27226086 2016-01-01 2016-12-31 27226086 2016-01-01 2016-12-31 cmn:PreviousYearMember 27226086 2016-01-01 2016-12-31 cmn:TwoYearsAgoMember 27226086 2016-01-01 2016-12-31 cmn:ThreeYearsAgoMember 27226086 2016-01-01 2016-12-31 cmn:FourYearsAgoMember 27226086 2016-01-01 2016-12-31 0 27226086 2016-01-01 2016-12-31 cmn:PreviousYearMember 1 27226086 2016-01-01 2016-12-31 cmn:TwoYearsAgoMember 2 27226086 2016-01-01 2016-12-31 cmn:ThreeYearsAgoMember 3 27226086 2016-01-01 2016-12-31 cmn:FourYearsAgoMember 4 27226086 2016-12-31 27226086 2016-12-31 cmn:PreviousYearMember 27226086 2016-12-31 cmn:TwoYearsAgoMember 27226086 2016-12-31 cmn:ThreeYearsAgoMember 27226086 2016-12-31 cmn:FourYearsAgoMember 27226086 2016-01-01 2016-12-31 5 27226086 2016-01-01 2016-12-31 cmn:PreviousYearMember 6 27226086 2016-01-01 2016-12-31 cmn:TwoYearsAgoMember 7 27226086 2016-01-01 2016-12-31 cmn:ThreeYearsAgoMember 8 27226086 2016-01-01 2016-12-31 cmn:FourYearsAgoMember 9 27226086 2016-01-01 2016-12-31 0 27226086 2016-01-01 2016-12-31 0 27226086 2016-01-01 2016-12-31 1 27226086 2016-01-01 2016-12-31 2 27226086 2016-01-01 2016-12-31 0 27226086 2016-01-01 2016-12-31 1 27226086 2015-01-01 2015-12-31 27226086 2016-01-01 2016-12-31 fsa:ProposedDividendRecognisedInEquityMember 27226086 2015-01-01 2015-12-31 fsa:ProposedDividendRecognisedInEquityMember 27226086 2016-01-01 2016-12-31 fsa:ProposedExtraordinaryDividendRecognisedInEquityMember 27226086 2015-01-01 2015-12-31 fsa:ProposedExtraordinaryDividendRecognisedInEquityMember 27226086 2016-01-01 2016-12-31 fsa:RetainedEarningsMember 27226086 2015-01-01 2015-12-31 fsa:RetainedEarningsMember 27226086 2015-12-31 iso4217:DKK xbrli:pure Regnskabsklasse C, stor virksomhed 2016-01-01 2016-12-31 Teller A/S Dorthe Rosenkilde Saunders Lautrupbjerg 10 DK-2750 Ballerup 27226086 2017-03-24 www.Teller.com 782500000 331400000 457000000 579400000 0.420 0.200 0.410 <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">*) Key figures for the years 2013 &amp; 2012 have been restated due to the merger at 1 January 2014 of Teller A/S and Norwegian sister company Teller AS. The restating is completed by using the aggregating method of the companies (proforma).</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Management’s review</td></tr><tr><td colspan="1">Business foundation</td></tr><tr><td colspan="1">The objective of Teller A/S is to operate systems and services in the market for payment cards and payment services, as well as any other business associated with these activities.</td></tr><tr><td colspan="1">2016 highlights</td></tr><tr><td colspan="1">Teller A/S’ business in Norway and Sweden are carried out through branches which are sales offices.</td></tr><tr><td colspan="1">Teller is the leading Nordic provider of card acquiring and has more than 35 years experience of card payments and is an expert in payments across national borders. Teller serve the merchant customers’ businesses with acquiring of the broadest range of payment methods in the Nordic region, including MasterCard, Visa, JCB, American Express, Union Pay and local payment met­hods. Teller are present across all Nordic and Baltic countries and work with a broad set of value-adding partners across the region.</td></tr><tr><td colspan="1">The transaction volumes saw strong growth across geographies and products. Compared to previous years, Teller experienced stronger growth as a result of the transformation of the business</td></tr><tr><td colspan="1">focusing on much improved commercial capability, the launch of competitive new solutions and acquisition of Nordea’s merchant acquiring services – now Kortaccept Nordic AB - in December 2015 has been a significant lever for the continued growth, contributing not least to improving our position in Sweden.</td></tr><tr><td colspan="1">Teller manages and simplifies merchants’ payments flow. We enable merchants to accept payments, easily and without friction regardless of channels, receive the settlement in their bank account and get detailed reconciliation information and statistics, all in different currencies and frequencies depending on merchant needs and consumer preferences.</td></tr><tr><td colspan="1">Since late 2015, Teller has focused on transforming the sales approach and on expanding the sales force in all markets towards small and medium-sized merchants and partners. This included a reorganisation in early 2016 along with the roll-out of a best-practice sales approach and tools in all call centres. This has led to strong results within cross-selling across our business and the sale of product bundles.</td></tr><tr><td colspan="1">Our Large Account and Key Account sales force was further professionalised in 2016 following a reorganisation in 2015. This led to major new wins based on an “integrated proposition” dialogue along with a number of constructive renegotiation processes with key accounts.</td></tr><tr><td colspan="1">During 2016, sales effectiveness programmes have been executed, leading to an aligned way-of-working, increasing transparency on the Nordic opportunity pipeline.</td></tr><tr><td colspan="1">When we experience pricing pressure, we address this through a solution approach by selling integrated propositions. As we have the full solution suite and are able to advise our customers across it (acquiring, terminals, mobile acceptance, e-commerce and value-added services such as loyalty, business intelligence and digital receipts), the price pressure is largely outweighed by new services and revenue streams.</td></tr><tr><td colspan="1">In October 2016, we launched our new card storage service to be rolled out to all Nordic e-commerce merchants, enabling their consumers to store their payment details securely with Nets. This allows consumers to shop easily using only three digits (CVC) across all merchants using Teller’s e-commerce solutions.</td></tr><tr><td colspan="1">Financial performance</td></tr><tr><td colspan="1">On 2 November 2015, Visa Inc. and Visa Europa Ltd. (Visa Europa) announced that they had reached an agreement for Visa Inc. to acquire Visa Europe, and the deal closed on 21 June 2016. As part of the sale of the Nets Group in 2014, certain agreements were entered into about the future distribution of the proceeds, given that a sale of Visa Europe would take place. The fair value adjustments of the Visa shares is included in net profit for the year with DKK 433 million (in 2015 DKK 1,139 million). The value adjustments of Visa shares in Teller Branch Norway amounted to DKK 185 million and belongs to Teller.</td></tr><tr><td colspan="1">Net profit for the year was DKK 579 million, which is a decrease of DKK 718 million compared to 2015. The results are – for both years - positively affected by financial income of a non-recurring nature linked to Visa transaction. Net profit level was in line with expectations.</td></tr><tr><td colspan="1">Revenue from card acquiring activities increased by 19% com­pared to 2015 and amounted to DKK 783 million.</td></tr><tr><td colspan="1">External and staff costs decreased by 14% compared to 2015 and amounted to DKK 429 million. Our focus on operating efficiency and cost optimisation remains a persistent part of the strategy. In 2014, the Nets Group initiated a transformation programme, part of which is aimed at improving operating efficiencies across the Nets group.</td></tr><tr><td colspan="1">Processing, service and development have been outsourced to the affiliated company Nets Denmark A/S which is responsible for continuously maintaining and updating operating platforms and business settlement systems. There will continue to be invested significant resources to optimize operations and processes so Teller can handle increased transaction volumes efficiently in the future</td></tr><tr><td colspan="1">Equity amounted to DKK 1,335 million, which is equivalent to a solvency ratio of 20% compared to 21% ultimo 2015. Proposed dividends amounted to DKK 562 million. Teller has distributed an extraordinary dividend of DKK 698 million in 2016.</td></tr><tr><td colspan="1">The Danish Payment Services Act requires that companies offering acquiring/issuing of payment cards must have authorisation from the Danish Financial Supervisory Authority to operate as a Payment Institution. Teller A/S has been approved as a Payment Institution, and the capital requirement in accordance with the rules of the Danish Financial Supervisory Authority has been calculated at DKK 67 million. Equity at 31 December 2016 amounted to DKK 1,335 million.</td></tr><tr><td colspan="1">Business Strategy</td></tr><tr><td colspan="1">Teller A/S, together with affiliates in Nets A/S Group, has implemented several initiatives to support our future strategy.</td></tr><tr><td colspan="1">Our strategy was launched in 2016 with the vision of Powering Digital Payments. The successful execution of the strategy centres around four key elements; great payments, a great network and great ideas, all executed by great people.</td></tr><tr><td colspan="1">Nets is well positioned to take advantage of the expected structural annual growth of 4% in the Nordic payments industry. To be competitive and able to benefit from the structural growth, investments and resources are prioritised around key payment technologies and platforms. These include mobile, e-commerce, PSD2, data analytics and blockchain. In these areas we are focused on driving innovation and continuously bringing new value propositions to the market for the benefit of merchants, corporates, banks and consumers.</td></tr><tr><td colspan="1">The commercial logic in our strategy is based on four strategic growth areas</td></tr><tr><td colspan="1">- Mobile payments</td></tr><tr><td colspan="1">- Outsourcing</td></tr><tr><td colspan="1">- Value chain expansion</td></tr><tr><td colspan="1">- Nordic growth</td></tr><tr><td colspan="1">On top of the strategic growth areas, priority is given to further enhance the operational efficiency of the group. Additionally, digital innovation is a key focus area as we operate in a rapidly developing sector.</td></tr><tr><td colspan="1">Mobile payments</td></tr><tr><td colspan="1">With the level of digitisation in Nordic societies at an unparalleled height, more and more consumer transactions are carried out online or on smartphones. In this new world order, we play an important role in enabling the network of different stakeholders whose needs we address to handle the rising digitisation and the needs it creates.</td></tr><tr><td colspan="1">Nets &amp; Teller are natural partners to the financial services industry, with a focus on developing and co-creating our own products and plat-forms. An example of this is our tokenisation services launched in March, which we believe is an important step towards frictionless connected commerce. With tokenisation, token numbers substitute sensitive cardholder data to prevent fraud. The token corresponds to an actual card number stored in our token vault and can be used for transactions and other value-added services such as loyalty offerings or e-receipts.</td></tr><tr><td colspan="1">While mobile payment in retail is now gravitating towards contactless payments based on near-field communication (NFC), the market for mobile payments is still quite fragmented with mobile payment providers often deploying proprietary solutions. With our tokenisation services, we is focusing on international standards to ensure scalability and adoption. Point-of-sale terminals do not distinguish between actual card or token numbers, and as all contactless terminals accept mobile contactless payments, our terminals at merchants’ points of sale were in fact ready for all original equipment manufacturer (OEM) Pays from day one.</td></tr><tr><td colspan="1">Outsourcing</td></tr><tr><td colspan="1">We see a growing trend in banks outsourcing non-core processes, and we are able to assist them with payment-related processes. To this end we have delivered a platform for Consumer Management Services (CMS) which has already gained strong traction across card issuers. In 2016, Nets had 2.3 million accounts managed on our CMS platform. As we process transactions initiated by approximately 35 million cards, increasing the penetration of CMS represents a potentially significant opportunity for Nets given the number of cards already handled by us in the region.</td></tr><tr><td colspan="1">Value chain expansion</td></tr><tr><td colspan="1">Teller and Nets has an extensive distribution network in the Nordic region, which will allow us to leverage the roll-out of new products and solutions commercially. In addition, we are driving new opportunities by up-selling and cross-selling products and services across the group. Towards merchants, we see a continued demand for distributing omni-channel solutions that enable merchants to accept payments from their customers via a wide range of payment solutions. Merchants increasingly demand a “one stop” payment provider for all popular payment instruments such as card, invoice, account, e-wallets, etc.</td></tr><tr><td colspan="1">We are constantly innovating to offer additional value-added services such as data analytics, including e-receipts, loyalty programmes, portal services and dynamic currency conversion.</td></tr><tr><td colspan="1">Within data analytics, we have made investments during 2016. New advanced technology and competences have been onboarded to grow capabilities within advanced analytics and data visualisation. We are actively running projects to turn data insights into business value for merchants, banks, corporates and consumers. Nets is well positioned to explore future commercial opportunities and meet a growing demand for clarity. We will do this by combining our deep understanding of the financial industry in the Nordics with the data insights.</td></tr><tr><td colspan="1">Towards banks we delivered a fraud prevention system which has already gained strong traction across card-issuers. Our enhanced fraud and dispute solutions support predictive fraud-prevention analytics. Highly advanced and automated card fraud is growing rapidly, resulting in high administrative and liability-related costs. We offer a high-quality combination of experienced fraud analysts and a state-of-the-art system that enables prevention of fraud in real time. We can thereby potentially reduce gross fraud significantly, lowering the cost burden for issuers.</td></tr><tr><td colspan="1">Nordic growth</td></tr><tr><td colspan="1">The Nordic payments market is characterised by continued growth in transactions both in terms of number and total value of transactions. Our acquisition of Nordea’s acquiring business (Kortaccept) in December 2015 added a large customer base, sales force and referral network with the largest bank in the Nordic region. Consequently, we have seen transaction volumes increase significantly in 2016.</td></tr><tr><td colspan="1">We expect to secure further growth going into 2017 by increasing our customer portfolios in Sweden, partly through leveraging theexisting Kortaccept customer base but also through investments done into our presence in Sweden, not least in stronger outbound sales capabilities.</td></tr><tr><td colspan="1">As part of our growth strategy we continue to focus on increasing customer retention through pro-active retention measures.</td></tr></table><br><table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Risk management</td></tr><tr><td colspan="1">Risk management is an integral part of our way of doing business at Nets Group and helps us understand and manage the uncertainties inherent in our strategy and the daily running of our business. Risk management is carried out jointly for the Group.</td></tr><tr><td colspan="1">Risk management is regarded as a needed core competency for executive management, business leaders and employees at all levels and has evolved as a discipline throughout 2016 to provide a clear and to the best of our knowledge complete overview of risks in the Group.</td></tr><tr><td colspan="1">Nets’ policy framework consists of a risk management policy, a security policy, a business continuity policy, a merchant acquiring risk policy and a treasury policy.The policy framework sets out the activities and risk assessment methodology used to ensure that all material risks are identified and that a consistent approach to risks is integrated into business management and decision-making across the Nets Group. At Nets, we define risk as “the effect of uncertainty on business objectives”.</td></tr><tr><td colspan="1">The Board of Directors of Nets A/S is responsible for the overall governance of the companies in Nets Group and oversees our risk landscape and approves strategies and policies within the areas of risk management, security, business continuity, merchant acquiring and treasury risk.</td></tr><tr><td colspan="1">The Board has appointed an Audit Committee which, among other tasks, monitors risk management strategies, policies, processes and methodology.</td></tr><tr><td colspan="1">The Group Executive Committee is responsible for allocating sufficient resources and budget to our Risk Management unit.Risk Management provides the domain expertise, policies, standards and procedures to enable the risk management process, and also facilitates risk identification, assessment and treatment plans.</td></tr><tr><td colspan="1">A “three lines of defence” model is implemented throughout the organisation and forms the basis for risk decision-making within Nets. The model is used to structure roles, responsibility and accountability for decision-making concerning risk and internal controls, and to ensure good collaboration between the three lines.</td></tr><tr><td colspan="1">First line – Business units and Group units.</td></tr><tr><td colspan="1">The business and group units perform the day-today risk-bearing activities and are responsible for identifying, assessing and treating risks within those activities. The business units and group units are responsible for com­pliance with legal, contractual and regulatory requirements.</td></tr><tr><td colspan="1">Second line – Risk management.</td></tr><tr><td colspan="1">The Risk Management function is responsible for defining policies, standards and procedures for risk-based decision-making, internal control and reporting. Risk Management supports the risk assessment process in the business units and group units, maintains the enterprise-wide overview of Nets’ risk landscape, mitigation plans and progress in relation hereto.</td></tr><tr><td colspan="1">Third line – Independent assurance.</td></tr><tr><td colspan="1">The third line is maintained by Nets’ internal and external auditors, providing independent assurance concerning the risk and control functions performed by the first and second lines. Internal Systems Audit coordinates and performs the audit of the general IT controls in Nets, the IT-based user systems and applications and the IT systems offered for exchange of data with the connected data centres and associated financial enterprises. Additionally, the core business processes in Nets and projects, which are important to Nets’ customers or internally within Nets, are audited. As part of the audit completion, the conclusions of each audit are reported to the managers of the activities audited, Executive Management and the Board of Directors.</td></tr><tr><td colspan="1">The risks described below are those currently considered the most material to our business.</td></tr><tr><td colspan="1">The risks are the result of risk assessments and workshops within the different business units and group units in Nets. Top manage­ment review the risks and prioritise, approve and follows up on mitigation actions. The mitigants to the risks set out below are examples described in summary form to further the understanding of the risk in question and how it may be mitigated.</td></tr><tr><td colspan="1">The risks described below are not listed in any particular order of priority as to significance or probability.</td></tr><tr><td colspan="1">Technology innovation</td></tr><tr><td colspan="1">Global technology trends such as artificial intelligence, biometrics, blockchain, Internet of Things (IoT), Open APIs and the use of cloud technologies accelerate the develop­ment and implementation of new products, services and business models. These new products, services and business models could create new opportunities but also potentially challenge.</td></tr><tr><td colspan="1">Industry &amp; market transformation</td></tr><tr><td colspan="1">New technologies (as described above), market entrants and regulation (as described below) drive structural changes in the industry. Traditional payment methods are supplemented by methods represented by both new players and incumbents, positioning themselves towards a developing payments market. E-commerce, mobile com­merce and digital products (app stores, streaming, in-app) are expected to drive a higher pace and growth rates, but are also easier for competitors to capture when compared with in-store products and services due a to lack of new hardware. Further, consumers, merchants and corporates expect transparent, digitised and readily available services. Increased competition could also result in an increased price pressure on services delivered by Nets.</td></tr><tr><td colspan="1">Regulatory environment</td></tr><tr><td colspan="1">The Group is subject to a wide array of laws and regulations in the jurisdictions in which it operates. Further, regulatory bodies across Europe, including the Nordic region, are placing the financial industry, payment institutions and providers of digital products and services under increased regulatory scrutiny. Privacy and financial crime prevention require significant resources while local regulators adapt and define clear requirements to market partici­pants. Anti-Money Laundering (AML) is one example where Nets must ensure that the requirements are being adhered to. As data processor and/or data controller, Nets must comply with strict data protection laws in the jurisdictions in which it operates. The General Data Protection Regulation (GDPR) is an area in which Nets as a data processor must implement appropriate technical and organisational measures in order to meet the requirements of the GDPR and ensure the protection of the rights of the data subject.</td></tr><tr><td colspan="1">PSD2</td></tr><tr><td colspan="1">Currently, banks do not grant access to information stored in their customers’ accounts. However, with PSD2, banks must allow third-party access if the third party has a licence to provide payment services. This may result in increased competition and opportunities for both traditional and new payment providers. For example, peer-to-peer payment platforms could shift from mostly card-based payments to account-based payments. PSD2 may also enable new business models.</td></tr><tr><td colspan="1">Information security</td></tr><tr><td colspan="1">Relevant security risk events include social engineering such as phishing and spear-phishing, malware and ransomware monitored during the year. In addition, malicious insider data breach has been a focus area for mitigation, including an increased logging and monitoring.</td></tr><tr><td colspan="1">Stability and operations</td></tr><tr><td colspan="1">Nets operates a number of services critical to the national financial infrastructures in the Nordic countries, such as domestic debit card schemes, clearing systems, e-identity schemes and payments platforms. As these systems are critical for our customers, government organisations and authorities, stability has a high priority at Nets. Any unscheduled system downtime would impact our services, causing Service Level Agreement (SLA) breaches, reputational damage and/or financial loss. Common risk events include change implementation issues and errors, network malfunction and Distributed Denial of Service (DDoS) attacks. Operational stability has been a critical strategic priority during 2016 to mitigate this risk both in the short and long term. If Nets fails to attract, manage and retain qualified personnel or key employees this could result in lack of critical resources and competence to maintain stable operations.</td></tr><tr><td colspan="1">Merchant acquiring</td></tr><tr><td colspan="1">Fraud risk</td></tr><tr><td colspan="1">Nets has a potential financial liability and could also suffer reputational damage for fraudulent digital payment transactions</td></tr><tr><td colspan="1">fraudulent sales of goods and service, or customers that get defrauded). Failure to effectively manage this risk could increase Nets’ chargeback liability and lead to fees from international card schemes. A chargeback normally occurs when a dispute between the merchant and the cardholder is not resolved in the favour of the merchant, so the transaction is “charged back” to the merchant and the purchase price is credited or otherwise refunded to the cardholder. If Nets is unable to collect such amounts from the merchant’s account, or if the merchant refuses or is unable to e.g. due to bankruptcy, then Nets will bear the losses. The risk of fraud-related chargebacks is greater in certain industries and especially within e-commerce.</td></tr><tr><td colspan="1">Credit risk exposure</td></tr><tr><td colspan="1">The Group is exposed to the risk of unpaid merchant service charges where a customer ceases to trade. To manage this risk, the Group maintains credit risk exposure in line with approved appetite for risk whilst achieving appropriate risk versus reward performance and ensuring that customers will be able tomeet their obligations to the Group.</td></tr><tr><td colspan="1">Third parties</td></tr><tr><td colspan="1">Outsourcing and use of third parties to carry out core business activities represent a risk while contacts and relationships with critical suppliers must also be monitored. Nets may also be exposed to stability issues with third-party systems operated by other parties in the digital payments ecosystem.</td></tr><tr><td colspan="1">The Group has entered into license agreements with major card scheme operators relevant for the merchant acquiring activities.</td></tr><tr><td colspan="1">For further information please find the risk management description in the Management’s review of the parent company Nets A/S.</td></tr><tr><td colspan="1">Outlook for 2017</td></tr><tr><td colspan="1">Teller has implemented several initiatives to support the new strategy and is well positioned to take advantage of the expected annual growth of 4% in the Nordic Payment Industry.</td></tr><tr><td colspan="1">Focus areas in 2017 are among other things</td></tr><tr><td colspan="1">Value chain expansion by leveraging our extensive distribution network across the Nordic region to roll out new products and solutions commercially.</td></tr><tr><td colspan="1">Nordic growth, especially in Sweden, by leveraging the large customer base, sales force and referral network that we gained through the Kortaccept acquisition. Additionally also through e.g. investments in stronger outbound sales capabilities.</td></tr><tr><td colspan="1">An increase in net turnover and continued improvement in operating profit are expected in 2017.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Corporate social responsibility (CSR)</td></tr><tr><td colspan="1">Please find the statutory statement on Corporate Social Responsibility description of this subject in the Management’s review of the parent company, Nets A/S.</td></tr><tr><td colspan="1">With respect to the statutory statement on social responsibility in accordance with section 99a of the Danish Financial Statements Act, please refer to the Management's Review of the parent company Nets A/S.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Report on gender composition of management</td></tr><tr><td colspan="1">With respect to the gender composition of board members elected by the General Assembly as well as the policy for the under­represented gender on other managerial levels in accordance with the Danish Financial Statements Act section 99b, please refer to the Management's Review of the parent company, Nets A/S.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Statement by the Board of Directors and the Executive Board</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">The Board of Directors and the Executive Board have today considered and adopted the Annual Report of Teller A/S for the financial year 1 January – 31 December 2016.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">The Annual Report is prepared in accordance with the Danish Financial Statements Act.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">It is our opinion that the Financial Statements give a true and fair view of the Company's financial position as at 31 December 2016 and of the results of the Company's operations for the financial year 1 January – 31 December 2016.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">In our opinion, Management's Review includes a true and fair account of the matters addressed in the Review.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">We recommend that the Annual Report be adopted at the Annual General Meeting.</td></tr></table> Ballerup 2017-03-24 <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Independent Auditor’s Report</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">To the Shareholder of Teller A/S</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Opinion</td></tr><tr><td colspan="1">In our opinion, the Financial Statements give a true and fair view of the financial position of the Company at 31 December 2016, and of the results of the Company’s operations for the financial year 1 January - 31 December 2016 in accordance with the Danish Financial Statements Act.</td></tr><tr><td colspan="1">We have audited the Financial Statements of Teller A/S for the financial year 1 January - 31 December 2016, which comprise income statement, balance sheet, statement of changes in equity and notes, including a summary of significant accounting policies (“financial statements”).</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Basis for Opinion</td></tr><tr><td colspan="1">We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, 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.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Statement on Management's Review</td></tr><tr><td colspan="1">Management is responsible for Management’s Review.</td></tr><tr><td colspan="1">Our opinion on the financial statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon.</td></tr><tr><td colspan="1">In connection with our audit of the financial statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.</td></tr><tr><td colspan="1">Moreover, it is our responsibility to consider whether Management’s Review provides the information required under the Danish Financial Statements Act.</td></tr><tr><td colspan="1">Based on the work we have performed, in our view, Management’s Review is in accordance with the Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement in Management’s Review.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Management's Responsibilities for the Financial Statements</td></tr><tr><td colspan="1">Management is responsible for the preparation of Financial Statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.</td></tr><tr><td colspan="1">In preparing the financial statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Auditor's Responsibilities for the Audit of the Financial Statements</td></tr><tr><td colspan="1">Our objectives are to obtain reasonable assurance about 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 ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.</td></tr><tr><td colspan="1">As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional skepticism throughout the audit. We also</td></tr><tr><td colspan="1">·        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.</td></tr><tr><td colspan="1">·        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 Company’s internal control.</td></tr><tr><td colspan="1">·        Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.</td></tr><tr><td colspan="1">·        Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’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.</td></tr><tr><td colspan="1">·        Evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view.</td></tr><tr><td colspan="1">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.</td></tr></table> Hellerup 2017-03-24 <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">The Annual Report has been prepared in accordance with the provisions applying to reporting class C large enterprises under the Danish Financial Statements Act.</td></tr></table> true <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Referring to The Danish Financial Statements Act § 112 a consolidated annual report has not been prepared for Teller A/S and the subsidiaries, since these companies are part of the con­solidated financial statements for the Group, Nets A/S, Lautrupbjerg 10, DK-2750 Ballerup.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Cash flow statement is not prepared in accordance with the Danish Financial Statements Act § 86 stk. 4, since the company is part of the consolidated financial statements for the Group, Nets A/S, Lautrupbjerg 10, DK-2750 Ballerup.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Recognition and measurement</td></tr><tr><td colspan="1">Assets are recognised in the balance sheet when it is probable that future economic benefits will flow to the Company and the value of the asset can be reliably measured.</td></tr><tr><td colspan="1">Liabilities are recognised in the balance sheet when an outflow of economic benefits is probable and when the liability can be reliably measured.</td></tr><tr><td colspan="1">On initial recognition, assets and liabilities are measured at cost. Subsequently, assets and liabilities are measured as described below for each individual item.</td></tr><tr><td colspan="1">In recognising and measuring assets and liabilities, any gains, losses and risks occurring prior to the presentation of the Annual Report that evidence conditions existing at the balance sheet date are taken into account.</td></tr><tr><td colspan="1">Income is recognised in the income statement as earned. Equally, costs incurred to generate the year's earnings are recognised, including depreciation, amortisation, impairment losses and provisions as well as reversals as a result of changes in accounting estimates of amounts which were previously recognised in the income statement.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Foreign currency translation</td></tr><tr><td colspan="1">On initial recognition, transactions denominated in foreign curren­cies are translated at the exchange rates at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as interest income or expense and similar items.</td></tr><tr><td colspan="1">Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rates at the balance sheet date. The difference between the exchange rates at the balance sheet date and at the date at which the receivable or payable arose or was recognised in the latest financial statements is recognised in the income statement as interest income or expense and similar items.</td></tr><tr><td colspan="1">On recognition of subsidiaries in the financial statements with another functional currency than DKK, the items of the income statements are translated at the exchange rate at the transaction date, and the balance sheet items are translated at the exchange rate at the balance sheet date. The average exchange rate for the individual month is used as the exchange rate at the transaction date to the extent that this does not differ significantly. Exchange rate differences arisen when translating foreign subsidiaries' equity at the beginning of the year using the exchange rate at the balance sheet date and when translating income statements from average exchange rates at the transaction date to the exchange rate at the balance sheet date are recognised directly in equity.</td></tr><tr><td colspan="1">On recognition of foreign branches which are integrated entities, monetary items are translated at the exchange rates at the balance sheet date. Non-monetary items are translated at the exchange rates at the acquisition date or at the date of any subsequent revaluation or impairment of the asset. Income statement items are translated at the exchange rates at the transaction date, although items derived from non-monetary items are translated at the historical exchange rates applying to the non-monetary items.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Revenue</td></tr><tr><td colspan="1">Revenue from the sale is recognised in the income statement provided that transfer of risk to the buyer has taken place before year end and that the income can be reliably measured and is expected to be received. Fees, directly related to income from card activities are deducted in revenue.</td></tr><tr><td colspan="1">Revenue is recognised excl. VAT, taxes and duties and discounts in relation to the sale.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">External costs</td></tr><tr><td colspan="1">External costs incurred in generating the revenue for the year comprise IT operation, operating leases of software, external pro­duction costs, loss and fraud, development costs, maintenance and development costs that do not qualify for capitalisation, postage, envelopes and other costs incurred in distributing goods as well as marketing and other sales costs and administration costs and lease agreements.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Staff costs</td></tr><tr><td colspan="1">Staff costs comprise wages and salaries and remuneration, pension contributions, social security costs and other salary-related costs.</td></tr><tr><td colspan="1">Share options issued are measured at fair value at the date of granting times the probability of vesting. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions. The fair value is fixed at the grant date. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The probabilities are adjusted at yearend. Teller A/S recognises the impact of adjustments to estimates, if any, in the income statement and in a corresponding adjustment to equity over the remaining vesting period. Adjustments relating to prior years are included in the income statement in the year of adjustment.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Depreciation, amortisation and impairment losses</td></tr><tr><td colspan="1">Depreciation, amortisation and impairment losses comprise the year's depreciation on property, plant and equipment, amortisation of intangible assets and impairment losses.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Net profit/loss from investments in subsidiaries</td></tr><tr><td colspan="1">The proportionate share of the net profit/loss of the individual subsidiaries is recognised in the income statement after elimination of intra-group gains/losses.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Financial income and expenses</td></tr><tr><td colspan="1">Financial income and expenses comprise interest income and expense and realised and unrealised gains and dividends and losses on transactions denominated in foreign currencies and securities.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Tax</td></tr><tr><td colspan="1">Nets A/S and Danish subsidiaries are jointly taxed. The current Danish corporation tax allocated between the jointly taxed companies in proportion to their taxable income is recognised in the income statement. The tax saving as a result of losses is also refunded proportionately.</td></tr><tr><td colspan="1">Deferred tax is measured using the balance sheet liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. The change in deferred tax liabilities is also recognised in the income statement.</td></tr><tr><td colspan="1">Tax assets are recognised if they can be set off against deferred tax in other consolidated enterprises or if it is probable that it can be utilised in future earnings.</td></tr><tr><td colspan="1">Current and deferred tax is computed at the tax rates applicable.</td></tr><tr><td colspan="1">The companies in the Group are taxed under the on-account tax scheme. Interest/refund relating to the tax payment is included in interest income and expense and similar items.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Intangible assets</td></tr><tr><td colspan="1">Customer agreements</td></tr><tr><td colspan="1">Customer agreements acquired are measured at historical cost less accumulated amortisation and any impairment loss. Amorti­sation is calculated using the straight-line method to allocate the cost over estimated useful life, which exceed up to 15 years.</td></tr><tr><td colspan="1">Goodwill</td></tr><tr><td colspan="1">Goodwill represents the value of the current workforce and know-how and also the operational synergies expected from integration within the company. Goodwill is measured at historical cost less accumulated amortisation and any impairment loss. Amortisation is calculated using the straight-line method to allocate the cost over estimated useful life of 5-10 years.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Property, plant and equipment</td></tr><tr><td colspan="1">Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.</td></tr><tr><td colspan="1">Depreciation is provided on a straight-line basis over the expected useful lives of the assets. The expected useful lives are as follows</td></tr><tr><td colspan="1">Fixtures and fittings, tools and equipment 2-5 years.</td></tr><tr><td colspan="1">Gains and losses from the current replacement of property, plant and equipment are recognised as external costs in the income statement.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Impairment losses</td></tr><tr><td colspan="1">The carrying amount of intangible assets as well as property, plant and equipment is tested annually for indications of impairment in excess of the impairment losses indicated in amortisation and depreciation.</td></tr><tr><td colspan="1">Impairment tests are conducted of individual assets or groups of assets when there is an indication that they may be impaired. The carrying amount of impaired assets is reduced to the lower of the net selling price and the value in use (recoverable amount).</td></tr><tr><td colspan="1">The recoverable amount is the higher of an asset's net selling price and its value in use. The value in use is determined as the present value of the anticipated net income from the use of the asset or group of assets.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Investments in subsidiaries</td></tr><tr><td colspan="1">Investments in subsidiaries are measured in accordance with the equity method.</td></tr><tr><td colspan="1">Investments in subsidiaries are measured in the balance sheet at the proportionate share of the enterprises' net asset values cal­culated in accordance with the Parent Company's accounting policies minus or plus unrealised intra-group profits and losses and minus or plus the residual value of positive or negative goodwill.</td></tr><tr><td colspan="1">Subsidiaries with negative net asset values are measured at DKK 0 (nil), and any amounts owed by such enterprises are written down by the Parent Company’s share of the negative net asset value if the amount owed is considered irrecoverable. Where the negative net asset value exceeds the amount owed, the remaining amount is recognised under provisions if the Parent Company has a legal or constructive obligation to cover the enterprise’s deficit.</td></tr><tr><td colspan="1">Acquisitions of enterprises, with exception of intra-group restructuring, are accounted for using the purchase method, according to which the identifiable assets and liabilities acquired are measured at their fair values at the date of acquisition. Provision is made for costs related to adopted and announced plans to restructure the acquired enterprise. The tax effect of the restatement of assets and liabilities is taken into account.</td></tr><tr><td colspan="1">Any excess of the cost of the acquisition over the fair value of the identifiable assets and liabilities acquired (goodwill), including decided restructuring provisions, is recognised as intangible assets and amortised on a systematic basis in the income statement based on an individual assessment of the useful life 7 years for customer agreements and 10 years for goodwill.</td></tr><tr><td colspan="1">Any excess of the fair values of the identifiable assets and liabilities over the cost of the acquisition (negative goodwill), representing an anticipated adverse development in the acquired enterprises, is recognised in the balance sheet as deferred income and recognised in the income statement as the adverse development is realised. Negative goodwill not related to any anticipated adverse development is recognised in the balance sheet at an amount corresponding to the fair value of non-monetary assets. The amount is subsequently recognised in the income statement over the average useful lives of the non-monetary assets.</td></tr><tr><td colspan="1">Goodwill and negative goodwill from acquired enterprises may be adjusted up until the end of the year following the acquisition.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Other securities and investments</td></tr><tr><td colspan="1">Equity investments that are recognised in non-current assets are measured at fair value. Equity investments for which a reliable measurement of the fair value cannot be determined are recognised at original cost.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Settlement assets &amp; settlement obligations</td></tr><tr><td colspan="1">Settlement assets and settlement obligations comprise balances with payment card companies primarily clearing transactions and fees that are cleared at the beginning of January with card acquirers and card issuers.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Receivables</td></tr><tr><td colspan="1">Receivables are measured at amortised cost and necessary provisions are made for bad debt losses based on an assessment of the individual receivables.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Prepayments, assets</td></tr><tr><td colspan="1">Prepayments comprise costs incurred, including operating leases concerning subsequent financial years.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Visa shares</td></tr><tr><td colspan="1">Listed shares are measured at the fair value at the balance sheet date.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Cash at banks</td></tr><tr><td colspan="1">Cash and cash equivalents comprise cash and bank deposits.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Equity</td></tr><tr><td colspan="1">Proposed dividends are disclosed as a separate item under equity. Dividends are recognised as a liability at the date when they are adopted at the annual general meeting.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Provisions</td></tr><tr><td colspan="1">Provisions are measured at net realisable value. Provisions are recognised when, as a result of past events, the company has a legal or a constructive obligation and it is probable that there may be an outflow of resources embodying economic benefits to settle the obligation.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Liabilities</td></tr><tr><td colspan="1">Financial liabilities are measured at amortised cost. Other liabilities are measured at net realisable value.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Deferred income, equity and liabilities</td></tr><tr><td colspan="1">Deferred income comprises payments received concerning income in subsequent years.</td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td colspan="1">Financial ratios</td></tr><tr><td colspan="1">The financial ratios stated in the survey of financial highlights have been calculated in accordance with the Danish Society of Financial Analysts' guidelines on the calculation of financial ratios "Recommendations and Financial Ratios 2015"</td></tr><tr><td colspan="1">Operating margin = (Operating profit x 100)/(Revenue)</td></tr><tr><td colspan="1">Liquidity ratio = (Current assets x 100)/(Short-term liabilities)</td></tr><tr><td colspan="1">Solvency ratio = (Equity x 100)/(Total assets)</td></tr><tr><td colspan="1">Return on equity = (Profit for the year x 100)/(Average equity)</td></tr></table> 351200000 77600000 22300000 -72100000 502800000 66000000 112100000 716000000 136600000 <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="5" align="left" valign="middle" ><b>Statement of changes in equity</b></td></tr><tr><td colspan="5"></td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >DKK million</td><td width="13%" colspan="1" align="right" valign="middle" >Share capital</td><td width="18%" colspan="1" align="right" valign="middle" >Retained earnings</td><td width="10%" colspan="1" align="right" valign="middle" >Dividends</td><td width="11%" colspan="1" align="right" valign="middle" >Total</td></tr><tr><td colspan="5"></td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Equity as at 1 January 2015</td><td width="13%" colspan="1" align="right" valign="middle" ><b>24.1</b></td><td width="18%" colspan="1" align="right" valign="middle" ><b>153.0</b></td><td width="10%" colspan="1" align="right" valign="middle" ><b>700.0</b></td><td width="11%" colspan="1" align="right" valign="middle" ><b>877.1</b></td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Currency translation adjustments</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >-11.3</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >-11.3</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Received group contribution</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >14.0</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >14.0</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Submitted group contribution, net</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >-10.2</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >-10.2</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Distributed dividends</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >0.0</td><td width="10%" colspan="1" align="right" valign="middle" >-700.0</td><td width="11%" colspan="1" align="right" valign="middle" >-700.0</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Retained earnings, cf. profit appropriation</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >1,297.1</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >1,297.1</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" ><b>Equity as at 31 January 2016</b></td><td width="13%" colspan="1" align="right" valign="middle" ><b>24.1</b></td><td width="18%" colspan="1" align="right" valign="middle" ><b>1,442.6</b></td><td width="10%" colspan="1" align="right" valign="middle" ><b>0.0</b></td><td width="11%" colspan="1" align="right" valign="middle" ><b>1,466.7</b></td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Currency translation adjustments</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >-0.9</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >-0.9</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Received group contribution, net</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >17.6</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >17.6</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Submitted group contribution, net</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >-13.2</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >-13.2</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Submitted group contribution, net</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >-19.7</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >-19.7</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Share-based payments (Employee share bonus)</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >2.8</td><td width="10%" colspan="1" align="right" valign="middle" >0.0</td><td width="11%" colspan="1" align="right" valign="middle" >2.8</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Extraordinary dividend declared</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >-698.0</td><td width="10%" colspan="1" align="right" valign="middle" >698.0</td><td width="11%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Distributed dividends</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >0.0</td><td width="10%" colspan="1" align="right" valign="middle" >-698.0</td><td width="11%" colspan="1" align="right" valign="middle" >-698.0</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" >Retained earnings, cf. profit appropriation</td><td width="13%" colspan="1" align="right" valign="middle" >0.0</td><td width="18%" colspan="1" align="right" valign="middle" >17.4</td><td width="10%" colspan="1" align="right" valign="middle" >562.0</td><td width="11%" colspan="1" align="right" valign="middle" >579.4</td></tr><tr><td width="48%" colspan="1" align="left" valign="middle" ><b>Equity as at 31 December 2016</b></td><td width="13%" colspan="1" align="right" valign="middle" ><b>24.1</b></td><td width="18%" colspan="1" align="right" valign="middle" ><b>748.6</b></td><td width="10%" colspan="1" align="right" valign="middle" ><b>562.0</b></td><td width="11%" colspan="1" align="right" valign="middle" ><b>1,334.7</b></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Revenue</b></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >DKK million</td><td width="17%" align="right" valign="middle" ><b>2016</b></td><td width="19%" align="right" valign="middle" ><b>2015</b></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Card acquiring in Denmark</td><td width="17%" colspan="1" align="right" valign="middle" >536.8</td><td width="19%" colspan="1" align="right" valign="middle" >465.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Card acquiring in Norway</td><td width="17%" colspan="1" align="right" valign="middle" >164.2</td><td width="19%" colspan="1" align="right" valign="middle" >149.3</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Card acquiring other countries</td><td width="17%" colspan="1" align="right" valign="middle" >81.6</td><td width="19%" colspan="1" align="right" valign="middle" >44.3</td></tr><tr><td width="64%" ></td><td width="17%" colspan="1" align="right" valign="middle" >782.5</td><td width="19%" colspan="1" align="right" valign="middle" >658.6</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Staff costs</b></td></tr><tr><td width="64%" ></td><td width="17%" align="right" valign="middle" ><b>2016</b></td><td width="19%" align="right" valign="middle" ><b>2015</b></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >Total staff costs are specified as follows</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Wages and salaries and remuneration</td><td width="17%" colspan="1" align="right" valign="middle" >59.7</td><td width="19%" colspan="1" align="right" valign="middle" >61.4</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Pension contributions</td><td width="17%" colspan="1" align="right" valign="middle" >6.3</td><td width="19%" colspan="1" align="right" valign="middle" >7.6</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Other salary-related costs</td><td width="17%" colspan="1" align="right" valign="middle" >11.6</td><td width="19%" colspan="1" align="right" valign="middle" >11.7</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" ></td><td width="17%" colspan="1" align="right" valign="middle" >77.6</td><td width="19%" colspan="1" align="right" valign="middle" >80.7</td></tr><tr><td colspan="3"></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >No remuneration has been paid to the Company’s management.</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Average number of full-time employees</td><td width="17%" align="right" valign="middle" >80</td><td width="19%" align="right" valign="middle" >87</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Number of full-time employees year-end</td><td width="17%" align="right" valign="middle" >74</td><td width="19%" align="right" valign="middle" >86</td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Share option programme</b></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >A long-term share option programme was established in 2016 in connection with the IPO of the parent company Nets A/S and granted to Management and certain key employees. In connection with the Annual General Meeting, and as determined by the Board of Directors, share options are granted annually for an amount equivalent to 20-100% of annual salary (however maximum 0.75% of the share capital). Vesting is subject to fulfilment of certain key financial targets and continued employment at the vesting date. Each option gives the right to purchase one existing share in Nets A/S.</td></tr><tr><td colspan="3"></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Retention programme</b></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >In connection with the IPO, a non-recurring share-based retention programme has been established for members of the Executive Committee and certain other employees (the “Retention Programme”). Under the Retention Programme, the participants may be granted shares at the end of a 720-day period subsequent to the date where the Company was listed. The shares equal an amount of 24 months’ base salary, provided, among other things, that the participants have retained at least 25% of the total number of shares that were directly or indirectly held by the participant under the former management Incentive Programme.</td></tr><tr><td colspan="3"></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Employee share award</b></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >Following the IPO each full-time employee was awarded shares worth DKK 24,900. The consolidated group expense in connection with the employee share award amounted to DKK 64 million (Teller A/S part DKK 2.8 million) in total including social costs. The shares delivered under the employee share award were covered by issuing bonus shares.</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Financial income and expenses</b></td></tr><tr><td width="64%" ></td><td width="17%" align="right" valign="middle" ><b>2016</b></td><td width="19%" align="right" valign="middle" ><b>2015</b></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >Financial income</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Group enterprise</td><td width="17%" colspan="1" align="right" valign="middle" >59.3</td><td width="19%" colspan="1" align="right" valign="middle" >62.4</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Other interest income</td><td width="17%" colspan="1" align="right" valign="middle" >6.7</td><td width="19%" colspan="1" align="right" valign="middle" >8.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Foreign exchange rate gains, net</td><td width="17%" colspan="1" align="right" valign="middle" >0.0</td><td width="19%" colspan="1" align="right" valign="middle" >44.3</td></tr><tr><td width="64%" ></td><td width="17%" colspan="1" align="right" valign="middle" >66.0</td><td width="19%" colspan="1" align="right" valign="middle" >114.7</td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >Financial expenses</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Group enterprise</td><td width="17%" colspan="1" align="right" valign="middle" >39.5</td><td width="19%" colspan="1" align="right" valign="middle" >19.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Other interest expenses</td><td width="17%" colspan="1" align="right" valign="middle" >14.2</td><td width="19%" colspan="1" align="right" valign="middle" >7.5</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Foreign exchange rate loss, net</td><td width="17%" colspan="1" align="right" valign="middle" >58.4</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" ></td><td width="17%" colspan="1" align="right" valign="middle" >112.1</td><td width="19%" colspan="1" align="right" valign="middle" >26.5</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Proposed profit appropriation</b></td></tr><tr><td width="64%" ></td><td width="17%" align="right" valign="middle" ><b>2016</b></td><td width="19%" align="right" valign="middle" ><b>2015</b></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Proposed dividends</td><td width="17%" colspan="1" align="right" valign="middle" >562.0</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Extraordinary dividend declared</td><td width="17%" colspan="1" align="right" valign="middle" >698.0</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Retained earnings</td><td width="17%" colspan="1" align="right" valign="middle" >-680.6</td><td width="19%" colspan="1" align="right" valign="middle" >1,297.1</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Total appropriation</td><td width="17%" colspan="1" align="right" valign="middle" >579.4</td><td width="19%" colspan="1" align="right" valign="middle" >1,297.1</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Tax</b></td></tr><tr><td width="64%" ></td><td width="17%" align="right" valign="middle" ><b>2016</b></td><td width="19%" align="right" valign="middle" ><b>2015</b></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Joint taxation</td><td width="17%" colspan="1" align="right" valign="middle" >451.6</td><td width="19%" colspan="1" align="right" valign="middle" >58.2</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Change in deferred tax</td><td width="17%" colspan="1" align="right" valign="middle" >-318.8</td><td width="19%" colspan="1" align="right" valign="middle" >313.1</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Change in deferred tax asset</td><td width="17%" colspan="1" align="right" valign="middle" >-0.4</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Tax in foreign branches</td><td width="17%" colspan="1" align="right" valign="middle" >4.2</td><td width="19%" colspan="1" align="right" valign="middle" >6.5</td></tr><tr><td width="64%" ></td><td width="17%" colspan="1" align="right" valign="middle" >136.6</td><td width="19%" colspan="1" align="right" valign="middle" >377.8</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Intangible assets</b></td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" ></td><td width="17%" colspan="1" align="right" valign="middle" >Customer agreements</td><td width="19%" colspan="1" align="right" valign="middle" >Goodwill</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Cost as at 1 January</td><td width="17%" colspan="1" align="right" valign="middle" >173.8</td><td width="19%" colspan="1" align="right" valign="middle" >122.8</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Additions</td><td width="17%" colspan="1" align="right" valign="middle" >0.0</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Exchange rate adjustments</td><td width="17%" colspan="1" align="right" valign="middle" >0.0</td><td width="19%" colspan="1" align="right" valign="middle" >6.6</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Cost as at 31 December</td><td width="17%" colspan="1" align="right" valign="middle" >173.8</td><td width="19%" colspan="1" align="right" valign="middle" >129.4</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Amortisation as at 1 January</td><td width="17%" colspan="1" align="right" valign="middle" >116.4</td><td width="19%" colspan="1" align="right" valign="middle" >104.1</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Amortisation for the year</td><td width="17%" colspan="1" align="right" valign="middle" >10.4</td><td width="19%" colspan="1" align="right" valign="middle" >11.8</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Exchange rate adjustments</td><td width="17%" colspan="1" align="right" valign="middle" >0.0</td><td width="19%" colspan="1" align="right" valign="middle" >5.9</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Amortisation as at 31 December</td><td width="17%" colspan="1" align="right" valign="middle" >126.8</td><td width="19%" colspan="1" align="right" valign="middle" >121.8</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Carrying amount as at 31 December</td><td width="17%" colspan="1" align="right" valign="middle" >47.0</td><td width="19%" colspan="1" align="right" valign="middle" >7.6</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Property, plant and equipment</b></td></tr><tr><td width="64%" ></td><td width="17%" ></td><td width="19%" colspan="1" align="right" valign="middle" >Fixtures and fittings, tools and equipment</td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Cost as at 1 January</td><td width="19%" colspan="1" align="right" valign="middle" >2.9</td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Additions</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Assets disposed of</td><td width="19%" colspan="1" align="right" valign="middle" >0.7</td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Cost as at 31 December</td><td width="19%" colspan="1" align="right" valign="middle" >2.2</td></tr><tr><td colspan="3"></td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Amortisation as at 1 January</td><td width="19%" colspan="1" align="right" valign="middle" >2.3</td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Amortisation for the year</td><td width="19%" colspan="1" align="right" valign="middle" >0.1</td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Assets disposed of</td><td width="19%" colspan="1" align="right" valign="middle" >0.4</td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Amortisation as at 31 December</td><td width="19%" colspan="1" align="right" valign="middle" >2.0</td></tr><tr><td colspan="3"></td></tr><tr><td width="81%" colspan="2" align="left" valign="middle" >Carrying amount as at 31 December</td><td width="19%" colspan="1" align="right" valign="middle" >0.2</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Investment in subsidiaries</b></td></tr><tr><td width="64%" ></td><td width="17%" align="right" valign="middle" ><b>2016</b></td><td width="19%" align="right" valign="middle" ><b>2015</b></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Cost as at 1 January</td><td width="17%" colspan="1" align="right" valign="middle" >1,717.2</td><td width="19%" colspan="1" align="right" valign="middle" >0.2</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Additions</td><td width="17%" colspan="1" align="right" valign="middle" >0.0</td><td width="19%" colspan="1" align="right" valign="middle" >1,717.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Disposals</td><td width="17%" colspan="1" align="right" valign="middle" >0.1</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Cost as at 31 December</td><td width="17%" colspan="1" align="right" valign="middle" >1,717.1</td><td width="19%" colspan="1" align="right" valign="middle" >1,717.2</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Value adjustment as at 1 January</td><td width="17%" colspan="1" align="right" valign="middle" >-7.6</td><td width="19%" colspan="1" align="right" valign="middle" >-0.2</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Exchange rate adjustments</td><td width="17%" colspan="1" align="right" valign="middle" >-13.6</td><td width="19%" colspan="1" align="right" valign="middle" >-1.9</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Group contribution, net</td><td width="17%" colspan="1" align="right" valign="middle" >-19.7</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Share-based payments (Employee share bonus)</td><td width="17%" colspan="1" align="right" valign="middle" >0.8</td><td width="19%" colspan="1" align="right" valign="middle" >0.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Net profit for the year</td><td width="17%" colspan="1" align="right" valign="middle" >-72.1</td><td width="19%" colspan="1" align="right" valign="middle" >-5.5</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Amortisation as at 31 December</td><td width="17%" colspan="1" align="right" valign="middle" >-112.2</td><td width="19%" colspan="1" align="right" valign="middle" >-7.6</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Carrying amount as at 31 December</td><td width="17%" colspan="1" align="right" valign="middle" >1,604.9</td><td width="19%" colspan="1" align="right" valign="middle" >1,709.6</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Fair value recognition from business combinations (goodwill)</td><td width="17%" colspan="1" align="right" valign="middle" >956.6</td><td width="19%" colspan="1" align="right" valign="middle" >1,063.9</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" ></td><td width="17%" colspan="1" align="right" valign="middle" >Ownership</td><td width="19%" colspan="1" align="right" valign="middle" >Sharecapital</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Kortaccept Nordic AB, Lumaparksvägen 9-11, S 120 31 Stockholm, Sweden - SEK</td><td width="17%" align="right" valign="middle" >100%</td><td width="19%" colspan="1" align="right" valign="middle" >0.01</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Teller Services ApS, Lautrupbjerg 10, DK-2750 Ballerup, Denmark</td><td width="17%" align="right" valign="middle" >100%</td><td width="19%" colspan="1" align="right" valign="middle" >0.2</td></tr><tr><td colspan="3"></td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" ><b>Results 2015</b></td><td width="17%" colspan="1" align="right" valign="middle" >Net profit</td><td width="19%" colspan="1" align="right" valign="middle" >Equity</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Kortaccept Nordic AB (period 28 May 2015 – 31 December 2015)</td><td width="17%" colspan="1" align="right" valign="middle" >9.5</td><td width="19%" colspan="1" align="right" valign="middle" >377.0</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Teller Services ApS</td><td width="17%" colspan="1" align="right" valign="middle" >-0.1</td><td width="19%" colspan="1" align="right" valign="middle" >0.8</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Equity</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >The share capital is owned by Nets Holding A/S, Lautrupbjerg 10, DK-2750 Ballerup.</td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >The share capital has been increased by DKK 4.0 million in connection with the merger on 1 January 2014 with Norwegian Teller AS. There has not been other changes in last 5 years.</td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >The share capital comprises shares of DKK 1.00 each.</td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >Teller A/S is part of the consolidated Financial Statements for the ultimate parent company Nets A/S, Lautrupbjerg 10, DK-2750 Ballerup, Denmark.</td></tr><tr><td colspan="1"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="3" align="left" valign="middle" ><b>Deferred tax.</b></td></tr><tr><td width="64%" ></td><td width="17%" align="right" valign="middle" ><b>2016</b></td><td width="19%" align="right" valign="middle" ><b>2015</b></td></tr><tr><td width="100%" colspan="3" align="left" valign="middle" >Deferred tax</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Carrying amount as at 1 January</td><td width="17%" colspan="1" align="right" valign="middle" >326.6</td><td width="19%" colspan="1" align="right" valign="middle" >13.5</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Change of the year</td><td width="17%" colspan="1" align="right" valign="middle" >-318.8</td><td width="19%" colspan="1" align="right" valign="middle" >313.1</td></tr><tr><td width="64%" colspan="1" align="left" valign="middle" >Carrying amount as at 31 December</td><td width="17%" align="right" valign="middle" >7,8</td><td width="19%" colspan="1" align="right" valign="middle" >326.6</td></tr><tr><td colspan="3"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Settlement assets</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >DKK 179.0 million to affiliated licenses (2015: DKK 391.9 million) is offset of the total receivables.</td></tr><tr><td colspan="1"></td></tr></table><br><table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Group enterprises</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >The Company has entered a cash pool arrangement with Nets A/S and related Companies in the Nets A/S Group. The cash pool arrangement amounts to net DKK 919.3 million (2015: DKK 1,265.4 million).</td></tr><tr><td colspan="1"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Other liabilities</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >Other liabilities includes provisions for loss and provisions for loss on abuse rising in the financial year where the case was not received by 31 December.</td></tr><tr><td colspan="1"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Deferred income</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >Deferred income comprises accrued fees from merchants.</td></tr><tr><td colspan="1"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Contingent liabilities</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >Nets A/S and its Danish subsidiaries are jointly taxed with the Danish companies in the Nets A/S Group. The joint taxation also covers withholding taxes in the form of dividend tax, royalty tax and interest tax. The Danish companies are jointly and individually liable for the joint taxation.</td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >The Company is comprised by a joint registration with other Danish companies owned by Nets Holding A/S. Together with the other companies included in the joint registration, the Company has joint and several unlimited liabilities for Danish VAT, payroll tax and interest within the joint registration.</td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >The company has not provided any guarantees or other collateral and has not entered into any rental or lease obligations.</td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >Jointly with other material subsidiaries within Nets Group, Teller A/S is providing cross-guarantees for the obligations under the IPO Facilities Agreement dated 6 July 2016.</td></tr><tr><td colspan="1"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Related party transactions</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >All transactions with related parties are made on an arm's length basis.</td></tr><tr><td colspan="1"></td></tr></table> <table xmlns="http://www.w3.org/1999/xhtml" style="border-right: 0px; border-top: 0px; border-left: 0px; width: 650px; border-bottom: 0px; border-collapse: collapse" width="100%"><tr><td width="100%" colspan="1" align="left" valign="middle" ><b>Events after the balance sheet date</b></td></tr><tr><td colspan="1"></td></tr><tr><td width="100%" colspan="1" align="left" valign="middle" >No significant events with effect to the annual report of 2016 have occurred subsequent to 31 December 2016.</td></tr></table> Årsrapport 33771231 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Strandvejen 44 2900 Hellerup 2015-01-01 2015-12-31 Revisionspåtegning 659000000 134000000 1548000000 1297000000 0.200 0.210 1.110 583000000 108000000 37000000 107000000 0.190 0.180 0.120 598000000 71000000 51000000 91000000 0.120 0.150 0.090 637000000 83000000 259000000 256000000 0.130 0.200 0.260 Profit before depreciation, amortisation and impairment losses 354000000 Profit before depreciation, amortisation and impairment losses 158000000 Profit before depreciation, amortisation and impairment losses 133000000 Profit before depreciation, amortisation and impairment losses 101000000 Profit before depreciation, amortisation and impairment losses 118000000 6727400000 1334700000 47000000 7600000 54600000 200000 200000 1604900000 1200000 1606100000 1660900000 2187700000 620900000 1056400000 2300000 3867300000 1199200000 5066500000 24100000 748600000 562000000 0 7800000 7800000 2267400000 1358100000 1759200000 0 200000 5384900000 6727400000 7105000000 1467000000 4980000000 877000000 5880000000 863000000 5226000000 1059000000 Liquidity ratio 94000000 Liquidity ratio 109000000 Liquidity ratio 119000000 Liquidity ratio 115000000 Liquidity ratio 122000000 Asger Hattel CEO Bo Nilsson Chairman Frode Åsheim Jens Heurlin PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Mikkel Sthyr State Authorised Public Accountant Rasmus Friis Jørgensen State Authorised Public Accountant 658600000 419800000 80700000 24000000 134100000 -7400000 1460000000 114700000 26500000 1674900000 377800000 1297100000 562000000 0 698000000 0 -680600000 1297100000 57400000 18700000 76100000 600000 600000 1709600000 800000 1710400000 1787100000 1871300000 1460000000 529900000 2500000 3863700000 1454400000 5318100000 7105200000 24100000 1442600000 0 1466700000 449000000 326600000 775600000 2255600000 1305300000 1301700000 100000 200000 4862900000 7105200000