Årsrapport 30700228 Ernst & Young Godkendt Revisionspartnerselskab Osvald Helmuths Vej 4 Postboks 250, 2000 Frederiksberg 2017-01-01 2017-12-31 2016-01-01 2016-12-31 2018-06-19 36490837 Valid Technologies Solutions ApS Hørkær 16, 2. 2730 Herlev Herlev Ernst & Young Godkendt Revisionspartnerselskab 30700228 Osvald Helmuths Vej 4 2000 Frederiksberg, Denmark 2018-06-19 Mahmut Duvarci Regnskabsklasse B Revisionspåtegning Grundlag for konklusion med forbehold Konklusion med forbehold true true 2018-06-19 2018-06-19 Herlev, Carlos Affonso Seigneur d'Albuquerque Chairman Rita Christiane Ribeiro Carvelho Vice Chairman Salvador Gerardo Cabrera Aguilar Copenhagen, Lars Hansen Rasmus Bloch Jespersen State Authorised Public Accountant mne24828 State Authorised Public Accountant mne35503 10138 -35389 204901 153734 11030 3465 0 33563 -205793 -226151 5954 2186 5837 3040 -205676 -227005 -45217 -49932 -160459 -177073 -160459 -177073 18595 29624 18595 29624 18595 29624 20055 0 34998 50990 2727 1062 57780 52052 24781 99236 82561 151288 101156 180912 7953 7953 -476296 -315837 -468343 -307884 0 1058 0 1058 0 47500 7956 3374 519800 413953 40713 19409 1030 3502 569499 487738 569499 487738 101156 180912 7953 -315837 -160459 7953 -476296 199990 126517 1906 1809 3005 25408 204901 153734 2 2 -44159 -50990 -1058 1058 -45217 -49932 33089 33089 3465 11029 14494 18595 50000 50000 50000 50000 50000 Today, the Board of Directors has discussed and approved the annual report of Valid Technologies Solutions ApS for the financial year 1 January - 31 December 2017. The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2017 and of the results of the Company's operations for the financial year 1 January - 31 December 2017. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. To the shareholders of Valid Technologies Solutions ApS We have audited the financial statements of Valid Technologies Solutions ApS for the financial year 1 January - 31 December 2017, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, except for the effect of the matter described in the "Basis for qualified opinion" section, the financial statements give a true and fair view of the financial position of the Company at 31 December 2017 and of the results of the Company's operations for the financial year 1 January - 31 December 2017 in accordance with the Danish Financial Statements Act. At 31 December 2017, the Company's accounts receivables include an overdue receivable from one of its customers of USD 20,055. Subsequent to 31 December 2017, the customer has entered into bankruptcy. The Company has not recognized an impairment of the receivable at 31 December 2017 in accordance with the Danish Financial Statements Act. In our opinion, the provision for impaired accounts receivable is understated by USD 20,055 at 31 December 2017. Accordingly, gross margin for 2017 is overstated by USD 20,055, whereas tax for the year 2017 is overstated by USD 4,412 and profit/loss for 2017 is overstated by USD 15,643. Further, at 31 December 2017, trade receivables is overstated by USD 20,055, receivables from associated companies is understated by USD 4,412 and total assets and equity are overstated by USD 15,643. 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Independence 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 rules and requirements. 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. 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. Our objectives are to obtain reasonable assurance as to 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 the financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of 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. Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. 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. Management is responsible for the Management's review. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of the Management's review. The primary activity of the Company is development and sale of software solutions. The income statement for 2017 shows a loss of USD 160,459 against a loss of USD 177,073 last year, and the balance sheet at 31 December 2017 shows a negative equity of USD 468,343. The negative equity of the Company is financed via short-term loans with other group companies. The Company's intermediate parent company Valid Soluciones Tecnologicas S.A.U. has issued a letter of financial support in which Valid Soluciones Tecnologicas S.A.U. guarantees to make sufficient funds available to support the Company's working capital needs, thereby enabling the Company to discharge its obligations as they fall due, at least though 31 December 2018. On this basis, the financial statements are presented based on the going concern assumption. No events materially affecting the Company's financial position have occurred subsequent to the financial year end. The Company has lost more than 50% of its subscribed share capital. At the ordinary general meeting of shareholders in 2017, the Board of Directors gave an account of the Company's financial position and proposed appropriate measures to reestablish the share capital. The annual report of Valid Technologies Solutions ApS for 2017 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to reporting class B entities and elective choice of certain provisions applying to reporting class C entities. The accounting policies used in the preparation of the financial statements are consistent with those of last year. Reporting currency The financial statements are presented in USD as the Company's most significant transactions are settled in USD. At the balance sheet date, the DKK/USD exchange rate was 6.21335. On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate 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 financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. The items revenue, change in inventories of finished goods and work in progress, work performed for own account and capitalised, other operating income and external expenses have been aggregated into one item in the income statement called gross margin in accordance with section 32 of the Danish Financial Statements Act. Other operating income and operating expenses comprise items of a secondary nature relative to the Company's core activities, including gains or losses on the sale of fixed assets. Other external expenses include the year's expenses relating to the Company's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs include wages and salaries, including compensated absence and pension to the Company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. The item comprises depreciation of property, plant and equipment. The basis of depreciation, which is calculated as cost less any residual value, is depreciated on a straight-line basis over the expected useful life. The expected useful lives of the assets are as follows: Fixtures and fittings, other plant and equipment 3-5 years Financial income and expenses are recognised in the income statement at the amounts that concern the financial year. Net financials include interest income and expenses as well as allowances and surcharges under the advance-payment-of-tax scheme, etc. Tax for the year includes current tax on the year's expected taxable income and the year's deferred tax adjustments. The portion of the tax for the year that relates to the profit/loss for the year is recognised in the income statement, whereas the portion that relates to transactions taken to equity is recognised in equity. The Company and its Danish group entities are jointly taxed. The total Danish income tax charge is allocated between profit/loss-making Danish entities in proportion to their taxable income (full absorption). Jointly taxed entities entitled to a tax refund are reimbursed by the management company based on the rates applicable to interest allowances, and jointly taxed entities which have paid too little tax pay a surcharge according to the rates applicable to interest surcharges to the management company. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses from the disposal of property, plant and equipment are recognised in the income statement as other operating income or other operating expenses. The carrying amount of intangible assets, property, plant and equipment and investments in subsidiaries and associates is assessed for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Impairment losses are calculated as the difference between the carrying amount of the receivables and the present value of the expected cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate. Cash comprises cash and is subject only to minor risks of changes in value. Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for the year, adjusted for prior-year taxes and tax paid on account. Deferred tax is measured according to the liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability, respectively. Deferred tax is measured according to the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the expected value of their utilisation; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity. Changes in deferred tax due to changes in the tax rate are recognised in the income statement. Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Financial liabilities also include the capitalised residual lease liability in respect of finance leases. Other liabilities are measured at net realisable value. Deferred income Deferred income recognised as a liability comprises payments received concerning income in subsequent financial reporting years. The negative equity of the Company is financed via short-term loans with other group companies. The Company's intermediate parent company Valid Soluciones Tecnologicas S.A.U. has issued a letter of financial support in which Valid Soluciones Tecnologicas S.A.U. guarantees to make sufficient funds available to support the Company's working capital needs, thereby enabling the Company to discharge its obligations as they fall due, at least though 31 December 2018. On this basis, the financial statements are presented based on the going concern assumption. Other contingent liabilities The Company is jointly taxed with its parent, Valid A/S, which acts as management company, and is jointly and severally liable with other jointly taxed group entities for payment of income taxes as well as withholding taxes on interest, royalties and dividends. Information about consolidated financial statements Parent Domicile Requisitioning of the parent company's consolidated financial statements Valid Soluções e Serviços de Segurança em Meios de Pagamento e Identificação S.A. Rio de Janeiro, Brazil Av. Pres. Wilson, 231-16º floor, Centro, Rio de Janeiro, 20030-905 Valid Soluciones Tecnologicas S.A.U. Madrid, Spain Av. Fuente de la Mora 3-5-7. 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