Respecto a la instalación del DSLAM Ethernet

Compliance with standards and legislation

The financial statements have been prepared in accordance with IFRS issued by the International Accounting Standards Board (IASB) and interpretations of the IFRS Interpretations Committee (IFRIC) as adopted by the EU. The Swedish Financial Reporting Board’s recommendation RFR 1 Supple- mentary Accounting Rules for Groups has also been applied.

The parent company applies the same accounting policies as the Group except in the cases specified below under the section ”parent company accounting policies”.

Basis of accounting

Prior to the formation of the Group in its current form, the operations were conducted in two separate groups. The combination of the two subsidiary groups is to be regarded as a restructuring of companies that are under common control since the controlling influence over the two subsidiary groups is the same both before and after the merger.

The historical financial information prior to 28 June 2013 has been prepared as combined financial statements. This means that the two separate groups have been combined into one group without there being any acquirer. The combined financial statements have been prepared as if the Hemfosa Group was formed on 1 January 2011. The combined financial statements are based on historical book values as recognised in the publis- hed annual reports of the respective group. Adjustments have been made to eliminate intra-group transactions.

Since it has been decided that Hemfosa will apply IFRS in preparing the consolidated financial statements, the combined financial statements have also been prepared in accordance to IFRS. The transition has been made retroactively as of 1 January 2011. The transition to IFRS is reported in accordance with IFRS 1, First-time Adoption of International Financial Reporting Standards. Accordingly, the effects arising in connection with transition to IFRS have been included in the financial state- ments. For the effects of the transition to IFRS, see ”Effects in connection with transition to IFRS”, which is incorporated by reference.

Valuation principles applied in preparing the financial statements

Assets and liabilities are recognised at historical cost, except for certain financial assets, liabilities and investment property that are measured at fair value. Financial assets and liabilities meas- ured at fair value are comprised of fixed-income derivative instruments.

Functional currency and presentation currency

The functional currency is Swedish kronor (SEK), which is also the presentation currency. This means that the financial state- ments are presented in SEK. All amounts, unless otherwise stated, are rounded to the nearest million.

Use of judgements and estimates in the financial statements

In preparing the financial statements, management has made judgements, estimates and assumptions that affect the applica- tion of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and under- lying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. Assessments made by management in the application of IFRS that have a signifi-

cant impact on the financial statements and estimates made, that may entail significant adjustments in the following year’s financial statements, are described in more detail in Note 25.

Significant accounting policies applied

The accounting policies stated below have been applied con- sistently to all periods presented in the consolidated financial statements. The Group’s accounting policies have also been applied consistently by the Group’s companies. In regards to joint ventures, adjustments are made to the Group’s policies, as necessary.

Changed accounting policies

Changed accounting policies pursuant to new or amended IFRSs

The changes to the accounting policies applied by the Group that became effective as of 1 January 2013 are described below. Other amendments of IFRS that became applicable as of 2013 had no material impact on the consolidated financial state- ments.

IFRS 13 Fair value Measurement constitutes a new uniform standard for measuring fair value as well as improved disclosure requirements. The new disclosure requirements are presented in Notes 11 and 19.

New IFRS that have not yet been applied

A number of new or amended IFRSs will not come into effect until the next financial year and have not been applied in advance when preparing these financial statements. New stand- ards or amendments with future application are not planned to be implemented before their effective date.

Our preliminary assessment is that the application of IFRS 10 Consolidated Financial Statements and IFRS 11 Joint Arrange- ments will not have a material impact on the consolidated finan- cial statements. Application of IFRS 12 Disclosure of Interests in Other Entities will result in expanded disclosure requirements.

Application of IFRIC 21 Levies will result in the year’s property tax for properties held at the start of the year being recognised in its entirety as a liability (in 2013, property tax amounted to MSEK 68). As was done in prior years, accrual of the cost in pro- fit and loss for the year will continue by means of the reporting of interim assets pertaining to the remaining portion of the pro- perty tax.

IFRS 9 Financial Instruments is intended to replace IAS 39 Financial instruments: recognition and measurement, possibly by 2017–18. IFRS 9 addresses the classification and measure- ment of financial assets, financial liabilities and hedge accoun- ting. IFRS 9 will be supplemented with new rules regarding the impairment of financial assets. IFRS 9 has not yet been appro- ved for application by the EU, and such approval is not expec- ted to take place until the EU has decided to take a stance on a more complete version of IFRS 9. Accordingly, the company has decided to postpone an analysis of the consequence of imple- mentation or make a decision on potential advance application.

Other new or amended IFRS including interpretations are not deemed to have any effect on the Group’s reporting.

Classification, etc.

Non-current assets and non-current liabilities are comprised, essentially, of amounts expected to be recovered or paid more than 12 months from the balance sheet date. Current assets and current liabilities are comprised, essentially, of amounts expected to be recovered or paid within 12 months from the balance sheet date.

Historical financial information

Operating segment reporting

An operating segment is part of the financial statements that conducts business operations from which it generates income and incurs costs and for which stand-alone financial information is available. Furthermore, the earnings of an operating segment are evaluated by the chief operating decision maker, in regards to results and allocation of resources to the operating segment. Hemfosa’s operating segments are; Community service proper- ties, Office properties in growth municipalities, Logistics prop- erties and Transaction properties.

Consolidation policies and business combinations

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. To assess whether one company has control over another com- pany, potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the financial statements from the date on which the control commences until the date on which control ceases.

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred is generally measured at fair value, as are the identifiable net assets acquired. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

An acquisition can either be classified as purchase of net assets or a business combination. When net assets are purchased, IFRS 3 does not apply.

In the event of a business combination in which the total of consideration transferred, non-controlling interests and the fair value of previously owned interests (in connection with step acquisitions) exceed the fair value of the acquired assets and assumed liabilities that are recognised separately, the difference is recognised as goodwill. When the difference is negative (i.e. a bargain purchase), the difference is recognised directly in profit and loss.

Consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit and loss.

Contingent consideration is recognised at fair value at the date of acquisition. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit and loss.

An acquisition which has a primary purpose to acquire an acquiree’s property - i.e., where the acquiree’s property mana- gement and administration are of secondary importance to the acquisition – ”the acquisition” is classified as an asset acquisi- tion. Acquisitions in which a property management and admi- nistrative organisation exists are recognised as a business combination.

No deferred tax is recognised for an asset acquisitions Instead, the value of the acquired property is reduced by the amount that pertains to the deduction attributable to the defer- red tax of the property, at the acquisition date. The initially deducted deferred tax will subsequently have an effect on remeasurement in that deductions are made from the new fair value (on the remeasurement date) in the amount of the initially deducted deferred tax.

Hemfosa generally acquires investment property through asset acquisitions, although each acquisition is assessed to determine whether it is a business combination or an asset acquisition.

Non-controlling interest arises if the acquisition does not pertain to 100% of the acquiree. There are two alternative methods for recognising non-controlling interests. The Group may either recognise the non-controlling interest’s proportion- ate share of net assets, or recognise the non-controlling interest at fair value, which means that the non-controlling interest may have a share of goodwill. The choice of these two methods for recognising non-controlling interests is made on an acquisition- to-acquisition basis. Changes in the group’s interest in a subsidi- ary that does not result in a loss of control are accounted for as equity transactions.

Joint ventures

A joint venture is an arrangement where the Group has joint control, whereby the Group has right to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Interests in the joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes transaction costs. Subsequent to initial recogni- tion, the financial statements include the Group’s share of the profit or loss and other comprehensive income of equity- accounted investees, until the date on which joint control ceases. The Group’s share of the joint ventures’ profit or loss is recognized in “Share of profit/loss of joint ventures” in the statement of profit and loss. Such share of income, less divi- dends received from joint ventures comprise the main change in the carrying amount of participations in joint ventures. The Group’s share in other comprehensive income in joint ventures is recognised on a separate line under Other comprehensive income in the consolidated financial statements.

Any differences arising from the acquisition between the cost of the holding and the owner company’s share of the net fair value of the joint venture’s identifiable assets and liabilities are recognised in accordance with the same policies as for acquisi- tions of subsidiaries.

When the Group’s share of recognised losses in joint ventures exceeds the carrying amount of the participations in the Group, the value of the participations is reduced to zero. Losses are also deducted against long-term financial balances without col- lateral, which in their financial significance comprise the portion of the owner company’s net investment in joint ventures. Losses beyond invested capital are not recognised unless the Group has provided guarantees to cover losses arising in the joint venture. The equity method is applied until the date on which the significant influence ceases.

Transactions eliminated on consolidation

Intra-group receivables and liabilities, income and expenses, and unrealised gains or losses arising from transactions between Group companies are eliminated in their entirety when the consolidated financial statements are prepared. Unrealised gains arising from transactions with joint ventures and from joint ventures are eliminated to the extent that they correspond to the Group’s participating interest in the company. Unrealised losses are eliminated in the same manner as unrealised gains, but only to the extent that no impairment requirement exists.

Foreign currencies

Transactions in foreign currency are translated to the functional currency at the exchange rate prevailing on the date of the transaction.

Income

Income is the gross inflow of financial benefits arising in a company’s normal business operations during a period and that increase the company’s equity, except for increases due to contributions from owners.

Income is measured at the fair value of the amount that has been received or will be received.

Historical financial information

Rental income

Rental income encompasses all types of rental income and includes additional billings for property tax, heating, etc. Rental income, less discounts exceeding 1 MSEK where applicable, is recorded on a straight-line basis in the profit and loss state- ment, based on the terms of the lease.

Rent paid in advance is recognised as prepaid rental income. Rental income from acquired properties is recognised from the day of taking possession.

Gains/losses from property sales

Gains/losses from the sale of properties, as well as gains/losses from shares and participations, in property-owning companies are recognised under the heading ”Changes in the value of property, realised”, below ”Profit from property management”. Gains/losses from property/share sales are recognised on the day on which the property or shares are relinquished, unless the risks and rewards have been transferred to the buyer on an earlier occasion.

Provisions are made on the sales date for items such as non- invoiced selling expenses or other remaining costs attributable to the transaction.

Other operating income

Other operating income refers to income from secondary activi- ties in the normal business operations such as, capital gains on tangible assets, exchange-rate gains on operating receivables and liabilities.

Leasing

Assets leased under operating leases are not, as a rule, recog- nised, as an asset in the statement of financial position and consequently, does not give rise to a liability.

Leasing expenses less discounts, where applicable, are recognised in profit and loss on a straight-line basis over the lease term. Variable fees are expensed in the periods in which they arise.

Refer to section Rental income above, for accounting princip- les where Hemfosa is a lessor.

Hemfosa has entered into leases for company cars. These are, by definition, financial leases, but are accounted for as operating leases since they are not deemed to be significant.

Finance income and costs

Finance income consists of interest income earned on funds invested. Interest income is recognized as earned.

Finance costs relate to interest, fees and other borrowing costs. Finance costs are charged to profit and loss in the period to which they relate.

Exchange-rate gains and exchange-rate losses are recogni- sed on a net basis.

Derivatives are utilised to financially hedge the risks of inte- rest-rate exposure to which the Group is exposed. Payments of interest pertaining to fixed-income derivatives (interest-rate swaps) are recognised as interest expense in the period to which they pertain. Other changes in the fair value of fixed- income derivatives are recognised on a separate line in profit and loss for the year.

Tax

Income tax is comprised of current tax and deferred tax. Income tax is recognised in profit and loss, except when the underlying transaction is recognised in other comprehensive income or in equity whereby the associated tax effects are rec- ognised directly in other comprehensive income or equity. Cur- rent tax comprises the tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for finan- cial reporting purposes and the amounts used for taxation pur- poses. Deferred taxes are not taken into account in goodwill arising upon consolidation, nor is it taken into account for differences arising on initial reporting of assets and liabilities that are not business combinations that, at the time of the transaction, do not affect recognised or taxable earnings. Temporary differences attributable to interests in subsidiaries and joint ventures that are not expected to be become liable to taxation in the foreseeable future are also not taken into consid- eration. The valuation of deferred tax is based on how the underlying assets or liabilities are expected to be realised or settled. Deferred tax is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets in respect to tax-deductible temporary differences and loss carry forwards are only recognised to the extent that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Financial instruments

Financial instruments recognised in the statement of financial position include assets such as cash and cash equivalents, rent receivables, current receivables and derivatives. Liabilities include accounts payable, loans and notes payable, as well as derivatives.

Recognition and derecognition in the statement of financial position

Financial instruments are recognised initially on the date when they are originated. A receivable is recognised when a contrac- tual obligation for the counterpart to pay exists, even if an invoice has not been sent. Rent and current receivables are recognised in the statement of financial position when an invoice has been sent. A liability is recognised when a contrac- tual obligation for the Group to pay exists, even if an invoice has not yet been received. Accounts payable are recognised when an invoice has been received.

A financial asset is derecognised from the statement of finan- cial position when the contractual rights to the cash flows from