Annual Report 2006 ISS Global A/S

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 January – 31 December. Amounts in DKK millions 35. Discontinued operations In 2006 there were no discontinued operations. In February 2005, ISS Global sold its Health Care operations to a newly formed joint venture entity, now named Aleris Holding AB ("Aleris"), owned by EQT III Limited, ISS Global and Aleris's management. In June 2005, ISS Global sold its interest in Aleris to EQT III Limited. The sale of Health Care resulted in a non-taxable gain DKK 237 million, included in Other income and expenses, net. In September 2005, ISS Global sold its activities in Japan to Mitsui & Co. Ltd. The sale consisted of a sale of the 50% share in Bussan ISS Holding Co Ltd., which is a holding company owning all shares of ISS Nesco Ltd. The sale of Japan resulted in a gain before tax of DKK 10 million, included in Other income and expenses, net. During 2005 the discontinued operations had cash inflow from operating activities of DKK 1 million, a cash outflow from investing activities of DKK 10 million and a cash inflow from financing activities of DKK 10 million. The discontinued operations resulted in proceeds of DKK 778 million and a decrease in net assets of DKK 539 million. Cash and cash equivalents in the discontinued operations were DKK 8 million. During 2005 the discontinued operations had a net profit of DKK 263 million: Revenue - Expenses - Operating profit before other items - Other income and expenses, net - Operating profit - Share of result from associates - Net finance costs - Income taxes - Profit/(loss) before impairment/amortisation of intangibles - Amortisation of customer contracts - Net profit for the period - _____________________________________________________________________________________________________________ ANNUAL REPORT 2006 / Consolidated Financial Statements 100 2006 2005 359 (319) - 40 247 287 1 (11) (13) 264 (1) 263
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 January – 31 December. Amounts in DKK millions 36. New accounting standards IASB has published the following new IFRS that are not mandatory for the preparation of the consolidated financial statements of ISS Global for the year ended 31 December 2006. Unless otherwise stated the standards have been approved by the EU. IFRS 7 Financial Instruments: Disclosures, and the complementary Amendment to IAS 1, Presentation of Financial Statements – Capital Disclosures is effective for annual periods beginning on or after 1 January 2007. This standard does not have any impact on the recognition and measurement of ISS Global’s financial instruments but only on the disclosure of the financial instruments. IFRS 8 Operating Segments on disclosures on operating segments is effective for annual periods beginning on or after 1 January 2009. This standard does not have any impact on recognition and measurement. IFRS 8 has not been approved by the EU. The following interpretations (IFRIC) have been published but are not mandatory for the preparation of the consolidated financial statements of ISS Global for the year ended 31 December 2006. Unless otherwise stated the interpretations have been approved by the EU. IFRIC 7 Applying Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies is effective for annual periods beginning on or after 1 March 2007. ISS Global has no entities in countries which presently can be defined as hyperinflation. IFRIC 8 Scope of IFRS 2 is effective for annual periods beginning on or after 1 May 2007. ISS Global recognises all share-based payments schemes in accordance with IFRS 2 and does not expect that IFRIC 8 will have any impact on the consolidated financial statements of ISS Global. IFRIC 9 Reassessment of Embedded Derivatives is effective for annual periods beginning on or after 1 June 2006. ISS Global has no and does not expect to acquire any embedded derivatives. Consequently, IFRIC 9 is not expected to have any impact on the consolidated financial statements of ISS Global. IFRIC 10 Interim Financial Reporting and Impairment prohibits the impairment losses recognised in an interim period on goodwill to be reversed at a subsequent balance sheet date even when no loss, or a smaller loss, would have been recognised at a later date. This is also applicable for investments in equity instruments and investments in financial assets carried at cost. IFRIC 10 is effective for annual periods beginning on or after 1 November 2006 and is not expected to have any impact on the consolidated financial statements of ISS Global. IFRIC 10 has not been approved by the EU. IFRIC 11 IFRS 2 - Group and Treasury Share Transactions is effective for annual periods beginning on or after 1 March 2007. ISS Global already accounts for intra-group transactions relating to share based payments in accordance with the principles described in IFRIC 11. IFRIC 11 has not been approved by the EU. IFRIC 12 Service Concession Arrangements is effective for annual periods beginning on or after 1 January 2008. ISS Global has no and does not expect to obtain consessions. Consequently, IFRIC 12 is not expected to have any impact on the consolidated financial statements of ISS Global. IFRIC 12 has not been approved by the EU. ISS Global expects to implement these IFRS and IFRIC from the mandatory effective date. 37. Subsequent events The Danish Minister of Taxation has in first quarter 2007 published a draft bill for public hearing. The proposed amendments in the draft bill are significant and include reduction of the statutory corporate tax rate, restrictions on the deduction of interest expenses and amendments to controlled foreign company (CFC) taxation. The impact on the Group depends on the final conditions of the bill. Primarily as a result of the substantial indebtness of ISS Global the bill is expected to have an adverse effect on the tax position in the Dansih part of the Group. Apart from the above and the events described in this Annual Report, the Group is not aware of events subsequent to 31 December 2006, which are expected to have a material impact on the Group's financial position. _____________________________________________________________________________________________________________ ANNUAL REPORT 2006 / Consolidated Financial Statements 101
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ISS Global A/S Bredgade 30 DK - 126
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Key Figures Amounts in DKK millions
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growth. Furthermore, the effect of
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In 2006, ISS Global continued the p
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to costs related to a turnaround pl
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structure, ISS established an Opera
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Strategy ISS Global is a fully owne
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Geography ISS intends to increasing
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Openness and transparency In additi
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tors. The controllers perform follo
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Risk Factors ISS Global is a fully
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tual obligations could harm ISS’s
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If ISS fails to manage growth and i
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ISS may incur substantial liabiliti
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thus reduce or prevent dividend pay
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Independent Auditor’s Report To t
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Organic growth ISS Global uses esti
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2006 primarily related to redundanc
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Tempo as well as a number of smalle
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including non-interest-bearing debt
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CONSOLIDATED CASH FLOW STATEMENT 1
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CONSOLIDATED STATEMENT OF TOTAL REC
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NOTES TO THE CONSOLIDATED FINANCIAL
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NOTES TO THE CONSOLIDATED FINANCIAL
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Page 103 and 104: CASH FLOW STATEMENT OF THE PARENT C
Page 105 and 106: STATEMENT OF TOTAL RECOGNISED INCOM
Page 107 and 108: NOTES TO THE FINANCIAL STATEMENTS O
Page 123: Definitions EBITDA = Operating prof
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Annual Report 2006 ISS Global A/S

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