ANNUAL REPORT 2017 - Empower · EMPOWER ANNUAL REPORT 2017 9 Fibre-optic network for Telia with micro-trenching technology 2017 HIGHLIGHTS CASE Empower built Open Fibre fibre-optic

ANNUAL REPORT 2017

EMPOWER ANNUAL REPORT 2017 2

CEO’s Review 2017 ....................................................3

2017 Key figures...........................................................5

Empower in Brief .........................................................6

Mission ........................................................................7

Best Customer Experience ...........................................8

2017 Highlights .............................................................9

Work Safety ................................................................16

Responsibility .............................................................18

Environmental Responsibility................................. .....20

Group Executive Team ...............................................22

FINANCIAL STATEMENTS

Report by the Board of Directors and Financial

Statements 2017 ........................................................23

Consolidated Statement of Comprehensive Income ....28

Consolidated Statement of Financial Position ............29

Index to Notes to the Consolidated Financial

Statements ...............................................................32

Financial Statements of the Parent Company ............62

Auditor’s Report .........................................................72

CONTENTS


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T he year 2017 was one of the best in Empower’s history with regard to performance. We built the foundation for sustainable growth and invested strongly in the development of digital solutions.

The Group’s turnover increased by 0.9 % to EUR 245.3 million. The demand for Empower’s services is supported by the megatrends, such as digitalisation, new technologies and the increase in terminal devices using mobile data, population growth, urbanisation and climate change. The demand for our services was high across all business areas, and our order book strengthened significantly, reaching an all-time high level. Our EBITDA amounted to EUR 16.4 million, decreasing slightly year-on-year, mainly due to non-recurring items.

The demand for digital solutions has increased worldwide in recent years. The demand for Empower’s digital products and solutions was strong in 2017, specifically in our energy segment and industrial products. The solutions we develop support our customers’ success in business, as we utilise our long-term expertise in the production of services in product development. This way, we have succeeded in creating solutions that meet the customer needs and can be used without long adjustment and iteration times. We increased our R&D investments in digital solutions. In 2017, our investments amounted to EUR 7.8 million, accounting for 3.2 % of the Group companies’ turnover.

At Empower, success is achieved togetherOur well-being and satisfied employees are at the core of our profitable business. In 2017, we took part in the Annual Review of Lost Labour survey, ranking among the best businesses in our sector. We focused on working capacity management and preventive activities in 2017, which provided us with significant savings. As the demand for our services is increasing, we also need new Empower employees to join us, and we were busy recruiting them in all of our business areas in 2017. New opportunities provided by digitalisation also result in the need for new kinds of expertise, so we provide our employees with an opportunity to grow and develop their expertise with us.

We boldly experiment and actively seek solutions to make our own processes more efficient. In addition to digital solutions offered to our customers, we also invested strongly in digitalising our own processes during the year. This has increased the transparency of our projects towards our customers and enhanced efficiency and service quality. We regularly measure customer satisfaction with a feedback survey. Its improved results indicate that we have succeeded in providing customer experiences exceeding expectations even more frequently.

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Demand for digital solutions is increasing strongly


We keep the wheels of the smart society turning 24/7The market share of our Power business grew in all countries. Our customers’ prior experience of good cooperation opened up the door to the Swedish wind farm market for us. We acted successfully as one of the main contractors in a wind farm with 41 wind turbines being built in Northern Sweden and secured new renewable energy projects in Sweden. We also launched a significant main grid reform project covering all the Baltic countries as the main contractor, allowing the Baltic countries to separate from the Russian grid and connecting them to the Continental Europe grid.

The focus of our Connectivity business was shifted to the Finnish market. Empower is the largest service provider in Finland in its industry, and our position strengthened further when we signed significant new multi-year contracts during the fall. Our fully digitalised delivery process solidified quality leadership, which could also be seen as improved profitability in the line of business in question. We actively seek new solutions to our customers’ challenges and piloted the micro-trenching method, less known in Finland, with our customer Telia with good success in the Open Fiber project. The construction of open fiber grew strongly also otherwise, and we believe that the growth will continue in the next few years as well.

The year was strong on the whole in the Smart Industry business. Digital platforms for the industry yielded good

results. Our digital EmSafe, EmSight and Emsight Lite IoT solutions based on positioning and analytics have met a good reception and facilitated business intelligence for our customers. The product families will be expanded in the future with solutions for resource management and development of productivity, for example. Regional services managed to grow their business, thanks to improved demand. The solid expertise in nuclear power plant projects, maintenance and services boosted the growth in business.

Energy Intelligence business strengthened its position as the market leader in Finland. The development of the Enerim platform proceeded at a quick rate, making several new modules available to our customers. The system now covers all of the basic processes of the energy market, produced automatically. Empower’s market share continued to grow strongly with the acquisition of numerous new customers in customer information system deliveries to energy companies, and thanks to high-quality service, our customer loyalty remained at a very high level.

Empower has a genuinely preventative safety cultureIn addition to financial performance and customer satisfaction, we also succeeded in improving work safety. Our accident frequency rate for 2017 was record-breaking low, and we made almost 6,500 HSE observations. Our work safety culture developed very well in 2017, especially in terms of reducing LTAs, and we will invest strongly to continue on the same path. In 2018, we will develop our

HSEQ work further by building a uniform HSEQ vision, long-term development path and operating model for Empower Group.

Towards sustainable growth as a trailblazerI would like to extend my gratitude to our customers for the successful cooperation and our employees and partners for their positive and dedicated attitude in providing the best customer experience. We have good preconditions for continuing on the path of profitable growth in 2018. In accordance with our strategy, we want to be among the trailblazers in promoting digitalisation and offering the best customer experience, for which Empower is renowned. The year 2017 was full of successful events – let’s make 2018 even greater together!

Jari OnniselkäCEO, Empower Group

“In accordance with our strategy, we want to be among the trailblazers in promoting digitalisation and offering the best customer experience, for which Empower is renowned.”

CEO’S REVIEW 2017


2017 KEY FIGURES

NPS GROWTH

Work Safety Business Personnel

21%

245,3

16,4

7,8

EBITDA

TURNOVER

m€

m€

EMPLOYEES AVARAGE AGE

SEX RATIO

45,31700

WOMENMEN88% 12%

ABSENCE RATE

3,2%SUMMER EMPLOYEES

150APPROXIMATELY

HSE OBSERVATIONS

R&D

m€

pcs/million hours4,8

LOST WORKDAY INJURY FREQUENCY (LWIF)

Customer Satisfaction

6427


Empower is a multinational company realizing a smarter society. The company develops digital platforms for customer needs utilizing profound domain competences of the service business ranging from building and maintaining electricity and telecom networks and maintaining factories and power plants to delivering information management systems and services to the energy sector. The company operates in the Nordic countries and in the Baltics.

FINLAND

ESTONIA

SWEDEN

LATVIA

NORWAY

EMPOWER IN BRIEF

Our values form the basis of our daily work and guide our working methods and decision making.

ACT AS AN EXAMPLE BUILD WINNING ATTITUDE BUILD TRUST COMMUNICATE TAKE RESPONSIBILITY

LITHUANIA

DENMARK


SMART INDUSTRYSecures the smart factory and industrial needs making digital transformation a reality.

Our mission is to build a smarter society CONNECTIVITY

Secures the communications part by rollout and handling of 5G, fiber and connectivity effectively utilizing digital tools.

POWER Secures fluent operations of society´s energy systems by utilizing smart solutions.

ENERGY INTELLIGENCE Secures the smart society energy systems management by big data handling and intelligent SW solutions.

MISSION


Empower’s objective is to provide the best customer experience in the business. This we believe is achieved by focusing on four core pillars.

1. Leader in services and solutions development2. Uncompromised work safety3. Most attractive employer4. High level of work satisfaction

We measure customer satisfaction by carrying out NPS (Net Promoter Score) surveys on a regular basis. Our continuous focus on customer experience has been fruitful, as our results show improvement every year.

We aim towards the best customer experience

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CUSTOMER EXPERIENCE

Customer satisfaction survey NPS development


Fibre-optic network for Telia with micro-trenching technology

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CASE

Empower built Open Fibre fibre-optic connections for Telia in the Länsi-Pakila district of Helsinki. In this project, Empower and Telia

piloted the micro-trenching method, which is faster and more environmentally friendly than the traditional excavation method and

also causes less disturbance in the site’s surroundings.

In this turnkey project, Empower was responsible for site planning, customer communications, micro-trenching, fibre blowing, household terminal installation, customer guidance and documentation. What was new about the project was that excavation was not carried out with a traditional excavator but with micro-trenching, a technique that was first introduced in Finland nearly 10 years ago. Now the methods have evolved and the technology has become a feasible option to traditional methods.

In micro-trenching, excavation is carried out with a special machine, with diamond blades cutting a groove that is slightly over 2 cm wide and roughly 40 cm deep. From the beginning of the cutting to the spreading of bitumen, the excavation phase lasts for approximately 24 hours and, in the end, all you can see is a stripe in the paving that

blends in well with the environment and does not prevent movement in the area during the project.

Telia is satisfied with the well-executed pilot project and the fast delivery of fibre-optic connections. The local residents were also delighted with the project’s speed and lack of disturbance.

– As technology has evolved, we wanted to gain more experience in micro-trenching. The method causes less disturbance to the residents in the surrounding area as the worksite requires less space and the schedule is shorter compared to using traditional methods. The method also causes less harm to the environment as the groove that is cut is smaller, says Jukka Huhtanen, Head of Network Deployment at Telia.

Empower’s customer-oriented approach and smooth cooperation are commended.

– In the pilot project, we cooperated in testing a technique that is not yet in as extensive commercial use in Finland as traditional methods. Empower arranged several work demonstrations and we could increase the awareness of this method significantly, Jukka Huhtanen goes on to say.

The analysis of the pilot results will be completed in spring 2018 once the snow has melted and it can be ensured that the roads where the method has been used have remained in good condition.


Updating Caruna’s customer information system

CASE

Finland’s largest electricity distribution company Caruna started using Empower’s EnerimCIS invoicing and customer information system as a Saas service in autumn 2017. This means that EnerimCIS is now used in handling energy-related matters for more than one million Finns – and the figure just keeps on increasing.

The system is a daily tool for Caruna’s customer service as all work orders and service requests from customers pass through it. In addition, Caruna’s customer invoicing is handled through the EnerimCIS system.

– At Caruna, customer experience development is one of the key goals. We have renewed our service processes, aiming for customer satisfaction and excellent customer experience quality. The EnerimCIS system contributes to these goals and provides us with fast and smoothly functioning interfaces for the service needs of both our customers and our other stakeholders, says Vesa Ojala, who was in charge of the project at Caruna.

The most important indicator of the project’s success was that all of Caruna’s customer issues were handled smoothly and operational quality remained high throughout the project.

– We have nearly 700,000 customers so it is important that the system automates all of our most essential processes and that the system change has not created confusion among our customers, Ojala goes on to say. Our goal is to automate our processes, all the way from the customer order to the work carried out by a contractor, and to take care of customer issues during a single encounter. EnerimCIS enables us to do this and speeds up our operations by digitalising the entire service chain.

EnerimCIS automates all processes required by the retail electricity market. The service that Caruna uses is browser-based and can be flexibly adjusted to changes in the electricity market. Thanks to its modular structure, the system can also be

connected with systems of other partners and different service providers.

– Our customer information system is connected to dozens of other information systems we use so a system that plays such a key role must function safely and reliably in order to not disturb our operations, Ojala notes. It is important for us that information security is taken into account in the system already at the planning phase. During the project, we also audited the system from the point of view of information security and ensured that safe solutions were developed for the risks identified.

The project started in autumn 2015 with more detailed specification, in which different use cases and functional requirements were mapped and service design goals were agreed on.

– Interaction between Caruna’s and Empower’s teams was constructive and together we created a functional solution, Ojala summarises.

System development cooperation still continues strongly as Empower also manages the maintenance and capacity service of Caruna’s EnerimCIS system.

– The optimal result was reached by combining energy sector customer service and process competence with strong technological know-how and learning from each other along the way, says Mika Yletyinen, President of Energy Intelligence at Empower.

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Lehtirova wind farm for OX2

CASE

The Lehtirova wind farm project has been a significant strategic step for Empower in the Swedish market and has strengthened the long-standing cooperation between OX2 and Empower in wind power construction.

Empower is one of the main contractors in the wind power company OX2’s Lehtirova wind farm. The 41-turbine wind farm is located in Pajala and Gällivare in Northern Sweden. The wind farm will be completed by the end of 2018 and its annual electricity generation is estimated to be at 490 GWh per year, which is roughly equivalent to the annual electricity consumption of 98,000 households.

Empower has designed and constructed the road lines, crane hardstands, foundation bottom structures and foundations required for the wind farm’s 41 wind turbines. Empower has also been responsible for the safety planning and route guidance of the entire worksite. The wind farm was the biggest wind farm project in Empower’s portfolio by 2017 and the first one in the targeted Swedish market. The Lehtirova wind farm project is large already on the basis

of the number of wind turbines but the longer distances in the park make it a particularly large project.

Empower started earthworks in October 2016, continuing through the winter. In April 2017, Empower began to construct the wind turbine foundations. A long and snowy winter brought some challenges to the start of foundation casting. However, by adjusting the casting rhythm, the schedule could be maintained. Casting continued actively throughout the summer, all the way to late autumn when the foundations of the last wind turbine were completed.

Empower achieved all the schedule-related objectives set for 2017 and kept up with the monthly forecasts, thanks to the skilled personnel and careful preparation: in addition to a project plan,

Empower’s experts prepared risk and contingency plans regarding the most critical parts of the project.

OX2 has been pleased with the cooperation with Empower.

– Empower has always dealt with questions or problems in a very professional manner and everything has gone as planned and according to schedule. I recommend Empower for future OX2 projects, too, says Björn Olofsson, Construction Project Manager at OX2.

The cooperation with the other contractors at the worksite has also proceeded in a good and constructive spirit. 20

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CASE

Empower was the main contractor for UPM Kymi’s annual maintenance in autumn 2017. Mobile work supervision was piloted in monitoring the service maintenance and alteration tasks carried out during the shutdown. It provided UPM with nearly real-time information about the progress of different subprojects and phases during the most extensive shutdown the pulp mill has ever undertaken.

The annual maintenance at UPM Kuusanniemi’s pulp recovery unit was carried out in October 2017. Empower was responsible for the annual maintenance of the recovery boiler, the evaporation plant, the causticising plant, the lime sludge reburning kiln and auxiliary equipment. It took two days to shut down the pulp mill and the maintenance shutdown started in mid-October. After the mill was shut down, there was slightly over a week of hectic work around the clock so that the mill could be restarted according to the planned schedule. During the production shutdown, Empower piloted mobile work supervision, the aim of which is to bring more transparency to the project and provide detailed information on the project’s progress.

– There were roughly 80 Empower employees on the worksite. Forepersons were provided with tablets for receiving assignments and marking them as completed. The daily entries enabled us to monitor how much time each task was taking and what their percentage of completion was, to react quickly to deviations and to ensure that we had the right professionals in the right place at the right time, says Mika Ruutiainen, who has been responsible for developing mobile work supervision at Empower.

The annual maintenance of a pulp mill involves numerous phases and interconnected tasks, so one of the key success factors is thorough advance planning of the project, the division of the project’s

tasks and the careful planning of subproject interfaces.

– With the customer dashboard, we provided UPM with information about the progress of the assignments that we were responsible for, always for each morning meeting, so that they could get an overview of the status of individual tasks and the entire project’s percentage of completion. As a result, UPM’s control room was well equipped for directing the entire project and ensuring that the shutdown was completed on schedule. The information collected will also help them in the planning of future shutdowns, Ruutiainen goes on to say.

Kymi’s maintenance shutdown was a pilot project for Empower’s Smart Industry business’ mobile work supervision, which provided a lot of valuable information for developing the functions and specified in more detail what is sought with the future tool.

– Our goal is that, in future, mobile work supervision will be used in all Empower projects and that we digitalise our own production from the project launch all the way to customer invoicing, says Eero Paunonen, President of Smart Industry at Empower. At the same time, we also conduct mobile risk assessment in order to review the existing working environment appropriately and to identify and assess all potential risks before work starts. The customer dashboard gives all parties immediate insight into the progress of work and the percentage of completion.

Mobile work supervision piloted during UPM Kymi’s maintenance shutdown

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In 2017, Empower’s Power business area achieved a historic milestone: seven consecutive months without accidents leading to absences. This excellent work safety achievement is the result of developments in the HSE culture.

– The management has contributed to and invested in the HSE culture for years, which has been of crucial importance for the practical implementation of our safety culture. The way in which matters are discussed has changed as safety dialogue has become an integral part of

our daily work in different operations of the company, says Timo Pekonen, who is in charge of safety and electrical installation in Empower’s Power business.

The various digital solutions used contribute to safety development. One of them is the HSEQ reporting tool Nordsafety, which has improved the efficiency of HSE observations in particular as now the personnel can report their observations quickly and in detail directly from the worksite with a mobile device.

– For instance, Nordsafety makes it possible to submit reports on worksite inspections, safety walks, worksite safety and quality assessments (MVR measurement) as well as HSE observations from the worksite, directly in digital format and tagged to the worksite in question. Thanks to this, we can react and rectify any deficiencies immediately, explains Timo Pekonen.

Advanced digital solutions contribute to safety development

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Big data helps prevent production problems

Data-based production process development is a new way of reviewing the data that has been collected. A presumption-free analysis offers an opportunity to find the root causes for production challenges and, consequently, to handle issues proactively instead of passive reacting.

The Emsight analytics service deployed at Stora Enso has been designed for analysing production process or phase problems and improving performance. The analysis involves combining the own process and equipment expertise with observations

yielded by mathematical algorithms, which requires cooperation among several experts. – Empower knows the paper mill production processes and acted as an analytics interpreter in this project, says Matti Karhu, Vice President, Digital and Expert Services, at Empower.

Cooperation will also continue in spring 2018 when more calculation models are included in the analytics service for predicting production problems.

Empower delivered the Emsight analytics service to Stora Enso’s Anjala paper mill in autumn 2017. The goal of the service is to tackle potential production problems proactively and to facilitate the process operators’ work and the mill’s production efficiency.

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During 2017, Empower’s Connectivity business took giant leaps in production process digitalisation.

In recent years, Empower has invested a lot in the development of process-based operations and the digitalisation of processes in the Connectivity business. In practice, this has meant that operations control in both project and unit delivery processes has been developed with the aid of new digital solutions.

Development was continued in 2017: the management of major telecom network construction projects was digitalised. The benefits are clear: the digital solutions used made it possible to report in real time directly from the field, which has increased project transparency and sped up the flow of information. In addition, project portfolio management and project planning has become easier.

– Process digitalisation allows us to see every day what is happening in the field. This has increased transparency in project monitoring and improved project management and leadership. We benefit from real-time reporting especially when monitoring committed costs and billable work,” says Joonas Koivuniemi, Head of Operational Excellence and New Business Development.

Production process digitalisation has improved quality in the entire construction business, as demonstrated by several projects that were successfully carried out in 2017 as well as new agreements that the company has won.

Production process digitalisation increases operational transparency

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Uncompromised work safety yielded results

In 2017, Empower’s lost workday injury frequency (LWIF) reached a record-breaking low, 4.8. The

reporting of HSE observations continued actively.

Empower Group’s lost workday injury frequency (LWIF)

Empower is committed to the continuous improvement of its safety culture, the systematic prevention of accidents and the promotion of occupational health. Our goal is to be the best company in our industry when it comes to work safety and to ensure that both employees and subcontractors get home safely at the end of the working day. Safety management is based on national legislation and safety leadership. Our occupational health and safety management system is OHSAS 18001 certified.

Our key focus areas are continuous safety culture development and the long-term goal of zero accidents that is supported by our membership in the Zero Accident Forum. In 2017, the Group’s LWIF in accidents that lead to absences exceeding one day was 4.8 per million hours. This was clearly lower than our goal of 6.0.

– The downward trend shows that our safety culture is developing. Each Empower employee is responsible for their own safety and that of their colleagues, says Vesa Rapo, Head of HSE at Empower.

– One factor that has an impact on LWIF is the alternative work duties model used at Empower. Provided that their condition allows, the employee can carry out lighter or alternative work duties if they cannot carry out all or some of their normal work duties due to an accident or illness. Alternative work is also rehabilitation as it may promote the employee’s ability to continue working and lowers the threshold for returning to their own duties and, as a result, prevent disability,” notes Vesa Rapo.

We emphasise proactive safety management. Proactive measures include, for instance, the teams’ joint HSE briefings and HSE observations made with regard to events that could result in an accident, health issues or negative environmental impact. In 2017, the number of HSE observations was 4.8 per employee, totalling 6,427 observations. We did not reach our target of 6.0 but the number of observations per employee remained on the same excellent level as in the previous year. During the year, we paid particular attention to reacting to HSE observations, taking corrective actions within 30 days and giving feedback on observations.

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WORK SAFETY

“The downward trend shows that our safety culture is developing.”


A workshop provided tools for HSE culture leadership

In 2017, we organised HSE culture workshops in Finland and the Baltic countries for the management teams of Smart Industry, Power and Connectivity businesses and for business unit managers as one prerequisite for a good HSE culture is commitment and genuine leadership among the top management and managers. The goal of the workshops was to develop the HSE culture by increasing awareness, commitment and understanding with regard to the significance of the HSE culture.

During the workshop day, the participants learnt more about safety culture development, conducted a self-evaluation of their approach to safety management, exchanged ideas in group discussions, made a personal plan about ways in which they can contribute to safety culture promotion and prepared an action plan for improving the safety culture in their own organisation.

– The workshop provided a solid foundation for joint safety culture improvement efforts. Our future goals include systematic and documented risk assessment and the harmonisation of HSEQ reporting among the Empower countries and business operations, says Timo Kiiveri, President of Power at Empower.

The UPA tool helps in developing safety cooperation

In 2017, we invested in supplier management and quality assessment. We conduct an HSEQ quality assessment for our most critical suppliers every three years and, to support work safety assessment, we started to use the Centre for Occupational Safety’s safety assessment (UPA) in August. The UPA method is a concrete tool for promoting work safety as it encourages our partners to develop and maintain their work safety and helps them pay attention to procedures that need improvement.

– Supplier assessments with the UPA method have been mutually beneficial: together we have been able to find development areas for improving work safety that our partners should focus on. In the assessments, we have given each other good tips that enable both parties to develop work safety procedures, notes Petri Lehtinen, Procurement Manager at Empower Group.

Safety is in your hands

In Finland, September was a theme month focusing on the prevention of accidents that cause hand injuries. Each day, we carry out many tasks manually and, additionally, our field personnel use many kinds of tools in their work. Consequently, the risk of hand injuries is high. In 2017, approximately 20 per cent of all accidents at Empower were hand accidents.

The right tools and the right personal protective equipment go a long way towards avoiding hand accidents, but what is also needed is the right working methods. The topic was handled in the teams’ HSE briefings and, as part of the campaign, Empower’s OHS delegates toured our sites and discussed the avoidance of hand accidents with our employees.

– The tour was welcomed positively and created constructive dialogue in the units. People were particularly interested in cut protection gloves, says installer Juha Jäntti, who acts as an OHS delegate at Empower.

During the campaign, we replaced sharp-pointed knives with safer tools in our Smart Industry business area’s operations as the risk of injury can be reduced by choosing safer tools and no longer using sharp-pointed knives. Instead, we started using safe and appropriate tools, such as safety knives, safety cutters and blunt-pointed knives.

WORK SAFETY


RESPONSIBILITY

Responsible summer jobs for more than 100 young people

Empower’s goal is to be the most attractive employer in its industry among existing and future employees. Each year, we offer many traineeship opportunities to young future talents as well as summer jobs for approximately 150 young people. In 2017, we participated in the Responsible Summer Job campaign, which also gave us a chance to see how successfully we could comply with the six principles of a good summer job.

After their employment, our summer workers responded to the Responsible Summer Job survey, assessing how the principles were realised and providing us with valuable feedback and ideas for developing the summer job experience further. We were acknowledged for providing a successful summer job experience and our results reflected our efforts to improve the different phases of the recruitment process. When compared to the previous year, we improved our performance in all areas and in overall results, we were rated 28th among the 98 participating companies. Our summer workers assessed their summer job experiences on a scale from 1 to 4. Our average, 3.65, was higher than the average for large companies (3.58).

– Ever since the job interview, I felt I was very welcome in the company and I was accepted as a full member of the work

community, says engineering student Mikki Hiltunen, one of the Energy Intelligence summer workers.

In the summer, Mikki worked in the customer support team for the EnerimCIS invoicing and customer information system.

– At the beginning, I received an introduction to my duties, after which I was assigned challenging tasks working with the extensive system. In my work, I could learn new things and develop my skills supported by experienced colleagues. The best thing about the summer was probably my co-workers – our team was really great, Hiltunen says in conclusion.

On the basis of the survey feedback, we will develop our operations and provide future talents with as inspiring and positive summer job experiences as possible also in 2018.

We are committed to the principles of a responsible summer job:• A good application experience• Meaningful work• Introduction and guidance• Fairness and equality• Reasonable pay • Written contract and testimonial

CASE

”Ever since the job interview, I felt I was very welcome in the company and I was accepted as a full member of the work community.”


Well-being through occupational health management

In 2017, Empower participated in the Annual Review of Lost Labour that looks into the total costs incurred to Finnish companies by the direct costs of sick leave absences, disability pension contributions (as defined in the Employees Pensions Act), workers’ compensation insurance premiums and costs related to the occupational health excess. There were altogether 223 participating companies and this year’s annual review focused on the years 2008–2016. Empower was among the best companies in its industry. In 2016, the costs of lost labour input were 5.98 % of the Group’s total wages and salaries and 1.31 percentage points lower than the average for the industry.

In 2011–2016, Empower’s costs of lost labour input in proportion to person-years have decreased by 17 %. Significant results have been achieved

especially in reducing the costs of sick leave absences. Preventive measures accounted for 58 % of Empower’s total costs in 2016, whereas the corresponding figure for the entire industry is usually below 50 %.

– We have concentrated on occupational health management and shifted our focus towards preventive measures, says Kirsi-Marja Ura, Senior Vice President, HR, HSE and Communications. In 2017, our absence rate was 3.2 %, which is clearly lower than the Finnish average and resulted in approximately EUR 200,000 worth of savings this year. The results show that we have succeeded in targeting the measures correctly and can be very satisfied with the progress achieved. Good personnel well-being makes it possible to achieve good business results.

Annual Review of Lost Labour Input looks into how successful companies are in occupational health management that aims

at personnel well-being. Empower’s investments in preventive measures bore fruit: our absence rate continued to fall, resulting in

approximately EUR 200,000 worth of savings in 2017.

FIBS (originally Finnish Business & Society) is Finland’s leading corporate responsibility network. Empower joined its Diversity Charter Finland in order to develop the Group’s management and service practices while taking diversity principles into account.

Empower became a member of Diversity Charter Finland

RESPONSIBILITY

The four principles of the Charter are:• We offer equal opportunities• We recognise and utilise individual know-how and needs• We manage our staff and customers with fairness• We communicate our goals and achievements


ENVIRONMENTAL RESPONSIBILITY

Empower is committed to continuous improvement in environmental issues

Empower’s environmental goal is to offer solutions to our customers’ environmental challenges and to reduce the negative

environmental impact of our operations.

Average CO2 for vehicles used in production

We offer solutions to our customers’ environmental challenges by reducing the consumption of materials and energy, among other things, and consequently reducing the customers’ environmental burden. In addition, we utilise our competence to promote environmental issues in our service offering that includes a comprehensive selection of services related to renewable energy. Our wind power services cover the entire wind farm life cycle, from development to construction and maintenance and to forecast, operation and monitoring services. We also offer services related to solar power, hydropower and the installation of electric vehicle charging stations.

We take the significant environmental aspects of our services into account throughout the service life cycle, from the purchase of raw materials to disposal, and act to influence them. This can only be achieved through close cooperation with our suppliers, customers and other stakeholders. We reduce the negative environmental impact of our operations by complying with the requirements set out in law and by the environmental management system. Our environmental management system is

ISO 14001 certified. Our operations also meet the requirements of the EU’s Energy Efficiency Directive.

The environmental goals for 2017 were to develop the handling of hazardous waste, to continue purchasing lower-emission vehicles, to develop energy and material efficiency in cooperation with customers and to increase the personnel’s environmental awareness through online training and internal communications.

Towards lower CO2 emissionsEmpower’s most significant CO2 emissions are generated by vehicle exhaust gas emissions. Empower had approximately 400 vehicles used in production in 2017. Our target is to reduce average vehicle emissions to 180 g per kilometre per vehicle by the end of 2018 by renewing our fleet and replacing vehicles with lower-emission alternatives. In 2017, the average emissions per vehicle were 199.48 grams. This downward trend shows that we are moving towards a lower emissions level.

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210,00

205,00

200,00

195,00

2010


A uniform operating model for handling hazardous waste

In 2017, we improved the efficiency of the hazardous waste handling process in our own premises to create a uniform operating model and to reduce the environmental impact of our operations.

– The volume of hazardous waste at individual Empower sites is quite insignificant, but their appropriate handling is necessary in order to minimise their environmental impact, emphasises Hannu Kujala, Category Manager, Vehicles and Facilities in charge of Empower’s hazardous waste handling project.

During the year, our partner Paperinkeräys Oy carried out, together with Kierto Ympäristöpalvelut Oy, inspection visits at our sites and analysed the current status of hazardous waste handling, advised our personnel on the handling of hazardous waste and removed any accumulated waste. On the basis of the visits and observations, Empower will launch a uniform approach to handling hazardous waste and, in the future, Kierto Ympäristöpalvelut Oy will take care of the recycling of hazardous waste.

The suitability of electric vehicles tested in the Connectivity business

To reduce emissions, we are constantly trying to find new solutions for developing our operations. In 2017, we piloted the use of electric vehicles in Turku.

– The goal of the pilot project was to gather experiences about the suitability of electric vehicles for the mobile work of telecom installers. The pilot project began in the spring and continued until the end of the year so that we could also gain experiences about driving in the winter, says Mikko Vaahersalo, President of Connectivity.

The pilot project showed that electric vehicles are well suited for driving in urban areas where distances are short and the charging network is comprehensive. Challenges were posed by longer distances, the lower driving range in sub-zero temperatures and the insufficient hauling capacity.

– However, we see future potential in electric vehicles once the charging networks evolve and the hauling capacity of the vehicles improves, notes Mikko Vaahersalo.

‟The goal of the pilot project was to gather experiences about the suitability of electric vehicles for the mobile work of telecom installers.”

ENVIRONMENTAL RESPONSIBILITY


MIKA YLETYINENPresident, Energy Intel l igence

TIMO KIIVERI President, Power

EERO PAUNONENPresident, Smart Industry

SUVI ONKAMO-HÄKKINEN CFO

JOHAN FAGERSTRÖMCTO

MIKKO VAAHERSALOPresident, Connect iv i ty

ANTTI RUOKONENCPO

KIRSI-MARJA URASVP, HR, HSE & Communicat ions

HEIKKI HILTUNENCLO

GROUP EXECUTIVE TEAM JARI ONNISELKÄCEO

EMPOWER’S ANNUAL REPORT 2016 23

EMPOWER OYJCONSOLIDATED FINANCIAL STATEMENTS

1.1.–31.12.2017

23


REPORT BY THE BOARD OF DIRECTORS AND FINANCIAL STATEMENTS 2017

Empower Oyj is the parent company of the Empower Group. Empower Oyj applies IFRS accounting principles in its consolidated financial statements.

Review of the company’s business operations, financial position, results and other factors that have an effect on business developmentEmpower is an international service and digital platform provider that is building a smart society.

With the aid of digital solutions, we develop our business that consists of maintaining power plants and factories, executing energy market operations and building and maintaining smart power networks and telecommunications connections. We

develop modular software and provide services that help our energy sector customers manage their data flows and Big Data. We operate in the Nordic and Baltic countries.

The decision to divest unprofitable operations (discontinued operations), made in 2016, had a significant impact on the Group’s business structure.

In the financial period 2017, the Empower Group’s turnover grew by 0.9 per cent.

The turnover by country and business area is shown in the tables below.

REVENUE PER COUNTRY

MEUR 2017 2016 change

Finland 194,3 209.,2 -7,1 % Sweden 17,9 0,0 Estonia 23,2 28,8 -19,5 %Latvia 14,0 4,7 199,9 % Lithuania 2,8 3,3 -16,1 %Elimination -6,8 -2,9Group 245,3 243,1 0,9 %

MEUR 2017 2016 change

Power 111,8 116,8 -4,3 %Connectivity 47,5 49,8 -4,5 %Smart Industry 67,8 57,0 19,1 %Energy Intelligence 25,0 22,4 11,6 %Elimination -6,8 -2,9 Group 245,3 243,1 0,9 %

REVENUE PER BUSINESS AREA EBITDA PER BUSINESS AREA

change

1 000 € % of turnover 1 000 € % of turnover 1 000 €

Power 3 701 3,3 % 6 670 5,7 % -2 969Connectivity 1 266 2,7 % 1 106 2,2 % 160Smart Industry 6 479 9,6 % 5 041 8,8 % 1 438Energy Intelligence 4 989 20,0 % 4 140 18,5 % 848internal -38 324 -362Group 16 397 6,7 % 17 282 7,1 % -885

EBITDA per business area2017 2016

EBITDA PER COUNTY

2017 2016 change

% of turnover 1 000 € % of turnover 1 000 €

Finland 14 613 7,5 % 16 743 8,0 % -2 130Sweden 1 488 8,3 % 0 1 488Estonia -600 -2,6 % 118 0,4 % -719Latvia 703 5,0 % 36 0,8 % 667Lithuania 193 6,9 % 384 11,6 % -191Group 16 397 6,7 % 17 282 7,1 % -885

EBITDA per country

In the Energy Intelligence business area, the demand for services offered by Empower increased markedly among energy companies. In the Smart Industry and Connectivity business areas, the year was also very good. In the Smart Industry business area, this was evident in the strong increase in business operations, and in the Connectivity business area, especially in the significant strengthening of the order book.

Empower’s EBITDA, EUR 16.4 million, decreased somewhat year on year, mainly due to non-recurring items. EBITDA by country and business area is shown in the tables below.



The operations of the Empower Group’s Swedish subsidiaries Empower AB and Empower Industry AB were discontinued through a corporate restructuring and bankruptcy procedure in April 2017. Discontinued operations also include power distribution network construction operations in Latvia and power distribution network EPC contracting operations in Finland. For discontinued operations, a profit of EUR 3.1 million (EUR -32.5 million) was recorded in the Empower Group’s profit and loss statement for 2017.

The impact of discontinued operations reduced the Group’s cash flow significantly still in the financial period 2017, which tightened the companies’ liquidity and lead to breaches of covenants in the Group’s financing agreements. The financing agreements were extended on the basis of waivers granted by financiers. The good and stable long-term profitability and healthy cash flow of Empower’s continuing operations contributed significantly to extending the financing agreements.

Significant events during and after the financial periodDuring 2017, Empower’s business operations developed favourably. The company managed to grow its order book in all business areas. The expansion and diversification of the customer base continued, too. On the basis of the feedback surveys conducted, Empower’s customer satisfaction was high.

The market share of the Power operations grew in all countries. Empower succeeded in achieving an established position in the Swedish wind farm market. The company won large power transmission network construction projects in Latvia, Estonia and Finland.

In the Connectivity business area, Empower is the largest service provider in Finland in its industry. The position was

of the Enerim platform proceeded as expected and made several new modules available to our customers. Empower’s market share continued to grow strongly with the acquisition of numerous new customers in customer information system deliveries to energy companies. The demand for Energy Intelligence services increased significantly during the financial period and customer loyalty remained extremely high.

Empower’s Swedish subsidiaries Empower AB and Empower Industri AB underwent corporate restructuring early in the year and ended up in a situation in which negative equity made it impossible for the companies to continue their business operations. Consequently, it was decided for the subsidiaries to file for bankruptcy on 28 April 2017. Empower’s Swedish subsidiaries Empower AB and Empower Industri AB underwent corporate restructuring early in the year and ended up in a situation in which negative equity made it impossible for the companies to continue their business operations. Consequently, it was decided for the subsidiaries to file for bankruptcy on 28 April 2017. Empower’s Finnish subsidiaries Empower PN Oy, Empower TN Oy and Empower IM Oy established branch offices in Sweden to support the project sales and deliveries of the Swedish subsidiaries during the corporate restructuring proceedings and to secure Empower’s market share in Sweden in selected profitable project deliveries, in the wind power and information management sectors, for instance.

The Group’s key figures

EUR MILLION 2017 2016 Turnover 245,3 243,1

EBITDA 16,4 17,3

Continuing operations, profit for the period 0,5 5,2

Discontinued operations, profit for the period 3,1 -32,5

Profit for the period 3,6 -27,3

further strengthened as Empower won significant new customer agreements. The fully digitalised delivery process solidified quality leadership, which could also be seen as improved profitability.

In the Smart Industry business area, the work for developing the digital platform yielded good results. For instance, Empower introduced the safety enhancing EmSafe product at the Mobile World Congress in Barcelona. The year was strong in other respects, too. Regional services managed to grow their business, thanks to improved demand. The solid expertise in nuclear power plant projects, maintenance and services boosted the growth.

Our Energy Intelligence business area strengthened its position as the market leader in Finland. The development


Estimate of future development and business outlookAt the end of 2017, the Group’s order book was at a record-breaking level. The outlook concerning profitability is promising in all business operations. Turnover is expected to increase significantly, thanks to the good order book. Significant growth is expected, specifically in the Power and Connectivity business areas. As a result of measures to improve efficiency, profitability is expected to increase. No significant changes are expected in market prices or production costs.

Estimate of risksThe Group’s financial performance is influenced by the sector risks of the largest customer segments. Should these risks materialise, they may reduce demand for the services of Empower Group’s companies.

The Empower Group’s companies have some large solvent customers, and their purchasing behaviour may have a significant impact on the result of the sectors of the business operations in question.

The price risk of material and equipment purchases is minimised through agreements. Salary, service and material purchase costs can be transferred to sales prices, partially or with a delay.

The Group companies have insurance policies for liability for damage or loss to material or property.

Risks associated with the sufficiency of the Group’s financing are discussed below under “Going concern”.

Going concernThe company’s mezzanine financiers Armada funds, Elo and Fennia converted a total of EUR 29 million of their receivables into the company’s equity as Class B shares. This share capital increase was subscribed for in December 2017 and registered in April 2018. Along with the conversion,

the Empower Group’s equity turned EUR 2.3 million positive, which has a favourable impact on the company’s business operations and financing position.

A financial agreement was also concluded in April by which the previous loan period received by the company from the financing companies was extended until the end of July 2019. The agreement also includes the option to enable a conditional additional liquidity resource of EUR 10 million, if required. These make it possible to develop the company’s operations in the long term. The new agreement includes regular covenant terms, regarding, for instance, the Group’s future profit and cash flow development. The covenant terms are based on the current outlook on business development with sufficient contingency.

The company is not aware of any threatening legal action or ending customer agreement which could materially reduce EBITDA or cash flow and cause a breach of a financing agreement.

After the financial period, the positive and stable profitability development and cash flow of the Group’s continuing operations have continued as planned. The Group’s liquidity outlook has also improved from the preceding year when discontinued operations burdened the Group’s liquidity heavily. The Group’s liquidity is expected to develop positively and in accordance with the normal seasonal


Personnel

2017 2016 Personnel average

Continued operations 1 661 1 674

Discontinued operations 22 202

Salaries and wages 73 475 88 136

After the financial period, Empower acquired real-time measuring technology solutions developed by TreLab. With the acquisition, Empower significantly strengthened its digital solutions for industry and created new services utilising the IoT technology.

Research and developmentThe Empower Group’s companies carried out platform-related R&D projects in the development of information systems related to energy measurements and invoicing as well as in the work planning and control systems related to the installation and maintenance of telecom and power networks. The company also invested heavily in industrial digital solutions that are based on positioning and analytics.

During the financial period 2017, the R&D costs of the Group’s companies stood at EUR -7.9 million (EUR -5.7 million), comprising 3.22 per cent (2.3 per cent) of their turnover.

InvestmentsDuring the financial period, the information system, maintenance and annual investments of the Empower Group’s companies totalled EUR 7.5 million (EUR 11.2 million).


variation. The company keeps its financiers regularly up to date by means of reports and negotiations and, according to the company’s understanding, the financiers are well aware of the status and outlook of the company’s business operations. The financiers have had a consistent stand on the company’s covenant breaches, and they also have aimed to ensure that the company’s profitable, continuing business can be smoothly carried on.

The company’s sharesThe parent company has a total of 1,000,000 A shares. The A shares include a right to vote.

The conversion of mezzanine loans into equity was implemented by creating a new series of preferred B shares. There are 600,000 new shares, and these B shares do not include a right to vote. The B shares have a dividend option.

Legal disputesIn 2013, the Finnish Competition and Consumer Authority conducted an investigation in the Group’s subsidiary Empower IN Oy and the Group’s then parent company TPI Holding Oy to find out whether Empower IN Oy (formerly Empower Oy) had participated in actions in breach of competition law in Finland in the business of constructing and designing of high voltage transmission lines during the previous decade. The investigation was initiated by Empower IN Oy as it had been made aware of such claims. The companies belonging to the Empower Group, including Empower Oyj, are therefore released from paying any fines.


With its (non-final) decision of 30 March 2016, the Market Court rejected the Finnish Competition and Consumer Authority’s claim for a fine as statute-barred. The authority has appealed to the Supreme Administrative Court. Should the Supreme Administrative Court conclude in a final decision that Empower IN Oy (formerly Empower Oy) is guilty of having acted in breach of competition law, this may lead to claims for damages. Based on the information available at this stage, the company’s Board of Directors does not consider it necessary to make a related provision in the annual accounts.

The company’s managementMembers of Empower Oyj’s Board of Directors during the financial period were: Ordinary members: Bo Elisson (Chair) Johan BjurströmRainer Häggblom Matti ManninenKristofer Runnquist President and CEO:Eero Auranne (1 Jan.–26 Dec. 2017)Jari Onniselkä (27 Dec. 2017–)

Auditors:Ernst & Young Oy, authorised public accountants, with Erkka Talvinko acting as the principal auditor.

Proposals of the Board of Directors to the Annual General MeetingThe Board of Directors proposes to the Annual General Meeting that the company’s loss for the period, EUR 7,871,312.44, be transferred to retained earnings on the balance sheet and that no dividend be distributed.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1000 EUR Note 1.1.2017-31.12.2017 1.1.2016-31.12.2016Continued business

REVENUE 5A 245 322 243 104Change in inventories of finished goods and work in progress 575 456Work performed for own purposes and capitalised 4 425 5 843Other operating income 5B 1 055 1 952Material and services 5C -116 524 -109 626Employee benefits expense 5E -87 556 -89 461Depreciation and amortisation 5D -5 975 -3 840Impairment 5D -24 -144Other operating expenses 5B -30 937 -34 985Loss on disposal of discontinued operations and revaluation to fair value 0 0OPERATING PROFIT 10 361 13 297Financing income 5F 13 20Financing expenses 5F -9 444 -8 349PROFIT/LOSS BEFORE TAX 930 4 968Tax on income from operations -425 246Profit/loss from continuing operations 504 5 214

Discontinued businessProfit/loss from discontinued operations 4A 3 108 -32 521

PROFIT/LOSS FOR THE PERIOD 3 613 -27 307

Other comprehensive income:

Items that will not be reclassified to profit or lossRemeasurement of defined benefit plan 227 -254Items that will not be reclassified to profit or loss 227 -254

Items that may be reclassified subsequently to profit or lossExchange differences on translating foreign operations 865 -185Items that may be reclassified subsequently to profit or loss 865 -185

TOTAL COMPREHENSIVE INCOME 4 704 -27 745

Profit attributable to:Owners of the parent company 3 451 -27 281Non-controlling interests 162 -26

Total comprehensive income attributable to:Owners of the parent company 4 542 -27 719Non-controlling interests 162 -26

Empower Oyj2727327-9

Consolidated Statement of Comprehensive Income


CONSOLIDATED STATEMENT OF FINANCIAL POSITIONEmpower Oyj2727327-9

Consolidated Statement of Financial Position 1000 EUR Note 31.12.2017 31.12.2016

ASSETSNON-CURRENT ASSETS

Intangible assets 6B 48 014 46 495Goodwill 6B 78 263 78 263Tangible assets 6A 6 776 7 228Other non-current financial assets 1 -4Non-current trade and other receivables 6C 2 876 3 535Deferred tax asset 6J 1 166 1 459NON-CURRENT ASSETS 137 096 136 976

CURRENT ASSETSInventories 6D 5 592 7 806Trade receivables and other receivables 6E 22 157 24 630Tax Receivable, income tax 6J 10 10Other current financial assets 6C 0 1Cash and cash equivalents 6F 1 763 3 220CURRENT ASSETS 29 522 35 666

ASSETS 166 617 172 642

EQUITY AND LIABILITIESOwners of the parent company

Share capital 80 80Rights issue 29 012 0Unrestricted equity reserve 62 450 62 450Translation differences -79 -596Accumulated earnings -89 682 -93 105Owners of the parent company 1 781 -31 170

Non-controlling interests 543 618EQUITY 2 323 -30 552

NON-CURRENT LIABILITIESDeferred tax liability 6J 5 784 6 082Non-current liabilities, interest-bearing 6C 68 723 90 657Non-current interest-free liabilities 6C 2 090 3 798Non-current provisions 6H 5 222 6 479Liabilities from defined benefit plan 6H 570 779NON-CURRENT LIABILITIES 82 389 107 794

CURRENT LIABILITIESCurrent interest-bearing liabilities 6C 8 847 10 840Trade Payables and Other Liabilities 6I 72 958 84 477Tax liability, income tax 6J 100 83CURRENT LIABILITIES 81 905 95 400

Liabilities 164 294 203 195

EQUITY AND LIABILITIES 166 617 172 642


CONSOLIDATED STATEMENT OF CHANGES IN EQUITYEmpower Oyj2727327-9Consolidated Statement of Changes in Equity

€000 Share capitalUnrestricted

equity reserveTranslation differences

Retained earnings Total

Non-controlling interests Total equity

EQUITY 1.1.2016 80 62 450 368 -65 462 -2 564 739 -1 825Restatement & new standards -896 -896 1 -896

Adjusted equity 80 62 450 368 -66 358 -3 460 741 -2 719Comprehensive income

Profit/loss for the period -27 281 -27 281 -26 -27 307Other comprehensive income:

Remeasurement of defined benefit plan 0 -254 -254 0 -254Translation differences 0 0 -964 780 -185 0 -185

0 0 -964 -26 755 -27 719 -26 -27 745Transactions with owners

Osingonjako 0 0 0 -195 -195Other changes 0 0 0 9 9 2 11

Total transactions with owners 0 0 0 9 9 -193 -184Changes in ownership interests in subsidiaries

Changes with change in control 0 0 0 0 97 97TOTAL EQUITY 31.12.2016 80 62 450 -596 -93 104 -31 170 618 -30 552

€000 Note Share capitalUnrestricted

equity reserveTranslation differences

Retained earnings Total

Non-controlling interests Total equity

EQUITY 1.1.2017 80 62 450 -596 -93 104 -31 170 618 -30 552Restatement & new standards 0 -61 -61

Adjusted equity 80 62 450 -596 -93 104 -31 170 557 -30 613Comprehensive income

Profit/loss for the period 3 451 3 451 162 3 613Other comprehensive income:

Remeasurement of defined benefit plan 0 227 227 0 227Translation differences 0 0 517 348 865 0 865

0 0 517 4 025 4 542 162 4 704Transactions with owners

Dividend distribution 0 0 0 0 0 -176 -176Rights issue 29 012 0 0 0 29 012 0 29 012Other changes 0 0 0 0 0

Total transactions with owners 29 012 0 0 0 29 012 -176 28 836Changes in ownership interests in subsidiaries

Changes with change in control 0 0 -604 -604 0 -604TOTAL EQUITY 31.12.2017 29 092 62 450 -79 -89 683 1 780 543 2 323

2323

0

Attributable to owners of the Company

TOTAL COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME

Attributable to owners of the Company


CONSOLIDATED STATEMENT OF CASH FLOWS KEY RATIOS

06/06/201814.51 1/1

01.01.2017-31.12.2017 01.01.2016-31.12.2016

TEXT2000P Cash flows from operating activities

994989P PROFIT/LOSS FOR THE PERIOD 3 612 570,94 -27 306 734,59

SUM5000P Depreciation, amortisation & impairment 6 085 685,06 10 048 780,72SUM5005P Gains and losses of disposals of fixed assets and other non-current assets -271 277,53 -485 579,41SUM5015P Unrealised foreign exchange gains and losses -16 637,56 10 224,61SUM5025P Financial income and expenses 17 110 278,31 8 976 361,93992999P Tax on income from operations -160 815,76 -391 339,02IFRS5040P Other adjustments, discontinued Swedish entities -15 768 139,10 934 156,11

TEXT2020P Working capital changesSUM5100P Increase / decrease in inventories 3 176 846,14 -135 590,89SUM5110P Increase /decrease in trade and other receivables -3 810 246,78 6 297 481,42SUM5115P Increase / decrease in trade payables 5 791 262,51 6 437 626,11SUM5117P Change in provisions -1 360 168,70 1 125 428,33

SUM1040P Interest paid -7 489 364,69 -3 746 564,76SUM1050P Dividends received 118,56 0,00SUM1060P Interest received 16 095,42 7 854,88SUM1070P Other financing items -1 228 757,47 -1 692 278,68SUM1090P Income taxes paid -150 501,00 -58 926,28SUM1088P Loans granted -130 000,00 -500 000,00SUM1089P Proceeds from repayments of loans 40 000,00 0,00SUMCF010P Net cash from operating activities 5 446 948,32 -2 481 842,01

TEXT2040P Cash flows from investing activitiesSUM2000P Purchase of tangible and intagible assets -6 988 812,17 -10 268 865,05SUM2010P Proceeds from sale of tangible and intangible assets 686 049,74 759 417,97SUM2020P Acquisition of subsidiaries, net of cash acquired 0,00 7 947,24SUM2030P Disposal of subsidiaries 6 591,36 2,00SUM2070P Proceeds from sale of investments -5 207,09SUM2090P Proceeds from repayments of loans 0,00 1 300,00SUMCF020P Net cash used in investing activities -6 301 378,16 -9 500 218,19

TEXT2050P Cash flows from financing activitiesSUM3040P Proceeds from current borrowings 0,00 7 012 366,40SUM3050P Repayment of current borrowings -2 490 789,86 -2 529 487,60SUM3060P Addition / deduction of current borrowings -26 053,91 0,00SUM3070P Proceeds from non-current borrowings 2 872 285,72 2 204 789,01SUM3090P Payment of finance lease liabilities -222 927,36 0,00SUM3100P Dividends paid -176 184,32 -134 584,96SUMCF030P Net cash used in financing activities -43 669,73 6 553 082,84

SUMCF040P Net change in cash and cash equivalents -898 099,57 -5 428 977,36

TEXT2090P Cash and cash equivalents, opening amount 3 220 658,01 8 840 555,23TEXT2060P Net increase/decrease in cash and cash equivalents -898 100,29 -5 428 977,36TEXT2080P Effects of exchange rate fluctuations on cash held -17 177,78 -57 147,91

Cash and cash equivalents, sold subsidiary -541 957,72 -133 771,95

Cash and cash equivalents 1 763 422,42 3 220 658,01

KEY RATIOS 2017 2016IFRS IFRS

Profit and loss statement 1.1-31.12. €000 €000Net result 245 322 243 104EBITDA 16 360 17 282EBITDA, % 6,7 % 7,1 %Operating profit 10 361 13 297Operating profit, % 4,2 % 5,5 %Net result before taxes 930 4 968% of net result 0,4 % 2,0 %Profit/loss for the period 3 613 -27 307% of profit/loss for the period 1,5 % Neg.

Balance sheetEquity and liabilities 166 617 172 642Net debt with interest -75 806 -98 277

Key figures and other informationNumber of personnel, average

Continued business 1 661 1 674Discontinued business 22 202

Definitions and key ratios

EBIDTA= Operating profit + depreciation and amortization

Net Dept= Interest-bearing debt - cash and cash equivalents

Number of Personnel, average = Average of the number of personnel at the end of each reporting period

01.01.2017-31.12.2017 01.01.2016-31.12.2016 2017 2016


INDEX TO NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Report by the Board of Directors 2017Consolidated statement of comprehensive incomeConsolidated statement of balance sheetConsolidated statement of cash flowsConsolidated statement of changes in equityKey ratiosSECTION 1: CORPORATE INFORMATION1A. Corporate informationSection 2: Basis of preparation and other significant accounting policies2A. Basis of preparation2B. Standards issued but not yet effective2C. Basis of consolidation and financial information on material partly-owned subsidiariesSection 3: Financial instruments risk management objectives and policies3A.1. Market risk3A.2. Interest rate risk3A.3. Foreign currency risk3A.4. Liquidity risk3A.5. Capital managementSection 4: Significant transactions and events during and after the end of reporting period4A. Discontinued operations4B. Goodwill and intangible assets with indefinite lives4C. Related party disclosures4D. Events after the reporting periodSection 5: Detailed information on statement of profit or loss and OCI items5A. Revenues5B. Other operating income and expenses5C. Materials and services5D. Depreciation, amortisation and impairment5E. Employee benefits expense5F. Finance income and expenses5G. Research and development costsSection 6: Detailed information on statement of financial position items6A. Tangible assets6B. Intangible assets6C. Financial assets and financial liabilities6D. Inventories6E. Trade and other receivables6F. Cash and short-term deposits6G. Provisions6H. Pensions and other post-employment benefit plans6K. Government grants6J. Income taxSection 7: Commitments and contingencies7A. Leases7B. Guarantees7C. Other contingent liabilities

NOTE 1:1A Corporate Information Empower Plc (the Company) through its subsidiaries (together the Group) conducts service business in power networks, telecom networks, information management and industrial sectors in Finland and in the Baltic countries, and to smaller extent in Sweden, Norway and Denmark. The Group’s parent company Empower Plc business consists of administrative and financial services to the group. Information on the group companies is provided in Principles of consolidation. Information on other related party relationships of the Group is provided in Note 4C.

The parent company of the Group, Empower Plc, is a limited liability company established under the law of Finland. The company is domiciled in Helsinki, Finland and its registered address is Valimotie 9-11, 00380 Helsinki.

The financial statements of Empower Plc Group for the financial year ending 31.12.2017 were approved for publication by its Board of Directors at its meeting on 22.5.2018. According to the Finnish Limited Liability Companies Act, shareholders have an opportunity to adopt or reject financial statements at an annual general meeting held after the publication of the financial statements. Copies of the consolidated financial statements are available from the headquarters of the company at Valimotie 9-11, 00380 Helsinki.

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES:2A Basis of preparation The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the applicable IAS and IFRS standards and SIC and IFRIC interpretations that were valid on 31.12.2017.

The International Financial Reporting Standards and interpretations that have been accepted or adopted by the EU under the procedure provided in Regulation (EC) No 1606/2002 and are in accordance with the regulations of the

Finnish Accounting Act and Limited Liability Companies Act that complement the IFRS requirements.The consolidated financial statements are presented in thousands of euros (EUR 1 000), unless otherwise stated, and individual figures and sums of individual figures are rounded. Consequently there can be rounding differences. Financial statements information is based on historical cost basis, with the exception of derivative contracts, which are measured at fair value. The financial statements are presented by type of expense income statement and balance sheet format. In addition, the Group presents an additional statement of financial position at the beginning of the preceding period when there is a retrospective application of an accounting policy, a retrospective restatement, or a reclassification of items in financial statements.

Principles of consolidationThe consolidated financial statements include the parent company Empower Oyj and all companies in which, at the end of the financial year, Empower Oyj exercises control, i.e. subsidiary companies. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:• Power over the investee (i.e., existing rights that give it

the current ability to direct the relevant activities of the investee)

• Exposure, or rights, to variable returns from its involvement with the investee

• The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:• The contractual arrangement(s) with the other vote

holders of the investee


• Rights arising from other contractual arrangements• The Group’s voting rights and potential voting rights

Subsidiaries are consolidated from the date on which control is transferred to the Group and disposed subsidiaries are consolidated up to their date of disposal. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses, if any. Investments in associated companies are initially recognized at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated companies represents the excess of the cost of acquisition of the associate over the Group’s share of the fair value of the identifiable net assets of the associate and is included in the carrying amount of the investments.

In applying the equity method of accounting, the Group’s share of its associated companies’ post-acquisition profits or losses are recognized in profit or loss and its share of

post-acquisition other comprehensive income is recognized in other comprehensive income. These post-acquisition movements and distributions received from the associated companies are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current receivables, the Group does not recognize further losses, unless it has obligations or has made payments on behalf of the associated company.

Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.

If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognized in profit or loss. Any investment retained is recognized at fair value. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.Inter-company transactions, receivables and liabilities are eliminated in full on consolidation. Non-controlling interest is presented separately from the net profit and disclosed as a separate item in the equity.

Summary of other significant accounting policiesCURRENT VERSUS NON-CURRENT CLASSIFICATIONThe Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:• Expected to be realised or intended to be sold or

consumed in the normal operating cycle• Held primarily for the purpose of trading• Expected to be realised within twelve months after the

reporting periodOr• Cash or cash equivalent unless restricted from being

exchanged or used to settle a liability for at least twelve months after the reporting period

• All other assets are classified as non-current.

A liability is current when:• It is expected to be settled in the normal operating cycle• It is held primarily for the purpose of trading• It is due to be settled within twelve months after the reporting periodOr• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

FOREIGN CURRENCY TRANSLATIONFunctional and presentation currencyItems included in the financial statements of each of the Group companies are measured using the currency of the primary economic environment in which the company

operates (the functional currency). The consolidated financial statements are presented in Euros, which is the functional and presentation currency of the parent company and the presentation currency of the Group.

Foreign currency transactionsTransactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.At the end of each reporting period foreign currency monetary items are translated using the closing rate. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction and non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognized in profit or loss in the period in which they arise. Exchange rate gains and losses on business operations are recognized in respective items in income statement.

Foreign subsidiariesIncome statement and cash flow statements of foreign subsidiaries are translated into Euros at the average exchange rates for each month and the balance sheets are translated using the exchange rates prevailing at the balance sheet date. Exchange differences arising from the translation are recognized in other comprehensive income. When a subsidiary is partially disposed or sold, exchange differences


that were recorded in equity are recognized in the income statement as part of the gain or loss on the sale.

REVENUE RECOGNITIONGroup recognizes revenue according to IFRS 15 starting from the annual reporting period beginning on 1 January 2016.

Group recognizes revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when (or as) the customer obtains control of that asset. For each performance obligation identified, Group determines at contract inception whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time. If Group does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time

Performance obligations satisfied over timeGroup transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over time, if one of the following criteria is met: (a) the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs;(b) Group’s performance creates or enhances an asset (for example, work in progress) that the customer controls as the asset is created or enhanced; or(c) Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

For each performance obligation satisfied over time, Group shall recognize revenue over time by measuring the progress towards complete satisfaction of that performance obligation. The objective when measuring progress is to depict Group’s performance in transferring control of goods or services promised to a customer.

Group determines progress as share of the costs incurred against the total estimated costs of the project. Cost estimates require estimate of the final outcome of the project and the actual future outcome may deviate from the estimate.If the outcome of a project cannot be estimated reliably, revenue is recognized only to the extent of contract costs incurred that are likely to recoverable and project costs are recognized as an expense in which they are incurred. An expected loss on the project is recognizes as an expense immediately.

Performance obligations satisfied at a point in timeIf a performance obligation is not satisfied over time, Group satisfies the performance obligation at a point in time. To determine the point in time at which a customer obtains control of a promised asset and the Group satisfies a performance obligation, Group shall consider the requirements for control. In addition, Group considers indicators of the transfer of control, which include, but are not limited to, the following: (a) Group has a present right to payment for the asset.(b) The customer has legal title to the asset.(c) Group has transferred physical possession of the asset.(d) The customer has the significant risks and rewards of ownership of the asset.(e) The customer has accepted the asset.

Main revenue streams and revenue recognition:

o Long-term maintenance service: In the long-term maintenance service contract Group provides maintenance services to the customer at the customer’s plant. • The overtime recognition criteria (a) was met as the

customer simultaneously receives and consumes the benefits while Empower provides the services to the customer.

o Frame contracts with individual purchase orders: The services Group provides under the frame agreements are services in which Group creates or enhances an asset that the customer controls as Group provides the services. • These assets include assets such as customer’s

telecommunications networks and power networks. Group provides services both in renewal and maintenance of the networks. The overtime recognition criteria (b) is met.

o Turnkey projects: In turnkey projects Group’s promise to the customer is to provide an operating asset that is customised to that specific customer. Group’s performance does not create an asset that has alternative use to Group. The industry specific terms and conditions (YSE) ensure that Group has the right to payment for performance completed to date. The overtime recognition criteria (c) is met.

DISCONTINUED OPERATIONSThe Group classifies non-current assets and disposal groups as held for distribution to equity holders of the parent if their carrying amounts will be recovered principally through

a distribution rather than through continuing use. Such non-current assets and disposal groups classified as held for distribution are measured at the lower of their carrying amount and fair value less costs to distribute. Costs to distribute are the incremental costs directly attributable to the distribution, excluding finance costs and income tax expense.

The criteria for held for distribution classification is regarded as met only when the distribution is highly probable and the asset or disposal group is available for immediate distribution in its present condition. Actions required to complete the distribution should indicate that it is unlikely that significant changes to the distribution will be made or that the decision to distribute will be withdrawn. Management must be committed to the distribution expected within one year from the date of the classification.

Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for distribution.

A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and: • Represents a separate major line of business or

geographical area of operations • Is part of a single co-ordinated plan to dispose of a

separate major line of business or geographical area of operations

Or • -Is a subsidiary acquired exclusively with a view to

resale.

Discontinued operations are excluded from the results of


continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit or loss. All other notes to the financial statements include amounts for continuing operations, unless otherwise mentioned. Additional disclosures are provided in Note 4A.

GOODWILL AND OTHER INTANGIBLE ASSETS

Business combinationsBusiness combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9, is measured at fair value with the changes in fair value recognized in the statement of profit or loss.

GoodwillGoodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Other intangible assetsIntangible assets are capitalized if they are controlled by the Group as a result of past events and from which future economic benefits are expected to flow to the Group.

Intangible assets are measured initially at cost. After initial recognition, an intangible asset shall be carried at its cost less any accumulated amortization and any accumulated impairment losses. The depreciable amount of an intangible asset with a finite useful life shall be allocated on a systematic basis over its useful life. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets.

Group has assessed the following useful lives for each intangible asset line item:o Intangible assets 5 – 10 yearso Development expenditure 3 – 5 yearso Other long-term expenditure 5 – 10 yearso Customer relations 5 - 20 years

The Group expenses expenditures on research when they incur. An intangible asset arising from development (or from

the development phase of an internal project) is recognized if, and only if, Group can demonstrate all of the following: o the technical feasibility of completing the intangible asset so that it will be available for use or saleo its intention to complete the intangible asset and use or sell it; its ability to use or sell the intangible asset; o how the intangible asset will generate probable future economic benefits; among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset; o the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; o its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected future benefit. Amortization is recorded in cost of sales. During the period of development, the asset is tested for impairment annually.

IMPAIRMENTSAssets that have an indefinite useful life, for example goodwill, are not subject to amortization but are tested annually for impairment. In addition, other assets are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.


For the purposes of assessing impairment, assets are grouped at lowest levels for which there are separately identifiable cash flows and which are independent.

IAS 36 defines recoverable amount as the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use. Value-in-use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.

An asset is impaired when its carrying amount exceeds its recoverable amount. Impairment loss is recognized in the income statement. The Group assesses at the end of each reporting period whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such indication exists, the Group estimates the recoverable amount of that asset. An impairment loss recognized for goodwill are not reversed in a subsequent periods.

Intangible asset with an indefinite useful life to be tested for impairment annually by comparing its carrying amount with its recoverable amount, irrespective of whether there is any indication that it may be impaired. In addition to goodwill and brand, the Group does not have any assets that have an indefinite useful life.

PROPERTY, PLANT AND EQUIPMENTNon-current assets are recognized in the balance sheet at original purchase cost less depreciation according to plan and accumulated impairment losses, if any. Costs capitalized as part of acquisition cost comprises of the variable costs attributable to the purchase. Depreciations according to

plan are calculated using the straight-line method based on the estimated useful lives. An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognized.

The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ from previous estimates, the change shall be accounted for as a change in an accounting estimate in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

Estimated useful lives of assets for all group companies are the following:o Machinery and equipment 3 – 15 yearso Buildings and structures 10 – 30 yearso Other tangible assets 3 – 5 years

GOVERNMENT GRANTSEmpower Group recognizes government grants when there is reasonable assurance that the grants will be received (that is, e.g. when the approval has been received), and that the entity will comply with the conditions attaching to the grants. Government grants are recognized in profit or loss on a systematic basis over the periods in which Empower Group recognizes as expenses the related costs for which the grants are intended to compensate. Grants related to income or expenses are presented as part of profit or loss as ‘Other income’ separately of other items.

LEASES – THE GROUP ACTING AS LESSEEThe determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset (or assets) and the arrangement conveys a right to use the asset (or assets), even if that asset is (or those assets are) not explicitly specified in an arrangement.A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases are recognized as assets and liabilities in their statements of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate to be used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease, if this is practicable to determine; if not, the lessee’s incremental borrowing rate shall be used.

Assets acquired under finance leases are depreciated over the shorter of asset’s useful life and the lease period.The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. An operating lease is a lease other than a finance lease. Operating lease payments are recognized as an operating expense in the statement of profit or loss on a straight-line basis over the lease term.

Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Initial recognitionThe Group initially recognizes trade receivables, trade payables, deposits, loans and borrowings on the date on which they are originated. All other financial instruments are recognized on the trade date, which is the date on which the Group becomes a party to the contractual provisions of the instrument.

On initial recognition, a financial asset or a liability, except for trade receivables, is measured at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Trade receivables that do not have a significant financing component are measured at their transaction price.

Financial assetsThe Group classifies a financial asset at initial recognition as a financial asset measured at amortized cost, a financial asset measured at fair value through other comprehensive income or a financial asset measured at fair value through profit or loss.

A financial asset is measured at amortized cost when both of the following conditions are met:• the asset is held within a business model whose

objective is to hold financial assets to collect contractual cash flows and


• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset is measured at fair value through other comprehensive income when both of the following conditions are met:• the asset is held within a business model whose

objective is achieved by both collecting contractual cash flows and selling financial assets and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset is measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income. On initial recognition of an equity instrument that is not held for trading, the Group may irrevocably elect to present subsequent changes in fair value in other comprehensive income. This election is made on an investment-by-investment basis.

The Group assesses the objective of a business model in which asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to the management. The information considered includes:• the stated policies and objectives for the portfolio and

the operation of those policies in practice. In particular, if the strategy focuses on earning contractual cash flows or realising cash flows through the sale of the assets

• how the performance of the portfolio is evaluated and

reported to the Group management and• the risks that affect the performance of the financial

assets held within the that business model and how those risks are managed.

In assessing whether the contractual cash flows are solely payments of principal and interest, theGroup considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

Based on analysis of the business model in which the financial assets are held and contractual cash flows of the instruments, financial assets held by the Group comprising of:• Receivables (arising from mortgages)• Trade receivables (arising from invoiced goods and

services)• Prepayments and accruals• Other financial assets• Cash and cash equivalents (comprising of balances with

banks) are classified as measured at amortised cost using effective interest rate (EIR).

Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of profit or loss.

Financial assets are not reclassified subsequent their initial recognition, except in situation where the business model for managing financial assets is changed.

Impairment of financial assetsThe Group recognizes loss allowances for expected credit losses (ECL) on the following financial instruments that are not measured at fair value through profit or loss:• Trade receivables• Cash and cash equivalents.

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following for which they are measured as 12-month ECL:• debt investments in securities that are determined to

have a low credit risk a the reporting date and• other financial instruments on which credit risk has not

increased significantly since their initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime ECL. Lifetime ECL is the portion of ECL that result from all possible default events over the expected life of a financial instrument.

For measurement of ECL for trade receivables the Group uses a provision matrix. The provision matrix is based on historical observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

Measurement of ECL for the receivables from financial institutions is based on a loss rate approach. The Group has determined that receivables from financial institutions have a low credit risk at the reporting date and therefore 12-month ECL is calculated. 12-month ECL are the portion of ECL that result from default events on a financial instrument that

are possible within the 12 months after the reporting date. Loss allowances for ECL are presented in the statement of financial position as a deduction from the gross carrying amount of the assets. In profit or loss, the amount of ECL (or reversal) is recognized as an impairment gain or loss.

Write-offTrade receivables and receivables from financial institutions are written off, either partially or full, when there is no realistic prospect of recovery. This is generally the case when the Group determines that the counterparty does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off can still be subject to enforcement activities to comply with the Group’s procedures for recovery of amounts due.

Financial liabilitiesThe Group’s financial liabilities include trade and other payables, loans and borrowings, other financial liabilities, advances received, accrued liabilities and deferred revenue that are classified as measured at amortized cost.

Amortized cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. Gains and losses are recognized in profit or loss as financial income or expense when the liabilities are derecognized as well as through the EIR amortization process.

Financial liabilities are not reclassified subsequent their initial recognition.


DerecognitionA financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:• The rights to receive cash flows from the asset have

expiredOr• The Group has transferred its rights to receive cash

flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

When the entity’s continuing involvement takes the form of guaranteeing the transferred asset, the extent of the entity’s continuing involvement is the lower of (i) the amount of the

asset and (ii) the maximum amount of the consideration received that the entity could be required to repay (‘the guarantee amount’).

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Group does not apply hedge accounting according to IFRS 9. Therefore the fair value of derivative instruments shall be recognized through profit and loss.

FAIR VALUE MEASUREMENTThe Group measures financial instruments such as derivatives, and non-financial at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated

using another valuation technique. The Group measures the fair value of an asset or a liability using the assumptions that market participants would use when pricing the asset or liability.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The Group has categorised the assets and liabilities into three levels of fair value hierarchy as follows:

o Level 1Input: Quoted prices (unadjusted) in active markets. Instruments: No assets or liabilities.

o Level 2Input: Observable inputs, other than quoted prices included within Level 1. Confirmation of the fair value is received annually from the bank.Instruments: Interest swap.

o Level 3Input: Unobservable inputsInstruments: No assets or liabilities.For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels

in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

PROVISIONS AND CONTINGENT LIABILITIESProvisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation. The amount of provision is recorded as the best estimate on costs to be incurred to fill the current obligation on reporting date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

A warranty provision is recognized when there is reasonable assurance that the project will lead to repairs agreed on the sale contract.

A provision for onerous contract is recognized when the costs requires to meet the obligations under the contract exceed the benefits to be received.

A legal provision is recognized when there is reasonable assurance that legal costs will incur relating to on-going litigations.

A provision related to personnel is recognized when there are still some costs to incur relating to restructurings already done.


A contingent liability is possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or a present obligation that arises from past events but is not recognised because: it is not probable that an outflow or resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. Information on contingent liabilities is disclosed in notes.

INVENTORIESEmpower Group measures its inventories at the lower of cost and net realisable value. These costs include labour and other costs of personnel directly engaged in providing the service, including supervisory personnel, and attributable overheads. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

PENSIONS AND OTHER POST-EMPLOYMENT BENEFITSThe Group operates a defined benefit pension plan in Mandatum Life and OP Life Insurance, which requires contributions to be made to a separately administered fund.

Remeasurements, comprising of actuarial gains and losses are recognised immediately in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

• The date of the plan amendment or curtailment, and• The date that the Group recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation under ‘cost of sales’, ‘administration expenses’ and ‘selling and distribution expenses’ in the consolidated statement of profit or loss (by function):• Service costs comprising current service costs, past-

service costs, gains and losses on curtailments and non-routine settlements

• Net interest expense or incomeGroup’s defined benefit obligations and the related service cost have been calculated using projected unit credit method. In defined benefit plans, the liability in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date minus the fair value of plan assets. The discount rate has been determined using iBoxx Corporate indices. The estimated duration of the benefit obligation has been taken into consideration. The market based inflation expectations have been determined using inflation-linked swaps.

TAXESThe Group’s income tax expense includes taxes of the group companies based on taxable income and the changes in the deferred taxes. Income tax is recognized in the income statement, except for the items recognized directly in other comprehensive income, when the tax effect is accordingly recognized in other comprehensive income. Income tax expense is based on the effective tax rate in each country. Tax adjustments from previous periods are included in tax expense.

Group recognises a deferred tax liability for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Group recognises a deferred tax asset for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Deferred income tax is determined using tax rates that have been enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or deferred income tax liability is settled.

Expenses and assets are recognised net of the amount of sales tax, except:• When the sales tax incurred on a purchase of assets or

services is not recoverable from the taxation authority, in which case, the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

• When receivables and payables are stated with the amount of sales tax included

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

TRADE RECEIVABLESTrade receivables are initially measured at fair value and subsequently at amortised cost less provision for impairment. Group has sold its trade receivables to financial institutions and according to IFRS 9 definitions the Group has transferred cash flows that have not expired; has transferred its rights to receive the cash flows and the risks and rewards have been transferred to the bank.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSThe preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In the process of applying the Group’s accounting policies, management has made various judgements. Those which management has assessed to have the most significant effect on the amounts recognised in the consolidated financial statements have been discussed in the individual notes of the related financial statement line items.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are also described in the individual notes of the related financial statement line items below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were


prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

2B Standards issued but not yet effective if not endorsed by EU yetAMENDMENTS TO IFRS 10 AND IAS 28: SALE OR CONTRIBUTION OF ASSETS BETWEEN AN INVESTOR AND ITS ASSOCIATE OR JOINT VENTUREThe amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an investor and its associate or joint venture, is recognised in full. Any gain or loss resulting from the sale or contribution of assets that do not constitute a business, however, is recognised only to the extent of unrelated investors’ interests in the associate or joint venture. The IASB has deferred the effective date of these amendments indefinitely, but an entity that early adopts the amendments must apply them prospectively. The Group will apply these amendments when they become effective.

IFRS 16 LEASESIFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation

and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model like the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees - leases of ’low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. In 2017, The Group plans to assess the potential effect of IFRS 16 on its consolidated financial statements. The standard has not yet been endorsed by EU.


2C. Basis of consolidation and financial information on material partly-owned subsidiaries

Proportion of equity interest held by non-controlling interests:

Name

Country of incorporation and operation 2017 2016

Empower Sia Latvia 51 % 51 %4Wind Oü Estonia 40 % 40 %Empower Fidelitas UAB Lithuania 25 % 25 %

2017 2016€ 000 € 000

Accumulated balances of material non-controlling interest:Empower Sia 4Wind Oü 0 486Empower Fidelitas UAB 89 132Profit allocated to material non-controlling interest:Empower Sia -2544Wind Oü 0 156Empower Fidelitas UAB 27 72

The summarised financial information of these subsidiaries is provided below.

Summarised statement of profit or loss for 2017: 4Wind OüEmpower Fidelitas

€ 000 € 000Revenue 2 393 2 777 Costs (1 931) (2 584) Amortisation&depreciation (58) (63) Finance costs (1) (1) Profit before tax 403 129Income tax (66) (20)Profit for the year from continuing operations 337 109Total comprehensive income 337 109Attributable to non-controlling interests 135 27

Summarised statement of profit or loss for 2016:

4Wind Oü Empower SIAEmpower Fidelitas

€ 000 € 000 € 000Revenue 2 663 7566 3 316 Cost of Sales (2 155) (8 713) (2 932) Amortisation&depreciation (34) (756) (62) Finance costs (1) (91) 2 Profit before tax 473 -1993 325Income tax (84) 39 -36Profit for the year from continuing operations 389 -1 954 289Total comprehensive income 389 -1 954 289Attributable to non-controlling interests 156 -254 72

Summarised statement of financial position as at 31 December 2017:

4Wind OüEmpower Fidelitas

€ 000 € 000Inventories and cash and bank balances (current) 1 219 762 Property, plant and equipment and other non-current assets (non-current) 136 84 Trade and other payables (current) (218) (477) Interest-bearing loans and borrowing and deferred tax liabilities (non-current) (5) (12) Total equity 1 133 357 Attributable to:Equity holders of parent 680 268 Non-controlling interest 453 89



€ 000 € 000 € 000Inventories and cash and bank balances (current) 1 258 1 745 1 030 Property, plant and equipment and other non-current assets (non-current) 140 2 554 106 Trade and other payables (current) (315) (2 577) (590) Interest-bearing loans and borrowing and deferred tax liabilities (non-current) (21) (2 760) (18) Total equity 1 062 (1 037) 529 Attributable to:Equity holders of parent 576 (902) 396 Non-controlling interest 486 (135) 132

Summarised cash flow information for year ended 31 December 2017:


€ 000 € 000Operating 499 354Investing (54) (142)Financing (279) (175)Net increase/(decrease) in cash and cash equivalents 166 36



€ 000 € 000 € 000Operating 527 -1337 115Investing -96 (148) 89Financing -431 945 (240)Net increase/(decrease) in cash and cash equivalents 0 (540) (36)

2D. Basis of consolidation and financial information on material partly-owned subsidiaries


Name



2017 2016€ 000 € 000























Name



2017 2016€ 000 € 000






















Name



2017 2016€ 000 € 000





















Summarised cash flow information for year ended 31 December 2017:Summarised statement of financial position as at 31 December 2017:


NOTE 3 – FINANCIAL INSTRUMENTS RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group is exposed to market risk and liquidity risk. Credit risk is concerned to be low in relation to the customer base and the sale of receivables.

The Group’s senior management oversees the management of these risks. The Group’s senior management makes sure that the Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. Financial risk management policies and procedures are reviewed regularly to reflect changes in market conditions and Group’s activities. The financial risk management is focused to minimize the negative effects of the financial risks on the Group’s income and cash flow. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

Group has identified following financials risks concerning its operations:• Market risk• Interest risk• Liquidity risk

3A.1 Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings,

deposits, AFS investments and derivative financial instruments. Main market risks of the Group is interest rate risk, other market risks referred above are immaterial to the Group.

3A.2 Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates. Group has no financial instruments under hedge accounting.

3A.3 Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense is denominated in a foreign currency) and the Group’s net investments in foreign subsidiaries.

Majority of Group’s business is in euros. The currency risk in Nordic Countries is limited as mainly same currency applies to revenues and purchases. As the foreign exchange exposure has been limited, no hedging has been required.Group’s translation risk emerges from translating foreign currency subsidiary’s profit and loss statement and balance sheet into the Group’s presentation currency upon Group consolidation. Part of Group’s net sales is generated by Swedish subsidiary, which operates in currency other than the Euro (SEK).

3A.4 Liquidity riskLiquidity risk is the risk that the Group will encounter financial difficulty in meeting its financial obligations. Liquidity risk management’s target is to ensure maintaining the sufficient liquidity reserve to meet its liabilities when they are due. Securing constant sufficient funding is centralised to the Group finance department. Adequate liquidity is maintained by efficient cash management through group level cash pools and related overdraft limits. Cash and cash equivalents consist of cash in hand and deposits.

The Group monitors closely the anticipated cash flows. The cash flow estimations are prepared on weekly level for the next 16 weeks. Main reservations are in the estimations are related to the cash flows from the project business.

Group’s Swedish subsidiaries Empower AB and Empower Industry AB have been placed to a bankruptcy on April 29th 2017. Empower Oyj, the Group’s parent company, has lodged parental company guarantees on behalf of the specific customer and supplier commitments of the Swedish subsidiaries, and these have been realized. According to the company’s view, a sufficient provision to cover the costs arising from the realization of these guarantees has been made in the 2017 financial statements. The cash effect of the realization of these guarantees has been taken into account in the Group’s financing plans and these have been discussed in detail with the Group’s financiers.


Päivitävielä osamaksuvelat

Year ended 31 December 2017Less than 1

year 1-3 years 3-5 years > 5 years Total€ 000 € 000 € 000 € 000 € 000

SeniorLoans 6 508 44 629 — — 51 137LoansfromCapitalinvestors — 3 750 — — 3 750Overdraft 18 916 — — — 18 916Hireandpurchacedebt 1 794 388 — — 2 182Otherpayables 55 340 55 340Tradepayables 17 618 95 — — 17 713

100 177 48 862 0 0 149 038

Year ended 31 December 2016Less than 1

year 1-3 years 3-5 years > 5 years Total€ 000 € 000 € 000 € 000 € 000

SeniorLoans 2540 49 119 — — 51 659LoansfromCapitalinvestors — 29 400 — — 29 400Overdraft — 16 043 — — 16 043Hireandpurchacedebt 731 2288 206 — 3 225Otherpayables 50 846 50 846Tradepayables 33 631 170 — — 33 801

87 748 97 020 206 0 184 974

3A.4 Liquidity risk The Group monitors its risk of a shortage of funds using a liquidity planning tool. The table below summarizes the maturity profile of the Group’s financial liabilities based on

contractual undiscounted payments:3A.5. Capital managementThe Group manages its capital structure and makes rectifications in accordance with changes in the financial situation and the requirements of the financing covenants. In order to maintain or rectify the capital structure the Group may make changes to the payment of dividends to the shareholders, return the capital to the shareholders or issue new shares. The Group monitors the capital situation by using the net debt/EBITDA ratio. The net debt monitored by the Group includes loans with interest minus cash funds and deposits, excluding terminated operations.

In order to reach this general goal the Group’s capital management aims to ensure, amongst other things, that the covenants linked to loans with interest are met. A breach of the financial covenants would give the bank the option to immediately accelerate the loans.

There were no changes to capital management goals, policies and processes during the years ending in 31 December 2017 and 2016.

The Group’s covenants were breached during the financial period. All breaches have been removed and because the Group’s development has been positive, there are no foreseeable

2017 2016€ 000 € 000

EBITDA 16 360 17 282

Interest-bearing loans and borrowings (Note 6D) 77 569 101 497 Less: cash and short-term deposits (Note 6G) (1 763) (3 220) Net debt 75 806 98 277

Net debt / EBITDA 4,6 5,7

Convertible preference shares (Note 6D)Equity (2 323) 30 552 Total capital 63 098 49 695 Capital and net debt 85 458 77 343 Net debt/EBITDA ratio 26 % 36 %

3A.5. Capital management

events or matters that would result in the Group’s funding being discontinued. The company’s mezzanine financiers Armada funds, Elo and Fennia converted a total of EUR 29 million of their receivables into the company’s equity as Class B shares. This share capital increase was subscribed for in December 2017 and registered in April 2018. Along with the conversion, the Empower Group’s equity turned EUR 2.3 million positive, which has a favourable impact on the company’s business operations and financing position. With an agreement concluded in April, the company’s earlier loan period granted by financing companies was extended until the end of July 2019, which makes it possible to develop the company’s operations over a longer term. The agreement includes regular covenant terms, which apply to, e.g. the Group’s future EBITDA and cash flow development. The covenant terms are based on the current business development trend taking into consideration the normal security margins.

After the financial period, the profitability and cash flow of the Group’s continuous operations remain positive, stable and in accordance with the plan. In addition, the Group’s liquidity and prospects have improved since the previous year when terminated operations weakened the Group’s liquidity. The Group’s liquidity is expected to develop positively during this financial period taking into account periodic variation.


SECTION 4: SIGNIFICANT TRANSACTIONS AND EVENTS DURING AND AFTER THE END OF REPORTING PERIODThis section provides additional information which will help users understand how changes in the Group structure has impacted the financial position and performance of the Group as a whole and the significant events that have occurred during the year impacting the financial position and performance of the Group.

4A. Discontinued operations 2017The Group classifies non-current assets and disposal groups as held for distribution to equity holders of the parent if their carrying amounts will be recovered principally through a distribution rather than through continuing use. Such non-current assets and disposal groups classified as held for distribution are measured at the lower of their carrying amount and fair value less costs to distribute. Costs to distribute are the incremental costs directly attributable to the distribution, excluding finance costs and income tax expense.

Following business operations are classified as discontinued business:a) Discontinued Swedish operationsEmpower Oyj group management has made the decision to discontinue Empower AB’s and Empower Industry AB’s operations. Discontinued operations include all business operations that have been performed under these companies ie. major lines of business: telecom operations and industry. In 27th of April both companies were set to bankruptcy. In 2017 few of the old projects started in Empower AB were transferred to Empower PN Filial and Empower IN Oy. This was due to parent company guarantees and to avoid the possible harm to current important customer relationships.

4B. Lopetetut toiminnot 2016

Konserni luokittelee pitkäaikaiset omaisuuserät ja luovutettavien erien ryhmät lopetetuiksi toiminnoiksi, jos niiden kirjanpitoarvo tulee kertymään pääasiallisesti omaisuuserän myynnistä sen sijaan, että se kertyisi omaisuuserän jatkuvasta käytöstä. Lopetettuihin toimintoihin kuuluvat varat ja velat arvostetaan kirjanpitoarvoon tai myynnistä aiheutuvilla menoilla vähennettyyn käypään arvoon sen mukaan , kumpi näistä on alempi. Myynnistä aiheutuviin menoihin luetaan suoraan myynnistä johtuvat kulut lukuunottamatta rahoituskuluja ja verokuluja.Seuraavat liiketoiminnat on luokiteltu lopetetuiksi toiminnoiksi:

Empower Oyj:n johto päätti joulukuussa 2016 myydä 38% omistuksestaan Empower SIA:ssa.Kauppa tehtiin joulukuussa 2016 ja konsernin tilinpäätöksessä 2016 Empower SIA on luokiteltu lopetetuksi toiminnoksi.

Empower Oyj:n johto sekä Power-liiketoiminnan johtaja ovat sitoutuneet myymään Projektit-liiketoiminnan.Myyntipäätös tehtiin marraskuussa 2016 ja mahdollisia ostajia on kontaktoitu. Projektit-liiketoiminta edustaa merkittävää liiketoiminta-aluetta. Projektit-liiketoiminta edustaa puolta Jakeluverkkojen liiketoiminnasta. Jakeluverkot on yksi Empowerin viidestä liiketointa-alueista. Projektit-liiketoiminta on n.10% koko Empower-konsernin liikevaihdosta ja sille on raportoitu oma kassavirta sekä tulos ja tase.Empower Oyj-konsernin johto on tehnyt päätöksen lopettaaEmpower AB:n ja Empower Industry Ab:n kaikki liiketoiminnot.Näiden yhtiöiden merkittävimpiä liiketoiminta-alueita ovat telesekä teollisuus.

Empower Oyj-konsernin johtoon arvioinut, ettäEmpower AB:n jaEmpower Industry AB:n kirjanpitoarvot kertyvät enemminyhtiöiden myynnistä kuin niiden jatkuvasta käytöstä eliliiketoiminnasta. Yhtiöt ovatheti myytävissä niidennykykunnossa.Johto on sitoutunut myyntiin ja yhtiöiden myyntiprosessi onaloitettu ja neuvotteluita käydään.

a) Discontinued Swedish operations

a.1) Empower Industry AB 2017 2016€ 000 € 000

Revenue 128 1 632 Expenses (142) (2 650) Operating income (13) (1 018) Finance costs (2) (10) Profit/(loss) for the year from discontinued operations (15) (1 028) Empower Industry AB was established in 2016.

The major classes of assets and liabilities of Empower Industry AB classified as held for distribution to equity holders of the parent as at 31 December are, as follows:

2017 2016€ 000 € 000

AssetsIntangible assets (Note 6C) 144 Property, plant and equipment (Note 6A) 119 Debtors 305 Cash and short-term deposits (Note 6G) 50

LiabilitiesCreditors (975) Interest-bearing liabilities (Note 6D) 975 Net assets directly associated with disposal group - 618

The net cash flows incurred by Empower Industry AB are, as follows:2017 2016

€ 000 € 000Operating (309) (162) Investing 259 203 FinancingNet cash (outflow)/inflow (51) 41

2017 2016€ 000 € 000

3 478 52 965 (6 694) (71 089) (3 216) (18 125)

(115) (557) 106

(3 331) (18 576)

2017 2016€ 000 € 000

a.2) Empower AB (Sweden)

RevenueExpensesOperating incomeFinance costsChange in deferred tax assetProfit/(loss) for the year from discontinued operations

The major classes of assets and liabilities of Empower AB classified as held for distribution to equity holders of the parent as at 31 December are, as follows:

AssetsIntangible assets (Note 6C) 98 Property, plant and equipment (Note 6A) 194 Debtors 4 996 Cash and short-term deposits (Note 6G) 695

LiabilitiesCreditors (18 241) Interest-bearing liabilities (Note 6D) (732) Net assets directly associated with disposal group - (12 990)

The net cash flows incurred by Empower AB are, as follows:2017 2016

€ 000 € 000Operating (1 574) (3 755) Investing 200 297 Financing 1 227 2 763 Net cash (outflow)/inflow (147) (695)

b) Empower SIA

2017 2016€ 000 € 000

Revenue 7 566 Expenses (9 469) Operating income - (1 902) Finance costs (91) Change in deferred tax asset 39 Profit/(loss) before tax from discontinued operations - (1 954) Profit/(loss) for the year from discontinued operations - (1 954)

Empower SIA:n lopetettuun toimintaan luokitellut varat ja velat 31.12.2016 ovat:

2017 2016€ 000 € 000

VaratAineettomat hyödykkeet (Liitetieto 6C)Aineelliset hyödykkeet (Liitetieto 6A)SaatavatKäteiset varat (Liitetieto 6F)

VelatVelatKorolliset velat (Liitetieto 6C)Lopetetun toiminnon nettovarat -

Empower SIA:n rahavirrat:2017 2016

€ 000 € 000Operatiivinen rahavirtaInvestointien rahavirtaRahoituksen rahavirtaNettokassavirta: - -

c) EPC-projects 2017 2016€ 000 € 000

Revenue 10 382 13 640 Expenses (9 486) (20 595) Operating income 895 (6 954) Profit/(loss) for the year from discontinued operations 895 (6 954)

The major classes of assets and liabilities of EPC-project classified as held for distribution to equity holders of the parent as at 31 December are, as follows:

2017 2016€ 000 € 000

AssetsDebtors 2 128 3 751

LiabilitiesCreditors (2 277) (8 467) Net assets directly associated with disposal group (149) (4 716)

a.3) PN Filial Sweden discontinued operations2017 2016

€ 000 € 000Revenue 6 155 Change in provisions (2 031)Expenses (7 141) Operating income (3 017) Profit/(loss) for the year from discontinued operations (3 017)

Projects transferred from Empower AB will contribute a loss and for this reason there has been made aprovision of 2 million euros in the financial statement.

The major classes of assets and liabilities of Empower PN Filial Sweden classified as held for distribution to equity holders of the parent as at 31 December are, as follows:

2017 2016€ 000 € 000

AssetsDebtors 2 848

LiabilitiesProvisions (2 031) Creditors (1 166) Net assets directly associated with disposal group (349)

a.4) Empower IN Oy Swedish discontinued projects2017 2016

€ 000 € 000Revenue 2 729 Change in provisions (858)Expenses (3 461) Operating income (1 590) Profit/(loss) for the year from discontinued operations (1 590)

The major classes of assets and liabilities of Empower IN discontinued projects classified as held for distribution to equity holders of the parent as at 31 December are, as follows:

2017 2016€ 000 € 000

AssetsDebtors -

LiabilitiesProvisions (858) Creditors (692) Net assets directly associated with disposal group (1 550)

Empower SIA was sold in 2016 and it became an associated company. That is why there are no assets or liabilities at the end 2016.











2017 2016€ 000 € 000





2017 2016€ 000 € 000

3 478 52 965 (6 694) (71 089) (3 216) (18 125)

(115) (557) 106

(3 331) (18 576)

2017 2016€ 000 € 000








b) Empower SIA

2017 2016€ 000 € 000



2017 2016€ 000 € 000





c) EPC-projects 2017 2016€ 000 € 000



2017 2016€ 000 € 000







2017 2016€ 000 € 000

AssetsDebtors 2 848





2017 2016€ 000 € 000

AssetsDebtors -












2017 2016€ 000 € 000





2017 2016€ 000 € 000

3 478 52 965 (6 694) (71 089) (3 216) (18 125)

(115) (557) 106

(3 331) (18 576)

2017 2016€ 000 € 000








b) Empower SIA

2017 2016€ 000 € 000



2017 2016€ 000 € 000





c) EPC-projects 2017 2016€ 000 € 000



2017 2016€ 000 € 000







2017 2016€ 000 € 000

AssetsDebtors 2 848





2017 2016€ 000 € 000

AssetsDebtors -




b) Empower SIAEmpower Oyj’s management made the decision to sell 38% of the ownership in Empower SIA in December 2016. The deal has been closed in December 2016 and Empower SIA’s operations are recorded as discontinued operations in Group’s financial statements.










2017 2016€ 000 € 000





2017 2016€ 000 € 000

3 478 52 965 (6 694) (71 089) (3 216) (18 125)

(115) (557) 106

(3 331) (18 576)

2017 2016€ 000 € 000








b) Empower SIA

2017 2016€ 000 € 000



2017 2016€ 000 € 000





c) EPC-projects 2017 2016€ 000 € 000



2017 2016€ 000 € 000







2017 2016€ 000 € 000

AssetsDebtors 2 848





2017 2016€ 000 € 000

AssetsDebtors -












2017 2016€ 000 € 000





2017 2016€ 000 € 000

3 478 52 965 (6 694) (71 089) (3 216) (18 125)

(115) (557) 106

(3 331) (18 576)

2017 2016€ 000 € 000








b) Empower SIA

2017 2016€ 000 € 000



2017 2016€ 000 € 000





c) EPC-projects 2017 2016€ 000 € 000



2017 2016€ 000 € 000







2017 2016€ 000 € 000

AssetsDebtors 2 848





2017 2016€ 000 € 000

AssetsDebtors -




c) EPC-projectsEmpower Oyj’s management and the President of Power business area are devoted in ending the business unit “Projects”.The decision to sell this unit has been made in November 2016 and after that few of the projects have been sold and the whole business line will end its operations during year 2018. The business line represents a separate major line of business. Projects constitutes half of Distribution Networks business line which is one of five business lines in Empower’s organisation. Projects unit represents about 10 % of Empower’s turnover and it creates separate cash flow and has its own P&L statement.

4B. Goodwill and intangible assets with indefinite livesThe Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Goodwill and brand with indefinete live are monitored on operating division level. The values are presented on table below.

As a result of the test made, the recoverable amount of the business exceeds the book value of business including goodwill and brand in each CGUs. No impairment was booked during 2017 (4,4 meuro in 2016).

Key assumptions used in value in use calculations and sensitivity to changes in assumptions The calculation of value in use most sensitive to the following assumptions:• EBITDA margins • Discount rates • Sales growth rates

EBITDA – margin - EBITDA margin is based on estimations of the market development, material costs, direct and indirect personnel costs and estimation of overhead development. EBITDA used has been prudent in each CGU. EBITDA in Connectivity business area has been evaluated lower to present run rate profitability level as in all other CGUs where the levels used in calculations are below last year level.

Discount rates - Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The used risk-free rate of returns are historical 10 year government bond rates derived from Bloomberg market database. The discount rate calculation is based on the specific circumstances of the Group and its operating segments and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity and debt is e.g. based on the comparable company market information, long term risk-free market interest rates and on specific risk premiums

2017 2016 2017 2016Connectivity 3182 3182 13472 13472Power 7163 7163 30328 30328SmartIndustry 3157 3157 13366 13366EnergyIntelligence 4488 4488 21097 21097Total 17990 17990 78263 78263

Brand Goodwill

divisionlevel. Thevaluesarepresentedontablebelow.










2017 2016€ 000 € 000





a.2) Empower AB (Sweden) 2017 2016€ 000 € 000

Revenue 3 478 52 965 Expenses (6 694) (71 089) Operating income (3 216) (18 125) Finance costs (115) (557) Change in deferred tax asset 106 Profit/(loss) for the year from discontinued operations (3 331) (18 576)


2017 2016€ 000 € 000





b) Empower SIA

2017 2016€ 000 € 000



2017 2016€ 000 € 000





c) EPC-projects 2017 2016€ 000 € 000

Revenue 10 382 13 640 Change in provisions 1 500 (1 500) Expenses (10 986) (19 095) Operating income 895 (6 954) Profit/(loss) for the year from discontinued operations 895 (6 954)


2017 2016€ 000 € 000


Liabilities

Provisions - (1 500)

Creditors (2 277) (6 967) Net assets directly associated with disposal group (149) (4 716)





2017 2016€ 000 € 000

AssetsDebtors 2 848





2017 2016€ 000 € 000

AssetsDebtors -




4C. Related party disclosures Note 4C provides information about the Group’s structure, including details of the subsidiaries and the holding company. The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year.

<<<<<<<4D. Lähipiiriliiketoimet

Group companies

Name Principal activitiesCountry of incorporation 2017 2016

Empower Oyj Group Services Finland 100 100Empower IN Oy Smart Industry Finland 100 100Empower PN Oy Power Finland 100 100Empower TN Oy Connectivity Finland 100 100Empower IM Oy Energy Intelligence Finland 100 100Invest Oy - Finland 100 100Empower AB Connectivity Sweden 100 100Empower Industry AB Smart Industry Sweden 100 100Empower SIA* Power Latvia 49 87Empower Fidelitas UAB Power Lithunia 75 75Empower AS Power Estonia 100 1004Wind öu Power Estonia 60 60Constellation** - Russia 0 100

* Empower SIA has been consolidated to Group accounts until 30.11.2016.** Constellation was closed down 31.12.2016

Entity with significant influence over the GroupTPI Holding Oy owns 100% of parent company Empower Oyj's shares.

Associated companiesEmpower SIA:sta became an associated company on 21.12.2016.Group's share of SIA's equity is 49%.

% equity interest

to each CGU. On equity risk premium we have applied market risk premium for mature markets based on professor Damodarans database. Market risk premium has been adjusted upwards with government specific risk premium. The used credit risk premium is industry specific and it is also derived for Damodaran’s database. We have used the credit risk and equity risk premiums close to each acquisition date. There is also a company specific premium in the rate of return on equity, it is based on investors demanding higher return on lower market value companies. In this premium factor we have used as benchmark the Ibbotsen’s credit risk premiums derived from quoted markets. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. Business area specific risk is incorporated by applying individual beta factors. The beta factors and the capital structure are evaluated annually based onprofessor Damodaran’s industry specific parameters in Europe. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate. Discount rates in the assessment calculations varied between 10.2 % and 10.44 %. Corporation taxes are derived from KPMG’s public list on government tax rates.

Sales growth rates – Sales growth rate reflects historical development, expected market development considering announcements of capex investments of main customers sectors and expected change in mix. Growth rate for each technical services CGU (Connectivity, Power and Smart Industry) has been calculated with an average growth of 5.7 % and terminal value of 1.0 %. Business services have been calculated with an average of 9.2 % yearly growth and 2.0 % terminal value.

Sensitivity analysesThe value of all operating divisions subject to impairment testing is higher than the book value. A reasonably possible change in the level of revenue, level of profitability or discount rate would not generate impairment in the Smart Industry or Connectivity business areas. The sensitivity indicators used are an increase of 0.5 %-unit in the discount rate, 0.5 % lower than estimated terminal growth and 0.5 %-units lower than estimated EBITDA for Power business area would trigger an impairment. For Energy Intelligence business area 0.5 %-units increase in the discount rate, 1 %-units decrease in the EBITDA-margin and 1 %-units decrease in terminal growth would trigger an impairment. The buffers for impairment are for Smart Industry 229 %, Connectivity 162 % Energy Intelligence 15.68 % and Power 11 %.


Purchases from related

parties


partiesIAS 24.18IAS 24.21

2017 2016Associate:Empower SIA 624 628 Laskelma aiheesta tallennettu sharepointiin

Entity with significant influence over the Group:TPI Holding Oy owns 100% of the shares of Empower Oyj. There were no transactions paid between the Group andTPI Holding Oy, the ultimate parent during the financial year 2017.

Interest received

Amounts owed by

related parties

IAS 24.13IAS 24.18

Loans from/to related parties € 000 € 000Associate:Empower SIA 2017 2 301 Oyj:n saaminen, luku tase-erittelyistä

2016 3 171 Oyj:n saaminen, luku tase-erittelyistä

Compensation of key management personnel of the Group IAS 24.172017 2016

€ 000 € 000Short-term employee benefits 1 845 1 876 Tähän laskettu Getin ja hallituksen palkat ja palkkiotTotal compensation paid to key management personnel 1 845 1 876

4D. Related party disclosures

Note 8A provides information about the Group’s structure, including details of the subsidiaries and the holdingcompany. The following table provides the total amount of transactions that have been entered into with relatedparties for the relevant financial year.

The amounts disclosed in the table are the amounts recognised as an expense during the reporting periodrelated to key management personnel.

Loan to an associateTheloangrantedtoSIAisintendedtofinanceanacquisitionofmajorityofEmpower SIAshares.Theloanisunsecuredandrepayableinfullon1November2022. Interestischargedat4%.

Terms and conditions of transactions with related partiesThere werenotransactions,loansorguaranteesbetweenGroupandthekeymanagementpersonelorthemembersoftheboardofdirectors.


parties


partiesIAS 24.18IAS 24.21

2017 2016Associate:Empower SIA 624 628 Laskelma aiheesta tallennettu sharepointiin

Entity with significant influence over the Group:TPI Holding Oy owns 100% of the shares of Empower Oyj. There were no transactions paid between the Group andTPI Holding Oy, the ultimate parent during the financial year 2017.

Interest received

Amounts owed by

related parties

IAS 24.13IAS 24.18

Loans from/to related parties € 000 € 000Associate:Empower SIA 2017 2 301 Oyj:n saaminen, luku tase-erittelyistä

2016 3 171 Oyj:n saaminen, luku tase-erittelyistä

Compensation of key management personnel of the Group IAS 24.172017 2016

€ 000 € 000Short-term employee benefits 1 845 1 876 Tähän laskettu Getin ja hallituksen palkat ja palkkiotTotal compensation paid to key management personnel 1 845 1 876

4D. Related party disclosures

Note 8A provides information about the Group’s structure, including details of the subsidiaries and the holdingcompany. The following table provides the total amount of transactions that have been entered into with relatedparties for the relevant financial year.

The amounts disclosed in the table are the amounts recognised as an expense during the reporting periodrelated to key management personnel.

Loan to an associateTheloangrantedtoSIAisintendedtofinanceanacquisitionofmajorityofEmpower SIAshares.Theloanisunsecuredandrepayableinfullon1November2022. Interestischargedat4%.

Terms and conditions of transactions with related partiesThere werenotransactions,loansorguaranteesbetweenGroupandthekeymanagementpersonelorthemembersoftheboardofdirectors.

4D Events after the reporting periodThe continuing businesses have performed according to expectations in 2018, both sales and EBITDA have developed as budgeted.

Section 5: Detailed information on statement of profit or loss and OCI items

• • •• ••••••

1000 EUR Note 1.1.2017-31.12.2017 1.1.2016-31.12.2016Revenue / sales 219 147 204 608Unbilled revenue 1 715 11 015Percentage of completion method 24 597 27 529Sales adjusting -137 -48

REVENUE 245 322 243 104

Revenue


5A.1.


REVENUE 245 322 243 104

5B

102 84451 705219 428283 735

1 055 1 952

-16 478 -17 912-14 459 -17 073-30 900 -34 985

5C-33 428 -38 346

193 42-83 288 -71 322

-116 524 -109 626

-240 -122

Other operating incomeRental incomeGrants receivedGain on disposal of non-current assets Other operating income.

Other operating expensesOther variable operating expenses Other fixed operating expenses.

Material and servicesPurchases during the periodIncrease / decrease in inventories External services.

TilintarkastusTo auditor: auditTo auditor: Costs related to acquisitions 0 40

#VALUE! -240 -82

5D

Amortisation, intangiblesImmaterial rights -815 -176Other intangible assets -2 662 -2 333Amortisation, intangibles -3 476 -2 509ImpairmentOther intangible assets -24 -144Impairment -24 -144

Amortisation, goodwill

Disposals (-), Consolidated goodwill 0 706Amortisation, goodwill 0 706

Depreciation, tangiblesBuildings and structures -66 -65Depreciation for the period (-), Machinery and equipment -1 901 -1 009Depreciation for the period (-), Other tangible assets -244 -125Depreciation, tangibles -2 211 -1 199

Depreciation and amortisation, finance leaseDepreciation for the period (-), Machinery and equipment, fin.lease -288 -838Depreciation and amortisation, finance lease -288 -838

5E

Salaries and fees -71 025 -73 436Variable pension expenses, defined contribution plans -2 694 -3 192Variable pension expenses, defined benefit plans -59 27Pension expenses, defined contribution plans -3 274 -2 933Pension expenses, defined contribution plans IN&IM -5 338 -5 416Other variable employee benefits -2 619 -1 813Other fixed employee benefits, cash flow -2 547 -2 698

Employee benefits expense -87 556 -89 461

5F

Financing incomeLong-term interest income from investments 9 13Foreign exchange gain 2 4Other financing income 1 3

Financing income 13 20

Financing expensesInterest expenses and other financing expenses -8 866 -7 191Foreign exchange loss -82 0Other financing expenses from others -455 -817Other financing expenses, Pohjola 55 -392Impairment on equity in Group companies -97 0Reconciliation entries relating to Internal items 1 51

Financing expenses -9 444 -8 349

Financing income and expenses


Revenue

Other operating income and expenses

Depreciation, amortisation and impairment

Employee benefits expense

5A.1.


REVENUE 245 322 243 104

5B

102 84451 705219 428283 735

1 055 1 952

-16 478 -17 912-14 459 -17 073-30 900 -34 985

5C-33 428 -38 346

193 42-83 288 -71 322

-116 524 -109 626

-240 -122





#VALUE! -240 -82

5D






5E



5F







Revenue




Ulkomaanliikevaihto 93614 131536 TähänvainVirojaLiettua

5A.2.Revenuebygeographicalarea,continuedbusiness

BusinessAreas SmartIndustry Power ConnectivityEnergy

Intelligence

Geographicalarea

Finland 67201 52808 24802 45751Sweden 17890Estonia 20785Latvia 14023Lithuania 2062

67201 107568 24802 45751

RevenuerecognitionGoodstransferredatapointintime 67201 71904 22515 45751Servicestransferredovertime 0 35664 2287 0

67201 107568 24802 45751

BusinessAreas SmartIndustry Power ConnectivityEnergy

Intelligence

GeographicalareaFinland 56326 81739 22128 47991Sweden 1414Estonia 30984Lithuania 2522

56326 116659 22128 47991

RevenuerecognitionGoodstransferredatapointintime 56326 91721 20070 47991Servicestransferredovertime 0 24938 2058 0

56326 116659 22128 47991

2017

2016

5A.2. Revenue by geographical area, continued business 5B Other operating inovome and expanses

5C Material and services

2017 1.1.–31.12.2017 1.1.–31.12.2016


5G. Research and development expensesGroup investments in research and development were -7.9 million euros in 2017 corresponding 3.22 per cent of Group turnover (2016: -5.7 million euros 2.3 %).

5D Depreciation, amortisation and impairment

6A Tangible assets

6ATangible assets

€000Buildings and

structuresMachinery and

equipmentOther tangible

assets

Advance payments and work in

progress TotalCost 1.1.2016 1 692 15 809 184 20 15 223Translation differences 0 -119 0 0 -119Additions 8 7 604 174 39 7 824Business disposals 0 -3 026 0 -9 -3 035Disposals 0 -3 332 -1 -13 -3 346Cost 31.12.2016 1 692 17 092 362 38 16 709

Cumulative amortisation and impairment 1.1.2016 -1 395 -10 479 -61 -9 453Translation differences 0 93 0 93Cumulative amortisation on business combinations 0 -289 0 -289Cumulative amortisation on business disposals 0 1 214 0 1 214Cumulative amortisation on disposals and reclassifications 0 1 788 0 1 788Amortisation -57 -2 642 -126 -2 833Cumulative amortisation and impairment 31.12.2016 -1 452 -10 316 -187 -9 481

Carrying amount 1.1.2016 297 5 330 122 20 5 769Carrying amount 31.12.2016 240 6 776 174 38 7 228

€000Buildings and

structuresMachinery and

equipmentOther tangible

assets

Advance payments and work in

progress TotalCost 1.1.2017 1 692 16 446 883 38 19 059Translation differences 0 -20 0 0 -20Business combinations 0 0 0 0 0Additions 0 1 974 476 126 2 576Business disposals 0 0 0 0 0Disposals 0 -2 412 -32 -62 -2 506Reclassifications 0 0 0 -102 -102Cost 31.12.2017 1 692 15 988 1 327 0 19 007

Cumulative amortisation and impairment 1.1.2017 -1 452 -9 710 -669 -11 832Translation differences 0 16 0 16Cumulative amortisation on business disposals 0 68 0 68Cumulative amortisation on change in ownership, proportional consolidation 0 59 0 59Cumulative amortisation on disposals and reclassifications 0 2 029 31 2 061Amortisation -66 -2 288 -250 -2 604Cumulative amortisation and impairment 31.12.2017 -1 518 -9 826 -888 -12 231

Carrying amount 1.1.2017 240 6 776 174 38 7 228Carrying amount 31.12.2017 174 6 162 440 0 6 776

Apartofothertangibleassetshavebeenpresentedinmachineryandequipmentinfiscalyear2016.Duringfiscalyear2017thecostoftheseassetsandtheircumulativeamortisationsarepresentedinthecorrectaccountforthebeginningofyear.Cost1.1.2017 0 -646 522 0 -124

Cumulativeamortisations1.1.2017 0 606 -482 0 123

Effectonthecostat1.1.2017ofmachineryandequipment 0 -40 40 0 0andothertangibleassets.

5A.1.


REVENUE 245 322 243 104

5B

102 84451 705219 428283 735

1 055 1 952

-16 478 -17 912-14 459 -17 073-30 900 -34 985

5C-33 428 -38 346

193 42-83 288 -71 322

-116 524 -109 626

-240 -122





#VALUE! -240 -82

5D






5E



5F







Revenue




6ATangibleassets

€000Buildingsandstructures

Machineryandequipment Othertangibleassets

Advancepaymentsandworkinprogress Total

Cost1.1.2016 1692 15809 184 20 15223Translationdifferences 0 -119 0 0 -119Yritysostot 0 157 5 0 162Additions 8 7604 174 39 7824Businessdisposals 0 -3026 0 -9 -3035Disposals 0 -3332 -1 -13 -3346Cost31.12.2016 1692 17092 362 38 16709

Cumulativeamortisationandimpairment1.1.2016 -1395 -10479 -61 -9453Translationdifferences 0 93 0 93Cumulativeamortisationonbusinesscombinations 0 -289 0 -289Cumulativeamortisationonbusinessdisposals 0 1146 0 1214Cumulativeamortisationondisposalsandreclassifications 0 1788 0 1788Amortisation -57 -2575 -126 -2833Impairment 0 0 0 0Cumulativeamortisationandimpairment31.12.2016 -1452 -10316 -187 -9481

Carryingamount1.1.2016 297 5330 122 20 5769Carryingamount31.12.2016 240 6776 174 38 7228

€000Buildingsandstructures

Machineryandequipment Othertangibleassets

Advancepaymentsandworkinprogress Total

Cost1.1.2017 1692 16446 883 38 19059Translationdifferences 0 -20 0 0 -20Additions 0 1974 476 126 2576Disposals 0 -2412 -32 -62 -2506Reclassifications 0 0 0 -102 -102Cost31.12.2017 1692 15988 1327 0 19007

Cumulativeamortisationandimpairment1.1.2017 -1452 -9710 -669 -11832Translationdifferences 0 16 0 16Cumulativeamortisationonchangeinownership,proportionalconsolidation0 59 0 59Cumulativeamortisationondisposalsandreclassifications 0 2029 31 2061Amortisation -66 -2221 -250 -2536Cumulativeamortisationandimpairment31.12.2017 -1518 -9826 -888 -12231

Carryingamount1.1.2017 240 6735 214 38 7227Carryingamount31.12.2017 174 6162 440 0 6776

Apartofothertangibleassetshavebeenpresentedinmachineryandequipmentinfiscalyear2016.Duringfiscalyear2017thecostoftheseassetsandtheircumulativeamortisationsarepresentedinthecorrectaccountforthebeginningofyear.Cost1.1.2017 0 -646 522 0 -124Cumulativeamortisations1.1.2017 0 606 -482 0 123Effectonthecostat1.1.2017ofmachineryandequipment 0 -40 40 0 0andothertangibleassets.

1.1.–31.12.2017 1.1.–31.12.2016


Empower Oyj2727327-96BIntangible assets

€000 Development costs Immaterial rightsOther intangible

assets

Advance payments for

intangible assets Goodwill TotalCost 1.1.2016 2 925 20 443 26 369 7 042 82 763 139 542Translation differences -111 -29 0 0 -171 -312Business combinations 0 242 0 0 0 242Additions 2 228 4 592 7 352 0 12 173Disposals 0 -196 -7 731 -3 154 0 -11 081Cost 31.12.2016 2 815 20 688 23 229 11 239 82 592 140 564

Cumulative amortisation and impairment 1.1.2016 -2 823 -1 956 -6 548 0 -11 327Translation differences 107 29 1 47 184Cumulative amortisation on business combinations -11 0 -12 0 -23Cumulative amortisation on business disposals 0 13 0 0 13Cumulative amortisation on disposals and reclassifications 0 2 2 494 0 2 495Amortisation 0 -374 -2 398 0 -2 772Impairment 0 0 0 -4 376 -4 376Cumulative amortisation and impairment 31.12.2016 -2 726 -2 286 -6 464 -4 329 -15 806

Carrying amount 1.1.2016 102 18 487 16 999 7 042 82 763 125 394Carrying amount 31.12.2016 89 18 402 16 765 11 239 78 263 124 758

€000 Development costs Immaterial rightsOther intangible

assets


intangible assets Goodwill TotalCost 1.1.2017 2 815 20 590 23 201 11 239 82 636 140 482Translation differences -25 -4 0 0 -270 -299Business combinations 0 -14 0 0 0 -14Additions 0 7 314 652 4 690 0 12 656Business disposals 0 -717 0 -3 0 -720Disposals -2 790 -237 -36 -7 607 658Reclassifications 0 147 1 0 0Cost 31.12.2017 0 27 079 23 819 8 319 83 024

-10 013 148

142 240

Cumulative amortisation and impairment 1.1.2017 -2 726 -2 188 -6 436 -4 373 -15 724Translation differences 25 6 0 270 300Cumulative amortisation on business combinations -5 0 0 0 -5Cumulative amortisation on business disposals 0 0 0 -658 -658Cumulative amortisation on disposals and reclassifications 0 42 42 0 84Amortisation 0 -843 -2 694 0 -3 538Impairment 2 707 689 0 0 3 396Cumulative amortisation and impairment 31.12.2017 0 -2 294 -9 089 -4 761 -16 144

Carrying amount 1.1.2017 89 18 402 16 765 11 239 78 263 124 758Carrying amount 31.12.2017 0 24 966 14 730 8 319 78 263 126 277

Thecostat1.1.2017andcumulativeamortisationshavebeencorrectedbyassetsthathavebeenamortisedtozero.Cost1.1.2017 0 -98 -28 0 44 -82Accumulatedamortisations1.1.2017 0 98 28 0 -44 82Effectonthecostofotherintangibleassetsand 0 0 0 0 0 0goodwillat1.1.2017.

6B Intangible assets 6C.1 Financial assets2017 2016

€ 000 € 000Financial assets at fair value through profit or lossQuoted equity shares 1 1 Total financial instruments at fair value 1 1

Financial assets at amortised cost:Trade receivables and other receivables 22 157 24 630 Non current loan receivables 2 701 3 178 Other non current receivables 174 357 Total financial assets 25 032 28 165

Total current 22 157 24 630

Total non-current 2 877 3 537

6C.2 Financial liabilities: Interest-bearing loans and borrowingsInterest rate Maturity 2017 2016

% € 000 € 000Non-current interest-bearing loans and borrowingsObligations under finance leases and hire purchase contracts (Note 7A) 3,44%-7,34% 2018-2022 (1 333) (1 469)

Bank overdraftsEURIBOR 6M +

3% On demand (18 916) (16 043)

Long-term bank loanEURIBOR 6M +

3% July 2019 (44 629) (44 692)

Long-term Mezzanine financingEURIBOR 6M +

5,5% December 2019 (3 750) (23 580)

Long-term interest on Mezzanine loanEURIBOR 6M +

3% July 2019 0 (4 702) Long-term trade payables (95) (170) Total non-current interest-bearing loans and borrowings (68 723) (90 657)

Non-current non-interest-bearing loans and borrowingsRental deposit (2 090) (2 683)

Non-capitalised interest on Mezzanine loanEURIBOR 6M +

5,5% July 2019 - (1 115) Total non-current non-interest-bearing loans and borrowings (2 090) (3 798)

Current interest-bearing loans and borrowings

Obligations under finance leases and hire purchase contracts (Note 7A) 3,44%-7,34% 2018-2022 (2 287) (2 031)

Short-term bank loanEURIBOR 6M +

3% 2018-2022 (6 508) (8 163) Short-term liabilities to others (51) Short-term trade payables 30-60 days 0 (645)

(8 847) (10 840)

(77 569) (101 497)

Total non-current non-interest-bearing loans and borrowings (2 090) (3 798)

6C.3 Financial liabilities: Other financial liabilities

Other financial liabilities2017 2016

€ 000 € 000Financial liabilities at fair value through profit or loss - -

Interest rate swap - 73 Total financial instruments at fair value - 73

Trade Payables and Other Liabilities (72 958) (84 477) Total other financial liabilities (72 958) (84 477)

Total current (72 958) (84 404)

Other financial liabilities at amortised cost, other than interest-bearing loans and borrowings

Total current interest-bearing loans and borrowings

Total interest-bearing loans and borrowings

6C.1 Financial assets


Fair value assesmentWhen measuring the financial assets and liabilities, the Group uses market observable data as far as possible. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: quoted prices in active markets for identical assets or liabilitiesLevel 2: inputs other than quoted prices included in Level 1 that are observable for the the asset or liability either directly or indirectlyLevel 3: inputs for the asset or liability that are not based on observable market data

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The management assessed that cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

- The fair values of the Group’s interest-bearing borrowings and loans are determined by using the DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance risk as at 31 December 2017 was assessed to be insignificant. The difference between carrying amount and fair value is considered to be insignificant because the borrowings and loans are floating rate based and there has been no significant change in the risk premium of the Group.

6C.4 Fair values Set out below is a comparison, by class, of the carrying amounts and fair values of the Group’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

2017 2016Carrying

amount/fair value

Carrying amount/fair

valueFairvaluehierarchy

€ 000 € 000Financial assetsLoans SIA 2 301 3 171 3

Trade receivables and other receivables 575 364Cash and cash equivalents 1 763 3 220Total 4 639 6 755

Financial liabilitiesInterest-bearing loans and borrowings (73 949) (101 497)

Obligations under finance leases and hire purchase contracts (3 620) (3 500) Derivatives not designated as hedges (IRS) 0 (73) 2Trade payables and other payables (72 958) (84 477) Total -150 528 -189 548

IFRS 7.29

Käypäänarvoonarvostaminen

Rahoitusvaroja ja-velkojaarvostaessaankonsernionkäyttänythavainnoitavissaoleviamarkkinatietojaniinpitkällekuinmahdollista.Kaikkirahoitusvaratja-velat,joilleonmääritettytaiesitettykäypäarvotilinpäätöksessä,onluokiteltukäyvänarvonhieraralimmallatasollaolevaansyöttötietoon,jokaonmerkittäväkäypäänarvoonarvostetuneränkannalta:

Taso1: Käyvätarvotperustuvattäysin samanlaistenomaisuuserientaivelkojennoteerattuihinhintoihintoimivillamarkkinoilla.Taso2: Käyvätarvot perustuvatmerkittäviltäosinmuihinsyöttötietoihinkuintasoon1sisältyviinnoteerattuihinhintoihin,muttakuitenkintietkyseiselleomaisuuserälletaivelalleovathavainnoitavissajokosuoraantaiepäsuoraan.Level3: Käyvätarvotperustuvat omaisuuseräätaivelkaakoskeviinsyöttötietoihin,jotkaeivätperustuhavainnoitavissaolevaanmarkkinatietoonvaanmerkittäosinjohdonarvioihintainiidenkäyttöönyleisestihyväksytyissäarvostusmalleissa.

Niidenvarojenjavelkojenosalta, jotkaarvostetaanjatkuvastikäypäänarvoon,konserniarvioivuosittainraportointikaudenpäättyessätulisikoeriäsiirtääkäyvänarvonhierarkioidenvälillä.

Konserninjohtoonarvioinut,ettäkäteisetvarat,myyntisaamiset,ostovelat,shekkitililimiittisekämuutlyhytaikaisetvelaarvostettuja,johtuenniidenlyhytaikaisestamaturiteetista.

KonserninkorollistenvelkojenkäypäarvoonmääritettyDCF-metodillakäyttäenrahoitttajanlainauskorkoaheijastavaadiskonttokKonserninomanluottoriskinarvioidaan31.12.2017tilanteessaolevanvähäinen.Korollistenvelkojenkirjanpitoarvonjakäyvänkoskalainatovatvaihtuvakorkoisiajakonserninriskipreemioeiolemerkittävästimuuttunut.

6C.4 Fair values Set out below is a comparison, by class, of the carrying amounts and fair values of the Group’s financial instruments, other those with carrying amounts that are reasonable approximations of fair values:

6C.1 Financial assets2017 2016

€ 000 € 000Financial assets at fair value through profit or lossQuoted equity shares 1 1 Total financial instruments at fair value 1 1

Financial assets at amortised cost:Trade receivables and other receivables 22 157 24 630 Non current loan receivables 2 701 3 178 Other non current receivables 174 357 Total financial assets 25 032 28 165

Total current 22 157 24 630

Total non-current 2 877 3 537

6C.2 Financial liabilities: Interest-bearing loans and borrowingsInterest rate Maturity 2017 2016

% € 000 € 000Non-current interest-bearing loans and borrowingsObligations under finance leases and hire purchase contracts (Note 7A) 3,44%-7,34% 2018-2022 (1 333) (1 469)

Bank overdraftsEURIBOR 6M +

3% On demand (18 916) (16 043)

Long-term bank loanEURIBOR 6M +

3% July 2019 (44 629) (44 692)

Long-term Mezzanine financingEURIBOR 6M +

5,5% December 2019 (3 750) (23 580)

Long-term interest on Mezzanine loanEURIBOR 6M +

3% July 2019 0 (4 702) Long-term trade payables (95) (170) Total non-current interest-bearing loans and borrowings (68 723) (90 657)

Non-current non-interest-bearing loans and borrowingsRental deposit (2 090) (2 683)

Non-capitalised interest on Mezzanine loanEURIBOR 6M +

5,5% July 2019 - (1 115) Total non-current non-interest-bearing loans and borrowings (2 090) (3 798)

Current interest-bearing loans and borrowings

Obligations under finance leases and hire purchase contracts (Note 7A) 3,44%-7,34% 2018-2022 (2 287) (2 031)

Short-term bank loanEURIBOR 6M +

3% 2018-2022 (6 508) (8 163) Short-term liabilities to others (51) Short-term trade payables 30-60 days 0 (645)

(8 847) (10 840)

(77 569) (101 497)

Total non-current non-interest-bearing loans and borrowings (2 090) (3 798)

6C.3 Financial liabilities: Other financial liabilities

Other financial liabilities2017 2016

€ 000 € 000Financial liabilities at fair value through profit or loss - -

Interest rate swap - 73 Total financial instruments at fair value - 73

Trade Payables and Other Liabilities (72 958) (84 477) Total other financial liabilities (72 958) (84 477)

Total current (72 958) (84 404)

Other financial liabilities at amortised cost, other than interest-bearing loans and borrowings

Total current interest-bearing loans and borrowings

Total interest-bearing loans and borrowings


6D Inventories 6E Trade and other receivables

6F Cash and cash equivalents

6DInventories

2017 2016€ 000 € 000

Raw materials and consumables 1 654 1 683 Work in progress 3 936 6 069 Advance payments for inventory 2 55 Inventories 5 592 7 806

6E. Trade and other receivables2017 2016

€ 000 € 000Trade receivables 10 393 16 530 Loan receivables (0) 405 Other receivables 2 564 4 302 Current prepayments and accrued income (from others) 9 200 3 392 Tax Receivable, income tax 10 10

22 166 24 640

Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.Group has not recognised any material credit losses on trade receivables since it sell all its trade receivablesto financing companies and the credit risk according to IFRS 9 is transferred to financing company.

As at 31 December, the ageing analysis of trade receivables is, as follows:

Total

Neither past due nor

impaired < 30 days 30-60 days 61-90 days 91-120 days > 120 days€ 000 € 000 € 000 € 000 € 000 € 000 € 000

2017 10 393 5 910 3 109 884 126 112 2522016 16 530 13 944 1 960 -4 18 0 612

Past due but not impaired

6F. Cash and cash equivalents

2017 2016€ 000 € 000

Cash and bank 1 763 3 220 1 763 3 220


6G. Provisions

Legal provisons Warranty provisions

Unprofitable contracts

Provisions related to employees Total

€ 000 € 000 € 000 € 000 € 0001.1.2017 322 1 840 3 152 1 164 6 479Arising during the year 0 0 2 888 153 3 041Utilised 0 -335 -3 152 -647 -4 134Remeasurement 0 0 0 -165 -16531.12.2017 322 1 505 2 888 506 5 222Long-term 322 1 505 2 888 506 5 222

Legal provisons Warranty provisions

Unprofitable contracts

Provisions related to employees Total

€ 000 € 000 € 000 € 000 € 0001.1.2016 507 1 430 1 031 1 850 4 819Arising during the year 200 600 2192 117 3109Utilised (100) (150) (111) (888) -1249Remeasurement (285) (40) 40 85 -20031.12.2016 322 1 840 3 152 1 164 6 479Long-term 322 1 840 3 152 1 164 6 479

6G Provisions 6H Defined benefit plan

6H. Defined benefit plan

6H. 1 Defined benefit plan 2017 2016€ 000 € 000

Liabilities from defined benefit plan (570) (779) (570) (779)

6H. 2 Changes in defined benefit obligations

Net benefit expense (recognised in profit or loss) 2017 2016€ 000 € 000

Current service cost (39) (30) Interest cost on benefit obligation (9) (10) Total (48) (40)

Changes in the present value of the defined benefit obligation:€ 000

Defined benefit obligation at 1 January 2017 (779) Interest cost (9) Current service cost (39) Benefits paid (11) Acturial changes 268 Defined benefit obligation at 31 December 2017 (570)


Defined benefit planChanges in 2017 defined benefit obligation and fair value of plan assets

Pension cost charged to profit or loss Remeasurement gains/(losses) in OCI

01/01/2017 Service costNet interest

expense

Sub-total included in

profit or loss Benefits paid

Return on plan assets (excluding amounts included

in net interest expense), gain (-),

loss (+)

Actuarial changes arising from changes in

demographic assumptions,

gain (-), loss (+)


financial assumptions,

gain (-), loss (+)Experience

adjustments


OCIContributions

by employer 31/12/2017€ 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000

Defined benefit 2 039 39 26 65 (46) - - (239) - (239) - 1 819 Fair value of plan assets 1 260 - 17 17 (46) (29) - - - (29) (11) 1 249 Defined benefit obligation (779) 39 (9) (48) (92) (29) - (239) - (268) (11) (570)

2016 changes in the defined benefit obligation and fair value of plan assets

Pension cost charged to profit or loss Remeasurement gains/(losses) in OCI

01/01/2016 Service costNet interest

expense


profit or loss Benefits paid

Return on plan assets (excluding amounts included

in net interest expense), gain (-),

loss (+)


demographic assumptions,

gain (-), loss (+)


financial assumptions,

gain (-), loss (+)Experience

adjustments


OCIContributions

by employer 31/12/2016€ 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000 € 000

Defined benefit 1 664 30 33 63 (30) - - 342 - 342 - 2 039 Fair value of plan assets 1 112 - 23 23 (30) (88) - - - (88) 67 1 260 Defined benefit obligation (552) 30 (10) (40) (60) (88) - 342 - 254 67 (779)


6H. 3 Key assuptions and sensitivity analysesThe principal assumptions used in determining pension benefit obligations

2017 2016% %

Discount rate: 1,5 1,3

Inflation 1,8 1,8

Life expectation for pensioners at the age of 65: Years Years

Male 21,4 21,4Female 25,4 25,4

Sensitivity analyses 31.12.2017 and 31.12.2016:

2017 2016Assumptions for defined benefit plan: € 000 € 000Future pension cost increase:

0.5% increase 1 961 2 200 0.5% decrease 1 692 1 895

Discount rate:0.5% increase 1 667 1 857 0.5% decrease 1 993 2 247

6J.5 Future expected contributions to the defined benefit plansThe following payments are expected contributions to the defined benefit plan in future years:

2017 2016€ 000 € 000

Within the next 12 months (next annual reporting period) 50 36 Between 2 and 5 years 233 204 Between 5 and 10 years 322 338 Beyond 10 years 1 818 1 909 Total expected payments 2 423 2 487

The average duration of the defined benefit plan obligation at the end of the reporting period is 18 years.

Impact of defined benefit obligation

6I. Trade Payables and Other Liabilities2017 2016

€ 000 € 000Trade Payables and Other LiabilitiesCurrent trade payables, interest-free (17 618) (33 631) Current VAT payables, interest-free (7 561) (7 647) Current liabilities to others, interest-free (4 072) (1 712) Current interest liabilities, interest-free (2 025) (147) Other current accrued liabilities on income, interest-free (66) (880) Other current accrued liabilities on expenses, interest-free (890) (1 253) Accrued expenses (13 577) (4 415) Accrued project expenses (8 010) (13 584) Accrued employee expenses, interest-free (19 139) (21 209) Trade Payables and Other Liabilities (72 958) (84 477)

6J.1 Current taxThe major components of income tax expense for the years ended 31 December 2016 and 2015 are:

Consolidated statement of profit or loss2017 2016

€ 000 € 000Current income tax:Current income tax charge (280) (157) Tax for previous accounting periods (191) (62)

Deferred tax:Change in deferred tax asset (252) 284 Change in deferred tax liability 298 181 Income tax expense reported in the statement of profit or loss (425) 246

Consolidated statement of OCI 2017 2016€ 000 € 000

Deferred tax related to items recognised in OCI during in the year:Net loss/(gain) on actuarial gains and losses (42) 165 Deferred tax charged to OCI (42) 165

Reconciliation of tax expense and the accounting profit multiplied by Group's domestic tax ratefor 2016 and 2017:

2017 2016€ 000 € 000

Profit/(loss) before tax from continued operation 930 4 968 Profit/(loss) before tax from a discontinued operation 2 571 (32 521) Accounting profit before income tax 3 501 (27 553) Taxes at Group's statutory income tax rate of 20% continuing operations (2016: 20%) 186 994 Discontinued operations losses (611) (748) Income tax expense reported in the statement of profit or loss (425) 246

Group has not recorded deferred tax asset on discontinued operations losses

6J.2 Deferred taxDeferred tax relates to the following:

2017 2016 2017 2016€ 000 € 000 € 000 € 000

Acquision of subsidiaries (5 784) (6 082) 297 247Provisions 1 051 1 303 -252 384Defined benefit plan 114 156 0 45Other 0 -66Recognised in the income statement 46 611Deferred tax liabilities, net (4 619) (4 623)

Reconciliation of deferred tax liabilities, net 2017€ 000

31.12.2016 (4 623)Tax income/(expense) during the period recognised in profit or loss

Discontinued operationDeferred taxes acquired in business combinations

46- (42)

31.12.2017 (4 619)

Consolidated statement of profit or lossConsolidated statement of financial position

6J. Income tax


The Group has not booked deferred tax receivable for confirmed accounting losses.

6J.1 Current taxThe major components of income tax expense for the years ended 31 December 2016 and 2015 are:

Consolidated statement of profit or loss2017 2016

€ 000 € 000Current income tax:Current income tax charge (280) (157) Tax for previous accounting periods (191) (62)

Deferred tax:Change in deferred tax asset (252) 284 Change in deferred tax liability 298 181 Income tax expense reported in the statement of profit or loss (425) 246

Consolidated statement of OCI 2017 2016€ 000 € 000

Deferred tax related to items recognised in OCI during in the year:Net loss/(gain) on actuarial gains and losses (42) 165 Deferred tax charged to OCI (42) 165

Reconciliation of tax expense and the accounting profit multiplied by Group's domestic tax ratefor 2016 and 2017:

2017 2016€ 000 € 000

Profit/(loss) before tax from continued operation 930 4 968 Profit/(loss) before tax from a discontinued operation 2 571 (32 521) Accounting profit before income tax 3 501 (27 553) Taxes at Group's statutory income tax rate of 20% continuing operations (2016: 20%) 186 994 Discontinued operations losses (611) (748) Income tax expense reported in the statement of profit or loss (425) 246

Group has not recorded deferred tax asset on discontinued operations losses

6J.2 Deferred taxDeferred tax relates to the following:

2017 2016 2017 2016€ 000 € 000 € 000 € 000

Acquision of subsidiaries (5 784) (6 082) 297 247Provisions 1 051 1 303 -252 384Defined benefit plan 114 156 0 45Other 0 -66Recognised in the income statement 46 611Deferred tax liabilities, net (4 619) (4 623)

Reconciliation of deferred tax liabilities, net 2017€ 000

31.12.2016 (4 623)Tax income/(expense) during the period recognised in profit or loss

Discontinued operationDeferred taxes acquired in business combinations

46- (42)

31.12.2017 (4 619)

Consolidated statement of profit or lossConsolidated statement of financial position

6J. Income tax


Section 7: Commitments and contingencies 7A.2 Finance lease and hire purchase commitments

The Group has finance leases and hire purchase contracts for various items of plant and machinery. The Group’s obligations under finance leases are secured by the lessor’s title to the leased assets. Future minimum lease payments under finance leases and hire purchase contracts, together with the present value of the net minimum lease payments are, as follows: IFRIC 4.6

IFRIC 4.7

IAS 17.8Future minimum rental payable under non-cancellable operating leases as at 31 December 2016 and 31 December 2017 are as follows;

2017 2016€ 000 € 000

Within one year 252 372 After one year but not more than five years 354 344 More than five years 27 281

633 997

Group’sfutureminimumvehiclerentalpayableundernon-cancellableoperatingleasesasat31Decemberare.

Leasing commitmentsFalling due within a year 1 736 1 663Falling due within 1-5 years 1 369 2 143Total 3 105 3 806

Minimum payments

Present value of payments

Minimum payments


€ 000 € 000 € 000 € 000Within one year 2 187 2 144 2 213 2 152 After one year but not more than five years 929 883 1 260 1 175 More than five years - - - - Total minimum lease payments 3 116 3 027 3 474 3 328 Less amounts representing finance charges (89) - (146) - Present value of minimum lease payments 3 027 3 027 3 328 3 328

2017 2016

7A. Leases

7A.1 Operating lease commitments — Group as a lessee

The Group has entered into operating leases on rental agreements, with fixed lease terms.

7A.2 Finance lease and hire purchase commitments

The Group has finance leases and hire purchase contracts for various items of plant and machinery. The Group’s obligations under finance leases are secured by the lessor’s title to the leased assets. Future minimum lease payments under finance leases and hire purchase contracts, together with the present value of the net minimum lease payments are, as follows:

IFRIC 4.6IFRIC 4.7

IAS 17.8Future minimum rental payable under non-cancellable operating leases as at 31 December 2016 and 31 December 2017 are as follows;

2017 2016€ 000 € 000

Within one year 252 372 After one year but not more than five years 354 344 More than five years 27 281

633 997

Group’sfutureminimumvehiclerentalpayableundernon-cancellableoperatingleasesasat31Decemberare.

Leasing commitmentsFalling due within a year 1 736 1 663Falling due within 1-5 years 1 369 2 143Total 3 105 3 806

Minimum payments


Minimum payments


€ 000 € 000 € 000 € 000Within one year 2 187 2 144 2 213 2 152 After one year but not more than five years 929 883 1 260 1 175 More than five years - - - - Total minimum lease payments 3 116 3 027 3 474 3 328 Less amounts representing finance charges (89) - (146) - Present value of minimum lease payments 3 027 3 027 3 328 3 328

2017 2016

7A. Leases

7A.1 Operating lease commitments — Group as a lessee

The Group has entered into operating leases on rental agreements, with fixed lease terms.

7A.2 Finance lease and hire purchase commitments

The Group has finance leases and hire purchase contracts for various items of plant and machinery. The Group’s obligations under finance leases are secured by the lessor’s title to the leased assets. Future minimum lease payments under finance leases and hire purchase contracts, together with the present value of the net minimum lease payments are, as follows:


IAS 24.21(h)

IAS 24.19(d)

IAS 24.19(e)

IAS 37.86

IFRS 12.23(b)

Commitments and contingent liabilitites 2017 2016Liabilities secured by pledged mortages and shares

Loans from financial institutions 70 053 68 898

Pledged real estate mortgages 7 200 7 200Pledged mortgages on company assets 698 800 698 800Liabilities secured by pledged mortages and shares total 706 000 706 000

The trademark of Empower Ltd has been pledged for loans from financial institutions.

Commitments on behalf of Group companies

Guarantees 5 788 11 142Total 5 788 11 142

Other commitments

Group has given bank guarantees related to maintanence and warranty guarantees.

Bank guarantees 13 324 14 992Total 13 324 14 992

Long-term rental commitments

Empower Group has fixed term tenancies from its business premises which are falling due at the latest on 16th June 2022.

Rental liabilities due on incoming fiscal year based on indexed rent ( incl. VAT) 252 372Rental liabilities due on subsequent to incoming fiscal years based on indexed rent (incl. VAT)381 625Total 633 997

Empower Group has non-fixed term tenancies from its business premises which havetermination period of 1-6 months 749 614

749 614Other commitments

Other own commitments total 14 706 16 604

tly with other investors of the associate (carrying amounts of the related financial guarantee contracts were

7B. Guarantees 7C. Contingent liabilities

The Group recognised a contingent liability of 200 000€ in relation to Empower Oyj at 31.12.2017.The Group recognised a contingent liability of 200 000€ in relation to Empower Oyj at 31.12.2016.


FINANCIAL STATEMENTS OF THE PARENT COMPANY


1 EUR Note

REVENUE 1 -12 488,88 -44 150,82Change in inventories of finished goods and work in progress 0,00 163 585,58Work performed for own purposes and capitalised 117 795,77 353 376,48Liiketoiminnan muut tuotot saman konsernin yrityksiltä 2 16 986 172,33 12 491 512,50Liiketoiminnan muut tuotot muilta 2 206 874,25 255 828,55Material and services

RAW MATERIALS AND CONSUMABLESPurchases during the period 3 -479,17 -1 975,87

External services -24 198,69 -24 677,86 -178 268,51 -180 244,38Employee benefits expense

Salaries and fees 4 -4 463 754,37 -2 427 540,17Social security expenses

Pension expenses 4 -665 149,78 -463 353,14Other employee benefit 4 -301 945,28 -5 430 849,43 -79 574,08 -2 970 467,39

Depreciation and amortisation 5 -1 678 421,81 -1 678 421,81 -1 132 307,22 -1 132 307,22Other operating expenses 6 -12 640 939,35 -10 632 609,75OPERATING PROFIT (LOSS) -2 476 534,98 -1 695 476,85Financing income and expenses 7 -9 164 273,86 -34 823 774,58Appropriations

Increase / decrease in depreciation in excess of plan 43 125,40 -391 523,09Group contribution 3 726 371,00 3 769 496,40 0,00 -391 523,09

Equity holders of the parent company -7 871 312,44 -36 910 774,52


Income Statement1.1.2017-31.12.2017 1.1.2016-31.12.2016



Balance Sheet 1 EUR Note 31.12.2017 31.12.2016

ASSETSNON-CURRENTASSETS

Intangible assets 11Immaterial rights 180,34 180,34 225,78 225,78Other intangible assets 2 226 532,05 2 831 462,55Advance payments for intangible assets 758 013,94 2 984 726,33 502 292,38 3 333 980,71Tangible assets 12Machinery and equipment 2 536 398,97 2 620 959,19Other tangible assets 16 446,10 2 552 845,07 3 117,28 2 624 076,47InvestmentsInvestments in Group companies 13 121 479 383,84 121 479 383,84 121 479 383,84 121 479 383,84

CURRENTASSETSCurrentreceivables 14Loan receivables, external 2 301 102,29 2 301 102,29 2 737 955,17 2 737 955,17

Trade receivables, external 617,96 108 307,01Loan receivables -0,31 433 146,81Receivables from Group companies 24 977 793,41 9 905 062,08Other receivables, external 901 290,24 590 535,76Accruals, external 423 012,38 26 302 713,68 683 299,32 11 720 350,98

Cash and bank 9 208,91 9 461,57ASSETS 155 629 980,12 141 905 209,04

EQUITY AND LIABILITIES

Share capital 29 091 721,46 80 000,00

Unrestricted equity reserve ####### 62 450 475,37 ###### 62 450 475,37Retained earnings -37 078 181,55 -167 407,43Changes in accounting principles, IAS 8 83 458,74 0,00Profit/loss for the period -7 871 312,44 -36 910 774,52TOTAL EQUITY 46 676 161,58 25 452 293,42

APPROPRIATIONS 348 397,69 391 523,09LIABILITIESNon-currentliabilities

Other statutory provisions 200 000,00 548 397,69 273 257,06 664 780,15

Loans from financial institutions 49 811 989,28 75 468 139,19Other liabilities, external 3 750 000,01 0,00Non-current accrued liabilities, (to others), interest-free 0,00 1 121 887,00Non-current liabilities to Group companies 14 320 475,64 67882464,93 14 965 050,00 91555076,19

Current liabilitiesLoans from financial institutions, external 1 799 704,08 1 781 828,21Trade payables, external 1 875 214,34 1 034 340,58Liabilities to Group companies 28 193 538,12 17 339 580,50Other liabilities, external 5 058 813,24 2 343 599,65Accruals and deferred income, external 3 595 686,17 40 522 955,95 1 734 310,34 24 233 059,28

EQUITY AND LIABILITIES 155 629 980,12 141 905 209,04


Balance Sheet 1 EUR Note 31.12.2017 31.12.2016

ASSETSNON-CURRENTASSETS

Intangible assets 11Immaterial rights 180,34 180,34 225,78 225,78Other intangible assets 2 226 532,05 2 831 462,55Advance payments for intangible assets 758 013,94 2 984 726,33 502 292,38 3 333 980,71Tangible assets 12Machinery and equipment 2 536 398,97 2 620 959,19Other tangible assets 16 446,10 2 552 845,07 3 117,28 2 624 076,47InvestmentsInvestments in Group companies 13 121 479 383,84 121 479 383,84 121 479 383,84 121 479 383,84

CURRENTASSETSCurrentreceivables 14Loan receivables, external 2 301 102,29 2 301 102,29 2 737 955,17 2 737 955,17

Trade receivables, external 617,96 108 307,01Loan receivables -0,31 433 146,81Receivables from Group companies 24 977 793,41 9 905 062,08Other receivables, external 901 290,24 590 535,76Accruals, external 423 012,38 26 302 713,68 683 299,32 11 720 350,98

Cash and bank 9 208,91 9 461,57ASSETS 155 629 980,12 141 905 209,04

EQUITY AND LIABILITIES

Share capital 29 091 721,46 80 000,00

Unrestricted equity reserve ####### 62 450 475,37 ###### 62 450 475,37Retained earnings -37 078 181,55 -167 407,43Changes in accounting principles, IAS 8 83 458,74 0,00Profit/loss for the period -7 871 312,44 -36 910 774,52TOTAL EQUITY 46 676 161,58 25 452 293,42

APPROPRIATIONS 348 397,69 391 523,09LIABILITIESNon-currentliabilities

Other statutory provisions 200 000,00 548 397,69 273 257,06 664 780,15

Loans from financial institutions 49 811 989,28 75 468 139,19Other liabilities, external 3 750 000,01 0,00Non-current accrued liabilities, (to others), interest-free 0,00 1 121 887,00Non-current liabilities to Group companies 14 320 475,64 67882464,93 14 965 050,00 91555076,19

Current liabilitiesLoans from financial institutions, external 1 799 704,08 1 781 828,21Trade payables, external 1 875 214,34 1 034 340,58Liabilities to Group companies 28 193 538,12 17 339 580,50Other liabilities, external 5 058 813,24 2 343 599,65Accruals and deferred income, external 3 595 686,17 40 522 955,95 1 734 310,34 24 233 059,28

EQUITY AND LIABILITIES 155 629 980,12 141 905 209,04

Balance Sheet


ACCOUNTING PRINCIPLES

The financial statements for Empower Plc, the parent company of the Group, have been prepared in accordance with the Finnish Accounting Act (FAS).

FIXED ASSETSFixed assets are recognised on the balance sheet at their original acquisition cost less depreciation according to plan. Depreciation according to plan has been calculated as straight-line depreciation according to the estimated financial service life of assets. Depreciation has been made starting from the activation month of each asset. Service lives are:

Intellectual property rights 5–10 yearsDevelopment expenses 3–5 yearsGoodwill 10 yearsOther long-term expenses 5–10 yearsMachinery and equipment 3–15 yearsOther tangible assets 3–5 years The financial service life of more than five years for goodwill can be considered to be in line with good accounting practices, due to the related long-term profit expectations.

INVENTORIESIn inventories, materials and supplies are measured in line with the weighted average-cost principle at acquisition cost or at sales value, if lower.

Unfinished work in inventories is measured under variable costs.

TURNOVER Sales of products and services have been recognised as income in connection with their transfer, apart from long-term projects that are recognised on the basis of their completion rate.

RESEARCH AND DEVELOPMENTResearch costs are recognised as expenses over the financial period. Development costs are activated when it is probable that a development project will produce corresponding financial benefit and the costs can be measured reliably. Development costs activated following particular caution are eliminated during their financial life, and at most in five years.

PENSION ARRANGEMENTSPension cover has been organised with a Finnish pension insurance company.

DIRECT TAXESTaxes include estimated taxes corresponding with the company’s profit for the period and adjustments to taxes from previous periods.

CASH AND CASH EQUIVALENTSThe Finnish Group companies are using a bank account with a credit facility. This Group account is in Empower Plc’s name and is used for the companies’ payment transactions. The subsidiaries recognise their deposits into the Group account as current receivables from the parent company. Correspondingly, the parent company recognises a liability to the subsidiary. A subsidiary’s Group account balance may also be negative, in which case the related assets and liabilities are reversed. In addition, when the balance is

positive, the parent company recognises the total balance of the Group account in cash and cash equivalents. When the balance is negative, it is recognised in current interest-bearing liabilities.

CONTINUITY OF OPERATIONSThe company’s mezzanine financiers Armada funds, Elo and Fennia converted a total of EUR 29 million of their receivables into the company’s equity as Class B shares. This share capital increase was subscribed for in December 2017 and registered in April 2018. Along with the conversion, the Empower Group’s equity turned EUR 2.3 million positive, which has a favourable impact on the company’s business operations and financing position.

A financial agreement was also concluded in April by which the previous loan period received by the company from the financing companies was extended until the end of July 2019. The agreement also includes the option to enable a conditional additional liquidity resource of EUR 10 million, if required. These make it possible to develop the company’s operations in the long term. The new agreement includes regular covenant terms, regarding, for instance, the Group’s future profit and cash flow development. The covenant terms are based on the current outlook on business development with sufficient contingency.

The company is not aware of any threatening legal action or ending customer agreement which could materially reduce EBITDA or cash flow and cause a breach of a financing agreement.

After the financial period, the positive and stable profitability development and cash flow of the Group’s continuing

operations have continued as planned. The Group’s liquidity outlook has also improved from the preceding year when discontinued operations burdened the Group’s liquidity heavily. The Group’s liquidity is expected to develop positively and in accordance with the normal seasonal variation. The company keeps its financiers regularly up to date by means of reports and negotiations and, according to the company’s understanding, the financiers are well aware of the status and outlook of the company’s business operations. The financiers have had a consistent stand on the company’s covenant breaches, and they also have aimed to ensure that the company’s profitable, continuing business can be smoothly carried on.


NOTESTOTHEINCOMESTATEMENT(1000EUR) 1.1.-31.12.2017 1.1.-31.12.2016

1 REVENUE

Revenue breakdownInformationmanagement -12 -44Total -12 -44

Domestic -12 26Foreign 0 -70Revenue(Domestic/Foreign) -12 -44

2 Other operating income

Rental income 102 48Other operating income 105 208Otheroperatingincome,Groupcompanies 16986 12492Other operating income 17 193 12 747

3 Material and services

Purchases during the period 0 -2Increase / decrease in inventories 0 0RAW MATERIALS AND CONSUMABLES 0 -2

External services -24 -178Total -25 -180

4 Employee benefits expense

Salaries and fees -4 464 -2 428Pension expenses -665 -463Other employee benefit -302 -80Total -5 431 -2 970

AveragenumberofpersonnelWhitecollar 54 61Bluecollar 1 0Total 55 61

ManagementsalariesandremunerationWagesandsalariesformanagementarenotspecifiedseparatelyforeachposition.(AccountingAct2:8§Thiskindofinformationisnotrequiredifitconcernsonlyoneperson.)

5 Depreciation and amortisationIntangible assetsAmortisation, intangibles -875 -684

-875 -684Tangible assetDepreciation, tangibles -713 -333Depreciation and amortisation, finance lease -90 -115

-803 -448

Depreciationandamortisationaccordingtoplan -1678 -1132

Impairment

Extraordinary impairment on current assets 0 0

6 Other operating expenses

Travel expenses -182 -178Leasingexpenses -1739 -1157Rentalexpenses -2478 -1164Externalservices -3165 -1813Otheroperatingexpenses -5078 -6321Total -12 641 -10 633

Auditor'sfeeTo auditor: audit -105 -66

7 Financingincomeand-expenses

Financing incomeIncome from investments 210 180Foreign exchange gain 0 4Long-term internal interest income 0 9Long-term interest income from others 3 5Total 213 199

Financing expenses -9 377 -35 022Impairment on securities carried as current assets -146 -27 853Interest on borrowings from Group entities -76 -105Financing expenses to others -7 782 -5 020Other financing expenses -1 372 -2 046Total -9 377 -35 022

Financingincomeand-expensesTotal -9164 -34824

8 AppropriationsAccelerated depreciation (+/-) 43 -392Group contribution 3 726 0Total 3 769 -392

NOTESTOTHEINCOMESTATEMENT(1000EUR) 1.1.-31.12.2017 1.1.-31.12.2016

1 REVENUE

Revenue breakdownInformationmanagement -12 -44Total -12 -44

Domestic -12 26Foreign 0 -70Revenue(Domestic/Foreign) -12 -44

2 Other operating income

Rental income 102 48Other operating income 105 208Otheroperatingincome,Groupcompanies 16986 12492Other operating income 17 193 12 747

3 Material and services

Purchases during the period 0 -2Increase / decrease in inventories 0 0RAW MATERIALS AND CONSUMABLES 0 -2

External services -24 -178Total -25 -180

4 Employee benefits expense

Salaries and fees -4 464 -2 428Pension expenses -665 -463Other employee benefit -302 -80Total -5 431 -2 970

AveragenumberofpersonnelWhitecollar 54 61Bluecollar 1 0Total 55 61

ManagementsalariesandremunerationWagesandsalariesformanagementarenotspecifiedseparatelyforeachposition.(AccountingAct2:8§Thiskindofinformationisnotrequiredifitconcernsonlyoneperson.)

5 Depreciation and amortisationIntangible assetsAmortisation, intangibles -875 -684

-875 -684Tangible assetDepreciation, tangibles -713 -333Depreciation and amortisation, finance lease -90 -115

-803 -448

Depreciationandamortisationaccordingtoplan -1678 -1132

Impairment

Extraordinary impairment on current assets 0 0

6 Other operating expenses

Travel expenses -182 -178Leasingexpenses -1739 -1157Rentalexpenses -2478 -1164Externalservices -3165 -1813Otheroperatingexpenses -5078 -6321Total -12 641 -10 633

Auditor'sfeeTo auditor: audit -105 -66

7 Financingincomeand-expenses

Financing incomeIncome from investments 210 180Foreign exchange gain 0 4Long-term internal interest income 0 9Long-term interest income from others 3 5Total 213 199

Financing expenses -9 377 -35 022Impairment on securities carried as current assets -146 -27 853Interest on borrowings from Group entities -76 -105Financing expenses to others -7 782 -5 020Other financing expenses -1 372 -2 046Total -9 377 -35 022

Financingincomeand-expensesTotal -9164 -34824

8 AppropriationsAccelerated depreciation (+/-) 43 -392Group contribution 3 726 0Total 3 769 -392

1.1.–31.12.2017 1.1.–31.12.2016


Empower Oyj2727327-9NOTES TO THE BALANCE SHEET (1000 EUR)

9 Intangible assets

1000 EUR Immaterial

rightsOther intangible

assets


intangible assets TotalCost 1.1.2017 0,47 3 526 502 4 029Additions 0,00 295 481 776Cost 31.12.2017 0,47 3 821 758 4 580

Cumulative amortisation and impairment 1.1.2017 -0,25 -694 -695Amortisation -0,05 -900 -900Cumulative amortisation and impairment 31.12.2017 -0,29 -1 595 -1 595

Carrying amount 1.1.2017 0,23 2 831 502 3 334Carrying amount 31.12.2017 0,18 2 227 758 2 985

1000 EUR Immaterial


assets


intangible assets TotalCost 1.1.2016 0,00 0 0 0Additions 0,47 3 526 1 552 5 078Disposals 0,00 0 -1 050 -1 050Cost 31.12.2016 0,47 3 526 502 4 029

Cumulative amortisation and impairment 1.1.2016 0,00 0 0Cumulative amortisation on disposals and reclassifications 0,00 0 0Amortisation -0,25 -694 -695Cumulative amortisation and impairment 31.12.2016 -0,25 -694 -695

Carrying amount 31.12.2016 0,23 2 831 502 3 334


9 Intangible assets

1000 EUR Immaterial


assets





1000 EUR Immaterial


assets




Carrying amount 31.12.2016 0,23 2 831 502 3 334


10 Tangible assets

1000 EUR Machinery and

equipment

Other tangible

assets TotalCost 1.1.2017 3 057 5 3 062Additions 686 21 768Disposals 0 0 -62Cost 31.12.2017 3 743 25 3 769

Cumulative amortisation and impairment 1.1.2017 -436 -2 -438Cumulative amortisation on disposals and reclassifications 0 0 0Amortisation -771 -7 -778Cumulative amortisation and impairment 31.12.2017 -1 207 -9 -1 216

Carrying amount 1.1.2017 2 621 3 2 624Carrying amount 31.12.2017 2 536 16 2 553

1000 EUR Machinery and

equipment

Other tangible

assets TotalCost 1.1.2016 0 0 0Additions 3 057 5 3 062Cost 31.12.2016 3 743 5 3 748

Cumulative amortisation and impairment 1.1.2016 0 0 0Amortisation -436 -2 -438Cumulative amortisation and impairment 31.12.2017 -436 -2 -438

Carrying amount 31.12.2016 2 621 3 2 624


NOTES TO THE BALANCE SHEET (1000 EUR) 31/12/2017 31/12/2016

12 Non-current receivables

Non-current loan receivables -2 301 -2 738

13 Current receivables

Trade receivables 1 -108Loan receivables 0 433Other receivables 901 591Current prepayments and accrued income (from others) 423 683

1 325 1815

14 Currentreceivables,GroupcompaniesInternal trade receivables 19 806 4 660Other internal accruals 1 003 634Group contribution receivables 3 726 0Internal account receivables 442 4 611Current internal receivables 24 978 9 905

Totalcurrentreceivables 26 303 11 720

EssentialitemsofprepaymentsandaccruedincomeAccruals of personnel expenses, current receivables 1 0Interest receivables (from others) 4 6Other prepayments and accrued income on sales (from others) 1 -2Other prepayments and accrued income on expenses (from others) 369 363Prepayments 0 0Prepaid expenses and accrued income 48 316Current prepayments and accrued income (from others) 423 683


11 Investments

1000 EUR

Investments in Group

companies TotalCost 1.1.2017 121 479 121 479Disposals 0 0Cost 31.12.2017 121 479 121 479

Carrying amount 31.12.2017 121 479 121 479

1 EUR

Osuudet saman konsernin

yrityksissä YhteensäAcquisition cost 1.1.2016 144 779 144779Additions 2 930 2930Disposals -26 230 -26230Acquisition cost 31.12.2016 121 479 121479

Carryingamount31.12.2016 121479 121479


9 Intangible assets

1000 EUR Immaterial


assets





1000 EUR Immaterial


assets




Carrying amount 31.12.2016 0,23 2 831 502 3 334

1.1.–31.12.2017 1.1.–31.12.2016


15 Equity 1000 EUR 31.12.2017 31.12.2016

Share capital 1.1. 80 80Rights issue 29 012 0Share capital 31.12. 29 092 80

Unrestricted equity reserve 1.1. 62 450 62 450Unrestricted equity reserve 31.12. 62 450 62 450

Retained earnings

Earnings (other than defined benefit plan) 1.1. -37 078 -167Correction of the previous fiscal year 83 (* 0Earnings (other than defined benefit plan) 31.12. -36 995 -167

Retained earnings 31.12. -36 995 -167

Profit/loss for the period -7 871 -36 911

(*The correction is related to wrongly booked interest expense in trade payables - 83 458,74€ in 2016.

31.12.2017 31.12.2016Restricted equity 29 092 80Non-restricted equity 17 584 25 372

Distributable to equity holders 31.12.2017Retained earnings -36 995 -167Profit/loss for the period -7 871 -36 911Unrestricted equity reserve 62 450 62 450-capitalizeddevelopmentexpenses -1 464Total 16 121 25 372

NOTES TO THE BALANCE SHEET (1000 EUR) 31/12/2017 31/12/201616 Appropriations

Cumulative accelerated depreciation 348 392

17 Provisions

Unprofitablecontracts 0 73Otherprovisions 200 200Non-currentprovisions 200 273

19 Non-currentliabilities

Interest-bearingNon-current loans from financial institutions, interest-bearing 30451 54031Non-current overdraft facility with bank, interest-bearing 18916 16043Non-current finance leases, interest-bearing 174 691Non-current accrued interest 0 4702Non-current installment liabilties, interest-bearing 271 0Total 49812 75468

Interest-free

Non-current accrued liabilities, (to others), interest-free 0 1122Non-current liabilities to others, interest-free 0 0Total 3750 1122

LiabilitiestoGroupcompanies

Other non-current internal debts, interest-bearing 855 1500

Other non-current internal debts, interest-free 13465 13465Other liabilities, internal 14320 14965

Currentliabilities

20 Interest-bearing liabilities to othersCurrent finance leases, interest bearing 62 1782Current installment debt 1738 0Total 1800 1782

20.1. Interest-bearingliabilitiestoGroupcompaniesInternal (internal bank) liabilities, interest-bearing 28158 14245Total 28158 14245

Interest-freeliabilitiestoothersTrade payables 1875 1034Current liabilities to others, interest-free 5059 2344Accrued liabilities 3596 1734Total 10530 5112

20.2. Interest-freeliabilitiestoGroupcompaniesCurrent internal trade payables, interest-free 0 107Current accrued internal interest payable, interest-free 6 105Current accrued internal liabilities, interest-free 29 623Total 35 3095

EssentielitemsofaccrualsanddeferredincomeAccrued personnel expenses 1584 658Current interest liabilities, interest-free 1416 112Prepaid income and accrued expenses 595 964

3596 1734


9 Intangible assets

1000 EUR Immaterial


assets





1000 EUR Immaterial


assets




Carrying amount 31.12.2016 0,23 2 831 502 3 334

15 Equity 1000 EUR 31.12.2017 31.12.2016

Share capital 1.1. 80 80Rights issue 29 012 0Share capital 31.12. 29 092 80

Unrestricted equity reserve 1.1. 62 450 62 450Unrestricted equity reserve 31.12. 62 450 62 450

Retained earnings

Earnings (other than defined benefit plan) 1.1. -37 078 -167Correction of the previous fiscal year 83 (* 0Earnings (other than defined benefit plan) 31.12. -36 995 -167

Retained earnings 31.12. -36 995 -167

Profit/loss for the period -7 871 -36 911

(*The correction is related to wrongly booked interest expense in trade payables - 83 458,74€ in 2016.

31.12.2017 31.12.2016Restricted equity 29 092 80Non-restricted equity 17 584 25 372

Distributable to equity holders 31.12.2017Retained earnings -36 995 -167Profit/loss for the period -7 871 -36 911Unrestricted equity reserve 62 450 62 450-capitalizeddevelopmentexpenses -1 464Total 16 121 25 372

31.12.2017 31.12.2016



9 Intangible assets

1000 EUR Immaterial


assets





1000 EUR Immaterial


assets




Carrying amount 31.12.2016 0,23 2 831 502 3 334

NOTES TO THE BALANCE SHEET (1000 EUR) 31/12/2017 31/12/201616 Appropriations

Cumulative accelerated depreciation 348 392

17 Provisions

Unprofitablecontracts 0 73Otherprovisions 200 200Non-currentprovisions 200 273

19 Non-currentliabilities

Interest-bearingNon-current loans from financial institutions, interest-bearing 30451 54031Non-current overdraft facility with bank, interest-bearing 18916 16043Non-current finance leases, interest-bearing 174 691Non-current accrued interest 0 4702Non-current installment liabilties, interest-bearing 271 0Total 49812 75468

Interest-free

Non-current accrued liabilities, (to others), interest-free 0 1122Non-current liabilities to others, interest-free 0 0Total 3750 1122

LiabilitiestoGroupcompanies

Other non-current internal debts, interest-bearing 855 1500

Other non-current internal debts, interest-free 13465 13465Other liabilities, internal 14320 14965

Currentliabilities

20 Interest-bearing liabilities to othersCurrent finance leases, interest bearing 62 1782Current installment debt 1738 0Total 1800 1782

20.1. Interest-bearingliabilitiestoGroupcompaniesInternal (internal bank) liabilities, interest-bearing 28158 14245Total 28158 14245

Interest-freeliabilitiestoothersTrade payables 1875 1034Current liabilities to others, interest-free 5059 2344Accrued liabilities 3596 1734Total 10530 5112

20.2. Interest-freeliabilitiestoGroupcompaniesCurrent internal trade payables, interest-free 0 107Current accrued internal interest payable, interest-free 6 105Current accrued internal liabilities, interest-free 29 623Total 35 3095

EssentielitemsofaccrualsanddeferredincomeAccrued personnel expenses 1584 658Current interest liabilities, interest-free 1416 112Prepaid income and accrued expenses 595 964

3596 1734

NOTES TO THE BALANCE SHEET (1000 EUR) 31.12.2017 31.12.2016

(14) Commitments and contingent liabilitiesLiabilities secured by pledged mortages and shares

Loans from financial institutions 49 366 70 075

Pledged real estate mortgagesPledged mortgages on company assets 155 000 155 000Carrying amount of pledged shares 121 479 121 479Total 276 479 276 479

The trademark of Empower Ltd has been pledged for loans from financial institutions.

Commitments on behalf of Group companies

Carrying amount of pledged shares 121 479 121 479GuaranteesMortgages on company assets 155 000 155 000Total 276 479 276 479

Other own commitments

Leasing commitmentsFalling due within a year 1 102 1 387Falling due within 1-5 years 686 1 693otal 1 788 3 080

Other commitmentsBank guarantees 673 17Limits 11 686Total 12 359 17

Long-term rental commitments

Empower Group has fixed term tenancies from its business premises which are falling due at the latest on 31th August 2027.

Rental liabilities due on incoming fiscal year based on indexed rent (incl. VAT) 123 372Rental liabilities due on subsequent to incoming fiscal years based on indexed rent (incl. VAT) 85 625Total 209 997

31.12.2017 31.12.201616 Tilinpäätössiirtojenkertymä

Poistoero 348 392

17 Pakollisetvaraukset

Varaustappiolliseensopimukseen 0 73Muutvaraukset 200 200Pitkäaikaiset varaukset 200 273

18 Pitkäaikainenvieraspääoma

KorollinenPitkäaikaiset lainat rahoituslaitoksilta, korollinen 30451 54031Pitkäaikainen shekkitililimiitti pankki, korollinen 18916 16043Pitkäaikaiset rahoitusleasingvelat, korollinen 174 691Pitkäaikaiset korkovelat 0 4702Pitkäaikaiset osamaksuvelat, korollinen 271 0Lainat rahoituslaitoksilta 49812 75468

Koroton

Pitkäaikaiset siirtovelat (muille), koroton 0 1122Pitkäaikaiset muut velat muille, korollinen 3750 0Yhteensä 3750 1122

Korottomatvelatkonserniyrityksille

Pitkäaikaiset muut velat konserniyrityksille, korollinen 855 1500Pitkäaikaiset muut velat konserniyrityksille, koroton 13465 13465Muut velat, sisäinen 14320 14965

Lyhytaikainenvieraspääoma 31/12/2017 31/12/2016

19 KorollisetvelatmuilleLyhytaikaiset rahoitusleasingvelat, korollinen 62 1782Lyhytaikaiset osamaksuvelat 1738 0Yhteensä 1800 1782

19.1.Korollisetvelatsamankonserninyrityksille

Konsernitilivelat kons.yrityksille, korollinen 28158 14245Yhteensä 28158 14245

KorottomatvelatmuilleOstovelat 1875 1034Lyhytaikaiset velat muille, koroton 5059 2344Siirtovelat 3596 1734Muut lyhytaikaiset velat 10530 5112

19.2.KorottomatvelatsamankonserninyrityksilleLyhytaikaiset ostovelat konserniyrityksille, koroton 0 107Lyhytaikaiset korkovelat konserniyrityksille, koroton 6 105Lyhytaikaiset siirtovelat konserniyrityksille, koroton 29 623Lyhytaikaiset velat saman konsernin yrityksille 35 3095

SiirtovelkojenolennaisimmaterätJaksotetut henkilöstökulut 1584 658Lyhytaikaiset korkovelat, koroton 1416 112Siirtovelat 595 964

3596 1734

31.12.2017 31.12.201616 Tilinpäätössiirtojenkertymä

Poistoero 348 392

17 Pakollisetvaraukset

Varaustappiolliseensopimukseen 0 73Muutvaraukset 200 200Pitkäaikaiset varaukset 200 273

18 Pitkäaikainenvieraspääoma

KorollinenPitkäaikaiset lainat rahoituslaitoksilta, korollinen 30451 54031Pitkäaikainen shekkitililimiitti pankki, korollinen 18916 16043Pitkäaikaiset rahoitusleasingvelat, korollinen 174 691Pitkäaikaiset korkovelat 0 4702Pitkäaikaiset osamaksuvelat, korollinen 271 0Lainat rahoituslaitoksilta 49812 75468

Koroton

Pitkäaikaiset siirtovelat (muille), koroton 0 1122Pitkäaikaiset muut velat muille, korollinen 3750 0Yhteensä 3750 1122

Korottomatvelatkonserniyrityksille

Pitkäaikaiset muut velat konserniyrityksille, korollinen 855 1500Pitkäaikaiset muut velat konserniyrityksille, koroton 13465 13465Muut velat, sisäinen 14320 14965

Lyhytaikainenvieraspääoma 31/12/2017 31/12/2016

19 KorollisetvelatmuilleLyhytaikaiset rahoitusleasingvelat, korollinen 62 1782Lyhytaikaiset osamaksuvelat 1738 0Yhteensä 1800 1782

19.1.Korollisetvelatsamankonserninyrityksille

Konsernitilivelat kons.yrityksille, korollinen 28158 14245Yhteensä 28158 14245

KorottomatvelatmuilleOstovelat 1875 1034Lyhytaikaiset velat muille, koroton 5059 2344Siirtovelat 3596 1734Muut lyhytaikaiset velat 10530 5112

19.2.KorottomatvelatsamankonserninyrityksilleLyhytaikaiset ostovelat konserniyrityksille, koroton 0 107Lyhytaikaiset korkovelat konserniyrityksille, koroton 6 105Lyhytaikaiset siirtovelat konserniyrityksille, koroton 29 623Lyhytaikaiset velat saman konsernin yrityksille 35 3095

SiirtovelkojenolennaisimmaterätJaksotetut henkilöstökulut 1584 658Lyhytaikaiset korkovelat, koroton 1416 112Siirtovelat 595 964

3596 1734

31.12.2017 31.12.2016


Tilinpäätöksen ja toimintakertomuksen allekirjoitukset

Helsingissä 22. päivänä toukokuuta 2018

Bo Elisson puheenjohtaja

Kristofer Runnquist hallituksen jäsen

Rainer Häggblom hallituksen jäsen

Tilinpäätösmerkintä

Suoritetusta tilintarkastuksesta on tänään annettu kertomus.

Helsingissä 24. päivänä toukokuuta 2018

Ernst & Young OyTilintarkastusyhteisö

Erkka Talvinko, KHT

Jari Onniselkätoimitusjohtaja

Johan Bjurström hallituksen jäsen

Matti Manninenhallituksen jäsen


AUDITOR’S REPORT (TRANSLATION OF THE FINNISH ORIGINAL)

To the Annual General Meeting of Empower Oyj

Report on the Audit of Financial Statements

Opinion We have audited the financial statements of Empower Oyj (business identity code 2727327-9) for the year ended 31 December, 2017. The financial statements comprise the consolidated balance sheet, consolidated income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes, including a summary of significant accounting policies, as well as the parent company’s balance sheet, income statement and notes.

In our opinion financial statements give a true and fair view of the group’s and parents financial position as well as its financial performance and their cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and comply with the statutory requirements

Basis for Opinion We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditors Responsibilities for the Audit of Financial Statements section of our report. We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter We draw attention to the accounting policies in the financial statements regarding information on uncertainty of the company’s ability to continue as a going concern. Should the risks described in the above mentioned accounting policies realize, it could have an impact on the company’s ability to continue operations in its current form and in its ability to pay its debts. Our opinion is not modified in respect of this matter.

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using

the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of Financial Statements Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of

the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 parent company’s or the group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the financial statements give a true and fair view.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other Reporting Requirements

Other information

The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.

In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.

If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard.

Helsinki 24.5.2018

Ernst & Young OyAuthorized Public Accountant Firm

Erkka TalvinkoAuthorized Public Accountant

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