted to DKK 6 million (DKK

89 million) corresponding to a decline of 93%.

Comprehensive incomeComprehensive income for 2012/13 totalled a loss of DKK 4

million (income of DKK 157 million). The comprehensive income

was positively affected by adjustments deriving from foreign

currency hedging instruments by DKK 1 million (positive ad-

justment of DKK 85 million) and negatively affected by foreign

currency translation adjustments regarding subsidiaries by DKK

10 million (positive adjustment of DKK 11 million).

Statement of financial position and cash flows

Statement of financial positionConsolidated assets rose by DKK 14 million to DKK 2,022 mil-

lion as at 30 June 2013 (DKK 2,008 million) which is attribu-

table to an increase of the consolidated current assets.

Non-current assets were reduced by DKK 203 million relative to

last financial year which is primarily attributable to assets clas-

sified as held-for-sale of DKK 144 million.

Consolidated intangible assets declined by DKK 23 million to

DKK 258 million (DKK 281 million) which is attributable to fewer

investments as well as amortisation and impairment losses on

software and IT systems.

Property, plant and equipment decreased by DKK 194 million to

DKK 144 million (DKK 338 million) primarily as a consequence

of DKK 144 million being classified as assets held-for-sale as

well as impairment losses in connection with discontinued

operations. In general the Group has invested less than the level

of depreciation.

Current assets rose by DKK 217 million to DKK 1,502 million

(DKK 1,285 million) due to surplus liquidity being invested in

securities as well as the reclassification of the Group’s head-

quarters as assets classified as held-for-sale.

Inventories amounted to DKK 529 million for 2012/13 (DKK 529

million) which is at the same level as last financial year. During

the financial year under review the Group has continued focusing

on reducing its inventories and inventory risks by clearing produ-

cts out-of-season which has improved the age distribution of the

Group’s inventories compared to 30 June 2012. As a consequen-

ce of this clearing, inventory write-downs were reduced by DKK

17 million to DKK 90 million (DKK 107 million). The inventory

turnover amounted to 3.1 which is the same level as 2011/12.

Trade receivables as at 30 June 2013 amounted to DKK

391 million (DKK 392 million) which is at the same level as

2011/12. Gross trade receivables rose by DKK 12 million to


DKK 460 million (DKK 448 million). This development reflects

the Group’s planned change in delivery flows resulting in col-

lections being delivered earlier to the stores. Furthermore, the

age distribution of trade receivables was deteriorated. Neverthe-

less, the level of days sales outstanding was at the same as last

financial year. Write-downs of trade receivables rose by DKK 13

million to DKK 69 million (DKK 56 million) as a consequence of

the deteriorated age distribution.

Other receivables declined to DKK 72 million (DKK 137 million)

which is primarily attributable to the fact that accruals of financial

foreign exchange contracts last year included an unrealised gain

of DKK 76 million compared to an unrealised gain of DKK 26

million for the year under review. This gain is primarily a result of

higher sales currency exchange rates throughout the financial

year 2012/13.

Prepayments decreased by DKK 14 million which is attributable

to a decline in accruals of rent and others.

The Group’s surplus liquidity has been invested in securities

which amounted to DKK 101 million (nil).

Furthermore, cash and cash equivalents increased by DKK 27

million to DKK 110 million (DKK 83 million).

After adjusting for non-cash funds, the total working capital

amounted to DKK 403 million (DKK 410 million) which is at the

same level as last financial year. The working capital constitutes

11% of revenue for the year under review (11%).

Long-term liabilities decreased by DKK 164 million to DKK 83

million (DKK 247 million) which is primarily due to DKK 140 mil-

lion being classified as liabilities concerning assets classified as

held-for-sale.

Current liabilities increased by DKK 201 million to DKK 1,131

million (DKK 930 million). An amount of DKK 140 million has

been classified as liabilities concerning assets classified as

held-for-sale under current liabilities. Furthermore, provisions

under current liabilities have been increased by DKK 99 million

as a consequence of discontinued operations and the restruc-

turings in the Mid Market Contemporary segment. Liabilities to

credit institutions were reduced by DKK 2 million whereas trade

payables rose by DKK 23 million. Other liabilities were reduced

by DKK 72 million to DKK 252 million (DKK 324 million) which is

primarily attributable to a decrease of unrealised loss on finan-

cial contracts and other costs payable.

Statement of cash flows Consolidated cash flow from operating activities for 2012/13

amounted to an inflow of DKK 232 million (inflow of DKK 258

million) corresponding to a decrease of DKK 26 million compa-

red to 2011/12 which is attributable to a reduction of DKK 104

million in the operating profit. The Group has achieved a reduc-

tion of DKK 7 million in the tied-up working capital compared to

a reduction of DKK 31 million in the tied-up working capital last

financial year.

Investments for 2012/13 amounted to DKK 66 million (DKK

108 million) corresponding to a decrease of DKK 42 million. The

investments were primarily employed for interior design of new

stores and IT.

Consolidated cash flow from financing activities for 2012/13

amounted to an outflow of DKK 35 million (outflow of DKK 87

million).

Total consolidated cash flow for 2012/13 amounted to an inflow

of DKK 131 million (an inflow of DKK 64 million) corresponding

to an increase of DKK 67 million.

Cash situationAs at 30 June 2013 consolidated net interest-bearing debt

amounted to DKK 118 million (DKK 248 million) corresponding

to a decline of DKK 130 million compared to 30 June 2012.

As at 30 June 2013 the Group’s total credit facilities including

banker’s credit and guarantees constituted DKK 924 million

(DKK 1,097 million) in terms of withdrawal rights of which an

amount of DKK 329 million has been drawn in relation to current

and non-current liabilities to credit institutions and an amount of

DKK 188 million has been drawn for trade finance facilities and

guarantees. Undrawn credit facilities thus amounted to DKK 407

million. All credit guarantees, except from the Group’s loan in the

corporate head office, are standby credits which may be drawn

with a day’s notice. The withdrawal rights have at no point in

time during the financial year 2012/13 exceeded 63%, including

provisions for trade finance facilities, bank guarantees, etc.

Equity Equity as at 30 June 2013 decreased by DKK 22 million to

DKK 809 million compared to 30 June 2012 (DKK 831 million)

which is primarily attributable to negative foreign currency trans-

lation adjustments concerning subsidiaries and intercompany

loans whereas payment of dividend in respect of the financial

year 2011/12 reduced equity by DKK 25 million. Equity ratio as

at 30 June 2013 was 40.0% (41.4%).

Events after the reporting period

Mads Ryder was appointed Group CEO of IC Companys A/S as at

1 August 2013.

Besides this, no material events have taken place after the

reporting period that have not been recognised or included in

the Annual Report.


EFFICIENT RISK MANAGEMENT IN THE FASHION AND SPORTS INDUSTRIESAs a market player within the fashion and sports industries the Group is exposed to a number of risks. Through

the development of an innovative knowledge centre and more than 30 years of experience, the Group has

achieved a unique ability to control the various risks. To the extent that the efficiency, flexibility and service level

in respect to brands are not compromised, the risks that fall outside the scope of the Group’s key disciplines are

outsourced to external partners.

Due to the Group’s activities, IC Companys is exposed to a num-

ber of risks. This entails a variety of risks all inherent in the fa-

shion and sports industries. The Management of IC Companys

considers efficient risk management as an integrated part of all

Group activities and all risks are therefore assessed thoroughly

in order to minimise uncertainty and thus create stakeholder

value. Reassessment of the risks will be conducted annually in

order to determine whether the risks have changed or the risk

control measures are adequate or relevant.

In general, IC Companys handles risk management at a

strategic level and categorises its risks as either core risks or

non-core risks. Both risk categories are managed with the pur-

pose of limiting the volatility in Group cash flows. The first risk

category represents areas in which IC Companys hold special

competences, whereas the second category represents areas

which are either core risks for other companies or risks that fall

outside the scope of efficient management.

Core risks

Any business operation involves a variety of risks and the

success of the business depends on its ability to control these

risks, minimise uncertainty and thus optimise its profit. The

Group creates stakeholder value by managing and minimising

uncertainty within the core activities in a manner superior to

that of its competitors. IC Companys considers fashion, sup-

plier, logistics, inventory, debtor, employee and brand value

risks as such risks. The Management believes that these core

risks should be accepted as an integrated part of the Group’s

business. The Group’s processes are thus employed in such

a manner that risks are controlled efficiently based on the ex-

periences and competences achieved over time in the fashion

and sports industries by the Group.

Fashion riskAll Group brands are heavily influenced by fashion trends. As

collections change at a minimum of four times a year and have

a long lead time, there is a potential risk that the products

when they reach the stores do not appeal to the customers and

consequently cannot be sold at the expected volumes and at

the expected prices.

Each individual brand develops their collections from a com-

mercial and facts-based approach in order to minimise this risk.

Furthermore, at Group level, there is an inherent high level of

diversification as a result of the number of different and inde-

pendent brands.

Brand value riskThe Group operates nine strong brands which all hold significant

intangible values accumulated over a number of years. Conti-

nuous development of the collections results in an all-existing

risk of errors which may damage the value of the individual

brand.

However, a strong control of the fashion risk influencing the Group

brands and a selective distribution help reducing this risk. Further-

more, the Group brands continuously work on brand building and

marketing in order to retain and build up intangible values.

Bad publicity in the national and international media or with the

brand’s core customers may lead to considerable loss of brand

value. The Group leads an active policy of corporate responsibi-

lity which requires the Group brands to comply with a number of

guidelines. Furthermore, the individual brands have their own

focus areas within corporate responsibility. The risk of Group

brands being involved in questionable issues, which may lead to

loss of brand value, is thus limited.

Supplier riskThe Group’s products are solely produced by sub-suppliers

which ensures a high level of flexibility. Yet, the co-operation

with external suppliers entails a number of risks in regards of

correct production of the ordered products.

Sourcing for all brands is handled by own shared sourcing of-

fices in China, (including Shanghai and Hong Kong) India and

Romania and to a limited extent by the use of agents.


The Group’s sourcing strategy, of which the objective is to capi-

talise on the relevant synergies arising between Group brands

by systematising the co-operation between Group brands and

selected sourcing partners, ensures that individual brands have

their production located in the right countries and co-operate with

the best suppliers.

The strategy enhances the compliance control of the Group’s

business and ethical standards through a systematic scoring of

all suppliers. In addition to this, the Group is working on increa-

sing the trade with each individual supplier as well as improving

the co-operation with its best suppliers. Consequently, this will

lead to a reduction in the number of suppliers and thereby a less

complex sourcing structure.

Furthermore, the sourcing structure makes it possible for all

brands to handle geographic sourcing alternatives safely and

quickly and thereby move production to wherever the combina-

tion of price, quality and supply stability is best. This allows IC

Companys to harness new sourcing opportunities more efficiently

as well as reduce the operational risk.

In 2012/13 China accounted for 63% of the production whereas

rest of Asia accounted for 10%, Europe for 24% and Africa for

2%. The Group has a total of 314 suppliers of which the largest

10 suppliers account for 30% of the total production value. The

largest single supplier accounts for 5% of the total production

value and the Group is thus not substantially dependent on one

single supplier. IC Companys is also working towards increasing

the number of suppliers who have completed BSCI training.

These efforts are described further in the section Corporate

Responsibility on page 28. The number of the Group’s suppliers

who are actively employing the BSCI processes amounted to

62% in 2012/13.

Supplier risk management is based on the Group’s international

sourcing experience gained over more than 40 years.

Inventory riskSale through own stores and the need to carry inventories and

supplementary products for retailers result in a risk that pro-

ducts, which during the year have been allocated for sale, re-

main unsold at the end of the season just as the Group is often

liable for sourcing materials until the products reach the stores

which is 6-9 months.

By focusing on collection development and the purpose of each

individual style in the brand’s distribution, a significant part of


the inventory risk may be reduced. A substantial amount of the

total purchase has been pre-ordered by the Group’s wholesale

customers which also contributes to a reduction of the inventory

risk.

The Group also has a network of outlets to where surplus pro-

ducts are channelled and are sold continously during the year.

Capacity in this network is increased or reduced as required.

Any products that cannot be sold through own outlets are sold to

brokers for resale outside the Group’s established markets.

As a consequence of the divestment of Jackpot and Cottonfield

and thereby the closure or sale of these brand stores, the num-

ber of own stores will be reduced significantly and the inventory

risk will thus be reduced.

Logistics riskCollections are products with a limited life-span. If the right pro-

ducts are not available in the stores at the right time, this may

result in lost revenues or a potential higher amount of returned

and surplus products leading to write-downs. Late, faulty or non-

delivery thus poses a risk.

In general the Group’s products are handled in two ways; the

products are either distributed in flat packages or hanging with

the flat packages being the primary transport method. The ma-

jority of the Group’s products sourced in Asia is transported on

container liners to Europe, but if deemed necessary air freight

is used instead. Measured by total volume, approx. 85% of the

products are transported on container liners while approx. 15%

is transported by air freight. All the Group’s products sourced in

Europe are transported by truckage which is a very flexible trans-

port method. Flexible geographical sourcing and the possibility of

moving freight from container liners to air planes help reducing

the logistics risk

The core of the Group’s logistics structure consists of three large

warehouses; a modern warehouse in Brøndby, Denmark, which

handles the Group’s flat packages for the majority of the Group

brands, a warehouse at Raffinaderivej, Denmark, which handles

the Group’s hanging products for the majority of the Group

brands and a warehouse in Herning, Denmark, which handles

the Group brand Tiger of Sweden’s hanging products.

Many years of logistics management and distribution experi-

ence within the fashion and sports industries has reduced the

logistics risk significantly. The corporate shared logistics function

is continuously working on optimising and enhancing the plan-

ning systems. Investment in a new Warehouse Management

System is expected to contribute further to the management and

optimisation of the corporate logistics function. To ensure timely

deliveries to our own and customers’ stores is a key element of

the corporate shared service functions.

Debtor risk The risk of late or no payment from the Group’s wholesale

customers poses a significant risk to the Group. The Group

brand products are sold at more than 8,000 selling points. As a

considerable number of the Group’s wholesale customers are

customers of more than one brand, the actual number of whole-

sale customers is lower. No customer accounts for more than 3%

of the Group’s wholesale revenue.

Prior to entering into business relations with customers, the

Group always assesses the customer pursuant to the Group’s

Debtor Policy and based on their distribution set-up. These as-

sessments are subsequently performed on a regular basis. By

ensuring a healthy base of customers, the debtor risk is reduced;

however, unanticipated losses may still occur. In addition to this,

a new bank integration system is expected to provide a faster

and improved overview of the Group’s wholesale customers.

Credit insurance is typically only taken out in those countries where

the credit risk exposure is estimated to be high and where this

is feasible. This primarily applies to distant markets in which IC

Companys is not represented through an independent sales set-up.

Credit terms vary in line with individual market practise. In the

past years the Group has recognised loss on trade receivables

amounting to less than 1% of the wholesale revenue. The Group

has thus recognised loss on trade receivables of 0.6% of the

wholesale revenue for the financial year under review.

Non-core risks

The Group is exposed to a number of other risks. These risks

relate to activities in which the Group does not hold special

competences in efficient risk management. To the extent that

the efficiency, flexibility and service level in respect to brands

are not compromised, these risks are outsourced. Such strategic

decisions are made at management level.

Political riskA substantial part of the Group’s sourcing takes place in markets

posing significant political risks. The Group’s single largest poli-

tical risk factor concerns reliable supplies from China which ac-

counts for 63% of the Group’s sourcing. The sourcing functions

are continuously monitoring the conditions at the global sourcing

markets and are thereby assisting in providing updated reports


of the situation. As mentioned earlier, geographic relocation of

sourcing may take place swiftly if deemed necessary.

Financial risksThe Group’s financial risks may be categorised as follows;

foreign currency exposure risk, interest rate risk and liquidity

risk, including counter-party risk. The Group monitors and con-

trols all its financial risks through the Parent Company’s Treasury

Department. The use of financial instruments and the related

risk management are controlled and set by the Group’s Treasury

Policy approved by the Board of Directors.

Financial instruments are solely used by the Group to hedge

financial risks. All financial instruments are entered into as a

means of hedging the underlying commercial activity and thus

no speculative contracts are made.

Foreign currency exposure riskThe Group is exposed to significant foreign currency exposure

risks which arise through purchase of supplies and sale of pro-

ducts in foreign currencies. The main part of the Group’s

purchase of supplies is made in the Far East and denominated

in USD and USD-related currencies while the main part of the

revenues and capacity costs are denominated in DKK, SEK, EUR

and other European currencies. The natural currency hedge in

the Group’s transactions is thus limited.

In general, the Group hedges all material transaction risks on

a forward trailing 15 months basis. The Group primarily uses

foreign exchange contracts to hedge the Group’s foreign cur-

rency exposure risks.

Interest rate riskThe Group’s interest rate risks are related to the Group’s

interest-bearing assets and liabilities.

The Group’s interest rate risk is controlled by obtaining loans

with a floating or fixed rate and/or financial instruments hedging

against the interest rate risk on the underlying investment.

Liquidity riskThe Group’s cash resources and capital structure are allocated

and planned in such manner as to always ensure and support

the Group’s on-going operations as well as planned investment

projects. Measures taken to minimise liquidity risks are described

further under the section Cash flow and debt level on page 8.

Please see note 31 to the consolidated financial statement for

further information on the Group’s financial risks at 30 June

2013.

IT riskThe Group is dependent on efficient and reliable IT systems for

the day-to-day business operations as well as to ensure control

of product sourcing and to enhance efficiency throughout the

Group’s supply chain. The Group is continuously working on

minimising the risks relating hereto. This work primarily includes

development and new employment of IT systems as well as

the day-to-day operation of these systems. Access controls and

implemented contingency plans also contribute to an improved

security when using the Group’s IT systems.

Solid IT support in all aspects of sourcing, distribution, logistics,

administration and sales renders it possible for the individual

brands to focus on the creative and commercial development

aspects. The Point of Sale IT System has led to significant

improvements of the Group’s retail data which permits a more

efficient utilisation of the sales area. The new Warehouse

Management System is expected to contribute significantly to

an improved logistics function and the bank integration system

will enhance the control of customer payments. Consequently,

in a number of areas the shared operation of the IT platform

ensures a significant risk reduction for the individual brands and

the Group.

Employee riskIn order to succeed with the corporate strategy, IC Companys

strives at creating a high-performance culture, where passio-

nate, committed employees may provide the all-important com-

petitive edge. To attract, develop and retain high-performance

employees thus poses a risk to the Group.

IC Companys strives at being an attractive employer offering

unique career opportunities, talent development and the op-

portunity to move between the different Group functions and

brands.

The Group has a professional and experienced HR department

which supports the development of IC Companys as a know-

ledge centre. Furthermore, the HR department is responsible for

the development and updating of guidelines, tools, processes

and training, and conducts employee surveys to ensure that the

Group is well on its way to becoming a world class employer.

This helps support the development of the Group’s performance

culture and ensures that all employees have clear goals and can

act as accountable, trustworthy ambassadors for our brands

and Group.


CORPORATE RESPONSIBILITY IN IC COMPANYS IC Companys’ corporate responsibility framework of People, Planet and Profit is based on international principles

and the UN Global Compact. Working with these international principles continues to play an important role in

guiding IC Companys in making the right decisions while also contributing to the Group’s readiness to meet future

challenges. As a natural part of aligning the corporate responsibility work with international best practices and to

further develop the implementation framework, IC Companys has joined the Sustainable Apparel Coalition.

Corporate responsibility policy

IC Companys recognises that the Group is part of an industry with

many corporate responsibility (CR) challenges both in terms of

complex supply chains and resource challenges. These chal-

lenges are taken seriously and the Group has adopted an overall

approach of making sure that it is not a barrier to sustainable

development. However, IC Companys would like to take it one step

further and where possible work towards turning these challenges

into opportunities. The Group therefore strives at employing its

creativity and strong innovation skills to make a difference and

contribute to sustainable development.

For IC Companys, CR is about not only reassuring that the pro-

ducts comply with the Group’s high quality standards and fulfill

the customer expectations, but also that they are produced

responsibly. IC Companys considers CR to be an integrated part

of its business and an essential element in the Company’s profi-

tability. Furthermore, working with CR plays an important role in

making sure that IC Companys is ready to meet future challenges.

IC Companys’ CR efforts are based on the UN Global Compact’s

10 principles which are rooted in internationally adopted declarati-

ons and conventions on human rights, labour rights, environmen-

tal protection and anti-corruption. These principles and the United

Nations Guiding Principles are used as an overall framework to

guide CR policies and implementation processes in the Group.

IC Companys has pledged to work pro-actively internally as well

as externally with its suppliers to promote compliance with these

principles. The Group will never be able to guarantee 100% comp-

liance, but it strives at making a positive difference and setting up

due diligence processes to avoid non-compliance issues. Further-

more, the Group’s Compliance Hotline is used to enable access to

remediation in cases of non-compliance.

A cornerstone in IC Companys’ approach is a continuous assess-

ment of the Group’s CR risks and opportunities. This is essential

for the efforts in securing compliance. Equally importantly, it

enables the Group to prioritise and allocate resources to where the

biggest impact can be achieved. Moreover, IC Companys believes

that for CR to be sustainable, it has to be integrated in the relevant

functions within IC Companys and the Group brands. Consequently,

the Group has thus assigned responsibility for the CR issues and

CR targets to the relevant functions based on continuously updated

assessment.

For a complete description of the CR policy, please see the corpo-

rate webpage www.iccompanys.com/responsibility/.

Highlights in 2012/13

Further development of the implementation frameworkDuring 2012/13 IC Companys has focused on further develo-

ping the processes to guide the implementation of the Group’s

CR strategy. This includes a very thorough revision and update

of IC Companys’ Restricted Substance List to become even

more comprehensive and aligned with the Group’s ‘precau-

tionary principle’. Furthermore, IC Companys has launched a

‘Chemical Workflow’ to assist employees in eliminating harmful

chemicals in the different stages of a collection development.

IC Companys has also introduced a new risk management pro-

cedure based on Country Risk Analyses to assess challenges in

existing sourcing countries and to assess potential new sourcing

countries.

IC Companys’ CR implementation framework continues to pro-

vide valuable guidance in the Group’s everyday CR work where

the processes offer hands-on guidance on how to operationalise

the CR work.

First Danish member of the Sustainable Apparel Coalition During the financial year under review IC Companys has joined

the Sustainable Apparel Coalition (SAC), an industry-wide initia-

tive established by a group of sustainability leaders from global

apparel and footwear companies. The members recognise that

addressing the industry’s current CR challenges is both a busi-


ness imperative and an opportunity. The member base consists

of more than 90 leading apparel and footwear brands, retailers,

suppliers and NGOs working to reduce the environmental and so-

cial impacts of apparel and footwear products around the world.

IC Companys sees SAC as an opportunity to take it one step

further and be a part of defining the rules of the game.

IC Companys believes that cooperating to find common solutions

is the way forward instead of every member developing their

own initiatives which frustrates suppliers and creates confusion

amongst consumers.

IC Companys believes that through cooperation with other mem-

bers in SAC and setting a common industry standard, the Group

has an opportunity to contribute to a more transparent and

sustainable fashion industry. This will benefit consumers, sup-

pliers and brands. Furthermore, a membership of SAC is in line

with how IC Companys, through the membership of the Danish

Ethical Trading Initiative (DIEH), the Business Social CompIiance

Initiative (BSCI) and Kemikaliegruppen, works to find solutions

and try to exert leverage beyond what can be achieved alone.

Finally, the membership matches the Group’s focus on education

as one of the main means to being able to identify potential CR

challenges and solutions. In SAC IC Companys gains access to a

highly qualified network which provides valuable insight in new

trends, challenges and opportunities.

During 2012/13 IC Companys has used the member-ship of SAC

to, among others, participate in developing The Higg Index. The

Higg Index is primarily an indicator-based tool for apparel that

enables businesses to evaluate material types, pro-

ducts, facilities and processes based on a range of environ-

mental and product design choices. IC Companys has piloted

The Higg Index both at a product level among the Group’s own

brands and on a brand level to assist in setting targets for the

Group’s CR efforts. The pilot exercise has also shown the edu-

cational value of The Higg Index by highlighting the options for

improving the sustainability of a product.

For further information on SAC and The Higg Index, please visit

www.apparelcoalition.org

Working with the suppliers The Group sees its suppliers as critical partners in its CR efforts.

Consequently, using a partnership approach to promote respon-

sible supply chain management has continued to be a main

focus area during 2012/13. This has included not only assisting

the Group’s suppliers to find the most responsible solutions

but also listening to the suppliers’ ideas on how to improve

the Group’s CR performance. An example of this partnership

approach is Peak Performance’s long-term sourcing strategy

which focuses on a closer relationship with the suppliers. The

target of Peak Performance is to be the best brand in the world

on relationship-based sourcing as opposed to transaction-based

sourcing. To achieve this, Peak Performance has worked on

being closer to its suppliers and has among others held strate-

gic workshop with the suppliers and set CR requirements for its

partner suppliers.

During the financial year under review IC Companys has also

started to implement the supplier scorecard which in addition to

parameters like quality, price and delivery also includes CR pa-

rameters. The tool is used to further promote dialogue with the

Group’s suppliers and to emphasise the focus on CR performan-

ce as an important aspect of being an IC Companys supplier.

The implementation is still at an initial phase, but the Group has

already received very positive feedback from the suppliers who

have been involved.

An important aspect of working with responsible suppliers is

the Group’s membership of BSCI. The Group uses the BSCI

audit process but puts equal emphasis on BSCI’s capacity

building work. Consequently, IC Companys has continued during

2012/13 to be an active member of BSCI’s Capacity Building

Working Group and to continuously promote BSCI training for the

Group’s suppliers. In other words, auditing is important but can

never stand alone. It is through training and partnerships with

suppliers that the Group expects to see the biggest improve-

ments.

Furthermore, IC Companys has updated the Group’s Standard

Operating Procedures to be aligned with the CR approach

including the focus on the partnership approach and training,

etc. Likewise, the Group has developed new procedures for its

nominated fabric and trim suppliers.

During the financial year 2012/13 the Group has reduced the

number of suppliers to 314 from 349.

DIEH (Danish Ethical Trading Initiative)As one of the founding members of DIEH, IC Companys conti-

nues to play a significant role in the initiative. During 2012/13

IC Companys’ CR Manager has played the role of vice chairman

and also functioning chairman for a period. This period coinci-

ded with the partnership agreement on responsible garments

and textile production in Bangladesh between the Danish

Ministry of Foreign Affairs and the Danish garment and textile

industry which was established in the aftermath of the terrible


accident in the garment factory in Savar, Bangladesh. DIEH took

lead in not only getting the support of the Danish industry to the

partnership, but also in the follow-up work on suggesting con-

crete actions for implementation and getting the Danish industry

to sign the international Accord on Fire and Building Safety in

Bangladesh. An agreement which IC Companys has also signed

and which put emphasis on ensuring fire and building safety at

factories by means of inspections as well as education of factory

workers and building inspectors.

For IC Companys its engagement in DIEH reflects the Group’s

belief in working together in a multistakeholder approach to

create sustainable solutions to the challenges in the industry.

This also reflects the growing awareness in the industry that no

single stakeholder can solve the complex challenges alone. On

the contrary, there is great potential in working together and in

identifying where each stakeholder has the best competences to

contribute to sustainable solutions.

Implementation of the Compliance HotlineDuring the financial year under review IC Companys has imple-

mented the Compliance Hotline allowing employees/managers

and agents working on the Group’s behalf to report suspected

misconduct in a secure and confidential way. The Compliance

Hotline plays an important role in ensuring that IC Companys

complies with all internal policies and regulatory requirements

and is an important part of the on-going due diligence work. IC

Companys has only received one case during the financial year

2012/13 which was handled by the CR Committee.

Targets for 2013/14

In the next financial year IC Companys will continue its strong

support of the UN Global Compact Principles and will work

hard to have even better systems and processes in place for

implementing the CR efforts across the board. Furthermore, the

Group’s membership of the SAC and the implementation of The

Higg Index will be an important driver for the Group’s CR work in

2013/14. Moreover, IC Companys will finalise the implementation

of the anti-corruption policy which was not fully implemented in

2012/13. In terms of using more quantitative indicators inspired

by the Global Reporting Initiative, the Group will assess the new

set of guidelines (G4) and then evaluate if inspiration can be

drawn from this new set of indicators for future reporting.

Furthermore IC Companys will focus on the following;

• full roll out of Supplier Scorecard tool;

• continue the work to further increase transparency

of supplier CR performance and ranking;

• continuous training and dialogue with preferred and

partner suppliers;

• active membership of BSCI including participation

in working groups;

• active membership of SAC;

• active membership of DIEH;

• continuous updating of the RSL;

• tools and training on harmful chemicals for

brands and production offices;

• increased training for sourcing and design teams

on using The Higg Index;

• implementation of The Higg Index Facility

and Product modules; and

• continue support to DIEH and the search

for multistakeholder solutions.

The above sections and the following schedule constitute the

Statutory Annual Corporate Responsibility Statement, cf. section

99a of the Danish Financial Statements Act. For more informa-

tion about the Group’s CR activities, please read the separate

CR report on the corporate website www.iccompanys.com.

”Through Sustainable Apparel Coalition we can all contribute and work together in setting a common industry

standard which we believe is needed.”


CR ACTIVITIES AND RESULTS 2012/13

COMMITMENTS

IC Companys supports and respects the Univer-sal Declaration of Human Rights which is outlined in the UN Global Compact principles 1-6. We do this by continuously identifying and assessing potential adverse human rights impacts both internally in IC Companys as well as in cooperation with our suppliers

Furthermore, we use education both externally with our suppliers and internally as a mean to develop the capacity and understanding of the importance and value of working with human rights

SYSTEMS

CR Integration in relevant departments, managed by Corporate CR Manager, who reports directly to our Group CEO

Consultation Committee with participation of ma-nagement and employees representatives

CR standards included in Occupational Health and Safety guidelines

Annual Employee Surveys

Compliance Hotline

Business Social Comp-liance Initiative (BSCI) Code of Conduct (cove-ring principles 3-6)

Supplier scorecard incl. CR indicators linked to BSCI process

Country Risk Analysis

Social and Labour part of The Higg Index

ACTIONS

Assessed CR risk and opportunities through Country Risk Analyses

Employee survey

Input to and membership of BSCI capacity building work group

Assessment of suppliers using BSCI process

Initiated rating of our suppliers (Supplier Scorecard) according to progression in BSCI process

Global Sourcing Project

Performed country risk analysis on all existing supplier countries

Piloted and provided input to the Social and Labour part of the The Higg Index

Signed International Ac-cord on Fire and Building Safety in Bangladesh

RESULTS

Increased awareness of CR challenges in existing and potential supplier countries

Increased dialogue with suppliers on how to avoid identified potential non-compliance issues

Employee survey results:Satisfaction & Motiva-tion and Loyalty’ scores among IC Companys’ employees are the same as for the 2012 survey

In 2012, BSCI trained 12,200 factory and farm staff

62% of the production de-riving from countries with a high risk profile was from suppliers who had or were in the process of completing the BSCI auditing process

Reduction of suppliers in 2012-13 by 10% to a total of 314 (349)

Increased awareness internally and for selected suppliers on the standards for social and labour and how to improve

PRINCIPLES

Principle 1: Support and respect the protection of internationally proclaimedhuman rights

Principle 2: Make sure that we are not complicit in human rights abuses

Principle 3: Support free-dom of associationand the right to collectivebargaining

Principle 4: Support elimination of all forms of forced and compulsory labour

Principle 5: Support the effective abolition of child labour

Principle 6: Support elimi-nation of discrimination in respect of employment and occupation

IC Companys supports the UN Global Compact’s principles for the environ-ment. Practically we do this by continuously as-sessing our environmen-tal challenges and follow-ing the overall principle of taking a precautionary approach to environmen-tal challenges

HQ chemicals knowledge center

Risk Matrix and suppor-ting guiding documents for avoiding harmful chemicals

Continued chemicals training of HQ knowledge center including partici-pation in monthly Swerea meetings

Increased competences of own staff and suppliers on how to avoid harmful chemicals in our products

Principle 7: Support a precautionary approach to environmental chal-lenges

PEOPLE – SOCIAL RESPONSIBILITY

PLANET – ENVIRONMENTAL RESPONSIBILITY


COMMITMENTS

Furthermore, we focus on educating our staff to become even better at identifying where in the supply chain we can take action to reduce our im-pact on the environment and where we can work with our suppliers to facili-tate that they, e.g., use environmentally friendly technologies

SYSTEMS

Restricted Substance List (RSL)

Database for monitoring test results on harmful chemicals

Chemical Workflow

Supplier scorecard incl. CR indicators on harmful chemicals

Membership of Swerea –The Swedish Chemicals Group - which includes continuous updates on newest research and de-velopments with regards to chemicals in textiles

Compliance Hotline

Country Risk Analysis

Environmental part of The Higg Index

Chemical risk matrix

ACTIONS

Training of HQ knowledge center on sustainable leather

Revised and updated Restricted Substance List

One-on-One dialogue with and advice to suppliers on using non-harmful chemicals

Workshop with brands on harmful chemicals and what can be done to eliminate them in the different stages of the col-lection development

Internal guidelines on working with chemicals

Suppliers rated according to chemical performance

Training of Hong Kong and Shanghai offices and suppliers on how to avoid harmful chemicals

Piloted and provided input to the Environmental part of The Higg Index

RESULTS

Increased competences to work with sustainable leather production

Improved RSL covering la-test REACH (Registration, Evaluation, Authorisa-tion and Restriction of Chemical substances) developments

Increased competences in brands to eliminate harmful chemicals

Increased transparency and awareness for sup-pliers with regards to compliance with our RSL

Increased knowledge of own staff and suppliers on how to avoid harmful chemicals

Application of Risk Matrix on all styles to secure the ‘right’ products are tested for harmful chemicals

PRINCIPLES

Principle 8: Undertake initiatives to promote greater environmental responsibility

Principle 9: Encourage the development and dif-fusion of environmentallyfriendly technologies

PLANET – ENVIRONMENTAL RESPONSIBILITY

With regards to anti-corruption, we support the 10th principle of the UN Global Compact and apply a zero tolerance ap-proach against corruption in all its forms, including extortion and bribery. To further safeguard our Company against illegal activities and to identify corrupt practices we ap-ply our whistle-blower system which provides a confidential system through which employees can report misconduct

Anti-Corruption policy

Compliance Hotline

Code of Conduct

Established Anti-corrupti-on policy

Established Compliance Hotline

Resolved one issue re-ported to the Compliance Hotline

Principle 10: Work against corruption in all its forms, including extortion and bribery

PROFIT – FINANCIAL RESPONSIBILITY


IC COMPANYS’ WORK WITH CORPORATE GOVERNANCEIC Companys considers Corporate Governance as an inherent and decisive factor in realising the corporate stra-

tegic targets. Group Management is thus subject to continuous development and monitoring. The objective is to

ensure an efficient, suitable, appropriate and sound management of IC Companys which is in accordance with the

prevailing recommendations on Corporate Governance.

The following sections constitute the Statutory Annual Corporate

Governance Statement, cf. section 107b of the Danish Financial

Statements Act.

The Board of Directors of IC Companys considers its primary task

to promote the long-term interests of the Company and thus of

all shareholders. This task is handled at six board meetings a

year and through an on-going dialogue between the Chairman-

ship and the Executive Board.

As expressed in IC Companys’ Corporate Governance schedule, the

Board of Directors has reviewed the Group’s relationship with its

stakeholders as well as the tasks of the Board of Directors and the

Executive Board and their interaction with each other. The Corpo-

rate Governance schedule may be downloaded from the corporate

website www.iccompanys.com under About/Corporate Governance.

The schedule serves as a framework for IC Companys’ Manage-

ment in connection with, e.g., the planning of working procedures

and principles of;

• the Group’s relationship with its stakeholders,

including the public and the press;

• the Group’s external communication, including its

Investor Relations Policy;

• the tasks and composition of the Board of Directors,

including its rules of procedures;

• the tasks of the Executive Board, including its

rules of procedures;

• the relationship between the Board of Directors and

the Executive Board; and

• the remuneration and incentive programmes for the

Company’s Management and employees.

This framework is intended to ensure an efficient, suitable,

appropriate and sound management of IC Companys. The

framework has been prepared within the scope defined by IC

Companys’ Articles of Association, business concept, vision,

mission and corporate values as well as the prevailing legislation

and rules applicable for Danish listed companies.

For more information on ownership structure, please see the

section on Shareholder information and share performance on

page 40. In case of completed acquisition offers, no significant

agreements will be affected

Articles of Association

Amendments to the Articles of Association must be adopted at a

general meeting. All resolutions at the general meeting may only

be adopted by simple majority unless the Danish Companies’

Act stipulates specific regulation regarding presentation and

majority.

In the event of an equality of votes, the resolution in question is

decided by drawing of lots.

The article defining majority may only be amended if at least

nine-tenths of the total votes at a general meeting vote in favour

of such amendment.

The voting procedure at the general meeting takes place by show

of hands unless the general meeting resolves to take a poll, or

the Chairman of the meeting deems a pool desirable.

Board of Directors

The Company’s Board of Directors consists of four to eight mem-

bers being elected at the annual general meeting for one-year

terms. Members may be re-elected, however, when a member

reaches the age of 70, the member must resign from the Board

at the first coming annual general meeting.

Prior to the election process of board members at the annual

general meeting, all information regarding each candidate’s

occupations, membership of board committees or other commit-

tees in both Danish as well as foreign companies, except from

wholly-owned subsidiaries, must be disclosed.


The Board of Directors is composed with emphasis on extensive

experience within both the fashion industry and general manage-

ment. It is furthermore emphasised that the Board of Directors

collectively has a professional broad spectrum, extensive experi-

ence and documented strategical and managerial competences

to the effect that the Board of Directors can perform their tasks

in the best possible way.

When assessing the nomination of new candidates, the need for

integration of new talent and the need for diversity in relation to,

e.g., international experience, gender and age are considered.

IC Companys has signed “Recommendation for more women on

supervisory boards” and it is the Group’s target, over the coming

years, to work consistently to recruit more female managers

in the Company in general and increase the number of female

candidates to the supervisory boards of Danish limited liability

companies. The proportionate share of females in IC Companys’

Board of Directors constitutes 17% at 30 June 2013 and the

Group works continuously to recruit and develop new female

managers.

The employees of IC Companys have chosen not to apply the pro-

visions of the Danish Companies Act on employee representation

on the Board of Directors.

Corporate Governance recommendations

The Group is subject to compliance with the recommendations

of Corporate Governance issued by the Committee of Corporate

Governance which are available at www.corporategovernance.dk.

In compliance with the recommendations from NASDAQ OMX

Copenhagen, the Board of Directors has assessed the need for

establishing additional board committees, including an audit

committee, a remuneration committee and a nomination com-

mittee. As a result of this, the Board of Directors has appointed

an Audit Committee and a Remuneration Committee. Further-

more, the Board of Directors will on an on-going basis assess the

need for establishing other particular ad hoc committees.

The Audit Committee monitors the financial reporting process

and estimates whether the Company’s internal control and risk

management systems operate in an efficient manner. Further-

more, the Audit Committee monitors the statutory auditing of

the annual report and makes proposal, for the approval of the

entire Board of Directors, on the appointment of auditors. Finally,

the Audit Committee monitors and controls the auditor indepen-

dence, including, in particular, additional services rendered to IC

Companys A/S and its subsidiaries. The Audit Committee meets

at least three times a year to undertake its assigned tasks.

The Remuneration Committee makes proposals, for approval of

the Board of Directors, on the Remuneration Policy, including the

general guidelines for incentive pay of the Board of Directors and

the Executive Board. Furthermore, the Remuneration Committee

makes proposals to the Board of Directors on remuneration for

members of the Board of Directors and the Executive Board and

ensures that the remuneration is consistent with the Remunera-

tion Policy. Finally, the Remuneration Committee oversees that

the information in the annual report on the remuneration for

members of the Board of Directors and the Executive Board is

correct, true and sufficient. The Remuneration Committee meets

at least two times a year to undertake its assigned tasks.

The Board of Directors conducts an annual self-evaluation in

order to, systematically and based on unequivocal criteria, eva-

luate the performance of the Board of Directors, the Chairman

and the individual members.

IC Companys complies - except from one issue explained in the

following sections - with the Recommendations on Corporate

Governance of May 2013 by NASDAQ OMX Copenhagen which

are based on the Recommendations from the Committee on

Corporate Governance.

NASDAQ OMX Copenhagen recommends that the supreme

governing body establishes a nomination committee. In general,

the Chairmanship of the Board of Directors undertakes the

preparatory tasks which are recommended to be assigned to

a nomination committee. Taking the size and structure of IC

Companys into account, it is not deemed expedient to establish

such a nomination committee.

The principles and the scope of the remuneration to the Board

of Directors and the Executive Board are disclosed under the

following section Remuneration Policy and under note 4 to the

consolidated financial statements.

Financial reporting and internal controls

The Group’s risk management and internal controls in con-

nection with its financial reporting are planned with a view to

reduce the risk of material errors and omissions in the financial

reporting.


The Board of Directors and the day-to-day management regularly

assess material risks and internal controls in connection with the

Group’s financial reporting process.

The Board of Directors has appointed an Audit Committee which

regularly monitors the financial reporting process and estimates

whether the internal control systems operate in an efficient and

adequate manner, including new financial reporting standards,

significant accounting policies and accounting estimates and

assumptions.

The Audit Committee reports to the entire Board of Directors.

The Board of Directors monitors and reviews the independence

of the external auditors and monitors the planning, execution

and the opinion of the external auditors.

The Board of Directors and the Executive Board define the guide-

lines for procedures and internal controls to which compliance

must be kept. These include;

• continuous follow-up on achieved targets and results in

relation to approved budgets;

• guidelines for general management;

• Code of Conduct;

• Finance Policy;

• Insurance Policy;

• Investor Relations Policy;

• internal rules; Dealing in IC Companys shares and related

financial instruments;

• Remuneration Policy and general guidelines for incentive

pay of the Executive Board; and

• Rules of Authority.

The adopted policies, guidelines and procedures are updated

and communicated on a regular basis.

Any material weaknesses, inadequacies and violation of adopted

policies, procedures and internal controls are reported to the

Board of Directors and the Audit Committee.

Remuneration Policy

The complete Remuneration Policy of IC Companys is available

on the corporate website www.iccompanys.com.

With the purpose of promoting common interests between share-

holders, the Executive Board and other executives and creating

a working environment where focus is on meeting the Group’s

targets, IC Companys has established bonus and share-based

incentive programmes.

The incentive pay for the members of the Executive Board and

other executives includes bonus and share-based incentive pro-

grammes. Pursuant to the IC Companys’ Corporate Governance

guidelines, members of the Board of Directors are not included

in the incentive pay programmes.

The members of the Executive Board and a number of other exe-

cutives are included in a bonus programme where payments are

dependent on the financial results achieved within the emplo-

yee’s area of responsibility. The scope of the bonus is potentially

between 20% to 50% of the annual salary. The bonus pro-

gramme is dependent on the results achieved in the individual

financial year and helps ensure that the Group’s performance

targets are met as the full bonus is only paid upon meeting these

performance targets.

The Group has granted warrants and share options to a number

of managers and key employees in earlier years, please find

further details on these programmes under note 4 to the consoli-

dated financial statements.

Incentive programmes

With effect from the financial year 2010/11 the Executive Board

has been offered a warrant programme. The Board of Directors

resolved under the authorisation granted at the Annual General

Meeting 2010 to grant the Executive Board warrants span-

ning over a three-year programme for 2010/11, 2011/12 and

2012/13. Each of these financial year the individual members of

the Executive Board could be granted warrants at a value of up

to 100% of their fixed salary.

The warrants granted represent the right, against payment in

cash, to subscribe for a number of new shares equivalent to the

warrants granted. The new shares may be acquired immediately

after the Company’s announcements of the annual reports after

3, 4 or 5 years, respectively. In case a member of the Executive

Board chooses to resign, the warrants granted become void if

they are not exercisable at the date of resignation.

The warrants have been issued at an exercise price fixed accor-

ding to the highest share price of either the closing price of the

Company’s share at NASDAQ OMX Copenhagen on the date of

the announcement of the Annual Reports for 2010/11, 2011/12

and 2012/13, respectively, or the average closing price of the

five previous trading days.

The programme was fully performance dependent. The number

of warrants granted each financial year was assessed by the use

of the Black & Scholes model as follows:

• 0% to 50% was granted on a pro rata basis when revenue

growth of 5% to 15%, compared to the previous financial

year, was achieved

• 0% to 50% was granted on a pro rata basis when an EBIT

margin of 5% to 15% was achieved


The members of the Executive Board were granted warrants

for the financial year 2010/11 based on the Group’s financial

performance, whereas no warrants were granted for the financial

year 2011/12. Due to the Group’s realised profit for the financial

year under review, no warrants have been granted to the Execu-

tive Board and other executives for the financial year 2012/13.

However, the members of the Executive Board have been awar-

ded cash bonuses for the financial year under review based on

the profit of continuing operations. The total remuneration of the

Executive Board and other executives is described in note 4 to

the consolidated financial statements.

Warrant programme for 2013/14The Board of Directors has decided to offer the Executive Board a

warrant programme with effect from the financial year 2013/14

with a similar structure as the recently completed warrant

programme and where the individual members of the Executive

Board may be granted warrants at a value of up to 100% of their

fixed salary.

The warrants granted represent the right, against payment in

cash, to subscribe for a number of new shares equivalent to the

warrants granted. The new shares may be acquired immediately

after the Company’s announcement of the annual report after

3, 4 or 5 years, respectively. In case a member of the Executive

Board chooses to resign, the warrants granted become void if

they are not exercisable at the date of resignation.

The warrants will be issued at an exercise price fixed according

to the highest share price of either the closing price of the

Company’s share at NASDAQ OMX Copenhagen on the date of

the announcement of the Annual Report for 2013/14 or the ave-

rage closing price of the five previous trading days.

The programme will be fully performance dependent. The num-

ber of warrants granted each financial year is assessed by the

use of the Black & Scholes model as follows:

• 0% to 50% is granted on a pro rata basis when achieving

revenue growth of 3% to 15% compared to the previous

financial year

• 0% to 50% is granted on a pro rata basis when achieving

an EBIT margin of 3% to 15%

No warrants will be granted when achieving an EBIT margin of

3% or less.


MADS RYDERGroup Chief Executive Officer (2013). Born 1963.

Member of the Board of Directors of Jensen’s bøfhus A/SMember of the Board of Directors of MLA-Gruppen A/S

Mads Ryder has served as Reserve Offi cer in the Danish Army and hereafter earned a Master of Business Law degree from Aarhus University. He joined the Group from Royal Copenhagen where he was CEO. Prior to this he served as Senior Vice President of Weight-Wathers and CEO of all LEGOLAND parks with residence in various places,e.g. London, Germany, Korea and Japan. He started his career in the LEGO Group where he, among others, worked as Global Head of HR.

Member of the Executive Board since 2013

Share holdings: nilShare options: nil

ANDERS CLEEMANNExecutive Vice President (2008). Born 1967.

Member of the Board of Directors of Muuto A/S

Anders Cleemann holds a MSc in Economics and Business Administration from Copen-hagen Business School and has previously worked as Brand Director for Part Two in IC Companys A/S and international Marketing Director in InWear Group A/S. Further, he has worked in sales and marketing with Ree-bok A/S and Carlsberg A/S and has been CEO of Valtech A/S.


Share holdings: 1,850 Share options: 57,494

CHRIS BIGLERChief Financial Officer (2004). Born 1970.

Member of the Board of Directors of BLS Invest

Chris Bigler holds a Bachelor in Business Administration and Commercial Law from Aalborg University, a Master in Business Administration and Auditing from Aarhus School of Business and was certifi ed as Chartered Accountant in 2000. Previously, Chris Bigler held a position as Group Finance Manager of IC Companys A/S. Prior to this, he worked as a chartered accountant with Arthur Andersen and Deloitte.


Share holdings: 4,339Share options: 50,237

Resigns as at 31 August 2013

PETER FABRINExecutive Vice President (2009). Born 1966.

Member of the Board of Directors of Ball Group A/SMember of the Board of Directors of Prefa A/S

Peter Fabrin holds a business diploma and has further training from, among others, IMD, Lausanne and has been Chief Executive Offi c-er of Diesel Nordic. Furthermore, he has been Executive Sales Offi cer and before that Retail Manager for InWear Group A/S, director with Kilroy Travels Denmark and Country Manager for Norway for Carli Gry International A/S.


Share holdings: nilShare options: 49,967

EXECUTIVE BOARD


NIELS MARTINSENChairman. Born 1948.Director of Friheden Invest A/S

Chairman of the BoD of A/S Sadolinparken and A/S Rådhusparken. Member of the BoD of Friheden Invest A/S

As founder of InWear A/S and long-standing CEO of InWear Group A/S and subsequently IC Companys A/S, Niels Martinsen has extensive national as well as international management experience as well as a solid experience within the international fashion industry. Further, he has experience from board committees of other companies.

Member of the Board of Directors (2001), the Audit Committee (2009) and the Remu-neration Committe (2011)

Considered a dependent Board member

Share holdings: 7,191,128 shares held by Fri-heden Invest A/S controlled by Niels Martinsen

HENRIK HEIDEBYDebuty Chairman. Born 1949. Group CEO & President of PFA Holding A/S/PFA Pension

Chairman of the BoD of FIH Holding A/S, Kirk & Thorsen Invest A/S, PFA Ejendomme A/S, PFA Professional Forening and PFA Invest International A/S and associated busi-nesses. Deputy Chairman of the BoD of FIH Erhvervsbank A/S and Forsikring & Pension. Member of the BoD of C.P. Dyvig & Co. A/S, PFA Kapitalforvaltning, fondsmæglerselskab A/S and PFA Brug Livet Fonden.

Henrik Heideby has extensive national and in-ternational management experience as Group CEO & President of PFA Pension and previously in Alfred Berg Bank and FIH as well as experi-ence with financing and risk management and from board committees of other companies.

Member of the Board of Directors (2005) and Chairman of the Audit Committee (2009)

Considered an independent Board member

Shareholdings: 12,500

PER BANKBoard member. Born 1967.CEO of Dansk Supermarked A/S

Per Bank has an extensive national and inter-national management experience through, among others, his current position as CEO of Dansk Supermarked A/S and previously as Commercial Director of Clothing, General Merchandising and e-Commerce and member of the board of directors of Tesco UK, CEO of Tesco Stores Ltd. Hungary, and as Group CEO of Coop Denmark and Coop Norden A/S. With this background, Per Bank has an extensive knowledge of and experience within European retail. Further, Per Bank also has experience from board committees of other companies.

Member of the Board of Directors (2008)


Shareholdings: nil

OLE WENGELDeputy Chairman. Born 1949.

As former Director of Corporate Affairs of InWear Group A/S, Ole Wengel has experience in the management of a major fashion company and the international fashion indu-stry. Through his many years in the Group, he further has an extensive insight into and knowledge of the Company.

Member of the Board of Directors (2003), Chairman of the Remuneration Committee (2011) and member of the Audit Committee (2009)



ANDERS COLDING FRIISBoard member. Born 1963.CEO of Scandinavian Tobacco Group A/S

Chairman of the BoD of Dagrofa A/S and Mon-berg & Thorsen A/S. Deputy Chairman of the BoD of Industriens Arbejdsgivere i København and member of the BoD of Topdanmark A/S and the Executive Committee and Central Board of the Confederation of Danish Industry.

Anders Colding Friis has an extensive national and international management experience as CEO of Scandinavian Tobacco Group as well as experience from board committees of other companies.

Member of the Board of Directors (2005) and the Remuneration Committee (2011)



ANNETTE BRØNDHOLT SØRENSENBoard member. Born 1963.Management Consultant of VS Consulting

As former Business & Finance Director and board member of By Malene Birger A/S, An-nette Brøndholt Sørensen has experience of the international fashion industry as well as board work. Through several executive posi-tions within the SAS Group, Annette Brøndholt Sørensen has furthermore gained extensive experience within management, strategy, management accounting and process optimisation.

Member of the Board of Directors (2010)

Considered a dependent Board member

Shareholdings: 253

BOARD OF DIRECTORS


to DKK 122 per share as at 28 June 2013. At the end of the fi-

nancial year the market capitalisation of IC Companys amounted

to DKK 2.1 billion. The highest closing price of the IC Companys

share was registered on 4 April 2013 at DKK 138 per share.

The total trading volume of IC Companys’ shares for the financial

year 2012/13 amounted to DKK 334 million (DKK 369 million)

and the transaction volume totalled 2.9 million (2.9 million).

Treasury shares

As at 30 June 2013 IC Companys owned 540,672 shares to be

used for outstanding share options. This number of shares cor-

responds to 3.2% of the total number of issued shares which is

at the same level as 30 June 2012.

IC Companys A/S NASDAQ OMX MidCap NASDAQ OMX C20

Jun 13May 13Apr 13Mar 13Feb 13Jan 13Dec 12Nov 12Oct 12Sep 12Jul 12 Aug 12

Index

150

140

130

120

110

90

80

SHAREHOLDER INFORMATION AND SHARE PERFORMANCEA strong free cash flow development and a reduction of the Group’s net interest-bearing debt during the financial

year under review ensure a sound financial position supporting the corporate strategic targets. In the future the

Group will distribute any surplus liquidity to the shareholders through dividends and share buy-back programmes.

The financial year 2012/13 has been marked by significant

events. The financial performance combined with the large stra-

tegic projects announced by the Group during 2012/13 have

had significant impact on the share price which, however, did

develop significantly positively throughout the year.

As in line with the corporate strategy, IC Companys financial tar-

gets is to ensure a long-term competitive return on investment

to the shareholders of the Company.

Share performance 2012/13 The IC Companys share is listed on the NASDAQ OMX Copen-

hagen. Measured on the daily average closing price, the share

increased by 25% from DKK 97.5 per share as at 29 June 2012

SHARE PRICE MOVEMENT (29 June 2012 = index 100)


Ownership structure

As at 30 June 2013 IC Companys had 7,534 registered sharehol-

ders who aggregated held 96.8% of the total share capital. The

share of votes is equivalent to the share capital for the Group’s

shareholders. A breakdown of the shareholders is as follows:

ShareShareholders as at 30 June 2013 Number capital

Friheden Invest A/S* (DK) 7,191,128 42.4%

Hs 2.G Aps (DK) 1,793,730 10.6%

Arbejdsmarkedets Tillægspension (DK) 1,792,097 10.6%

Other Danish institutional investors 2,152,142 12.7%

Danish private investors 1,315,590 7.8%

Foreign institutional investors 953,849 5.6%

Foreign private investors 56,876 0.3%

Treasury shares 540,672 3.2%

Non-grouped 1,146,723 6.8%

Total 16,942,807 100.0%

*Friheden Invest A/S is controlled by the Group’s Chairman of the

Board of Directors.

Investor relations

The Group has set out the objective to maintain a high and uni-

form information level as well as engaging in an open and active

dialogue with investors, analysts and other stakeholders. Our

Investor Relations Policy, financial statements, presentations,

company announcements and other relevant investor informati-

on are available at the corporate website www.iccompanys.com.

During the financial year the Group hosted four webcasts in con-

nection with the announcements of the interim reports and the

annual report. Furthermore, the Company participates regularly

in road shows, investor seminars and sets up meetings with

individual investors and financial analysts. The four week period

leading up to the announcement of financial reports or other sig-

nificant information is deemed to be a quiet period which means

that IC Companys does not hold investor meetings.


FINANCIAL CALENDAR 2013/14

Date Event

25 September 2013 2013 Annual General Meeting expected to be held

1 October 2013 Expected dividend payment in respect of the financial year 2012/13

13 November 2013 Expected announcement of interim report for Q1 2013/14

4 February 2014 Expected announcement of interim report for H1 2013/14

15 May 2014 Expected announcement of interim report for Q3 2013/14

13 August 2014 Expected deadline for proposed resolutions to be considered at the 2014 Annual General Meeting

21 August 2014 Expected announcement of Annual Report 2013/14

24 September 2014 2014 Annual General Meeting expected to be held

29 September 2014 Expected dividend payment in respect of the financial year 2013/14

COMPANY ANNOUNCEMENTS 2012/13

Date Number Subject

24 July 2012 9 (2012) Information meeting

7 August 2012 10 (2012) Annual Report for 2011/12

29 August 2012 11 (2012) Notice of Annual General Meeting 2012

24 September 2012 12 (2012) Minutes of Annual General Meeting 2012

5 October 2012 13 (2012) Articles of Association

24 October 2012 14 (2012) Information meeting

7 November 2012 15 (2012) Interim report for Q1 2012/13

22 January 2013 1 (2013) Information meeting

29 January 2013 2 (2013) Amended financial calendar for 2012/13

5 February 2013 3 (2013) Interim report for H1 2012/13

16 April 2013 4 (2013) Historical comparative figures for new business segments

16 April 2013 5 (2013) CFO Chris Bigler resigns

1 May 2013 6 (2013) Information meeting

15 May 2013 7 (2013) Interim report for Q3 2012/13

15 May 2013 8 (2013) Correction to interim report for Q3 2012/13

17 May 2013 9 (2013) Announcement regarding insider transactions

28 May 2013 10 (2013) Sale of Jackpot and Cottonfield

10 June 2013 11 (2013) Financial calendar for 2013/14

30 July 2013 12 (2013) New Group CEO has been appointed in IC Companys

8 August 2012 13 (2013) Information meeting

21 August 2013 14 (2013) New CFO has been appointed in IC Companys

ANALYSTS

Securities house Analyst E-mail

Carnegie Jonas Guldborg [email protected]

Danske Bank Kristian T. Johansen [email protected]

Handelsbanken Fasial Kalim Ahmad [email protected]

Nordea Dan Wejse [email protected]

Inquiries from shareholders, fi nancial analysts and other stakeholders may be directed to:

Investor Relations Manager Jens Bak-HolderIC Companys A/S, 10 Raffi naderivej2300 Copenhagen S, DenmarkPhone: +45 2128 5832 E-mail: [email protected]


Annual General Meeting 2013

The Annual General Meeting 2013 is scheduled to be held on Wednesday 25 September 2013 at 3 p.m. at the Company’s headquarters located at 10 Raffi naderivej, 2300 Copenhagen S, Denmark.

The agenda is as follows:

1. Report of the Board of Directors on the Company’s activities during the year under review.

2. Presentation of the Annual Report for the period 1 July 2012 - 30 June 2013 endorsed by the auditors and adoption of the audited Annual Report.

3. Appropriation of the profi ts, including the declaration of dividends, or provision for losses as recorded in the adopted Annual Report. The Board of Directors recommends that a dividend of DKK 32.8 million corresponding to DKK 2.00 per ordinary share eligible for dividend is distributed.

4. Election of members of the Board of Directors. The Board of Directors proposes re-election of the remaining Board.

5. Approval of remuneration of the Board of Directors for the fi nancial year 2013/14.

6. Appointment of auditors.

7. Authorisation of the Board of Directors for the period until the next annual general meeting to allow the Company to acquire own shares representing 10% of the share capital and at a price deviating by no more than 10% from the listed price at the time of the acquisition.

8. Any other business.


CONSOLIDATED INCOME STATEMENT PAGE 46

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME PAGE 46

CONSOLIDATED STATEMENT OF FINANCIAL POSITION PAGE 47

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY PAGE 48

CONSOLIDATED STATEMENT OF CASH FLOWS PAGE 49

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS PAGE 50

2. ACCOUNTING ESTIMATES AND ASSUMPTIONS PAGE 50

3. SEGMENT INFORMATION PAGE 51

4. STAFF COSTS PAGE 53

5. OTHER EXTERNAL COSTS PAGE 55

6. OTHER OPERATING INCOME AND COSTS PAGE 55

7. FINANCIAL INCOME AND COSTS PAGE 56

8. TAX FOR THE YEAR OF CONTINUING OPERATIONS PAGE 56

9. DISCONTINUED OPERATIONS PAGE 57

10. EARNINGS PER SHARE PAGE 57

11. DIVIDENDS PAGE 57

12. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT PAGE 58

13. FINANCIAL ASSETS PAGE 59

14. DEFERRED TAX PAGE 60

15. INVENTORIES PAGE 60

16. TRADE RECEIVABLES PAGE 61

17. OTHER RECEIVABLES PAGE 61

18. PREPAYMENTS PAGE 61

19. SHARE CAPITAL PAGE 61

20. RETIREMENT BENEFIT OBLIGATIONS PAGE 62

21. PROVISIONS PAGE 63

22. NON-CURRENT LIABILITIES TO CREDIT INSTITUTIONS PAGE 63

23. CURRENT LIABILITIES TO CREDIT INSTITUTIONS PAGE 64

24. OTHER LIABILITIES PAGE 64

25. ASSETS AND LIABILITIES CLASSIFIED AS HELD-FOR-SALE PAGE 64

26. OPERATING LEASES PAGE 64

27. OTHER LIABILITIES AND CONTINGENT LIABILITIES PAGE 65

28. CHANGE IN WORKING CAPITAL PAGE 65

29. SECURITIES PAGE 65

30. CASH AND CASH EQUIVALENTS PAGE 65

31. FINANCIAL RISKS AND DERIVATIVE FINANCIAL INSTRUMENTS PAGE 65

32. RELATED PARTY TRANSACTIONS PAGE 68

33. EVENTS AFTER THE REPORTING PERIOD PAGE 69

34. APPROVAL OF THE ANNOUNCEMENT OF THE ANNUAL REPORT PAGE 69

35. SIGNIFICANT ACCOUNTING POLICIES PAGE 69

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

Note DKK million 2012/13 2011/12

3 Revenue 3,314.2 3,292.5 Cost of sales (1,445.3) (1,457.9) Gross profi t 1,868.9 1,834.6

5 Other external costs (756.6) (727.7)4 Staff costs (865.9) (827.7)6 Other operating income and costs 2.1 11.212 Depreciation, amortisation and impairment losses (91.5) (95.2) Operating profi t 157.0 195.2

7 Financial income 9.3 35.7 7 Financial costs (22.4) (36.4) Profi t before tax 143.9 194.5

8 Tax on profi t for the year of continuing operations (32.4) (60.4) Profi t for the year of continuing operations 111.5 134.1

9 Loss for the year of discontinued operations (105.7) (44.7) Profi t for the year 5.8 89.4

Profi t allocation: Shareholders of IC Companys A/S 3.7 88.1 Non-controlling interests 2.1 1.3 Profi t for the year 5.8 89.4

Earnings per share10 Earnings per share, DKK 0.2 5.410 Diluted earnings per share, DKK 0.2 5.410 Earnings per share of continuing operations, DKK 6.7 8.210 Diluted earnings per share of continuing operations, DKK 6.7 8.2

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Profi t for the year 5.8 89.4

OTHER COMPREHENSIVE INCOME Items which may be reclassifi ed to the income statement: Foreign currency translation adjustments arising in connection with foreign subsidiaries 2.9 (14.7) Foreign currency translation adjustments on intercompany loans (12.7) 25.531 Fair value adjustments, gains on derivatives held as cash fl ow hedges 25.7 56.431 Fair value adjustments, loss on derivatives held as cash fl ow hedges (6.0) (37.9)31 Reclassifi cation to profi t or loss, gains on realised cash fl ow hedges (56.4) (2.0)31 Reclassifi cation to profi t or loss, loss on realised cash fl ow hedges 37.9 68.28 Tax on other comprehensive income (1.0) (27.5) Total other comprehensive income (9.6) 68.0 Total comprehensive income (3.8) 157.4

Comprehensive income allocation: Shareholders of IC Companys A/S (5.9) 156.1 Non-controlling interests 2.1 1.3 Total (3.8) 157.4

IC COMPANYS • ANNUAL REPORT 2012/13 • CONSOLIDATED FINANCIAL STATEMENTS46

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETSNote DKK million 30 June 2013 30 June 2012

NON-CURRENT ASSETS Goodwill 205.5 205.1 Software and IT systems 36.9 48.5 Leasehold rights 15.4 17.5 IT systems under development - 9.5 12 Total intangible assets 257.8 280.6

Land and buildings 8.6 151.7 Leasehold improvements 70.4 97.7 Equipment and furniture 57.6 86.0 Property, plant and equipment under construction 6.9 2.5 12 Total property, plant and equipment 143.5 337.9

13 Financial assets 39.3 40.3 14 Deferred tax 79.7 64.1 Total other non-current assets 119.0 104.4 Total non-current assets 520.3 722.9

CURRENT ASSETS 15 Inventories 529.4 528.5 16 Trade receivables 390.8 391.9 8 Tax receivable 60.5 34.8 17 Other receivables 71.5 137.4 18 Prepayments 95.0 109.429 Securities 100.9 -30 Cash 109.6 82.6 1,357.7 1,284.6

25 Assets classifi ed as held-for-sale 144.3 - Total current assets 1,502.0 1,284.6 TOTAL ASSETS 2,022.3 2,007.5

EQUITY AND LIABILITIES Note DKK million 30 June 2013 30 June 2012

EQUITY 19 Share capital 169.4 169.4 Reserve for hedging transactions 16.8 15.9 Translation reserve (46.6) (36.1) Retained earnings 665.5 679.5 Equity attributable to shareholders of the Parent Company 805.1 828.7

Equity attributable to non-controlling interests 3.7 1.9 Total equity 808.8 830.6

LIABILITIES 20 Retirement benefi t obligations 8.1 12.9 14 Deferred tax 36.6 52.221 Provisions 12.3 7.124 Other liabilities 25.5 34.622 Non-current liabilities to credit institutions - 140.0 Total non-current liabilities 82.5 246.8

23, 30 Current liabilities to credit institutions 188.7 190.7 Trade payables 420.1 396.5 8 Tax payable 30.7 19.0 24 Other liabilities 252.3 323.921 Provisions 99.2 - 991.0 930.125 Liabilities concerning assets classifi ed as held-for-sale 140.0 - Total current liabilities 1,131.0 930.1 Total liabilities 1,213.5 1,176.9 TOTAL EQUITY AND LIABILITIES 2,022.3 2,007.5

CONSOLIDATED FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS 47

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Total equity owned by Total equity Reserve for Parent owned by Share hedging Translation Retained Company non-contr. TotalDKK million capital transactions reserve earnings shareholders interests equity

Equity at 1 July 2011 169.4 (47.7) (40.6) 657.5 738.6 4.1 742.7

Comprehensive income 2011/12

Profi t for the year - - - 88.1 88.1 1.3 89.4

Other comprehensive income

Foreign currency translation adjustments arising in connection with foreign subsidiaries - - (14.7) - (14.7) - (14.7)Foreign currency translation adjustments on intercompany loans - - 25.5 - 25.5 - 25.5Fair value adjustments, gains on derivatives held as cash fl ow hedges - 56.4 - - 56.4 - 56.4Fair value adjustments, loss on derivatives held as cash fl ow hedges - (37.9) - - (37.9) - (37.9)Reclassifi cation to profi t or loss, gains on realised cash fl ow hedges - (2.0) - - (2.0) - (2.0)Reclassifi cation to profi t or loss, loss on realised cash fl ow hedges - 68.2 - - 68.2 - 68.2Tax on other comprehensive income - (21.1) (6.4) - (27.5) - (27.5)Total other comprehensive income - 63.6 4.5 - 68.0 - 68.0

Dividends paid - - - (73.8) (73.8) (3.5) (77.3)Share-based payments - - - 7.7 7.7 - 7.7 Equity at 30 June 2012 169.4 15.9 (36.1) 679.5 828.7 1.9 830.6


Profi t for the year - - - 3.7 3.7 2.1 5.8


Foreign currency translation adjustments arising in connection with foreign subsidiaries - - 2.9 - 2.9 - 2.9Foreign currency translation adjustments on intercompany loans - - (12.7) - (12.7) - (12.7)Fair value adjustments, gains on derivatives held as cash fl ow hedges - 25.7 - - 25.7 - 25.7Fair value adjustments, loss on derivatives held as cash fl ow hedges - (6.0) - - (6.0) - (6.0)Reclassifi cation to profi t or loss, gains on realised cash fl ow hedges - (56.4) - - (56.4) - (56.4)Reclassifi cation to profi t or loss, loss on realised cash fl ow hedges - 37.9 - - 37.9 - 37.9Tax on other comprehensive income - (0.3) (0.7) - (1.0) - (1.0)Total other comprehensive income - 0.9 (10.5) - (9.6) - (9.6)

Dividends paid - - - (24.6) (24.6) (0.2) (24.8)Share-based payments - - - 6.9 6.9 - 6.9 Equity at 30 June 2013 169.4 16.8 (46.6) 665.5 805.1 3.7 808.8


CONSOLIDATED STATEMENT OF CASH FLOWS


CASH FLOW FROM OPERATING ACTIVITIES3 Operating profi t, continuing operations 157.0 195.23,9 Operating loss, discontinued operations (130.6) (64.8) Operating profi t 26.4 130.4

Reversed depreciation and impairment losses and gain/loss on sale of non-current assets 137.5 128.7 Share-based payments recognised in profi t or loss 6.9 (7.7) Provisions 104.4 - Other adjustments 13.2 13.228 Change in working capital 6.7 31.2 Cash fl ow from ordinary operating activities 295.1 295.8

Financial income received 22.7 11.6 Financial costs paid (31.8) (19.5) Cash fl ow from operating activities 286.0 287.9

8 Tax paid (53.9) (29.5) Total cash fl ow from operating activities 232.1 258.4

CASH FLOW FROM INVESTING ACTIVITIES12 Investments in intangible assets (16.1) (34.3)12 Investments in property, plant and equipment (58.2) (71.5) Change in deposits and other fi nancial assets 6.3 (4.9) Purchase and sale of other non-current assets 1.7 2.5 Total cash fl ow from investing activities (66.3) (108.2)

Total cash fl ow from operating and investing activities 165.8 150.2

CASH FLOW FROM FINANCING ACTIVITIES Repayment of non-current liabilities (10.0) (9.4) Share buy-back programmes - -11 Dividends paid (24.8) (77.3) Total cash fl ow from fi nancing activities (34.8) (86.7) NET CASH FLOW FOR THE YEAR 131.0 63.5

CASH AND CASH EQUIVALENTS Cash and cash equivalents at 1 July (108.1) (170.9) Foreign currency translation adjustment of cash and cash equivalents at 1 July (1.1) (0.7) Net cash fl ow for the year 131.0 63.530 Cash and cash equivalents at 30 June 21.8 (108.1)

The consolidated statement of cash flows may not be concluded based solely on the announced financial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis for preparation of consolidated financial statements

The consolidated fi nancial statements and the parent fi nancial statements of IC Companys A/S for the fi nancial year 2012/13 have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and additional Danish disclosure requirements for the annual reports of listed companies (accounting class D), cf. the Statutory Order on the adoption of IFRS under the Danish Financial Statements Act.

The consolidated fi nancial statements and the parent fi nancial statements are also prepared in accordance with the IFRS standards as issued by the International Accounting Standards Board (IASB).

The consolidated fi nancial statements and the parent fi nancial statements are expressed in Danish Kroner (DKK), which is considered the primary currency of the Group’s operations and the functional currency of the Parent Company. The accounting policies are applied consistently throughout the fi nancial year and for the comparative fi gures. Few reclassifi cations and adjustments of the comparative fi gures have been made as a consequence of applying the IFRS concerning discontinued operations as well as the requirement regarding classifi cation of discontinued operations.

During the fi nancial year under review the segment reporting has been changed and in the future the Group’s segment information will be disclosed under the Group’s three core business segments: Premium Outdoor, Premium Contemporary and Mid Market Contemporary. This segmentation refl ects the reporting to the Chief Operating Decision Maker. This new reporting provides an enhanced transparency in respect of the future performance of the individual core segments. Please see note 3 for further information on segment information.

New standards in 2012/13Implementation of new standards and interpretations IC Companys has adopted all new and amended standards and interpretations (IFRIC) as endorsed by the EU and which are effective for the fi nancial year 1 July 2012 - 30 June 2013. Based on thorough analysis, IC Companys has concluded that the standards which are effective for the fi nancial year beginning on 1 July 2012 are either of no relevance to the Group or exert no material impact on the consolidated fi nancial statements.

New and amended standards and interpretations not yet effective IASB has issued a number of IFRS standards, amended standards and IFRIC interpretations which are effective for fi nancial years beginning on or after 1 July 2013. IC Companys has thoroughly considered the impact of the IFRS standards, amended standards and IFRIC interpretations not yet effective, and it is estimated that these standards and interpretations are deemed to exert no material impact on the consolidated fi nancial statements or the parent fi nancial statements in the coming years.

Please see note 35 for further information on signifi cant accounting policies.

2. Accounting estimates and assumptions

The calculation of the carrying amount of certain assets and liabilities requires an estimate of how future events will affect the value of such assets and liabilities at the end of the reporting period. Estimates material to the fi nancial reporting are made in connection with, e.g., the calculation of depreciation, amortisation and impairment losses, the valuation of inventories and receivables, tax assets, goodwill, provisions and discontinued operations.

The accounting estimates applied in respect of provisions and write-downs of discontinued operations are especially based on Management’s best estimates of assumptions and judgments. Due to uncertainty in the closing down process these estimates could be affected signifi cantly by changes in the assumptions and judgments applied.

The estimates applied are based on assumptions which Management believes to be reasonable, but which are inherently uncertain and unpredictable. In the consolidated fi nancial statements, the measurement of inventories and receivables could be materially affected by signifi cant changes in estimates and assumptions underlying the calculation of inventory and receivables write-downs. Similarly, the measurement of goodwill could be affected by signifi cant changes in estimates and assumptions underlying the calculation of values. Please see note 12 to the consolidated fi nancial statements for a more detailed description of impairment tests for intangible assets.

The measurement of inventories is based on an individual assessment of season and age and on the realisation risk assessed to exist for individual items.

Tax assets are written down if Management believes that it is not suffi ciently likely that the operations of an individual tax object (business) or a group of jointly taxed businesses can generate a profi t within the foreseeable future (typically 3-5 years), the expected taxable income is insuffi cient for the tax assets to be exploited in full or there is uncertainty with respect to the value of the tax asset at the end of the reporting period, e.g., as a result of an on-going tax audit or pending tax litigation.


3. Segment information

Business segmentsReporting to the Executive Board, which is considered to be the Chief Operating Decision Maker, is based on the Group’s three core business segments; Premium Outdoor, Premium Contemporary and Mid Market Contemporary.

IC Companys’ two brands; Saint Tropez and Designers Remix are considered non-core business and are presented under the business segment Non-core business.

On 28 May 2013 IC Companys entered into an agreement to sell its two brands Jackpot and Cottonfi eld to COOP (Company Announcement 10/2013) after having had a formal sales process. These two brands have therefore been classifi ed separately as discontinued operations in the income statement.

The Executive Board evaluates operating profi ts of business segments separately in order to make decisions in relation to resource allocation and performance measurement. The segment results are evaluated on the basis of operating results, which are calculated by the same methods as in the consolidated fi nancial statements. Financial income, costs and corporate taxes are calculated at Group level and are not allocated to operating segments.

No material trade or other transactions take place between the business segments. Revenue from external customers, which is reported to Management, is measured by the same methods as in the income statement. Cost allocation between business segments is made on an individual basis with the addition of some, systematically allocated indirect costs to show the profi tability of the business segments. Assets and liabilities of the individual business segments are not included in the regular reporting to the Management.

No individual customer accounts for more than 10% of revenue.

Premium Outdoor and Premium ContemporaryPremium Outdoor comprises the following brand; Peak Performance as well as any external third party revenue generated in the brand’s stores.

Premium Contemporary comprises the following two brands; Tiger of Sweden and By Malene Birger as well as any external third party revenue generated in the brands’ stores.

The main target for Premium Outdoor and Premium Contemporary is to generate growth through enhanced market penetration and internationalisation and thereby boost revenues and earnings. Consequently, the prerequisite for future investments is that the business segments must;

• be among the most successful businesses in their home markets within their segment;

• be able to document international growth potential; and

• achieve a high return on invested capital.

Mid Market ContemporaryMid Market Contemporary comprises the following brands; InWear, Matinique, Part Two and Soaked in Luxury as well as any external third party revenue generated in the brands’ stores and the Group’s Companys stores.

These brands are operated as one business unit with a shared management team.

The main targets for brands in Mid Market Contemporary are optimisation and consolidation of their core markets. The requirements for these brands are as follows;

• to be relevant within their core markets in their segment;

• to be able to generate satisfactory earnings; and

• to be able to convert profi t to cash fl ow.

Non-core businessNon-core business comprises the two brands; Saint Tropez and Designers Remix.

Saint Tropez operates independently and has not been integrated into IC Companys’ shared service platform and may in the long-term be divested. Designers Remix is only partly owned by IC Companys and the future ownership needs to be resolved.

The Group sells clothing within a number of brands all characterised as “fashion wear”. As a result, no Group products or services differentiate by comparison and separate information on products or services are consequently not provided.


Premium Premium Mid Market Non-core Contin. Discontin. Outdoor Contemp. Contemp. business operations operations GroupDKK million 2012/13 2012/13 2012/13 2012/13 2012/13 2012/13 2012/13

Total revenue 930.5 1,063.6 890.5 429.7 3,314.2 468.8 3,783.0Growth compared to 2011/12 (%) (5) 18 (11) 3 1 (11) (1)

Operating profi t/loss before depreciation amortisation and net fi nancials (EBITDA) 95.5 120.9 (9.1) 41.1 248.5 (84.6) 163.8EBITDA margin (%) 10.3 11.4 (1.0) 9.6 7.5 (18.0) 4.3

Depreciation and amortisation (26.2) (25.9) (27.4) (10.9) (90.5) (17.4) (108.1)Impairment losses (0.4) - (0.6) - (1.0) (28.6) (29.6)Operating profi t/loss (EBIT) 68.9 95.0 (37.1) 30.2 157.0 (130.6) 26.4EBIT margin (%) 7.4 8.9 (4.2) 7.0 4.7 (27.9) 0.7

Reconciliation of segment information of continuing operations

Operating profi t (EBIT) 157.0Financial income 9.3Financial costs (22.4)Profi t before tax 143.9Tax on profi t for the year (32.4)Profi t for the year 111.5

Premium Premium Mid Market Non-core Contin. Discontin. Outdoor Contemp. Contemp. business operations operations GroupDKK million 2011/12 2011/12 2011/12 2011/12 2011/12 2011/12 2011/12

Total revenue 975.5 905.1 995.2 416.6 3,292.4 526.7 3,819.1

Operating profi t/loss before depreciation amortisation and net fi nancials (EBITDA) 85.4 119.7 71.8 13.6 290.4 (31.3) 259.1EBITDA margin (%) 8.8 13.2 7.2 3.3 8.8 (5.9) 6.8

Depreciation and amortisation (28.1) (21.9) (27.6) (11.0) (88.6) (21.4) (110.0)Impairment losses (2.5) - (4.1) - (6.6) (12.1) (18.7)Operating profi t/loss (EBIT) 54.8 97.8 40.1 2.5 195.2 (64.8) 130.4EBIT margin (%) 5.6 10.8 4.0 0.6 5.9 (12.3) 3.4

Reconciliation of segment information of continuing operations

Operating profi t (EBIT) 195.2Financial income 35.7Financial costs (36.4)Profi t before tax 194.5Tax on profi t for the year (60.4)Profi t for the year 134.1

Geographic informationRevenue is allocated to the geographic areas based on the customer’s geographic location. Allocation of assets is made based on the geographic location of the assets.

Assets are measured by the same method as in the statement of fi nancial position.

In all material aspects, geographic breakdown of Group revenue and assets are as follows: Revenue Compulsory reporting of assets* share share growth growth share share 30 June 30 June 30 June 30 JuneDKK million 2012/13 2011/12 2012/13 2011/12 2012/13 2011/12 2013 2012 2013 2012

Nordic region 2,379.8 2,199.1 8% 3% 72% 67% 359.4 540.0 90% 87%Rest of Europe 759.0 915.9 (17%) (8%) 23% 28% 33.2 72.1 8% 12%Rest of the world 175.4 177.4 (1%) 10% 5% 5% 8.7 6.4 2% 1%Total 3,314.2 3,292.4 1% 0% 100% 100% 401.3 618.5 100% 100%*Compulsory reporting of assets consists of non-current assets excluding fi nancial assets and deferred tax.


4. Staff costs

DKK million 2012/13 2011/12

Total salaries, remuneration, etc. can be specifi ed as follows: Remuneration to the Board of Directors 2.3 2.3 Remuneration to the Audit Committee 0.4 0.4Remuneration to the Remuneration Committee 0.2 0.2Salaries and remuneration* 731.4 693.8 Defi ned contribution plans, cf. note 20 to the consolidated fi nancial statements 38.2 36.4 Defi ned benefi t plans, cf. note 20 to the consolidated fi nancial statements (2.0) 1.1 Other social security costs 67.2 62.4 Share-based payments 6.8 7.7 Other staff costs 21.4 23.4 Total staff costs 865.9 827.7

Average number of Group employees 1,576 1,807* Costs re. external agents amounting to DKK 92.3 million (DKK 79.3 million) have been included under salaries and remuneration.

Remuneration to the Board of Directors, Executive Board and other executives is as follows: Board of Executive Other Board of Executive Other Directors Board executives* Directors Board executives*DKK million 2012/13 2012/13 2012/13 2011/12 2011/12 2011/12

Remuneration to the Board of Directors 2.3 - - 2.3 - -Remuneration to the Audit Committee 0.4 - - 0.4 - -Remuneration to the Remuneration Committee 0.2 - - 0.2 - -Salaries and remuneration - 16.4 22.5 - 15.7 20.1Bonus payments - 4.0 3.6 - - 0.6Retirement contributions - - 1.4 - - 1.4Share-based payments - 2.8 2.4 - 3.1 2.9Total 2.9 23.2 29.9 2.9 18.8 25.0* The category other executives comprises Vice Presidents and CEOs. Other executives are together with the Executive Board responsible for planning, executing and supervising the operations of the Group. 15 employees were defi ned as other executives (15 employees) in 2012/13. Vice Presidents appointed as at 1 July 2013 are not included in the fi gures above, but are listed under other executives on page 97.

DKK thousands 2012/13 2011/12

Remuneration to the Board of Directors: Niels Martinsen (Chairman) 625.0 625.0 Henrik Heideby (Deputy chairman) 650.0 650.0Ole Wengel (Deputy chairman) 660.0 660.0Per Bank 300.0 300.0 Anders Colding Friis 350.0 350.0 Annette Brøndholt Sørensen 300.0 300.0 Total remuneration to the Board of Directors 2,885.0 2,885.0

Hereof remuneration to the Audit Committee: Henrik Heideby (Chairman) 175.0 175.0Niels Martinsen 100.0 100.0Ole Wengel 100.0 100.0Total 375.0 375.0

Hereof remuneration to the Remuneration Committee: Ole Wengel (Chairman) 85.0 85.0Anders Colding Friis 50.0 50.0Niels Martinsen 50.0 50.0Total 185.0 185.0

DKK million 2012/13 2011/12

Remuneration to the Executive Board: Niels Mikkelsen (Chief Executive Offi cer) 9.8 8.3 Chris Bigler (Chief Financial Offi cer) 4.3 3.4 Anders Cleemann (Executive Vice President) 4.7 3.6 Peter Fabrin (Executive Vice President) 4.4 3.5 Total remuneration to the Executive Board 23.2 18.8

The members of the Executive Board and other executives are included in a bonus programme, the payments of which are related to the fi nancial performance of the employee’s own area of responsibility. The bonus potential is in the range of 20-50% of the annual salary. The bonus programme is based on profi ts achieved in the individual fi nancial year which helps ensure that the Group’s growth targets are met.


Remuneration PolicyThe Board of Directors ensures that the total individual remuneration to the members of the Executive Board refl ects their performance and the value added to the Company. The remuneration paid to the members of the Executive Board consists of a cash salary, an annual bonus, share-based incentive programmes, a company car and the usual other benefi ts. When not taking into account the discontinuation of employment of the former CEO, the overall composition of the Executive Board’s remuneration is in general expected to be unchanged for 2013/14 meaning that the Remuneration Policy will be applied as in 2012/13.

If the employment of a member of the Executive Board of the Parent Company is terminated by the Company before reaching retirement age, the Company shall pay the executive severance payment during the period of notice, which is 12-18 months and in certain circumstances up to 24 months.

Incentive programmesGeneral informationWith the purpose of motivating and retaining employees, other executives and members of the Executive Board, IC Companys has established incentive programmes consisting of option and warrant programmes. Furthermore, these programmes are to ensure common interest between the employees and the shareholders.

All exercise prices have been fi xed according to the listed share price applicable on the date of the grant.

The share options and warrants granted to the employees may only be exercised against payment in cash. The obligation regarding the incentive programmes is partly settled by IC Companys’ holding of treasury shares.

Valuation assumptionsThe market values of IC Companys’ share options and warrants have been calculated by using the Black & Scholes model.

The expected volatility is based on the volatility over the past years for the IC Companys share compared with Management’s expectations at the time when granted.

The risk-free interest rate has been set corresponding to the yield of a government bond with similar maturity terms as the programme in question.

The applied assumptions are as follows:

Stated in % 2012/13 2011/12

Expected volatility 25.0-46.4 25.0-46.4Expected dividend rate compared to share price 1.3-4.1 1.3-4.1Risk-free interest rate (based on Danish government bonds with similar maturity terms) 2.7-4.4 2.7-4.4

Outstanding share options are specifi ed as follows: Average exercise Executive Board Other employees Total price per option (no.) (no.) (no.) (DKK)

Outstanding share options at 1 July 2011 311,353 311,251 622,604 226.3

Expired/void (60,000) - (60,000) 171.2Void due to discontinuation of employment - (23,167) (23,167) 239.5Outstanding share options at 30 June 2012 251,353 288,084 539,437 228.9

Expired/void (110,000) - (110,000) 151.4Void due to discontinuation of employment - (5,404) (5,404) 223.8Outstanding share options at 30 June 2013 141,353 282,680 424,033 252.0

Number of shares options that are exercisable at 30 June 2013 141,353 282,680 424,033 252.0 Outstanding Exercise price Exercise period 4 weeks after Financial year share options per option (DKK) announcement of annual report Other employees 2007/08 138,380 329.4 + 5% p.a. 2012/13Executive Board 2007/08 21,353 329.4 + 5% p.a. 2012/13Executive Board 2007/08 40,000 180.0 + 5% p.a. 2012/13Executive Board 2008/09 10,000 163.0 + 5% p.a. 2012/13Executive Board 2008/09 10,000 113.0 + 5% p.a. 2012/13Other employees 2009/10 144,300 139.0 from 2012/13 to 2013/14Executive Board 2010/11 60,000 237.3 2012/13Total share options 424,033 251.9 No share options have been exercised in 2012/13.


The fair value of the share options recognised in the consolidated income statement amounted to costs of DKK 0.3 million (DKK 1.3 million) for 2012/13. The fair value of the share options recognised in the Parent Company’s income statement amounted to costs of DKK 0.4 million (DKK 0.8 million) for 2012/13.

Outstanding warrants are specifi ed as follows:

Average exercise Executive Board Other employees Total price per warrant (no.) (no.) (no.) (DKK)

Outstanding warrants at 1 July 2011 - 98,590 98,590 263,8

Granted during the fi nancial year 147,294 110,471 257,765 153.9Void due to discontinuation of employment - (11,097) (11,097) 211.7Outstanding warrants at 30 June 2012 147,294 197,964 345,258 183.2

Void due to discontinuation of employment - (3,250) (3,250) 263.8Outstanding warrants at 30 June 2013 147,294 194,714 342,008 182.4

Number of warrants that are exercisable at 30 June 2013 - - - -

Outstanding Exercise price Exercise period 14 days after Financial year warrants per warrant (DKK) announcement of annual report

Other employees 2010/11 88,768 263.8 from 2012/13 to 2014/15Executive Board 2011/12 147,294 166.8 from 2013/14 to 2015/16Other employees 2011/12 105,946 136.0 from 2013/14 to 2015/16Total warrants 342,008 182.4

No warrants have been exercised in 2012/13.

The fair value of the warrants recognised in the consolidated income statement amounted to costs of DKK 6.5 million (DKK 6.4 million) for 2012/13. The fair value of the warrants recognised in the Parent Company’s income statement amounted to costs of DKK 4.5 million (DKK 3.8 million) for 2012/13.

5. Other external costs

Other external costs include the total fees paid to the auditors appointed at the annual general meeting for auditing the fi nancial statements for the fi nancial year under review. DKK million 2012/13 2011/12

Statutory audit 3.5 3.6Other statements and opinions with guarantees 0.1 0.1Tax consultancy 1.0 1.9Other services 0.4 0.4Total other external costs 5.0 6.0

One of the Group’s minor subsidiaries is not audited by Deloitte, nor by its international business partners nor by a recognised international auditing company. Costs attributable to this amount to DKK 0.1 million (DKK 0.1 million).

6. Other operating income and costs

DKK million 2012/13 2011/12

Loss on sale of intangible assets and property, plant and equipment (0.3) (2.6)Proceeds in connection with handing over store leases 1.2 13.8Other 1.2 -Total other operating income and costs 2.1 11.2


7. Financial income and costs

DKK million 2012/13 2011/12

Financial income: Interest on bank deposits 1.5 5.2Interest on receivables 5.0 5.0Other fi nancial income 0.1 1.5Interest income from fi nancial assets not measured at fair value 6.6 11.7

Interest income on securities 0.1 -Realised gain on derivative fi nancial instruments 2.6 22.8Net gain on foreign currency translation - 1.2Total fi nancial income 9.3 35.7

Financial costs: Interest on liabilities to credit institutions (7.0) (14.4)Interest on mortgage loans (2.7) (4.9)Other interest costs (3.9) (3.1)Interest costs from fi nancial liabilities not measured at fair value (13.6) (22.4)

Fair value adjustments on securities (0.4) -Realised loss on derivative fi nancial instruments (6.9) (14.0)Net loss on foreign currency translation (1.5) -Total fi nancial costs (22.4) (36.4)Net fi nancials (13.1) (0.7)

8. Tax for the year of continuing operations

DKK million 2012/13 2011/12

Current taxCurrent tax for the year under review 33.2 36.3Prior-year adjustments, current tax 5.3 0.3Foreign non-income dependent taxes 1.7 2.1Total current tax 40.2 38.7

Deferred taxChange in deferred tax (18.4) 28.7Prior-year adjustments, deferred tax (7.5) -Adjustment regarding changes in tax rates, deferred tax (5.8) 0.4Total deferred tax (31.7) 29.1Tax for the year 8.5 67.8

Recognised as follows: Tax on profi t for the year of continuing operations 32.4 60.4Tax on loss of discontinued operations (24.9) (20.1)Tax on other comprehensive income 1.0 27.5Tax for the year 8.5 67.8

Net tax receivable at 1 July 15.8 25.0

Tax payable on profi t for the year (40.2) (39.2)Tax paid during the year 53.9 29.5Foreign currency translation adjustments, etc. 0.3 0.5Net tax receivable at 30 June 29.8 15.8

Recognised as follows:Tax receivable 60.5 34.8Tax payable (30.7) (19.0)Net tax receivable at 30 June 29.8 15.8

Breakdown on tax on profi t for the year of continuing operations is as follows:

DKK million 2012/13 2011/12

Calculated tax on profi t before tax, 25% 24.6 52.5Effect of other non-taxable income and other non-deductable costs 3.7 5.3Effect of adjustment regarding changes in tax rates, deferred tax (5.8) 0.4Effect of net deviation of tax in foreign subsidiaries relative to 25% (0.2) (1.1)Foreign non-income dependent taxes 1.7 2.1Prior-years adjustments (2.0) 0.6Revaluation of tax losses, etc. 8.5 -Other adjustments 1.9 0.6Total tax on profi t for the year 32.4 60.4

Effective tax rate for the year (%) 22.5 31.0

Tax on other comprehensive income Foreign currency translation adjustments arising in connection with foreign subsidiaries (0.7) (6.4)Fair value adjustment on derivatives held as cash fl ow hedges (0.3) (21.1)Total tax on other comprehensive income (1.0) (27.5)


9. Discontinued operations

DKK million 2012/13 2011/12

Revenue 468.8 526.6Costs (570.8) (579.3)Loss before tax for the year (102.0) (52.7)Tax on loss for the year 19.4 16.3Loss after tax for the year (82.6) (36.4)Write-downs (28.6) (12.1)Tax on write-downs 5.5 3.8Value adjustment after tax (23.1) (8.3)Loss for the year of discontinued operations (105.7) (44.7)

Statement of cash fl ows: Cash fl ow from operating activities (14.9) 3.2Cash fl ow from investing activities (1.8) 11.1Cash fl ow from fi nancing activities - -Total cash fl ow (16.7) 14.3

EPS - Earnings per share of discontinued operations (6.4) (2.7)EPS - Diluted earnings per share of discontinued operations (6.4) (2.7)

A formal sales process for the Group brands Jackpot and Cottonfi eld was initiated in the beginning of the calendar year 2013. As a consequence hereof the operations were presented in the interim report for Q3 2012/13 as discontinuing operations, and related assets and liabilities were presented as assets held-for-sale and liabilities concerning assets classifi ed as held-for-sale, respectively.

The sales process resulted in an agreement with COOP entered on 28 May 2013 regarding the sale of the trademark rights of Jackpot and Cottonfi eld whereas the remaining assets and liabilities relating to the two brands in question, including existing retail stores, gradually will be sold or closed down during the fi nancial year 2013/14. The profi t/loss from the sales transaction and closing down process is therefore still presented as discontinued operations. The distribution to wholesale customers will continue until 31 December 2013. COOP did not want to take over the distribution as Jackpot and Cottonfi eld will be sold through their own distribution chain.

The sales proceeds have been recognised as an income under costs.

10. Earnings per share

DKK million / 1,000 shares 2012/13 2011/12

Profi t for the year Profi t for the year attributable to shareholders of IC Companys 3.7 88.1The Group IC Companys’ profi t share of continued operations 109.4 132.8

Average number of shares Number of issued shares 16,942.8 16,942.8Number of treasury shares (540.7) (540.7)Number of outstanding shares 16,402.1 16,402.1

Diluted effect of outstanding shares and warrants - 4.2Number of shares excluding treasury shares, diluted 16,402.1 16,406.3

Earnings per share (EPS)Earnings per share, DKK 0.2 5.4Diluted earnings per share, DKK* 0.2 5.4Earnings per share of continuing operations, DKK 6.7 8.2Diluted earnings per share of continuing operations, DKK* 6.7 8.2*When calculating diluted earnings per share, 424,033 share options (421,637 share options) have not been included as they are characterised as out-of-the-money, but they may, however, dilute earnings per share in the future.

11. Dividends

Please see note 9 of the parent fi nancial statements.


12. Intangible assets and property, plant and equipment

INTANGIBLE ASSETS Software Trade- Lease- IT systems Total and IT mark hold under de- intangibleDKK million Goodwill systems rights rights velopment assets

Cost at 1 July 2011 199.4 204.4 8.1 99.6 13.8 525.3

Foreign currency translations adjustments 5.7 - - - - 5.7Reclassifi cation of assets under construction - 6.0 - - (6.0) -Addition - 28.3 - 4.4 1.6 34.3Disposal - (0.1) - (12.9) - (13.0)Cost at 30 June 2012 205.1 238.6 8.1 91.1 9.4 552.3

Foreign currency translations adjustments 0.4 - - (0.2) 0.1 0.3Reclassifi cation of assets under construction - 9.5 - - (9.5) -Addition - 11.7 - 4.4 - 16.1Disposal - (1.8) - (2.1) - (3.9)Cost at 30 June 2013 205.5 258.0 8.1 93.2 - 564.8

Accumulated amortisation and impairment at 1 July 2011 - (175.8) (8.0) (79.1) - (262.9)

Foreign currency translations adjustments - (0.2) (0.1) (0.3) 0.1 (0.5) Amortisation and impairment on disposals - 0.2 - 10.9 - 11.1 Amortisation and impairment for the year - (14.3) - (5.1) - (19.4) Accumulated amortisation and impairment at 30 June 2012 - (190.1) (8.1) (73.6) 0.1 (271.7)

Foreign currency translations adjustments - 0.1 - 0.2 (0.1) 0.2 Amortisation and impairment on disposals - 0.8 - 1.2 - 2.0 Amortisation and impairment for the year - (31.9) - (5.6) - (37.5) Accumulated amortisation and impairment at 30 June 2013 - (221.1) (8.1) (77.8) - (307.0)

Carrying amount at 30 June 2013 205.5 36.9 - 15.4 - 257.8

Carrying amount at 30 June 2012 205.1 48.5 - 17.5 9.5 280.6

PROPERTY, PLANT AND EQUIPMENT Total Leasehold Equip- Assets- property Land and improvement & under con- plant &DKK million buildings ments furniture struction equipment

Cost at 1 July 2011 192.3 406.9 424.0 5.9 1,029.1

Foreign currency translations adjustments 0.7 2.1 2.2 0.1 5.1Reclassifi cation - - 0.2 (0.2) -Addition 1.1 35.1 38.6 (3.3) 71.5Disposal - (74.0) (61.0) - (135.0)Cost at 30 June 2012 194.1 370.1 404.0 2.5 970.7

Foreign currency translations adjustments - (2.5) (1.8) - (4.3)Reclassifi cation 5.3 (5.3) - - -Addition 2.8 27.9 23.0 4.5 58.2Disposal (0.1) (15.1) (18.6) (0.1) (33.9)Reclassifi cation of assets held-for-sale (184.9) - - - (184.9)Cost at 30 June 2013 17.2 375.1 406.6 6.9 805.8

Accumulated depreciation and impairment at 1 July 2011 (37.3) (288.9) (327.4) - (653.6)

Foreign currency translations adjustments (0.2) (1.8) (2.3) - (4.4) Depreciation and impairment on disposals - 76.0 58.4 - 134.4 Depreciation and impairment for the year (4.9) (57.7) (46.7) - (109.3) Accumulated depreciation and impairment at 30 June 2012 (42.4) (272.4) (318.0) - (632.8)

Foreign currency translations adjustments - 1.7 1.5 - 3.2 Depreciation and impairment on disposals 0.2 12.7 13.8 - 26.7 Depreciation and impairment for the year (3.2) (50.5) (46.3) - (100.0) Reclassifi cation (3.8) 3.8 - - -Reclassifi cation of assets held-for-sale 40.6 - - - 40.6Accumulated depreciation and impairment at 30 June 2013 (8.6) (304.7) (349.0) - (662.3)

Carrying amount at 30 June 2013 8.6 70.4 57.6 6.9 143.5

Carrying amount at 30 June 2012 151.7 97.7 86.0 2.5 337.9


GoodwillGoodwill on business combinations is allocated at the takeover date to the cash-generating units expected to achieve economic benefi ts from the takeover. The carrying amount of goodwill is allocated to the respective cash-generating units as follows:

DKK million 30 June 2013 30 June 2012

Tiger of Sweden AB (Premium Contemporary) 87.4 87.2Peak Performance AB (Premium Outdoor) 53.7 53.5Saint Tropez A/S (Non-core business) 37.0 37.0IC Companys Norway AS - the Peak Performance activity of the business (Premium Outdoor) 27.4 27.4Carrying amount of goodwill 205.5 205.1

Goodwill is tested at least once annually for impairment and more frequently in the event that impairment is indicated.

The recoverable amounts of the individual cash-generating units to which the goodwill amounts have been allocated are calculated based on expected discounted future cash fl ows compared with the carrying amounts. Future cash fl ows are based on the entities’ business plans and budgets during the strategy period for 2013/14–2017/18. The most important parameters in the calculation of the net present value are revenue, EBITDA and working capital. The business plans are based on Management’s specifi c assessment of the business units’ expected performance during the strategy period. When calculating the net present value, a discount rate of 13.78% before tax/10.35% after tax has been applied which is unchanged compared to 2011/12.

No write-down of goodwill was recorded during the fi nancial year 2012/13 (no write-downs of goodwill last fi nancial year).

Leasehold rights with indeterminable useful livesOf the total carrying amount of leasehold rights DKK 6.2 million (DKK 6.2 million) relates to leasehold rights with indeterminable useful lives which are determined on the basis of the contractual terms of the leases. Therefore, impairment tests were conducted at 30 June 2013, and Management assessed that the recoverable amount exceeded the carrying amount.

Non-current assets including leasehold rights with determinable useful lives in Group storesThe Group’s non-current assets, which are located in Group stores, are tested annually for impairment. The recoverable amounts of the individual stores (cash-generating units) are calculated based on the store’s net present value. Future cash fl ows are based on the individual store’s budget for a period corresponding to the average expected useful life of the store’s assets. When calculating the net present value, a discount rate of 13.78% before tax/10.35% after tax has been applied which is unchanged compared to 2011/12.

Write-downs of non-current assets and leasehold rights amounted to DKK 29.6 million (DKK 18.7 million) for 2012/13 which is disclosed in note 3 to the consolidated fi nancial statements.

13. Financial assets

Long-term loans Total to business Shares fi nancialDKK million partners and bonds Deposits, etc. assets

Carrying amount at 1 July 2011 0.4 0.7 32.7 33.8

Net additions, disposals and foreign currency translation adjustments for the year (0.2) 6.6 0.1 6.5Carrying amount at 30 June 2012 0.2 7.3 32.8 40.3

Net additions, disposals and foreign currency translation adjustments for the year (0.2) (1.3) 0.5 (1.0)Carrying amount at 30 June 2013 - 6.0 33.3 39.3

Long-term loans to business partnersThe Group had granted subordinated loans of DKK 0.4 million to business partners as at 30 June 2012. An amount of DKK 0.2 million of the loans was classifi ed as long-term loans to business partners.

The Group has received payments of DKK 0.2 million corresponding to the long-term part of the loans for 2012/13. The short-term part of the loans amounting to DKK 0.2 million has been recognised under other receivables.

All outstanding amounts are interest-bearing.

No security has been received for the loan. The carrying amount of the fi nancial assets corresponds to the fair value.

SharesNet additions for the year amounting to DKK 1.3 millon are attributable to shares used for hedging of retirement benefi t obligations in one of the Group businesses.


14. Deferred tax


Deferred tax at 1 July 11.9 42.7

Prior-year adjustments 7.5 - Adjustment regarding changes in tax rates 5.8 (0.4)Foreign currency translation adjustments (0.5) (1.8)Deferred tax on other comprehensive income (1.0) (27.5)Change in deferred tax on profi t/loss for the year 19.4 (1.1)Net deferred tax at 30 June 43.1 11.9

Recognised as follows: Deferred tax assets 79.7 64.1Deferred tax liabilities (36.6) (52.2)Net deferred tax at 30 June 43.1 11.9

Breakdown of deferred tax at 30 June as follows: Gross deferred tax assets and liabilities 104.8 64.5Unrecognised tax assets (61.7) (52.6)Net deferred tax at 30 June 43.1 11.9

Unrecognised tax assets relate to tax losses that are assessed not to be suffi ciently likely to be utilised in the foreseeable future. The unrecognised tax losses have in all material respect no expiry date.

Temporary differences and changes during the year are specifi ed as follows:

Foreign Net deferred currency Recognised Reclassifi ed Recognised Net deferred tax assets at translation in profi t as assets in other tax assets atDKK million 1 July 2012 adjustment for the year held-for-sale comp. income 30 June 2013

Intangible assets 6.4 - (0.6) - - 5.8Property, plant and equipment 27.5 (0.2) 0.6 (1.7) - 26.2Receivables 1.7 (0.1) 1.5 - - 3.1Inventories 22.0 0.1 (6.2) - - 15.9Provisions 3.3 - 31.7 - - 35.0Other liabilities (48.8) (0.3) 16.9 - - (32.2)Financial instruments (10.5) - 9.6 - (1.0) (1.9)Tax losses 62.9 0.2 (10.2) - - 52.9Unrecognised tax assets (52.6) (0.2) (8.9) - - (61.7)Total 11.9 (0.5) 34.4 (1.7) (1.0) 43.1

Foreign Net deferred currency Recognised Recognised Net deferred tax assets at translation in profi t in other tax assets atDKK million 1 July 2011 adjustment for the year comp. income 30 June 2012

Intangible assets 7.4 0.1 (1.1) - 6.4Property, plant and equipment 15.4 (0.1) 12.2 - 27.5Receivables 1.2 0.1 0.4 - 1.7Inventories 26.9 0.2 (5.1) - 22.0Provisions - - 3.3 - 3.3Other liabilities (50.8) (2.1) 4.1 - (48.8)Financial instruments 17.0 - - (27.5) (10.5)Tax losses 76.9 0.2 (14.2) - 62.9Unrecognised tax assets (51.3) (0.2) (1.1) - (52.6)Total 42.7 (1.8) (1.5) (27.5) 11.9

15. Inventories


Raw material and consumables 37.2 42.3Finished goods and goods for resale 328.2 341.0Goods in transit 164.0 145.2Total inventories 529.4 528.5

Changes in inventory write-downs are as follows:


Inventory write-downs at 1 July 107.3 120.6

Write-down for the year, addition 37.9 47.8Write-down for the year, reversal (54.9) (61.1)Total inventory write-downs 90.3 107.3

Inventories recognised at net realisable value amounted to DKK 75.9 million (DKK 87.3 million) at 30 June 2013.


16. Trade receivables

Trade receivables (gross) are specifi ed as follows: DKK million 30 June 2013 30 June 2012

Not yet due 277.7 279.6Due, 1-60 days 65.7 67.3Due, 61-120 days 33.3 41.7Due more than 120 days 83.4 59.3Total gross trade receivables 460.1 447.9

In general, the receivables do not carry interest until between 30 and 60 days after the invoice date. After this date, interest is charged on the outstanding amount.

The Group has recognised DKK 5.0 million (DKK 5.0 million) in connection with interest on overdue trade receivables for 2012/13.

Change in write-downs regarding trade receivables is as follows:


Write-downs 1 July 56.0 49.1

Foreign currency translations adjustments 0.6 2.9Change in write-downs for the year 27.0 18.1 Realised loss for the year (14.3) (14.1)Total write-downs 69.3 56.0

Receivables are written down to net realisable value corresponding to the amount of expected future net payments received on the receivables. Write-downs are calculated on the basis of individual assessments of the receivables.

The carrying amounts of the receivables correspond in all material respect to their fair values.

17. Other receivables


VAT 9.2 12.0Receivables from third party stores 0.6 9.4Credit card receivables 18.1 10.0Unrealised gain on fi nancial instruments 25.9 76.2Sundry receivables 17.7 29.8Total other receivables 71.5 137.4

All other receivables are due for payment within 1 year.

Management assesses that the carrying amount of receivables at 30 June 2013 corresponds in all material respect to the fair value, and that the receivables are not subject to any particular credit risk.

18. Prepayments


Collection samples 43.5 44.2Advertising 6.6 6.5Rent, etc. 25.8 29.0Others 19.1 29.7Total prepayments 95.0 109.4

19. Share capital

The share capital consists of 16,942,807 shares with a nominal value of DKK 10 each. No shares carry any special rights. The share capital is fully paid up.


The below capital adjustments have been made in the past fi ve years as follows: Nominal value Number DKK thousands

Share capital at 1 July 2008 17,919,632 179,196

Share capital reduction due to share buy-back programmes (976,825) (9,768)Share capital at 30 June 2009 16,942,807 169,428Share capital at 30 June 2010 16,942,807 169,428Share capital at 30 June 2011 16,942,807 169,428Share capital at 30 June 2012 16,942,807 169,428Share capital at 30 June 2013 16,942,807 169,428

Treasury shares are as follows: % of share Nominal value capital Number DKK thousands

Treasury shares at 1 July 2011 3.2 540,672 5,407Treasury shares at 1 July 2012 3.2 540,672 5,407Treasury shares at 30 June 2013 3.2 540,672 5,407

Pursuant to a resolution passed by the shareholders at the Company’s general meeting, the Company may acquire treasury shares equivalent to a maximum of 10% of the share capital.

The Company has not engaged in any share buy-back for the fi nancial year 2012/13.

The value of the Company’s treasury shares at market price on 30 June 2013 amounted to DKK 65.9 million (DKK 52.7 million).

20. Retirement benefit obligations

The retirement benefi t obligations of Danish companies are covered by insurance which is also the case with the retirement benefi t obligations of a large number of the Group’s subsidiaries. Foreign subsidiaries whose retirement benefi t obligations are not or only partly covered by insurance (defi ned benefi t plans) recognise the uncovered retirement benefi t obligations on an actuarial basis at the present value at the end of the reporting period. The Group has defi ned benefi t plans in the Netherlands and Norway. These retirement plans are covered in retirement funds for the employees. In the consolidated fi nancial statements an amount of DKK 2.7 million (DKK 6.3 million) has been recognised under liabilities in relation to the Group’s obligations for current and former employees after deduction of assets relating to the plan. The Parent Company only operates defi ned contribution pension plans.

Furthermore, an amount of DKK 5.4 million (DKK 6.6 million) attributable to retirement benefi t obligations in one of the Group companies has been included which has been hedged by shares and recognised under fi nancial assets.

For defi ned benefi t plans, the present value of future benefi ts, which the Company is liable to pay under the plan, is computed using actuarial principles. The computation of the present value is based on assumptions of computable rate of interest, increases in pay rates and retirement contributions, investment yield, staff resignation rates and mortality rates. Present value is computed exclusively for the benefi ts to which the employees have earned entitlement through their employment with the Company up till now.

Costs of DKK 38.2 million (DKK 36.4 million) have been recognised in the consolidated income statement relating to plans covered by insurance (defi ned contribution plans). For plans not covered by insurance (defi ned benefi t plans) income of DKK 2.0 million have been recognised (costs of DKK 1.1 million).

For defi ned contribution plans, the employer is obliged to pay a defi ned contribution (for example a fi xed amount or a fi xed percentage of an employee’s salary). For defi ned contribution plans, the Group runs no risk in respect of future developments in interest rates, infl ation, mortality or disability.

DKK million 30 June 2013 30 June 2012Recognised in profi t or loss: Contributions for defi ned contributions plans 38.2 36.4

Retirement benefi t obligations for the year 1.3 1.2 Calculated interest on obligations 1.3 1.4 Expected return on the assets of the plan, etc. (1.3) (1.1)Prior-year adjustments (0.1) -Recognised actuarial gain/loss (3.2) (0.4)Total recognised obligations regarding defi ned benefi t plans (2.0) 1.1Total recognised obligations in profi t or loss 36.2 37.5

Change in recognised obligations:Net obligations for defi ned benefi t plans at 1 July 6.3 5.8 Foreign currency translation adjustments of obligations, at the beginning of the year (0.1) 0.1Recognised in the income statement, net (2.0) 1.1 Group contributions (1.5) (0.7)Total net obligations 2.7 6.3


The retirement benefi t obligations are specifi ed as follows:

DKK million 30 June 2013 30 June 2012 30 June 2011 30 June 2010 30 June 2009Present value of defi ned benefi t plans 39.2 40.3 35.8 35.0 25.0 Fair value of the assets of the plan (36.5) (34.0) (30.0) (28.1) (20.4)Total net retirement benefi t obligations 2.7 6.3 5.8 6.9 4.6

The average assumptions for the actuarial calculations at the end of the reporting period were as follows:

Stated in % 2013 2012

Average discounting rate applied 3.7 3.1Expected return on plan assets 3.7 3.7Expected future pay increase rate 2.8 2.6 The plan assets consist of ordinary investment assets, including shares and bonds. No investments have been made in treasury shares.

The expected return on the plans is based on long-term expectations for the return of the assets in the respective countries. The return on the plans’ assets amounted to DKK 1.2 million for 2012/13 (gain of DKK 9.5 million). The Group’s expected contribution to the plans for 2013/14 amounted to DKK 1.6 million.

21. Provisions

Provisions for expected poten- Provisions tial fi nancial for risks of pending loss-making Provisions for Other TotalDKK million litigation contracts restructurings provisions provisions

Provisions at 1 July 2011 - - - - -

Provisions for the year 1.5 5.6 - - 7.1Provisions at 30 June 2012 1.5 5.6 - - 7.1

Provisions for the year - 30.0 30.6 43.8 104.4Provisions at 30 June 2013 1.5 35.6 30.6 43.8 111.5

Specifi ed in the consolidated fi nancial statement of position as follows:

Current liabilities 1.5 5.6 - - 7.1Provision at 30 June 2012 1.5 5.6 - - 7.1

Non-current liabilities - 8.7 3.6 - 12.3Current liabilities 1.5 26.9 27.0 43.8 99.2Provision at 30 June 2013 1.5 35.6 30.6 43.8 111.5

From time to time the Group is involved in court litigations of various kinds. Management considers that pending litigation poses no signifi cant fi nancial risks.

Provisions for loss-making contracts are primarily attributable to closure of showrooms and termination of retail leases in respect of discontinued operations.

Provisions for restructurings are attributable to measures initiated in the Mid Market Contemporary segment. Please see the section on Mid Market Contemporary on page 17 in this Annual Report for further information.

Other provisions primarily relate to staff reductions in discontinued operations.

22. Non-current liabilities to credit institutions


Maturity structure of non-current liabilities: After 5 years from the end of the reporting period - 140.0Total non-current liabilities - 140.0

Nominal value - 140.0

The loan is attributable to the Group’s headquarters which have been put up for sale. Consequently, the loan has been reclassifi ed as liabilities concerning assets classifi ed as held-for-sale. Please see note 25 to the consolidated fi nancial statements.


23. Current liabilities to credit institutions

The Group’s total current liabilities to credit institutions comprise Danish and foreign overdraft facilities carrying variable interest at an average rate of 2.09% p.a. (3.22% p.a.).

Current liabilities are repayable on demand, and therefore the carrying amount corresponds to the fair value.

Current liabilities to credit institutions are denominated in the currencies as follows: Stated in % 30 June 2013 30 June 2012

DKK 40 4SEK 44 61EUR 7 13USD - -PLN - 13CHF - 1CAD - 4GBP 4 1Other currencies 5 3Total 100 100

24. Other liabilities


VAT, customs and tax deducted from income at source 79.1 73.9Salaries, social security costs and holiday allowance payable 126.0 116.1Unrealised loss on fi nancial instruments 15.6 39.1Severance payments 9.1 6.3Other costs payable 48.0 123.1Total other liabilities 277.8 358.5

In other costs payable an amount of DKK 25.6 million (DKK 34.6 million) has been recognised which is due after 12 months.

The carrying amount of amounts payable under other liabilities corresponds in all material respect to the fair value of the liabilities.

25. Assets and liabilities classified as held-for-sale


Property, plant and equipment 144.3 -Assets classifi ed as held-for-sale 144.3 -

Liabilities to credit institutions 140.0 -Liabilities concerning assets classifi ed as held-for-sale 140.0 - The Group’s headquarters have been put up for sale and, consequently, the buildings have been classifi ed as assets as held-for-sale.

Non-current liabilities to credit institutions as at 30 June 2013 constituted a mortgage loan denominated in DKK and based on a six month CIBOR interest. The loan was taken out on 26 January 2010 with the Group’s headquarters located at Raffi naderivej 10 as security for the loan. The average interest rate for 2012/13 amounted to 1.44% p.a. (2.03% p.a.). As of 30 June 2011 the loan was hedged with a 2 year interest rate swap. 6 month CIBOR interest is received and a fi xed interest rate of 1.17% p.a. is paid.

26. Operating leases


Commitments under non-terminable operating leases are:

Store leases and other land and buildings 0-1 year 210.0 262.81-5 years 242.9 340.1More than 5 years 32.9 40.5Total 485.8 643.4

Equipment and furniture leases, etc. 0-1 year 14.0 16.31-5 years 9.6 23.2More than 5 years - -Total 23.6 39.5

The Group leases properties under operating leases. The lease period is typically between 3-10 years with an option to extend upon expiry. Many of the lease contracts contain rules regarding revenue based lease.


In addition, the Group leases cars and other operating equipment under operating leases. The lease period is typically between 3-5 years with an option to extend upon expiry.

An amount of DKK 394.5 million (DKK 360.2 million) relating to operating leases has been recognised in the consolidated income statement for 2012/13.

Some of the leased stores are sub-let to franchise stores, etc., and for these, the Group has received a rental income on non-terminable leases of DKK 19.7 million (DKK 16.7 million). The future rental income on non-terminable leases is expected as a minimum to amount to DKK 87.7 million (DKK 90.4 million) for the fi nancial years 2013/14–2018/19.

27. Other liabilities and contingent liabilities


Guarantees and other collateral security 594.9 682.3

The Company has entered into binding agreements with suppliers on the delivery of collections until 31 December 2013 of which the majority is tied to sales orders entered into with pre-order customers. The Group has furthermore guaranteed punctual and correct payment, secured against the merchandise, on behalf of a business partner in China to the suppliers approved by the Group.

As at 30 June 2013 the Group was not involved in any pending litigation which may have a material effect on the Group’s fi nancial position.

The Group is subject to the usual return obligations imposed on the industry. Management expects no major loss on these obligations.

28. Change in working capital


Change in inventories (1.0) 28.0Change in receivables excluding derivative fi nancial instruments 31.6 (54.3)Change in current liabilities excluding tax and derivative fi nancial instruments (23.9) 57.5Total change in working capital 6.7 31.2

29. Securities


Listed bonds 100.9 -Total securities 100.9 - The Group’s securities measured at fair value amounted to a nominal value of DKK 100 million of 0.71% Nykredit 21E 2018.

30. Cash and cash equivalents


Cash 109.6 82.6 Credit institutions, current liabilities (188.7) (190.7) (79.1) (108.1)

Listed bonds 100.9 -Cash and cash equivalents, cf. the statement of cash fl ows (21.8) (108.1)

As at 30 June 2013 The Group’s total credit facilities amounted to DKK 924 million (DKK 1,097 million) in terms of withdrawal rights. Of this amount, DKK 329 million has been drawn in relation to current and non-current liabilities to credit institutions and DKK 188 million has been drawn in relation to trade fi nance facilities and guarantees. Accordingly, undrawn credit facilities thus amount to DKK 407 million. All credit facilities are standby credits which may be drawn with a day’s notice.

31. Financial risks and derivative financial instruments

Foreign exchange riskThe Group’s foreign exchange risk (transaction risk) is handled centrally by the Group’s Treasury Department. The Parent Company’s functional currency is DKK, and foreign exchange positions are generally hedged vis-à-vis DKK. The Group’s primary transaction risk relates to the buying and selling of goods in foreign currencies. Hedge accounting as well as hedging of expected risks take place by means of forward contracts and/or options. Hedging is made on a 15-month horizon.

The risk coverage of the Group’s transaction exposure is made from an estimate of the cash fl ow demand for the future 15 months. As a general rule cash fl ows in all currencies are hedged except from EUR.


Foreign exchange contracts only relate to hedging of selling and buying of goods pursuant to the Group’s policy hereto. The risk coverage of the Group’s transaction exposure is made from an estimate of the cash fl ow demand for the future 15 months.

The Group’s foreign exchange exposure is hedged centrally although a few subsidiaries have unhedged foreign exchange exposures if they have signed leases in a currency other than the local currency.

As at 30 June 2013 the Group’s risks for the coming 0-15 months may be specifi ed as follows:

Net posi-At 30 June 2013 Expected Expected Hedges Hedges Hedges Average Net tion DKKMillion: infl ow outfl ow 0-6 m. 7-12 m. 13-15 m. rate position million

EUR 96.7 (45.7) - - - - 51.0 380.4USD 4.9 (124.8) 48.1 52.4 19.4 572.8 - -HKD - (225.0) 87.0 95.0 43.0 73.8 - -SEK 610.6 (20.2) 298.0 204.4 88.0 85.1 - -NOK 381.5 (2.2) 174.0 147.0 58.3 97.3 - -GBP 11.5 (0.3) 5.7 4.0 1.5 900.6 - -CHF 19.3 (0.5) 9.1 6.7 3.0 612.8 - -PLN 16.0 (1.0) 15.0 - - 170.0 - -CZK 32.0 - 32.0 - - 29.2 - -HUF 105.4 - - - - - 105.4 2.7CAD 15.8 - 7.5 5.8 2.5 546.3 - -

Net posi-At 30 June 2012 Expected Expected Hedges Hedges Hedges Average Net tion DKKMillion: infl ow outfl ow 0-6 m. 7-12 m. 13-15 m. rate position million

EUR 96.5 (38.6) - - - - 57.9 430.4USD 2.4 (149.7) 73.6 55.5 18.2 547.9 - -HKD - (297.4) 153.2 104.0 40.2 70.3 - -SEK 708.9 (8.9) (300.0) (280.0) (120.0) 81.2 - -NOK 379.8 - (174.5) (147.3) (58.0) 95.4 - -GBP 13.9 - (6.0) (6.0) (1.9) 870.3 - -CHF 20.8 - (11.4) (5.6) (3.8) 627.8 - -PLN 31.9 - (15.0) (11.9) (5.0) 173.1 - -CZK 65.4 - (31.0) (23.8) (10.6) 30.0 - -HUF 180.4 - (75.0) - - 2.6 105.4 2.7CAD 17.4 - (7.6) (7.3) (2.5) 546.3 - -

Net outstanding foreign exchange contracts at 30 June 2013 for the Group and the Parent Company designated and qualifying as hedge accounting of cash fl ow are as follows: 2013 2012 fair value fair value adjustments adjustments recognised recognised in statement in statement of other of other Notial compr. Maturity Notial compr. MaturityDKK million principal* income Fair value months principal* income Fair value months

USD 119.9 (4.8) 682.3 0-15 123.5 46.9 727.8 0-15HKD 225.0 (1.2) 164.8 0-15 213.6 9.5 162.3 0-15SEK (590.4) 3.6 (498.8) 0-15 (700.0) (20.1) (588.5) 0-15NOK (379.3) 13.4 (355.7) 0-15 (379.8) (9.2) (371.5) 0-15Other currencies - 8.7 (179.6) 0-15 - (8.6) (206.4) 0-15Total at 30 June 19.7 (187.0) 18.5 (276.3) * Positive principal amounts on foreign exchange contracts indicate a purchase of the currency in question. Negative principal amounts indicate a sale.

Costs of DKK 4.7 million relating to ineffective cash fl ow hedges have been recognised in the income statement for 2012/13 (income of DKK 8.8 million). Ineffective cash fl ow hedges are recognised in the income statement under fi nancial income/costs.

Open foreign exchange contracts for the Group and the Parent Company qualifying as hedges of recognised assets and liabilities are as follows: 2013 2012 fair value fair value adjustments adjustments recognised recognised Notial in income Maturity Notial in income MaturityDKK million principal* statement Fair value months principal* statement Fair value months

HKD 65.0 (2.2) 47.8 0-15 83.8 7.4 63.8 0-15USD 20.9 (4.7) 119.2 0-15 23.8 12.3 113.9 0-15SEK (70.0) (2.0) (59.5) 0-15 - - - 0-15Total at 30 June (8.9) 107.5 19.7 177.7 * Positive principal amounts on foreign exchange contracts indicate a purchase of the currency in question. Negative principal amounts indicate a sale.

Fair value adjustments as at 30 June 2013 have been recognised in the consolidated income statement under cost of sales.


The fair values have been calculated based on current interest rate curves and foreign exchange rates as at 30 June 2013.

Neither the Group nor the Parent Company has any open foreign exchange contracts that do not qualify for hedge accounting at 30 June 2013 or at 30 June 2012.

The recognised positive/negative market values under equity have been treated in accordance with the rules for hedging of future cash fl ows and are closed/adjusted during the year according to the hedge accounting principles.

The net position of the Group calculated according to the value at risk method will as a maximum result in a loss of DKK 1.0 million. The calculation is made by using a 95% confi dence interval with a term of 6 months. Value at risk states the amount that as a maximum may be lost on a position calculated by using historical volatilities on the different currencies as well as correlations between the currencies.

Except from derivative fi nancial instruments for hedging of foreign exchange exposure risks in the statement of fi nancial position, no fair value adjustments for unlisted fi nancial assets and liabilities have been recognised in the income statement.

The existing categories of fi nancial assets and liabilities are as follows:


Listed securities 100.9 -Unlisted shares and bonds recognised under non-current assets (shares) 6.0 7.3Financial assets at fair value recognised through the income statement 106.9 7.3

Derivative fi nancial instruments for hedging of recognised assets and liabilities, recognised under current assets (other receivables) - 19.7Derivative fi nancial instruments for hedging of future cash fl ow, recognised under current assets (other receivables) 25.7 56.4Financial assets for hedging purposes 25.7 76.1

Deposits (fi nancial assets) 33.3 32.8Long-term loans (fi nancial assets) - 0.2Trade receivables 390.8 391.9Other receivables 45.7 61.2Cash 109.6 82.6Loans and receivables 579.4 568.7Total fi nancial assets 712.0 652.1

Liabilities to credit institutions (non-current liabilities) - 140.0Liabilities to credit institutions (current liabilities) 188.7 190.7Trade payables 420.1 396.5Share of other liabilities recognised at amortised cost (non-current liabilities) 25.5 34.6Share of other liabilities recognised at amortised cost (current liabilities) 236.5 284.8Financial liabilities measured at amortised cost 870.8 1,046.6

Derivative fi nancial instruments for hedging of recognised assets and liabilities, recognised under current liabilities (other liabilities) 8.9 -Derivative fi nancial instruments for hedging of future cash fl ow, recognised under current liabilities (other liabilities) 6.0 37.9Interest rate swap for hedging interest rate level on the Group’s mortgage loan for property at Raffi naderivej 10 - 1.1Financial liabilities for hedging purposes 14.9 39.0Total fi nancial liabilities 885.7 1,085.7

Fair value hierarchy for fi nancial instruments measured at fair value in the statement of fi nancial positionThe fair value hierarchy is divided into three levels:

• Listed prices in active markets for identical assets and liabilities (level 1).

• Listed prices in active markets for identical assets and liabilities or other methods of measurement where all substantial inputs are based on market observables (level 2).

• Method of measurement where substantial inputs may not be based on market observables (level 3).

Calculation of the fair value adjustments of the Group’s cash fl ow hedges and interest rate swaps is based on listed prices in active markets for identical assets where all substantial inputs are based on market observables (level 2).

Inputs for measurement of the Group’s unlisted shares have not been based on market observables (level 3).

Liquidity riskIC Companys secures a suffi cient liquidity reserve by a combination of liquidity control and non-guaranteed credit facilities. Please see below for maturity profi les on fi nancial assets and liabilities.

Interest rate riskThe Group’s interest rate risk is continuously monitored by the Treasury Department in accordance with Group policies. The Group employs matching of the maturities of each individual asset/liability. The typical neutral maturity for the Group is 2 months. Potential interest rate risks are hedged by means of FRAs and/or interest rate swaps.


The Company’s interest rate risk relates to the interest-bearing debt and the securities with a nominal value of DKK 100 million of 0.71% Nykredit 21E 2018. The Company’s loan portfolio consists of current bank debt and a long-term loan fi nancing the properties which the Company owns. The sensitivity of an interest rate change of 1%/(1%) amounts to approximately DKK 6.5/(6.5) million calculated by using the BPV method (DKK 3.8/(3.8) million).

The below maturity/reassessment profi les applying to the Group’s fi nancial assets and liabilities are as follows:

Re-assessment-/maturity profi le Fixed EffectiveAt 30 June 2013 in DKK million 0-1 year 1-5 years above 5 years interest rate interest rate

Short-term loans to business partners 0.2 - - No 1.70%Trade receivables 390.8 - - No 2-24%Listed securities 100.9 - - No 0.71%Trade payables 420.1 - - No -Credit institutions, current liabilities 188.7 - - No 2.09%Credit institutions, non-current liabilities* - - - No 1.44% Re-assessment-/maturity profi le Fixed EffectiveAt 30 June 2012 in DKK million 0-1 year 1-5 years above 5 years interest rate interest rate

Long-term loans to business partners - 0.2 - No 2.06%Short-term loans to business partners 0.2 - - No 2.06%Trade receivables 391.9 - - No 2-24%Trade payables 396.5 - - No -Credit institutions, current liabilities 190.7 - - No 3.22%Credit institutions, non-current liabilities* - - 140.0 No 2.03%* The re-assessment profi le is within 1-5 years. The loan is reclassifi ed as liabilities concerning assets classifi ed as held-for-sale. Default on loansThe Group has not defaulted any loan during the year under review or last fi nancial year.

Credit riskThe Group solely uses internationally recognised banks with a high credit rating. The credit risk on forward contracts and bank deposits is consequently deemed to be low.

In respect of trade receivables, the Group typically uses credit insurance in countries in which the credit risk is deemed to be high and where credit insurance is feasible. This primarily applies to export markets in which IC Companys is not represented through an independent sales company.

Beyond this, the credit risk regarding trade receivables and other receivables is limited as the Group has no material credit risk as the exposure is spread on a large amount of counter-parties and customers in many different markets.

Capital structureThe Company’s Management considers on a regular basis whether the Group’s capital structure is in the best interest of the Company and its shareholders. The general target is to ensure a capital structure which supports long-term fi nancial growth and at the same time increases the return on investment for the Group’s stakeholders by optimising the ratio between equity and debt. The overall strategy of the Group is unchanged compared to last year. The Group’s capital structure consists of debt which includes fi nancial liabilities such as mortgage loan, bank loans and cash and equity which includes share capital, other reserves as well as retained earnings.

32. Related party transactions

IC Companys A/S’ related parties include subsidiaries as set out at the back of this Annual Report, their boards of directors, executive boards and other executives as well as their related family members. Related parties also comprise businesses in which the individuals mentioned above have material interests. IC Companys A/S has no related parties with controlling infl uence on the Company.

IC Companys A/S conducts substantial trading with all its subsidiaries. Trading is conducted on an arm’s length basis.

Information on trading with subsidiaries is as follows: Parent Parent Group Group Company CompanyDKK million 30 June 2013 30 June 2012 30 June 2013 30 June 2012

Purchase of fi nished goods and consumables from subsidiaries - - 1,256.8 1,276.3Sale of fi nished goods and consumables to subsidiaries - - 1,249.5 1,405.2Sale of services to subsidiaries - - 134.8 136.3

Transactions with subsidiaries have been eliminated in the consolidated fi nancial statements in accordance with the accounting policies.

The remuneration paid to the members of the Executive Board, the Board of Directors, and other executives as well as share-based remuneration programmes and acquisitions are disclosed in note 4 to the consolidated fi nancial statements. Shareholdings of the Executive Board and the Board of Directors are disclosed under Executive Board and Board of Directors in the section IC Companys’ work with Corporate Governance.


Interest on accounts with subsidiaries is stated in note 7 to the parent fi nancial statements.

The Parent Company’s accounts with the subsidiaries comprise ordinary trade balances concluded on trading terms equivalent to those applied for the Group’s and the Parent Company’s other customers and suppliers. Furthermore, the Parent Company has granted loans to subsidiaries with a total balance as at 30 June 2013 of DKK 33.1 million (DKK 945.8 million) consisting of two bullet loans for which no due dates have been set. During the fi nancial year 2012/13 loans corresponding to DKK 912.8 million have been repaid. The Parent Company’s net receivables from subsidiaries include a provision of DKK 149.8 million (DKK 164.0 million) to meet likely future losses in subsidiaries with negative equity values.

The Parent Company has issued letters of comfort for certain subsidiaries.

The Parent Company has recognised dividends of DKK 69.6 million (DKK 221.3 million) from subsidiaries for 2012/13.

The Company has had other transactions during the year with the former CEO of the Company as well as the Chairman of the Board of Directors and businesses controlled by the Chairman of the Board of Directors. The transactions were all made on arm’s length terms and did not exceed DKK 1 million for the fi nancial year under review.

With the exception of intragroup transactions, which have been eliminated in the consolidated fi nancial statements, and usual management remuneration, the Group has not made any other transactions other than mentioned above in this or any previous years with the Board of Directors, Executive Board, other executives, major shareholders or other related parties.

33. Events after the reporting period

Mads Ryder was appointed Group CEO of IC Companys A/S as at 1 August 2013.

Besides from this, no material events have taken place after the reporting period that have not been recognised or included in this Annual Report.

34. Approval of the announcement of the Annual Report

The Board of Directors of IC Companys A/S has approved the announcement of this Annual Report at a board meeting held on 22 August 2013. This Annual Report will be presented for approval at the Annual General Meeting of IC Companys A/S to be held on 25 September 2013.

35. Significant accounting policies

Except from the accounting policies described in note 1 and note 2 to the consolidated fi nancial statements, the signifi cant accounting policies applied are as described below.

DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidationThe consolidated fi nancial statements consist of the fi nancial statements of IC Companys A/S (the Parent Company) and its subsidiaries in which the Company’s voting rights directly or indirectly exceed 50%, or in which the Company is able to exercise a controlling interest in any other way.

The consolidated fi nancial statements are prepared on the basis of the parent fi nancial statements and the individual subsidiaries by consolidating items of a uniform nature. Equity interests, intercompany transactions, intercompany balances, unrealised intercompany gains on inventories and dividends are eliminated.

The items of the fi nancial statements of subsidiaries are fully consolidated in the consolidated fi nancial statements. The proportionate share of the results of non-controlling interests is recognised in the consolidated income statement for the year.

Business combinationsNewly acquired or newly established businesses are recognised in the consolidated fi nancial statements from the acquisition date or incorporation date. The acquisition date is the date when control of the business actually passes to the Group. Businesses sold or liquidated are recognised up to the date of disposal or liquidation. The date of disposal is the date when control of the business actually passes to a third party.

Acquisitions are accounted for using the acquisition method, under which the identifi able assets, liabilities and contingent liabilities of businesses acquired are measured at fair value at the acquisition date. Acquired non-current assets held-for-sale are measured at fair value less expected costs to sell, however.

Restructuring costs are only recognised in the acquisition’s statement of fi nancial position if they represent a liability to the acquired business. The tax effect of revaluations is taken into account.

The cost of a business is the fair value of the consideration paid. If the fi nal determination of the consideration is conditional on one or more future events, these adjustments are recognised at fair value from the acquisition date.


Costs directly attributable to acquisitions are recognised directly in the income statement from the date of payment.

Any excess (goodwill) of the cost of an acquired business, the value of the non-controlling interest in the acquired business and the fair value of previously acquired capital interests over the fair value of the acquired assets, liabilities and contingent liabilities is recognised as an asset under intangible assets and tested annually for impairment. If the carrying amount of an asset exceeds its recoverable amount, the asset is written down to the lower recoverable amount.

In case of negative differences (negative goodwill), the calculated fair values and the calculated cost of the business, the value of the non-controlling interest in the acquired business and the fair value of previously acquired capital interests are reassessed. If the difference is still negative following the reassessment, the difference is then recognised as income in the income statement.

Acquisitions of non-controlling interest in subsidiaries are accounted for as equity transactions in the consolidated fi nancial statements, and the difference between the consideration and the carrying amount is recognised under equity owned by Parent Company.

Gains or losses on disposal or liquidation of subsidiaries are stated as the difference between the disposal or liquidation amount and the carrying amount of net assets including goodwill at the date of disposal or liquidation, accumulated foreign exchange adjustments recognised under other comprehensive income and anticipated disposal or liquidation costs. The disposal or liquidation amount is measured as the fair value of the consideration received.

Foreign currency translationFor each of the reporting entities in the Group, a functional currency is determined. The functional currency is the currency in the primary economic environment in which the individual reporting entity operates. Transactions in currencies other than the functional currency are transactions denominated in foreign currencies.

On initial recognition, transactions denominated in foreign currencies are translated into the functional currency at the exchange rate ruling at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement under revenue, cost of sales or fi nancial income or costs.

Receivables, payables and other monetary items denominated in foreign currencies are translated into the functional currency at the exchange rates ruling at the end of the reporting period. The difference between the exchange rate ruling at the end of the reporting period and the exchange rate at the date when the receivable or payable arose or was recorded in the most recent annual report is recognised in the income statement under revenue, sales of costs or fi nancial income or costs. Property, plant and equipment and intangible assets, inventories and other non-monetary assets acquired in foreign currencies and measured based on historical cost are translated at the exchange rates prevailing at the transaction date.

The statements of fi nancial position of foreign subsidiaries are translated into DKK at the exchange rate ruling at the end of the reporting period, while income statements are translated into DKK at monthly average exchange rates during the year. Foreign exchange differences arising on the translation of foreign subsidiaries’ opening equity using the exchange rates ruling at the end of the reporting period as well as on the translation of the income statements using average exchange rates at the end of the reporting period are recognised under other comprehensive income. Foreign exchange adjustments of receivables and subordinated loan capital in foreign subsidiaries that are considered to be part of the overall investment in the subsidiaries are recognised under other comprehensive income in the consolidated fi nancial statements and in the income statement of the parent fi nancial statements.

Derivative fi nancial instruments and hedging activities On initial recognition in the statement of fi nancial position, derivative fi nancial instruments are measured at their fair value. Positive and negative fair values of derivative fi nancial instruments are recognised under other receivables and other liabilities, respectively, as unrealised gain on fi nancial instruments and unrealised loss on fi nancial instruments, respectively.

Changes in the fair value of derivative fi nancial instruments designated as and qualifying for recognition as cash fl ow hedges are recognised under other comprehensive income. Gains and losses relating to such hedge transactions are reclassifi ed from other comprehensive income on realisation of the hedged item and recognised in the same line item as the hedged item.

Changes in the fair value of derivative fi nancial instruments used to hedge net investments in independent foreign subsidiaries and which otherwise meet the criteria for hedge accounting are recognised under other comprehensive income in the consolidated fi nancial statements (net investment hedge).

For derivative fi nancial instruments not qualifying as hedges, changes in the fair value are recognised in the income statement under fi nancial income or costs.

Discontinued operations and non-current assets held-for-sale Discontinued operations are major business areas or geographical areas which have been sold or which are held-for-sale according to an overall plan.

The results of discontinued operations are presented as separate items in the income statement, consisting of the operations’ operating profi t/loss after tax and any gains or losses on fair value adjustment or sale of the related assets.

Cash fl ow from discontinued operations has been included in the consolidated statement of cash fl ows under cash fl ows from operating, investing and fi nancing activities of continuing operations and has been explained in the notes.

Non-current assets and groups of assets held-for-sale, including assets related to discontinued operations, are presented as separate items in the statement of fi nancial position under current assets. Liabilities directly related to the assets and discontinued operations in question are presented under current liabilities in the statement of fi nancial position. Assets are classifi ed as held-for-sale when their carrying amounts will be recovered principally through a sale transaction within 12 months according to a formal plan rather than through continuing use.


Impairment losses arising at the initial classifi cation of held-for-sale as well as any subsequent gains or losses measured at the lower of the carrying amount or the fair value less costs to sell are recognised in the income statement under the items in question. Gains and losses are explained in the notes.

Non-current assets held-for-sale are not depreciated or amortised, but are written down to fair value less expected costs to sell where this is lower than the carrying amount. Comparative fi gures in the statement of fi nancial position are not adjusted.

INCOME STATEMENT

RevenueRevenue from the sale of goods is recognised in the income statement when delivery and transfer of risk to the buyer have taken place and if the income can be reliably measured and is expected to be received. Revenue is measured excluding VAT, indirect taxes and less expected returns and discounts related to sales.

Revenue is measured at the fair value of the consideration received or receivable.

In addition to the sale of goods, revenue comprises license revenue.

Cost of salesCost of sales includes direct costs incurred in generating the revenue for the year. The Company recognises cost of sales as revenue is earned.

Staff costsStaff costs include salaries, remuneration, retirement benefi t schemes, share-based payments and other staff costs to the Group’s employees, including the members of the Executive Board and Board of Directors. Agents’ commissions to external sales agents are also included.

Depreciation, amortisation and impairment lossesDepreciation, amortisation and impairment losses comprise amortisation of intangible assets, depreciation of property, plant and equipment and impairment losses for the year.

Other external costsOther external costs comprise other purchase and selling costs and administrative costs, bad debts, etc.

Lease costs relating to operating lease agreements are recognised by using the straight-line method in the income statement under other external costs.

Other operating income and costsOther operating income and costs comprise items of a secondary nature relative to the principal activities, including gains and losses on sale of intangible assets and property, plant and equipment.

Financial income and costsFinancial income and costs include interest, realised and unrealised foreign currency translation adjustments, fair value adjustments of derivative fi nancial instruments which do not qualify for hedge accounting and supplements, deductions and allowances relating to the payment of tax.

Interest income and costs are accrued based on the principal and the effective rate of interest. The effective rate of interest is the discount rate to be used in discounting expected future payments in relation to the fi nancial asset or the fi nancial liability so that their present value corresponds to the carrying amount of the asset or liability, respectively.

Tax on profi t for the yearTax for the year comprises of current tax for the year and adjustments in deferred tax. Tax for the year relating to the profi t/loss for the year is recognised in the income statement and tax for the year relating to items recognised under other comprehensive income or directly in equity is recognised under other comprehensive income or directly in equity, respectively. Foreign currency translation adjustments of deferred tax are recognised as part of the adjustment of deferred tax for the year.

The current tax expense for the year is calculated based on the tax rates and rules applicable at the end of the reporting period.

The Parent Company is taxed jointly with all consolidated wholly owned Danish subsidiaries. The current tax expense is allocated among the companies of the Danish tax pool in proportion to their taxable income (full absorption with refunds for tax losses). The jointly taxed companies pay tax under the Danish on-account tax scheme.

Deferred tax is calculated using the current tax rules and tax rates on temporary differences between carrying amounts and tax bases. Deferred tax assets, including the tax base of deferrable tax losses, are recognised at the expected value of their utilisation as a setoff against future taxable income or as a setoff against deferred tax liabilities within the same legal entity and jurisdiction. If deferred tax is an asset, it is included in non-current assets based on an assessment of the potential for future realisation.

Deferred tax is calculated based on the planned use of each asset and settlement of each liability, respectively.

Deferred tax is measured using the tax rates and tax rules that, based on legislation in force or in reality in force at the end of the reporting period, are expected to apply in the respective countries when the deferred tax is expected to crystallise as current tax. Changes in deferred tax as a result of changed tax rates or tax rules are recognised in the income statement unless the deferred tax is attributable to transactions which have been recognised previously under other comprehensive income or directly in equity.


Deferred tax is recognised on temporary differences arising on investments in subsidiaries, unless the Parent Company is able to control when the deferred tax is to be realised and it is likely that the deferred tax will not crystallise as current tax in the foreseeable future.

STATEMENT OF FINANCIAL POSITION, ASSETS

Intangible assetsOn initial recognition, goodwill is measured and recognised as described under the section Business combinations. Subsequently, goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised but tested at least once a year for impairment as further described in the below section on Impairment.

The carrying amount of goodwill is allocated to the Group’s cash-generating units at the date of acquisition. The determination of cash-generating units is based on the management structure and the internal fi nancial management.

Payments to take over leases (“key money”) are classifi ed as leasehold rights. Leasehold rights are amortised over the lease period or the useful life if this is shorter. The basis of amortisation is reduced by any write-downs. Leasehold rights with an indeterminable useful life are not amortised, but tested for impairment annually.

Software and IT development are amortised over the useful life of 3-7 years. Cost includes the acquisition price as well as costs arising directly in connection with the acquisition and until the point of time where the asset is ready for use. Amortisation is provided on a straight-line basis over the expected useful life.

Property, plant and equipmentProperty, plant and equipment are measured at historical cost less accumulated depreciation and impairment losses.

Cost comprises the acquisition price and costs directly related to the acquisition until the time when the asset is ready for use.

The difference between cost and the expected scrap value is depreciated on a straight-line basis over the expected economic lives of the assets. The depreciation period is determined on the basis of Management’s experience in the Group’s business area, and Management believes the following estimates to be the best estimate of the economic lives of the assets:

Leasehold improvements up to 10 yearsBuildings 25-50 yearsEquipment and furniture 3-5 years

If the depreciation period or the scrap values are changed, the effect on depreciation going forward is recognised as a change in accounting estimates.

Gains and losses on disposal of property, plant and equipment are computed as the difference between the selling price less costs to sell and the carrying amount at the date of disposal. Gains and losses are recognised in the income statement under other operating income or costs.

Property, plant and equipment are written down to the recoverable amount if this is lower than the carrying amount as described in the below section on Impairment.

ImpairmentThe carrying amount of goodwill is tested at least once a year for impairment together with the other non-current assets of the cash-generating unit to which the goodwill has been allocated, and is written down to the recoverable amount through the income statement if this is lower than the carrying amount. The recoverable amount is generally calculated as the present value of the future cash fl ows expected to derive from the cash-generating unit to which the goodwill relates.

The carrying amount of non-current assets other than goodwill, intangible assets with indeterminable useful lives, deferred tax assets and fi nancial assets is tested annually for indications of impairment. If such an indication exists, the recoverable amount of the asset is calculated. The recoverable amount is the higher of the fair value of the asset less costs to sell and the value in use.

An impairment loss is recognised when the carrying amount of an asset or a cash-generating unit exceeds the recoverable amount of the asset or the cash-generating unit. Impairment losses are recognised in the income statement under depreciation, amortisation and impairment losses.

Impairment losses on goodwill are not reversed. Write-downs of other assets are reversed to the extent changes have occurred to the assumptions and estimates leading to the write-down. Write-downs are only reversed to the extent the new carrying amount of an asset does not exceed the carrying amount the asset would have had net of depreciation, had the asset not been written down.

Financial assetsSecurities are measured at their fair value at the end of the reporting period. Other fi nancial assets are measured at cost or at fair value at the end of the reporting period if this is lower.

InventoriesInventories are measured at cost using the FIFO method. Inventories are written down to the lower of cost and net realisable value.

The cost of raw materials and consumables includes the purchase price and direct costs to take delivery of the products.


The cost of fi nished products includes the cost of raw materials, consumables, external production costs and costs to take delivery of the products.

The net realisable value of fi nished products is determined as the expected selling price less costs incurred to execute the sale.

ReceivablesReceivables include trade receivables and other receivables. Receivables are part of the category loans and receivables which are fi nancial assets with fi xed or defi nable payments and which are not listed on an active market nor derivative fi nancial instruments.

Receivables are, on initial recognition, measured at fair value and subsequently at amortised cost which usually corresponds to the nominal value less provision for bad debts.

PrepaymentsPrepayments recognised under assets comprise costs incurred relating to the following fi nancial year, including collection samples, rent, insurance, etc. Prepayments are measured at cost.

STATEMENT OF FINANCIAL POSITION, EQUITY

DividendsProposed dividends are recognised as a liability at the time of adoption by the shareholders at the annual general meeting.

Treasury sharesThe acquisition and sale of treasury shares and dividends thereon are taken directly to equity under retained earnings.

Translation reserveThe translation reserve comprises the shareholders of the Parent Company’s share of foreign exchange differences arising in connection with the translation of foreign subsidiaries’ fi nancial statements reported in their functional currency into the Group’s reporting currency (DKK).

Reserve for hedging transactionsReserve for hedging transactions comprises the accumulated net change of the fair value of hedging transactions which qualify for recognition as cash fl ow hedges, and where the hedged transaction has not yet been realised.

Share-based incentive programmesShare-based incentive programmes in which employees can only chose to buy or subscribe for shares in the Parent Company (equity schemes) are measured at the equity instruments’ fair value at the grant date and recognised in the income statement under staff costs over the period during which the employee’s right to buy the shares vests. The balancing item is recognised directly in equity.

The fair value of equity instruments is determined by using the Black & Scholes model with the parameters stated in note 4 to the consolidated fi nancial statements.

STATEMENT OF FINANCIAL POSITION, LIABILITIES

Retirement benefi t obligationsThe Group has entered into retirement benefi t agreements and similar agreements with the majority of the Group’s employees.

Obligations relating to defi ned contribution plans are recognised in the income statement in the period in which the employees render the related service, and contributions due are recognised in the statement of fi nancial position under other liabilities.

For defi ned benefi t plans, an annual actuarial assessment is made of the net present value of future benefi ts to be paid under the plan. The net present value is calculated based on assumptions of the future developments of, e.g., salary, interest, infl ation and mortality rates. The net present value is only calculated for those benefi ts to which the employees have earned the right through their past service for the Group. The actuarial calculation of the net present value less the fair value of any assets related to the plan is included in the statement of fi nancial position as retirement benefi t obligations, however, please see below.

Differences between the expected development of assets and liabilities in connection with retirement benefi t schemes and the realised values are termed actuarial gains or losses. Subsequently, all actuarial gains or losses are recognised in the income statement.

If a retirement plan represents a net asset, the asset is only recognised to the extent that it offsets future contributions from the plan, or it will reduce future contributions to the plan.

ProvisionsProvisions are recognised when, as a consequence of a past event during the fi nancial year or previous years, the Group has a legal or constructive obligation, and it is likely that settlement of the obligation will require an outfl ow of the Company’s fi nancial resources.

Provisions are measured as the best estimate of the costs required to settle the liabilities at the end of the reporting period. Provisions with an expected term of more than a year at end of the reporting period are measured at present value.

In connection with planned restructurings of the Group, provisions are only made for liabilities relating to the restructurings that have been set out in a specifi c plan at the end of the reporting period and where the parties affected have been informed of the overall plan.


Mortgage loansMortgage loans are measured at fair value less any transaction costs at the date of raising the loan. Subsequently, mortgage loans are measured at amortised cost.

Other fi nancial liabilitiesOther fi nancial liabilities, including bank loans and trade payables, are on initial recognition measured at fair value. In subsequent periods, fi nancial liabilities are measured at amortised cost, applying the effective interest method, to the effect that the difference between the proceeds and the nominal value is recognised in the income statement as fi nancial costs over the term of the loan.

STATEMENT OF CASH FLOWS

The statements of cash fl ows of the Group and the Parent Company show the cash fl ows from operating, investing and fi nancing activities for the year, and the net cash fl ows for the year as well as cash and cash equivalents at the beginning and at the end of the fi nancial year.

The statement of cash fl ows presents cash fl ow from operating activities indirectly based on the ordinary operating profi t.

Cash fl ow from operating activities is calculated as operating profi t adjusted for non-cash operating items, provisions, fi nancials paid, change in working capital and tax.

The working capital comprises current assets, excluding cash items or items attributable to the investing activity, less current liabilities excluding bank loans, mortgage loans and tax payable.

Cash fl ow from investing activities includes payments regarding acquisition and sale of non-current assets and securities including investments in businesses.

Cash fl ow from fi nancing activities includes payments to and from shareholders as well as the raising and repayment of mortgage loans and other non-current liabilities not included in working capital.

Cash and cash equivalents comprise cash, listed securities and net short-term bank loans that are an integral part of the Group’s cash management.

SEGMENT INFORMATION

Segment information has been prepared in accordance with the Group’s applied accounting policies and is consistent with the Group’s internal reporting to the Executive Board.

Segment income and costs comprise income and costs that are directly attributable to the individual segment and the items that can be allocated to the individual segment on a reliable basis.

The comparative fi gures for the fi nancial year 2011/12 have been adjusted to the new business segments. The adjusted comparative fi gures were announced on 16 April 2013 (Company Announcement no. 4/2013).

No information has been provided as to the segments’ share of items concerning fi nancial position or cash fl ows as the Executive Board does not use this segmentation in the internal reporting of the statement of fi nancial position or the statement of cash fl ows


INCOME STATEMENT PAGE 78

STATEMENT OF COMPREHENSIVE INCOME PAGE 78

STATEMENT OF FINANCIAL POSITION PAGE 79

STATEMENT OF CHANGES IN EQUITY PAGE 80

STATEMENT OF CASH FLOWS PAGE 81

NOTES TO THE PARENT FINANCIAL STATEMENTS

1. BASIS FOR PREPARATION OF PARENT FINANCIAL STATEMENTS PAGE 82

2. ACCOUNTING ESTIMATES AND ASSUMPTIONS PAGE 82

3. REVENUE PAGE 82

4. STAFF COSTS PAGE 82

5. OTHER OPERATING INCOME AND COSTS PAGE 82

6. OTHER EXTERNAL COSTS PAGE 83

7. FINANCIAL INCOME AND COSTS PAGE 83

8. TAX FOR THE YEAR PAGE 83

9. DIVIDENDS PAGE 84

10. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT PAGE 84

11. INVESTMENTS IN SUBSIDIARIES PAGE 85

12. FINANCIAL ASSETS PAGE 85

13. DEFERRED TAX PAGE 86

14. INVENTORIES PAGE 86

15. TRADE RECEIVABLES PAGE 87

16. OTHER RECEIVABLES PAGE 87

17. PREPAYMENTS PAGE 87

18. SHARE CAPITAL PAGE 87

19. CURRENT LIABILITIES TO CREDIT INSTITUTIONS PAGE 88

20. OTHER LIABILITIES PAGE 88

21. PROVISIONS PAGE 88

22. OPERATING LEASES PAGE 88

23. OTHER LIABILITIES AND CONTINGENT LIABILITIES PAGE 89

24. CHANGE IN WORKING CAPITAL PAGE 89

25. SECURITIES PAGE 89

26. CASH AND CASH EQUIVALENTS PAGE 89

27. FINANCIAL RISKS AND DERIVATIVE FINANCIAL INSTRUMENTS PAGE 89

28. RELATED PARTY TRANSACTIONS PAGE 89

29. EVENTS AFTER THE REPORTING PERIOD PAGE 89

30. APPROVAL OF THE ANNOUNCEMENT OF THE ANNUAL REPORT PAGE 90

31. SIGNIFICANT ACCOUNTING POLICIES PAGE 90

PARENT FINANCIAL STATEMENTS

INCOME STATEMENT


3 Revenue 1,423.1 1,564.3

Cost of sales (1,322.5) (1,360.0) Gross profi t 100.6 204.3

6 Other external costs (178.4) (168.1)4 Staff costs (265.4) (260.9)5 Other operating income and costs 168.8 135.910 Depreciation, amortisation and impairment losses (40.8) (20.1) Operating loss (215.2) (108.9)

11 Income from investments in subsidiaries 83.8 217.57 Financial income 113.4 135.97 Financial costs (38.6) (48.2) Loss/profi t before tax (56.6) 196.3

8 Tax on profi t/loss for the year 42.6 (3.5) Loss/profi t for the year (14.0) 192.8

Profi t allocation: 9 Proposed dividend 32.8 24.6 Retained earnings (46.8) 168.2 Loss/profi t for the year (14.0) 192.8

STATEMENT OF COMPREHENSIVE INCOME


Loss/profi t for the year (14.0) 192.8

OTHER COMPREHENSIVE INCOME Items which may be reclassifi ed to the income statement:27 Fair value adjustments, gains on derivatives held as cash fl ow hedges 25.7 56.427 Fair value adjustments, loss on derivatives held as cash fl ow hedges (6.0) (37.9)27 Reclassifi cation to profi t or loss, gains on realised cash fl ow hedges (56.4) (2.0)27 Reclassifi cation to profi t or loss, loss on realised cash fl ow hedges 37.9 68.28 Tax on other comprehensive income (1.0) (21.1) Total other comprehensive income 0.2 63.6 Total comprehensive income (13.8) 256.4

IC COMPANYS • ANNUAL REPORT 2012/13 • PARENT FINANCIAL STATEMENTS78

STATEMENT OF FINANCIAL POSITION

ASSETS

Note DKK million 30 June 2013 30 June 2012

NON-CURRENT ASSETS Software and IT systems 33.6 46.2 IT systems under development - 9.510 Total intangible assets 33.6 55.7

Leasehold improvements 2.0 2.4 Equipment and furniture 12.4 18.9 Property, plant and equipment under construction 2.5 1.710 Total property, plant and equipment 16.9 23.0

11 Investments in subsidiaries 1,462.7 546.712 Financial assets 36.8 949.613 Deferred tax 39.5 15.5 Total other non-current assets 1,539.0 1,511.8 Total non-current assets 1,589.5 1,590.5

CURRENT ASSETS 14 Inventories 323.7 352.415 Trade receivables 22.1 33.3 Receivables from subsidiaries 406.0 380.78 Tax receivable 12.0 8.716 Other receivables 26.9 77.517 Prepayments 11.2 12.025 Securities 100.9 -26 Cash 0.8 34.3 Total current assets 903.6 898.9 TOTAL ASSETS 2,493.1 2,489.4

EQUITY AND LIABILITIES Note DKK million 30 June 2013 30 June 2012

EQUITY 18 Share capital 169.4 169.4 Reserve for hedging transactions 16.1 15.9 Retained earnings 1,092.4 1,124.1 Total equity 1,277.9 1,309.4

LIABILITIES20 Other liabilities 25.5 34.6 Total non-current liabilities 25.5 34.6

19,26 Liabilities to credit institutions 91.7 102.4 Trade payables 45.1 34.2 Payables to subsidiaries 920.9 880.120 Other liabilities 120.4 128.721 Provisions 11.6 - Total current liabilities 1,189.7 1,145.4 Total liabilities 1,215.2 1,180.0 TOTAL EQUITY AND LIABILITIES 2,493.1 2,489.4

PARENT FINANCIAL STATEMENTS • ANNUAL REPORT 2012/13 • IC COMPANYS 79

STATEMENT OF CHANGES IN EQUITY Reserve for Share hedging Retained TotalDKK million capital transactions earnings equity

Equity at 1 July 2011 169.4 (47.7) 996.8 1,118.5


Profi t for the year - - 192.8 192.8


Fair value adjustments, gains on derivatives held as cash fl ow hedges - 56.4 - 56.4Fair value adjustments, loss on derivatives held as cash fl ow hedges - (37.9) - (37.9)Reclassifi cation to profi t or loss, gains on realised cash fl ow hedges - (2.0) - (2.0)Reclassifi cation to profi t or loss, loss on realised cash fl ow hedges - 68.2 - 68.2Tax on other comprehensive income - (21.1) - (21.1)Total other comprehensive income - 63.6 - 63.6

Dividends paid - - (73.8) (73.8)Share-based payments - - 7.7 7.7Other adjustments - - 0.6 0.6Equity at 30 June 2012 169.4 15.9 1,124.1 1,309.4


Loss for the year - - (14.0) (14.0)


Fair value adjustments, gains on derivatives held as cash fl ow hedges - 25.7 - 25.7Fair value adjustments, loss on derivatives held as cash fl ow hedges - (6.0) - (6.0)Reclassifi cation to profi t or loss, gains on realised cash fl ow hedges - (56.4) - (56.4)Reclassifi cation to profi t or loss, loss on realised cash fl ow hedges - 37.9 - 37.9Tax on other comprehensive income - (1.0) - (1.0)Total other comprehensive income - 0.2 - 0.2

Dividends paid - - (24.6) (24.6)Share-based payments - - 6.9 6.9Equity at 30 June 2013 169.4 16.1 1,092.4 1,277.9


STATEMENT OF CASH FLOWS


CASH FLOW FROM OPERATING ACTIVITIES Operating loss (215.2) (108.9) Reversed depreciation and impairment losses and gain/loss on sale of non-current assets 40.8 20.4 Share-based payments recognised in income statement 4.9 4.6 Other adjustments 30.6 (37.5) 24 Change in working capital 107.5 (13.1) Cash fl ow from ordinary operating activities (31.4) (134.5)

Financial income received 90.7 110.1 Financial costs paid (13.9) (25.3) Cash fl ow from operating activities 45.4 (49.7)

8 Tax recovered 14.4 18.0 Total cash fl ow from operating activities 59.8 (31.7)

CASH FLOW FROM INVESTING ACTIVITIES 10 Investments in intangible assets (8.7) (28.5)10 Investments in property, plant and equipment (7.9) (10.0) Sale of other non-current assets - 2.0 Change in deposits and other fi nancial assets (0.1) (0.1) Dividend received, proceeds in connection with liquidation, etc. 69.6 221.3 Total cash fl ow from investing activities 52.9 184.7

Total cash fl ow from operating and investing activities 112.7 153.0

CASH FLOW FROM FINANCING ACTIVITIES9 Dividends paid (24.6) (73.8) Repayment of non-current liabilities (10.0) (9.4) Total cash fl ow from fi nancing activities (34.6) (83.2) NET CASH FLOW FOR THE YEAR 78.1 69.8

CASH AND CASH EQUIVALENTS Cash and cash equivalents at 1 July (68.1) (137.9) Net cash fl ow for the year 78.1 69.8 26 Cash and cash equivalents at 30 June 10.0 (68.1)

The statement of cash flows may not be concluded based solely on the announced financial statements.


NOTES TO THE PARENT FINANCIAL STATEMENTS

1. Basis for preparation of the parent financial statements

The fi nancial statements of the Parent Company IC Companys A/S for the fi nancial year 2012/13 have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by EU and additional Danish disclosure requirements for the annual reports of listed companies (accounting class D), cf. the Statutory Order on the adoption of IFRS under the Danish Financial Statements Act.

The parent fi nancial statements are also prepared in accordance with the IFRS standards as issued by the International Accounting Standards Board (IASB).

The parent fi nancial statements are expressed in Danish Kroner (DKK) which is the functional currency of the Parent Company.

The accounting policies for the Parent Company are consistent with those used in the previous fi nancial year.

Please see note 30 for further information on signifi cant accounting policies.

2. Accounting estimates and assumptions

Please see note 2 to the consolidated fi nancial statements.

3. Revenue

DKK million 2012/13 2011/12

Sale of goods to subsidiaries 1,250.4 1,405.1Sale of goods to non-Group related parties 172.7 159.2Total revenue 1,423.1 1,564.3

4. Staff costs

DKK million 2012/13 2011/12

Total salaries, remuneration, etc., can be specifi ed as follows: Remuneration to the Board of Directors 2.3 2.3Remuneration to the Audit Committee 0.4 0.4Remuneration to the Remuneration Committee 0.2 0.2Salaries and remuneration 234.6 231.0Defi ned contribution plans 14.2 15.2Other social security costs 1.5 1.6Share-based payments 4.9 4.6Other staff costs 7.3 5.6Total staff costs 265.4 260.9

Average number of employees of the Parent Company 358 394

Remuneration to the Board of Directors, Executive Board and share-based programmes for the Management and employees are disclosed in note 4 to the consolidated fi nancial statements.

5. Other operating income and costs

DKK million 2012/13 2011/12

Services provided to subsidiaries 134.8 136.3Loss on sale of non-current assets (1.1) (0.4)Sales proceeds and other operating income and costs 35.1 -Total other operating income and costs 168.8 135.9


6. Other external costs

Other external costs include the total fees paid for the fi nancial year under review to the auditors appointed at the annual general meeting.

DKK million 2012/13 2011/12

Statutory audit 0.7 1.0Other statements and opinions with guarantees 0.1 - Tax consultancy 0.5 0.7Other services 0.1 -Total other external costs 1.4 1.7

7. Financial income and costs

DKK million 2012/13 2011/12

Financial income: Interest on receivables from subsidiaries 107.0 83.2Interest on bank deposits 0.7 2.5Other fi nancial income 0.1 1.1Interest income from fi nancial assets not measured at fair value 107.8 86.8

Interest income on securities 0.1 -Realised gain on derivative fi nancial instruments 2.6 22.8Net gain on foreign currency translation 2.9 26.3Total fi nancial income 113.4 135.9

Financial costs: Interest on liabilities to credit institutions (9.5) (11.2)Interest on payables to subsidiaries (21.3) (23.4)Interest costs from fi nancial liabilities not measured at fair value (30.8) (34.6)

Fair value adjustments on securities (0.4) -Realised loss on derivative fi nancial instruments (7.4) (13.6)Total fi nancial costs (38.6) (48.2)Net fi nancials 74.8 87.7

8. Tax for the year

DKK million 2012/13 2011/12

Current taxCurrent tax for the year under review (11.1) (8.1)Prior-year adjustments, current tax (6.6) -Total current tax (17.7) (8.1)

Deferred taxChange in deferred tax (23.0) 27.6Adjustments regarding changes in tax rates 1.0 -Prior-year adjustments, deferred tax (1.9) 5.1Total deferred tax (23.9) 32.7Tax for the year (41.6) 24.6

Recognised as follows: Tax on loss/profi t for the year (42.6) 3.5Tax on other comprehensive income 1.0 21.1Tax for the year (41.6) 24.6

Net tax receivable at 1 July 8.7 18.6

Tax payable on profi t for the year 17.7 8.1Tax paid during the year (14.4) (18.0)Net tax receivable at 30 June 12.0 8.7

Recognised as follows: Tax receivable 12.0 8.7Net tax receivable at 30 June 12.0 8.7


9. Dividends

IC Companys A/S distributed to its shareholders DKK 24.6 million in dividends during the fi nancial year 2012/13 (DKK 73.8 million).

The Board of Directors has resolved to recommend a dividend of DKK 2.00 per ordinary share corresponding to a total dividend of DKK 32.8 million in respect of the fi nancial year 2012/13 (DKK 1.50 per ordinary share).

10. Intangible assets and property, plant and equipment

INTANGIBLE ASSETS Software Trade- IT systems Total and IT mark under intangibleDKK million systems rights development assets

Cost at 1 July 2011 200.9 8.1 13.8 222.8

Reclassifi cation 6.1 - (6.1) -Addition 26.7 - 1.8 28.5Disposal (0.1) - - (0.1)Cost at 30 June 2012 233.8 8.1 9.5 251.3

Reclassifi cation 9.5 - (9.5) -Addition 8.7 - - 8.7Disposal (1.6) - - (1.6)Cost at 30 June 2013 250.4 8.1 - 258.4

Accumulated amortisation and impairment at 1 July 2011 (174.2) (8.0) - (182.2)

Amortisation and impairment on disposals - - - - Amortisation and impairment for the year (13.3) (0.1) - (13.4)Accumulated amortisation and impairment at 30 June 2012 (187.5) (8.1) - (195.6)

Amortisation and impairment on disposals 0.8 - - 0.8Amortisation and impairment for the year (30.0) - - (30.0)Accumulated amortisation and impairment at 30 June 2013 (216.8) (8.1) - (224.8)

Carrying amount at 30 June 2013 33.6 - - 33.6

Carrying amount at 30 June 2012 46.2 - 9.5 55.7

PROPERTY, PLANT AND EQUIPMENT Total Leasehold Equip- Assets- property improvement & under con- plant &DKK million ments furniture struction equipment

Cost at 1 July 2011 10.0 58.2 4.3 72.5

Reclassifi cation - 4.3 (4.3) -Addition - 8.3 1.7 10.0Disposal - (5.9) - (5.9)Cost at 30 June 2012 10.0 64.9 1.7 76.6

Reclassifi cation - - - -Addition 2.0 5.1 0.8 7.9Disposal (5.0) (3.1) - (8.1)Cost at 30 June 2013 7.0 66.9 2.5 76.5

Accumulated depreciation and impairment at 1 July 2011 (6.2) (44.9) - (51.1)

Depreciation and impairment on disposals - 4.2 - 4.2 Depreciation and impairment for the year (1.4) (5.3) - (6.7) Accumulated depreciation and impairment at 30 June 2012 (7.6) (46.0) - (53.6)

Reclassifi cation - - - -Depreciation and impairment on disposals 3.8 1.1 - 4.9 Depreciation and impairment for the year (1.2) (9.6) - (10.8) Accumulated depreciation and impairment at 30 June 2013 (5.0) (54.5) - (59.6)

Carrying amount at 30 June 2013 2.0 12.4 2.5 16.9



11. Investments in subsidiaries


Cost at 1 July 905.9 905.9

Addition 916.0 -Cost at 30 June 1,821.9 905.9

Write-downs at 1 July (359.2) (359.2)

Write-downs at 30 June (359.2) (359.2)

Total carrying amount 1,462.7 546.7

An overview of the Group structure may be found at the back of this Annual Report.

Income from investments in subsidiaries amounts to net DKK 83.8 million (income of DKK 217.5 million) and comprises dividends from subsidiaries deducted write-downs of investments and receivables for the year.

An amount of DKK 14.2 million for 2012/13 was recognised in the income statement regarding prior-year write-downs of short-term receivables from subsidiaries (write-down of DKK 3.8 million).

During the fi nancial year 2012/13 the loan granted to ICe Companys Sweden Holding AB has been repaid and converted into investment in the subsidiary.

12. Financial assets

Long-term Long-term receivables loans to Total from business fi nancialDKK million subsidiaries partners Deposits, etc. assets

Cost at 1 July 2011 33.0 0.4 3.5 36.9

Addition 875.3 - 0.1 875.4Disposal - (0.2) - (0.2)Cost at 30 June 2012 908.3 0.2 3.6 912.1

Addition - - 0.1 0.1Disposal (875.3) (0.2) - (875.5)Cost at 30 June 2013 33.0 - 3.7 36.7

Value adjustments at 1 July 2011 0.4 - - 0.4

Foreign currency translation adjustments for the year, etc. 37.1 - - 37.1Value adjustments at 30 June 2012 37.5 - - 37.5

Foreign currency translation adjustments for the year, etc. (40.3) - - (40.3)Disposal 2.9 - - 2.9Value adjustments at 30 June 2013 0.1 - - 0.1

Carrying amount at 30 June 2013 33.1 - 3.7 36.8


The Parent Company has not granted any loans for 2012/13.

During the fi nancial year under review the Parent Company has converted receivables from a subsidiary corresponding to a carrying amount of DKK 916 million into investment in the subsidiary.

All loans are interest-bearing.

No security has been received for the loans. The carrying amount of the fi nancial assets corresponds to the fair value.


13. Deferred tax


Deferred tax at 1 July 15.5 48.3

Prior-year adjustments 1.9 (5.2)Adjustments regarding changes in tax rates (1.0) -Deferred tax on other comprehensive income (1.0) (21.1)Change in deferred tax on profi t/loss for the year 24.0 (6.5)Total net deferred tax at 30 June 39.5 15.5

Recognised as follows: Deferred tax 39.5 15.5Total net deferred tax at 30 June 39.5 15.5

Breakdown of deferred tax at 30 June as follows: Gross deferred tax 45.5 21.5Unrecognised tax assets (6.0) (6.0)Total net deferred tax at 30 June 39.5 15.5

Unrecognised tax assets relate to tax losses that are assessed not to be suffi ciently likely to be utilised in the foreseeable future. The unrecognised tax losses are not limited in time.

Changes to temporary differences during the year are as follows: Net deferred Recognised Recognised Net deferred tax assets at in profi t in other tax assets atDKK million 1 July 2012 for the year compr. income 30 June 2013

Intangible assets 6.6 (2.6) - 4.0Property, plant and equipment 14.1 (2.0) - 12.1Receivables - - - -Provisions 0.3 31.7 - 32.0Other liabilities - - - -Financial instruments (11.9) 9.6 (1.0) (3.3)Tax losses 12.4 (11.7) - 0.7Unrecognised tax assets (6.0) - - (6.0)Total 15.5 25.0 (1.0) 39.5 Net deferred Recognised Recognised Net deferred tax assets at in profi t in other tax assets atDKK million 1 July 2011 for the year compr. income 30 June 2012

Intangible assets 6.6 - - 6.6Property, plant and equipment 8.5 5.6 - 14.1Receivables - - - -Provisions 0.4 (0.1) - 0.3Other liabilities (0.2) 0.2 - -Financial instruments 16.5 (7.3) (21.1) (11.9)Tax losses 22.5 (10.1) - 12.4Unrecognised tax assets (6.0) - - (6.0)Total 48.3 (11.7) (21.1) 15.5

14. Inventories


Finished goods and goods for resale 153.1 191.1Goods in transit 170.6 161.3Total inventories 323.7 352.4

Changes in inventory write-downs are as follows:


Inventory write-downs at 1 July 27.3 35.6

Write-down for the year, addition 21.4 17.1Write-down for the year, reversal (36.9) (25.4)Total inventory write-downs 11.8 27.3

Inventories recognised at net realisable value amount to DKK 16.7 million at 30 June 2013 (DKK 34.8 million).


15. Trade receivables

Breakdown of gross trade receivables is as follows:


Not yet due 14.8 22.0Due, 1-60 days 7.2 10.3Due, 61-120 days - 1.0Due more than 120 days 3.9 0.9Total gross trade receivables 25.9 34.2

The carrying amounts of trade receivables in all material respect correspond to their fair values.

In general, trade receivables do not carry interest until between 30 and 60 days after the invoice date. After this date, interest is charged on the outstanding amount.

Change in write-downs regarding trade receivables are as follows:


Write-downs 1 July 0.9 2.9

Foreign currency translation adjustments - -Change in write-downs for the year 3.7 (1.3)Realised loss for the year (0.8) (0.7)Total write-downs 3.8 0.9

Please see note 16 to the consolidated fi nancial statement.

16. Other receivables


VAT 0.1 0.1Sundry receivables 0.9 1.2Unrealised gain on fi nancial instruments 25.9 76.2Total other receivables 26.9 77.5

All other receivables are due for payment within 1 year.

Management assesses that the carrying amount of receivables at 30 June 2013 in all material respect corresponds to the fair value, and that the receivables are not subject to any particular credit risk.

17. Prepayments


Collection samples 4.1 5.0Advertising 0.4 1.2Others 6.7 5.8Total prepayments 11.2 12.0

18. Share capital

Information on the share capital distribution on number of shares, etc., is disclosed in note 19 to the consolidated fi nancial statements.


19. Current liabilities to credit institutions

The Parent Company’s total current liabilities to credit institutions comprise Danish and foreign overdraft facilities carrying interest at an average fl oating rate of 2.09% p.a. (3.22% p.a.).

Current liabilities are repayable on demand, and the fair value therefore corresponds to the carrying amount. Current liabilities to credit institutions are denominated in the below currencies as follows: Stated in % 30 June 2013 30 June 2012

DKK 70 6SEK 6 45EUR 10 17USD - -PLN 1 19CHF - 2CAD - 6GBP 9 1Other currencies 4 4Total 100 100

20. Other liabilities


VAT, customs and tax deducted from income at source 26.8 32.6Salaries, social security costs and holiday allowance payable 35.2 31.8Unrealised loss on fi nancial instruments 14.8 37.9Severance payments 1.2 1.1Other costs payable 67.9 59.9Total other liabilities 145.9 163.3

In other costs payable an amount of DKK 25.5 million (DKK 34.6 million) has been recognised which is due after 12 months.

The carrying amount of amounts payable under other liabilities in all material respect corresponds to the fair value of the liabilities.

21. Provisions Provisions for Other TotalDKK million restructurings provisions provisions

Provisions at 1 July 2011 - - -

Provisions at 30 June 2012 - - -

Provisions for the year 2.5 9.1 11.6Provisions at 30 June 2013 2.5 9.1 11.6

22. Operating leases


Commitments under non-terminable operating leases are: Store leases and other land and buildings 0-1 year 17.5 24.61-5 years 27.3 35.7Total 44.8 60.3

Lease of equipment and furniture, etc. 0-1 year 3.6 3.41-5 years 3.8 3.6Total 7.4 7.0


The Parent Company leases properties under operating leases. The lease period is typically between 3-10 years with an option to extend upon expiry.

In addition, the Parent Company leases cars and other operating equipment under operating leases. The lease period is typically between 3-5 years with an option to extend upon expiry.

An amount of DKK 23.1 million (DKK 26.2 million) relating to operating leases has been recognised in the income statement of the Parent Company for 2012/13.

23. Other liabilities and contingent liabilities


Guarantees and other collateral security in connection with subsidiaries 540.5 618.7Other guarantees and collateral security 11.4 23.0

The Parent Company has issued letters of comfort for certain subsidiaries.

24. Change in working capital


Change in inventories 28.7 36.9Change in receivables 56.1 (45.9)Change in current liabilities excluding tax 22.7 (4.1)Total change in working capital 107.5 (13.1)

25. Securities


Listed bonds 100.9 -Total securities 100.9 - The Group’s securities measured at fair value amounted to a nominal value of DKK 100 million of 0.71% Nykredit 21E 2018.

26. Cash and cash equivalents


Cash 0.8 34.3 Credit institutions, current liabilities (91.7) (102.4) (90.9) (68.1)

Listed bonds 100.9 -Cash and cash equivalents, cf. the statement of cash fl ows 10.0 (68.1)

27. Financial risks and derivative financial instruments


28. Related party transactions


29. Events after the reporting period



30. Approval of the announcement of the Annual Report


31. Significant accounting policies

The accounting policies for the Parent Company are the same as for the Group with the exception of the items below, please see note 35 to the consolidated fi nancial statements.

Other operating income and costsOther operating income and costs comprise administration fees paid from subsidiaries to the Parent Company for their share of the Group’s overheads.

Dividends from investments in subsidiaries in the parent fi nancial statementsDividends from investments in subsidiaries are recognised in the income statement for the fi nancial year in which the dividend are declared.

Investments in subsidiaries in the parent fi nancial statementsInvestments in subsidiaries are measured at cost. Where the recoverable amount is lower than cost, the investments are written down to such lower value.

Receivables from subsidiaries in the parent fi nancial statementsOn initial recognition, receivables from subsidiaries in the parent fi nancial statements are measured at fair value and subsequently at amortised cost which usually corresponds to the nominal value less write-downs for bad debts.


DEFINITION OF KEY RATIOS Gross profit

Gross margin (%) = Revenue

Operating profit before depreciation and amortisation

EBITDA margin (%) = Revenue

Operating profit

EBIT margin (%) = Revenue

Profit for the year

Return on equity (%) = Average equity

Equity year-end

Equity ratio (%) = Total assets year-end

Net average working capital plus intangible assets and property,

plant and equipment less provisions. Goodwill included represents

Average invested capital = total purchased goodwill after write-down for impairment.

Operating profit before goodwill write-down and special items

Return on invested capital (%) = Average capital employed including goodwill

Short-term and long-term liabilities to credit institutions

Net interest-bearing debt = and lease debt less cash and cash equivalents

Net interest-bearing debt

Financial gearing (%) = Equity at year-end

Profit attributable to shareholders of the Parent Company

Earnings per share = Average number of shares excluding treasury shares

Profit attributable to shareholders of the Parent Company

Diluted earnings per share = Average number of shares excluding treasury shares, diluted

Cash flow from operating activities

Diluted cash flow per share = Average number of shares excluding treasury shares, diluted

Equity at year-end excluding non-controlling interests

Diluted net asset value per share = Number of shares at year-end excluding treasury shares, diluted

Market price per share at year-end

Diluted price / earnings = Diluted earnings per share

A store measured on same-store data has an unchanged location, sales area and name

Same-store definition = on shop for a full financial year of comparable sales data.

Cost of sales

Inventory turnover = Inventories at year-end

Trade receivables at year-end x 182

Days sales outstanding (DSO) = Wholesale revenue for H2

ANNUAL REPORT 2012/13 • IC COMPANYS 91

STATEMENTS

Statement by the Management

The Board of Directors and the Executive Board have today considered and approved the Annual Report of IC Companys A/S for the fi nancial year 1 July 2012 - 30 June 2013.

The Annual Report is prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.

In our opinion, the consolidated fi nancial statements and the parent fi nancial statements give a true and fair view of the Group’s and the Parent Company’s fi nancial position at 30 June 2013 and of the results of their operations and cash fl ows for the fi nancial year 1 July 2012 - 30 June 2013 .

We believe that the management commentary contains a fair review of the development in the Group’s and Parent Company’s operations and fi nancial affairs, the fi nancial performance for the year as well as the Parent Company’s fi nancial position and the fi nancial position as a whole of the entities included in the consolidated fi nancial statements, and describes the signifi cant risks and uncertainty factors that may affect the Group and the Parent Company.

We recommend the Annual Report for adoption at the Annual General Meeting.

Copenhagen, 22 August 2013

Executive Board:

MADS RYDER CHRIS BIGLER ANDERS CLEEMANN PETER FABRINGroup Chief Executive Offi cer Chief Financial Offi cer Executive Vice President Executive Vice President

Board of Directors:

NIELS ERIK MARTINSEN HENRIK HEIDEBY OLE WENGEL Chairman Deputy Chairman Deputy Chairman

ANDERS COLDING FRIIS PER BANK ANNETTE BRØNDHOLT SØRENSEN

IC COMPANYS • ANNUAL REPORT 2012/13 92

The independent auditor’s report

TO THE SHAREHOLDERS OF IC COMPANYS A/S

Report on the consolidated fi nancial statements and parent fi nancial statementsWe have audited the consolidated fi nancial statements and parent fi nancial statements of IC Companys A/S for the fi nancial year 1 July 2012 – 30 June 2013, which comprise the income statement, statement of comprehensive income, statement of fi nancial position, statement of changes in equity, cash fl ow statement and notes, including the accounting policies, for the Group as well as for the Parent Company. The consolidated fi nancial statements and parent fi nancial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.

Management’s responsibility for the consolidated fi nancial statements and parent fi nancial statementsManagement is responsible for the preparation of consolidated fi nancial statements and parent fi nancial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies and for such internal control as Management determines is necessary to enable the preparation and fair presentation of consolidated fi nancial statements and parent fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on the consolidated fi nancial statements and parent fi nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements and parent fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements and parent fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatements of the consolidated fi nancial statements and parent fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated fi nancial statements and parent fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as the overall presentation of the consolidated fi nancial statements and parent fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Our audit has not resulted in any qualifi cation

OpinionIn our opinion, the consolidated fi nancial statements and parent fi nancial statements give a true and fair view of the Group’s and the Parent’s fi nancial position at 30 June 2013, and of the results of their operations and cash fl ows for the fi nancial year 1 July 2012 – 30 June 2013 in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies.

Statement on the management commentaryPursuant to the Danish Financial Statements Act, we have read the management commentary. We have not performed any further procedures in addition to the audit of the consolidated fi nancial statements and parent fi nancial statements.

On this basis, it is our opinion that the information provided in the management commentary is consistent with the consolidated fi nancial statements and parent fi nancial statements.

Copenhagen, 22 August 2013

Deloitte Statsautoriseret Revisionspartnerselskab

Kirsten Aaskov Mikkelsen Lars Siggaard Hansen State Authorised Public Accountant State Authorised Public Accountant


GROUP STRUCTURE AT 30 JUNE 2013

Share capitalCompany Country Currency 1,000 units

Wholly-owned subsidiaryIC Companys Danmark A/S Denmark DKK 18,000IC Companys Danmark Premium Brands A/S Denmark DKK 500Saint Tropez af 1993 A/S Denmark DKK 500By Malene Birger A/S Denmark DKK 500Raffi naderivej 10 A/S Denmark DKK 500IC Companys Norway AS Norway NOK 9,450ICe Companys Sweden AB Sweden SEK 10,000Tiger of Sweden AB Sweden SEK 501ICe Companys Sweden Holding AB Sweden SEK 50,000Vingåker Factory Outlet AB Sweden SEK 200Carli Gry International Sweden AB Sweden SEK 100,000Peak Performance AB Sweden SEK 2,645Peak Performance Production AB Sweden SEK 400S T Sweden AB Sweden SEK 100By Malene Birger AB Sweden SEK 100IC Companys Finland Oy Finland EUR 384IC Companys Holding & Distributie B.V. Netherlands EUR 2,269IC Companys Nederland B.V. Netherlands EUR 16IC Companys B.V. Netherlands EUR 23IC Companys Belgium N.V. Belgium EUR 3,305IC Companys (UK) Ltd. UK GBP 4,350IC Companys Germany G.m.b.H. Germany EUR 26IC Companys Verwaltungs G.m.b.H. Germany EUR 1,432IC Companys Austria G.m.b.H. Austria EUR 413IC Companys AG Switzerland CHF 3,101IC Companys Spain S.A. Spain EUR 1,400IC Companys France SARL France EUR 457IC Companys Canada Inc. Canada CAD 2,200IC Companys Poland Sp. Z o.o. Poland PLN 126IC Companys Hungary Kft. Hungary HUF 10,546IC Companys Cz s.r.o. Czech Rep. CZK 2,000IC Companys Hong Kong Ltd. Hong Kong HKD 10,000IC Companys (Shanghai) Ltd. China CNY 5,289IC Companys Romania SRL Romania ROL 1,317Peak Performance Italy SRL Italy EUR 10

51%-owned subsidiary Designers Remix A/S Denmark DKK 500

IC COMPANYS • ANNUAL REPORT 2012/1394

FINANCIAL HIGHLIGHTS AND KEY RATIOSQUARTERLY FOR 2012/13 (UNAUDITED)

DKK million Q1 Q2 Q3 Q4

INCOME STATEMENT1) Revenue 1,050.7 734.3 905.6 623.6 Gross profi t 601.6 415.3 515.8 336.2 Operating profi t/loss before depreciation and amortisation (EBITDA) 187.2 32.8 102.4 (73.8)Operating profi t/loss before depreciation and amortisation,

adjusted for non-recurring costs 187.2 39.8 110.4 (35.9)Operating profi t/loss (EBIT) 165.2 10.4 79.2 (97.7)Net fi nancials (1.8) (5.5) (2.1) (3.7)Profi t/loss before tax 163.4 4.9 77.0 (101.4)Profi t/loss for the quarter of continuing operations 122.6 3.7 60.0 (74.8)Profi t/loss for the quarter of discontinued operations 0.4 (12.1) (16.4) (77.6)Profi t/loss for the quarter 123.0 (8.4) 43.6 (152.4)Comprehensive income 65.4 (7.2) 66.7 (128.7)

STATEMENT OF FINANCIAL POSITION Total non-current assets 730.5 727.9 533.6 520.3 Total current assets 1,501.4 1,212.7 1,474.0 1,502.0 Assets classifi ed as held-for-sale - - 308.1 144.3 Total assets 2,231.9 1,940.6 2,007.6 2,022.3 Share capital 169.4 169.4 169.4 169.4Total equity 873.3 868.0 936.4 808.8Total non-current liabilities 241.8 232.0 98.4 82.5Total current liabilities 1,116.7 840.6 972.8 1,131.0Liabilities concerning assets classifi ed as held-for-sale - - 168.1 140.0Total equity and liabilities 2,231.9 1,940.6 2,007.6 2,022.3

STATEMENT OF CASH FLOWS Cash fl ow from operating activities (182.1) 310.0 (77.7) 181.9 Cash fl ow from investing activities (6.7) (25.9) (10.9) (22.8)Cash fl ow from investments in property, plant and equipment (13.4) (16.7) (7.0) (21.1)Cash fl ows from fi nancing activities (24.6) (9.7) - (0.5)Net cash fl ow for the year (213.4) 274.4 (88.6) 158.6

KEY RATIOS - CONTINUING OPERATIONS Gross margin (%) 57.3 56.6 57.0 53.9 EBITDA margin (%) 17.8 4.5 11.3 (11.8)EBITDA margin (%), adjusted for non-recurring costs 17.8 5.4 12.2 (5.8)EBIT margin (%) 15.7 1.4 8.8 (15.7)Return on equity (%) 14.1 0.4 6.8 (9.0)Equity ratio (%) 39.1 44.7 46.6 40.0 Average invested capital including goodwill 1,452.0 1,392.6 1,229.2 1,402.1 Return on invested capital (%) 11.4 0.7 6.4 (7.0)Net interest-bearing debt, end of quarter 463.2 188.5 277.3 118.2 Financial gearing (%) 53.0 21.7 29.6 14.6

SHARED BASED RATIOS* Average number of shares excluding

treasury shares, diluted (thousands) 16,402.1 16,402.1 16,408.9 16,402.1 Share price, end of quarter, DKK 102.5 134.0 134.0 122.0 Earnings per share, DKK 7.4 (0.5) 2.6 (9.3)Diluted earnings per share, DKK 7.4 (0.5) 1.9 (9.3)Diluted cash fl ow per share, DKK (11.2) 18.8 (4.7) 11.1 Diluted net asset value per share, DKK 53.0 51.0 56.8 49.6 Diluted price/earnings, DKK 13.9 (268.0) 70.5 (13.1)

EMPLOYEES Number of employees, full-time equivalent at the end of the quarter (continuing operations) 1,729 1,712 1,640 1,615

1) The comparative figures in the income statement have been adjusted in order to reflect that the brands Jackpot and Cottonfield have been separated as discontinued operations.

* The effect of IC Companys’ programmes for share options and warrants has been included in the diluted values.

The key ratios and share data have been calculated according to the recommendations in “Recommendations and Ratios 2010” issued by the Danish Society of Financial Analysts. Please see definition of key ratios on page 91.


OTHER EXECUTIVES

NAME POSITION

Frederik Aakerlund Vice President, IT

Henrik Bunge CEO, Peak Performance

Martin Christiansen Vice President, Group Legal & Real Estate

Charlotte Egelund CEO, By Malene Birger

Niels Eskildsen CEO, Designers Remix

Hans-Peter Henriksen CEO, Saint Tropez

Tine Knarreborg Vice President, Finance

Christian Heireth Levorsen Vice President, Logistics

Morten Linnet Vice President, Group HR

Alexander Martensen-Larsen Senior Vice President, Corporate Business Development

David Thunmarker CEO, Tiger of Sweden

Charlotte Witmeur Vice President, Sourcing

AUDITOR

Deloitte Statsautoriseret Revisionspartnerselskab

IC COMPANYS CORPORATE INFORMATION

Share capital 169,428,070 Address IC Companys A/SNumber of shares 16,942,807 10 Raffi naderivejShare classes One class 2300 København SISIN code DK0010221803 DenmarkRegistration number 62816414 Phone: +45 3266 7788 Fax: +45 3266 7703Reuter ticker IC.CO E-mail: [email protected] ticker IC DC Homepage: www.iccompanys.com


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ANNUAL REPORT 2012/131ij5r73z81m72a9uqy1agofi.wpengine.netdna-cdn.com/wp-content/up… · MANAGEMENT COMMENTARY • ANNUAL REPORT 2012/13 • IC COMPANYS 3 * This announcement is