Incap Enjoys 65% Revenue Growth in 2015

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In autumn 2015 Incap paid back to Finnfund the capital investment of EUR 1.9 million, which Finnfund had made in Incap’s subsidiary in India in 2009. At the same time, Finnfund’s holding of 22.5% in Incap Contract Manufacturing Services Pvt. Ltd. became void. The payback was realised by lowering the share capital of the Indian subsidiary and financed by means of the accumulated profits of the Indian subsidiary and the local financing.

The company repaid the rest of the so-called OP Bank loan (previous convertible loan 2007), EUR 0.2 million, in June 2015. The company further paid the last instalment of the payment arrangement with the Finnish Tax Administration in September 2015.

As to the loans granted by the Indian bank the company has committed to follow ordinary covenants and the bank’s general loan conditions.

The Group’s cash position improved thanks to the improved profitability, rights issue and the renewal of financing agreements.  The Group’s quick ratio was 1.1 (0.6), and the current ratio was 1.8 (0.9).

Cash flow from operations was EUR 1.0 million (EUR -0.7 million). On 31 December 2015, the Group’s cash and cash equivalents totalled EUR 2.1 million (EUR 1.9 million). The change in cash and cash equivalents showed an increase of EUR 0.2 million (increase of EUR 0.2 million).

Aspects related to the Group’s financing and liquidity are also described in the section “Short-term risks and factors of uncertainty concerning operations”.

Personnel

At the end of 2015, Incap Group had a payroll of 468 employees (423). 86.6% (89%) of the personnel worked in India, 13.0% (9%) in Estonia and 0.4% (2%) in Finland. At the end of the year, 96 of Incap’s employees were women (68) and 372 were men (355). Permanently employed staff totalled 192 (167) and the number of fixed-term employment contracts was 275 (204). The company had 1 part-time employment contract at the end of the period (52). The average age of the personnel was 29 years (36).

Management and organisation

The duties of CEO of Incap were carried out by Ville Vuori (B.Sc. Eng., eMBA, born 1973). At the end of the report period the Group’s Management Team included besides the CEO Ville Vuori also the local Managing Directors: Murthy Munipalli in India and Otto Pukk in Estonia.

The renewal of operational model of the Group was continued and the tasks in finance and administration were outsourced to partners. At the same time, key functions in the factories were strengthened and a new Managing Director was appointed to the operations in Estonia. The Group’s factories in Estonia and in India operate as independent cost centres, which are responsible besides for the actual delivery-order process also for the quotations and pricing.

Annual General Meeting 2015

The Annual General Meeting of Incap Corporation was held in Helsinki on 31 March 2015. A total of 15 shareholders participated in the meeting, representing approximately 69.4% of all shares and votes. The Annual General Meeting adopted the financial statements for the financial period ended 31 December 2014 and decided, in accordance with the proposal of the Board of Directors, that no dividend be distributed for the financial period and that the loss for the financial period (EUR 2,677,306.56) be recognised in equity.

Extraordinary General Meeting

Incap Corporation’s Extraordinary General Meeting was held on 7 May 2015. A total of 14 shareholders participated in the meeting, representing a total of 60.0% of all shares and votes. The Extraordinary General Meeting authorised the Board of Directors to decide on a rights issue in the way that the number of new shares to be given in the rights issue can be a maximum of 109,114,035 new shares of the company. The Board of Directors used the authorisation in June 2015, when the company carried out a successful rights issue.

Authorisation of the Board of Directors

The Annual General Meeting held on 31 March 2015 authorised the Board of Directors to decide to issue a maximum of 10,911,403 new shares either against payment or without payment. The new shares may be issued to the company’s shareholders in proportion to their current shareholdings in the company or deviating from the shareholders’ pre-emptive right through one or more directed share issue, if the company has a weighty financial reason to do so, such as developing the company’s equity structure, implementing mergers and acquisitions or other restructuring measures aimed at developing the company’s business, financing of investments and operations or using the shares as a part of the company’s remuneration and compensation system, to the terms and scope decided by the Board of Directors.

The Board has not exercised the authorisation, which is valid until 31 March 2016.

Board of Directors and Auditor

Lassi Noponen acted as the Chairman of the Board of Directors until 4 March 2015, when the Board elected Olle Hulteberg to the Chairman of the Board.

The Annual General Meeting held on 31 March 2015 re-elected Fredrik Berghel, Olle Hulteberg and Susanna Miekk-oja and elected Rainer Toiminen and Carl-Gustaf von Troil as new members to the Board of Directors. From among its members, the Board elected Olle Hulteberg to the Chairman of the Board.

The Board convened 26 times in 2015 and the average attendance rate of Board members was 83.8%.

The firm of independent accountants Ernst & Young Oy continued to act as the company’s auditor, with Jari Karppinen, Authorised Public Accountant, as the principal auditor.

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