annual report löfbergs 20142015

ANNUAL REPORTSUSTAINABILITY REPORT2014/2015

CONTENTS

Comment from the CEO 3

The Löfbergs Group in brief 5

About us 6

Responsibility from bean to cup 10

In dialogue with our customers and the world around us 14

Coffee farming 18

Our own business 24

About the Sustainability Report 34

Directors' report 36

The business in figures 37

Our history 72

Good moments for future generations.

That is the vision of our current owners,

the third and fourth generation of the

Löfberg family. It extends to 2050 and

includes responsibility and benefit at

all stages from bean to cup: for coffee

farmers, employees, customers, con-

sumers, citizens, partners and owners.

That kind of mindset is possible for a

responsible family business, where sus-

tainability always has been integrated.

The coffee market is tough with

low margins and fierce competition.

A prerequisite for sustainable production

and coffee consumption is that more

people ask for and choose responsibly

produced coffee - and are willing to pay

for it. The development is going in the

right direction, especially within hotels

and restaurants where more customers

appreciate our sustainability work and

our sustainable profile. The sales of

certified coffee in grocery stores have

increased this year, but there is still more

to do. One of our great challenges is to

communicate our sustainability work

and the benefits of concious choices to

the consumer in a better way.

A central part in our sustaina bility

work is to improve the situation of

the coffee farmer to secure the future

supply of really good coffee. We can

see for ourselves on our journeys to the

producing countries how climate chan-

ges and variable world market prices are

affecting crops and living conditions,

but also what benefits the conversion to

more sustainable farming methods and

better agreements can give.

We have continued to invest in

International Coffee Partners and

Coffee & Climate during the year.

Together with other coffee busines-

ses, we help small-scale coffee farmers

with climate change adaptation and

improved profitability. The development

programme of International Coffee Part-

ners comprises more than 32,000 coffee

farmers in twelve countries.

We have also increased the

purchase of coffee from certified farms.

Almost half of all coffee we sell under

our own brands on all our markets now

comes from certified farms, and we will

reach 100% by 2020!

We also continue to work with

our climate impact at home. We have

reduced our climate impact with 24 per

cent during the last ten years through

several efforts, both big and small. One

remaining challenge towards our goal

of 100 per cent renewable is to find

an alternative to the LPG that is used

when roasting.

The Löfbergs Group's goal is to

have the best tasting and most sustai-

nable coffee and through that acheive

long-term profitability. We want to give

a relevant and honest representation

of the work with our most important

issues in our sustainability report. Issues

we have been working with for a hund-

red years and that we will continue to

work with for a hundred more. The key

is sustainability.

Lars Appelqvist

CEO, AB Anders Löfberg

THE KEY IS SUSTAINABILITY

3S U S TA I N A B I L I T Y R E P O R T 2 0 1 4 / 2 0 1 5

Milestone: The entire

Löfbergs assortment in

Sweden is certified

OUR SUSTAINABILITY GOALS IN BRIEF

Certified farms

Today, 46.3 per cent of the coffee we

purchase comes from certified farms.

The entire assortment of our own

brands will be labelled by 2020; a goal

we already have met with the Löfbergs

brand, which is good for both people

and the environment.

Read more about it on page 19.

Climate impact

Since 2005, we have reduced our

climate impact with 24 per cent. The

goal is a reduction with 40 per cent by

2020. One of our great sustainability

challenges is to find an alternative to

the LPG that is used during roasting in

our main facility. Read more about it

on page 26.

Renewable energy

We are continually working on reducing

our energy use, and we are using more

and more renewable energy, for example

biogas, wind power, geothermal and

district heating. The goal is 100 per cent

renewable energy by 2020. The number

today is 39.6 per cent. Read more about it

on page 24.

Gender equality

We increased our proportion of female

executives to 29 per cent this year. The

goal is at least 40 per cent by 2020.

Becoming a more equal work place is

important to be an attractive employer for

even more people, and for creating pre-

requisites for more perspectives and wiser

decisions. Read more about it on page 31.

The Löfbergs Group in brief(Last year's figures in parentheses)

OWNER: The family Löfberg in the third and

fourth generation

MAIN OFFICE: Karlstad, Sweden

TURNOVER (MSEK): 1,709 (1,490)

OPERATING PROFIT (LOSS) (MSEK): 21.7 (23.5)

NUMBER OF EMPLOYEES: 326 (327)

VOLUME COFFEE: 26,592 metric tons (28,741)

VOLUME TEA: 160 metric tons (145)

CORE MARKETS: Sweden, Norway, Denmark,

Finland, Estonia, Latvia, Lithuania, UK

BRANDS: Löfbergs, Peter Larsen Kaffe, Melna,

Crema, Percol, Green Cup and Kobbs

46 % 40 %

29 %24 %


Office

Our sales

Roasting house

ABOUT USA family business with passion forgood coffee

The coffee company AB Anders

Löfberg was founded in 1906 by

the brothers Anders, John and Josef

Löfberg. We started roasting our own

coffee in Karlstad in 1911. Today, we

are one of the largest family-owned

coffee rosters in the Nordic countries

and we are producing an equivalent

closer to ten million cups of coffee

every day.

The company is still fully-owned by the

Löfberg family, now in its third and fourth

generation. The passion for good coffee

has been with us ever since the start,

just as the commitment concerning

social and environmental sustainability.

As a value-driven family business it is

natural and a matter of course to have a

long-term perspective on the business.

Our long-term approach combined with

the will to constantly develop and be in

the forefront is our strength on a tough

market with fierce competition.

Where we operate - our business and our markets. Up till the 1990's, we were only operating in

Sweden. Today, we have seven companies in

five countries: Sweden, Norway, Denmark,

Latvia and UK. Our main office and our largest

roasting house are situated in Karlstad, Sweden

(87 per cent of the production). A great propor-

tion of the company's employees, about 100

people, are working here.

6

The Löfberg family

AB Anders Löfberg

Löfbergs Lila ABKaffehuset i Karlstad AB

Peter Larsen Kaffe A/S(75 %) Denmark

Löfbergs Lila A/SNorway

SIA Melna KafijaLatvia Löfbergs UK Food Brands Group

UKLöfbergs Logistics

Crema Kaffebrenneri A/S

Sweden 56 %

Denmark 19 %

UK 8 %

Norway 5 %

Lithuania 4 %

Finland 3 %

Latvia 2 %

Estonia 2 %

Other 2 %

Our organisation

Brands. Our coffee is sold in about ten countries in Northern Europe under the brands Löfbergs, Peter Larsen Kaffe, Melna, Green Cup,

Crema and Percol. In Sweden, we also sell tea under the brand Kobbs.

Sales in multiple channels. About half

of our total sales takes place via the

trade of convenience goods (Retail)

and a third via cafés and restaurants

(Out of Home). The rest consists of

different business customers that sell

or serve the coffee we produce under

their own brands.

We are number two on the Swed-

ish market with a total market share

of about 20 per cent. That number is

slightly higher within café and restau-

rant, about 30 per cent (Source: SKI).

Sales (value). Sweden is decidedly our largest market, but

the shares in the other countries increase every year.

The parent company AB Anders Löfbergs has the comprehensive responsibility for the group's development, strategy and financial

governance. The group's board of directors consists of seven regular members (three owners and four external members), two employee

representatives and two deputy members. The chairman of the board is Kathrine Löfberg. The operating coffee and tea business is led by

the group management, and Lars Appelqvist is the CEO.


VISIONThe Löfbergs Group will be regarded

the the most sustainable coffee group in Europe that with passion,

strong brands and the best tasting coffee delivers

increased value for our customers and owners.

KATHRINE LÖFBERG, CHAIRMAN OF THE BOARD AND OWNER About the owner family's and the company's business philosophy, basis of value and vision.

The vision to be regarded as the most sustainable coffee group in Europe with the best tasting coffee, what does it mean and how do you know you are developing in that direction? It is really about continuing to build on the work that my great-grandfather started a hundred years

ago: producing coffee that both tastes and does good. We will keep on chasing the best coffee beans

and at the same time be a forerunner in sustainability and spread knowledge about all the good

things we do to contribute to a sustainable development. One sign of our success is that we get new

and more loyal customers.

How does it show in the company, from the daily coffee production and customer meetings to management decisions, that this is a family business of several generations? We are an active and committed owner family with clear values: Long term approach, responsibility, entrepre-

neurship, commitment and professionalism. That contributes to us making quick decisions at the same time as

we want and dare to have a long-term perspective, not at least regarding sustainability. One specific example

is when my father purchased the first container of organic coffee to Sweden in 1995, not because there was a

demand for it, but because it felt as the right thing to do. In the beginning, we sold the coffee with a loss. More

than every four cup we sell is organic today, which is great for the coffee farmer, the environment and for us.

What do you want to leave to the next generation of the Löfberg family? What do you hope has been achieved by 2050, a year that you have as target to look forward to? We are six persons in the fourth generation, and our common vision is "Good moments for future gene-

rations". We want to leave our children a respected, independent family business with strong brands that

compete on the international coffee market. But our vision is also to protect coming generations of coffee

farmers, customers and employees. We are bigger, stronger and more profitable in 2050, and we have the

same strong focus on sustainability and good coffee as today.

8

lowing areas: Financial, Customers and

Markets, Internal Processes, Responsibi-

lity and Employees.

Living values

We have a common basis of values in

the group that describes the fundamen-

tal principles of how we act towards

each other in the company as well as

in external relationships and towards

Vision and goal - good mom ents for future generations

Our vision and our goals involve being

leading in good tasting coffee, sustai-

nability and long-term profitability. We

developed our strategic plan in 2014,

which includes our most important ob-

jective areas and perspectives. Tangible

goals and governing key performance

indicators are connected to the fol-

the world around us. The basis of

values works as guidance in the daily

work and in decisions on all levels with

the starting point in five value words:

Responsibility, Commitment, Entre-

preneurship, Long-term approach and

Professionalism. The basis of our values

is described in a book that each em-

ployee receives in their native tongue.

Responsibility

Commitment

Long-term approach

Entrepreneurship

Professionalism

Our basis of values describes the fundamental principles for how we act towards each other and the world around us.

In the forefront for sustainable development

We want to take leadership and be in the

forefront in the industry when it comes to

sustainable development. We are taking

responsibility for our business's impact on

people and the environment through the

entire value chain, from bean to cup.

By continuously developing the

know ledge on where and what kind

of impact is most significant, and by

keeping ourselves updated on trends

and expectations from the world around

us, we can focus on the right things and

make sure that our sustainability work

really makes a difference.

RESPONSIBILITY FROM BEAN TO CUP

An important starting point is that

the responsibility for people and the

environment at the same time creates

conditions for long-term sustainable

business at all stages: for the coffee

farmers, for us and for our customers.

» Boat and train right into the roasting house

» Efficient logistics and renewable fuels

» Investments and commitment at home and in the producing countries

» Increase demand for certified coffee

» Energy efficiency, renewable energy sources and smart packaging

» Stimulate more sustai - nable farming methods and conditions

Andel av ka�ets totala klimatpåverkan

3,1%

TRANSPORTLEVERANS


2,6%


3,1%

FÖRÄDLING

82,4%Andel av ka�ets totala

klimatpåverkan

KAFFEODLING


8,8%

KONSUMTION

SAMHÄLLSANSVARSOCIAL RESPONSIBILITY

CONSUMPTION

DISTRIBUTION TRANSPORT

PROCESSING

COFFEE GROWING

1 0

Focus on the most essential

Our sustainability work is partly about

effect and responsibility when farming

coffee, and partly about our role as a

responsible company on the markets

where we have our own roasting and

sales business.

From a holistic perspective, the

greatest impact both environmentally

and socially is in the farming stage. The

effects from climate change for the

conditions of farming, and the supply of

great coffee in the long run, as well as

the coffee farmers' conditions and

livelihoods are some of our most

important sustainability aspects. These

areas are also our key priorities, even if

we certainly are doing a lot in many

other areas too.

Coffee farming

The farms are responsible for approxi-

mately 80 per cent of the total climate

impact of coffee, so this is where our

investments are doing most good. By

purchasing our coffee directly from the

producing countries and by increasing

the demand for coffee from certified

farms, we can get more farmers to

transition to more sustainable farming

methods. We also run and participate

in development projects to help coffee

farmers to farm with environmental

consideration, tackle climate changes

and increase their productivity and

profitability.

Community engagement - with the coffee farmers and at home

We have always been committed in the

local society and aim to contribute to a

positive development in places where

we operate, in our immediate surroun-

dings and with coffee farmers in the

producing countries around the world.

Through International Coffee Partners,

we contribute together with other Eu-

ropean family-owned coffee companies

to improve prerequisites, profitability

and living conditions for small-scale

coffee farmers.

Our commitment at home consists

of participating in infrastructural invest-

ments, cooperating with universities

as well as sponsoring sports teams and

associations.

Responsibility from bean to cup. What does it mean and what issues are most important?It means that we are taking responsibility for people and the environment along the entire value

chain. The most important is that those who farm coffee have good working conditions and get paid

fairly, and that the coffee is farmed without harming nature. At the same time we have to reduce our

own climate impact. It is about smart transport solutions, being resource-efficient when it comes to

use of energy and materials, and make environmental demands when purchasing goods and services.

What does it take to reach the vision of being the most sustainable coffee company in Europe? It is important to include all sustainability aspects: environmental, social and financial. We have to work with

improvements in the entire chain, for all interested parties, our surroundings, our suppliers and customers as

well as our company. We have to talk about the challenges the planet and its inhabitants face and about the

initiatives that we take to contribute to a more sustainable development. If we manage to increase the will to

pay for sustainable coffee, we can speed up the transition to sustainable farming methods with profitability at

all stages without negative environmental impacts.

What in the sustainability work are you most proud of?I am very proud of working in a family business with a clear basis of values, where a relatively large share of

the profit is invested in development projects in the coffee producing countries and other community

initiatives. There is a great and real commitment for people and the environment in the owner family and the

top management - that is something I am really proud of!

EVA ERIKSSON, DIRECTOR SUSTAINABILITY About the holistic perspective and prioritized issues in the sustainability work.

SUSTAINABILITY GOALS 2020

100 % renewable energy

40 % female managers

100 % certified assortment (all our own brands)

40 % less climate impact (compared to 2005)

1 2

Owners

Employees

Society

Suppliers

Customers

Consumers

Board of directors

IN DIALOGUE WITH OUR CUSTOMERS AND THE WORLD AROUND US

Our company affects and is affected

by many different interested parties

through the value chain. We are keen to

have an open and transparent dialogue

with customers, suppliers and others

in the world around us, to guarantee

that we meet the made demands and

to develop the business in the right

direction.

The dialogue is made primarily

through our daily business, in meetings

and in communication with customers

and employees, in contacts with autho-

rities and through industry cooperation

and so forth. We also follow and carry

through various customer surveys and

brand surveys and have an active busi-

ness intelligence.

1 4

Highly regarded and a sustai-nable profile with the business customers

Sustainable production and consump-

tion of coffee imply an increased

demand for responsibly produced coffee

and that more consumers make active

sustainable choices. An important task

for us is therefore to successfully reach

out with our sustainability work and the

added values we can offer.

Customers in café and restaurant

(Out of Home) and in Retail on the

Swedish market have generally put sus-

tainability matters high up on the agenda.

They also have high levels of confidence

for our sustainability work, we are ranked

among the best companies in the surveys

made. Above all, customers appreciate our

holistic approach with a clear responsibility

from bean to cup, and that we take lead-

ership and push the business in matters

of environment and social responsibility.

Many of our larger hotel and restaurant

customers that have a clear sustainability

profile themselves choose us as their supp-

lier thanks to this. Nordic Choice, Scandic,

McDonald's, Compass Group and Sodexo

are some that serve their guests certified

Löfbergs coffee.

We also have a strong sustainability

profile in Denmark and UK through our

brands Peter Larsen Kaffe, Percol and

Green Cup.

Challenging to reach the consumersAt the same time as the expectations on

responsibility and sustainability are increa-

sing, there are still few consumers that

actively are choosing certified coffee, even if

the proportion is steadily growing. For the

great majority, taste and price are significantly

more important than sustainability when

choosing coffee. One of our greatest challen-

ges forward is to communicate our

sustainability work in a clearer and more easily

accesible way to contribute to a more

sustainable coffee consumption.

"Löfbergs has worked for a long time with

sustainability and always puts ethics, social

responsibility and environment first. There are

few that work with sustainability as whole-

heartedly and consistent as Löfbergs. The com-

pany strengthens us in our sustainability work

and enables us to free up resources to focus on

areas where the needs are greater."

That was the jury's statement when Löfbergs won this year's edition of the Nordic Choice Hotels Sustainability Award.

In the last year, Löfbergs and Nordic Choice

Hotels have strengthen their cooperation in

sustainability. Besides serving organic and

Fairtrade labelled coffee, the cooperation invol-

ves climate compensation and ethical projects in

the producing countries.

AWARD-WINNING SUSTAIN-A BILITY COOPERATION

1 5S U S TA I N A B I L I T Y R E P O R T 2 0 1 4 / 2 0 1 5

Sustainable Food Chain

The initiative Sustainable Food Chain

was launched in connection with the

food conference EAT Forum in June.

Behind the initiative, which is coordi-

nated by WWF, are a number of other

large operators in the Swedish food

industry and trade of consumer goods.

Löfbergs is one of the companies. The

goal is to force the pace and increase

the transition to a sustainable produc-

tion and consumption of food through

cooperation, dialogue and clear measu-

res. For more information, please visit

www.hallbarlivsmedelskedja.se

Networks and cooperation

Cooperation is required to push the

industry and the coffee market in a

sustainable direction. We are actively

participating in different networks and

forums with focus on the issues where

we have our greatest challenges or

where we can make the most difference.

We have been members of CSR Sweden

and the climate network the Haga Ini-

tiative for several years, where we carry

out annual greenhouse gas emissions

disclosures to show that it is profitable

to take active climate responsibility.

Together with a number of other

operators in the Swedish food industry,

we launched Sustainable Food Chain

in 2015.

1 6

67 %

17 % 11 %

COFFEE FARMINGResponsibility in the producing countries

The climate changes' effects on

coffee farming and the coffee farmer's

livelihood are our most important

sustainability matters. Working for

climate change adaptation and

environmental adaptation in farming,

and better social conditions is ultima-

tely about guaranteeing our long-term

supply of good coffee.

We are actively working to get

more farmers to convert to more

sustainable farming methods and to

improve the living conditions for the

approximately 40,000 coffee farmers

that deliver our coffee. We focus on two

areas: coffee from certified farms and

development projects that benefit

small-scale coffee farmers.

Good coffee directly from the producing countries. We purchase care-

fully selected and high-quality coffee beans from some twenty countries in

South and Central America, East Africa and Asia. We purchase all our coffee

directly from the producing countries with as few intermediaries as possible.

We purchase all coffee directly from

producing countries on four continents,

mostly from South America.

South America

Central AmericaAfrica

1 8

5 %

The majority of our coffee is sourced from small-scale coffee farmers that sell the

coffee through cooperatives. In all, about 40,000 coffee farmers deliver coffee to

us. We have full traceability on the coffee we purchase, even though a delivery from

a cooperative can consist of coffee from hundreds of different coffee farmers.

Africa

Asia

Coffee from certified farms

Seen to the entire life cycle of coffee,

the clearly biggest share of its climate

impact, about 80 per cent, lies at the

farming stage. Felling and the use of

chemical pesticides are two other

factors that can affect the environment

and the biological diversity negatively

when farming coffee. Many small-scale

coffee farmers and a fast-moving global

coffee market also mean social and

financial challenges.

By demanding and purchasing

coffee from certified farms, we can

contribute to improving the coffee

farmer's possibilities to meet climate

changes, increase their income and

thereby improve the living conditions of

themselves and their families.

The Löfbergs Group is one of the

world's largest importers of organic and

Fairtrade labelled coffee today. Already

in 1995, we purchased the first contai-

ner of organic coffee, not because there

was a market for it, but because it felt

right. We introduced Fairtrade labelled

coffee a few years later. Since then, we

have gradually increased the share of

certified coffee, and the entire assort-

ment under the brand Löfbergs has one

or several labels since last year. The

next goal is 100 per cent certified for all

of our brands, which we will reach by

2020.

Coffee grows best in tropical climate and is cultivated in about 50 countries

around the equator. There are two main coffee species, arabica and robusta, as well as numerous subspecies and cross-breeds. The differences in flavour are not just depending on the coffee specie, but also

on farming conditions and how the beans are handled and roasted.

In the Löfbergs Group, we mainly use high-grown arabica, which has a soft,

aromatic and complex flavour profile. A few products also include high-quality

robusta that gives a special, full-bodied contribution of flavours.

CAREFULLY SELECTED COFFEE BEANS


2010/2011

UTZ Certfied/Organic

Rainforest Alliance Fairtrade Organic/Fairtrade Organic

UTZ Certfied Rainforest Alliance/Organic

50%

40%

30%

20%

10%

0%2011/2012 2012/2013 2013/2014 2014/2015

100%

80%

60%

40%

20%

0%

2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

One of the world's largest importers of

organic and Fairtrade labelled coffee.

The Löfbergs Group purchased 12,700

metric tons of coffee from certified farms

during the year, which is an increase with

38 per cent compared to the year before.

Almost half of all coffee we purchase

comes from certified farms. The combina-

tion organic/Fairtrade is the largest one.

The sales of certified coffee increases.

Most of our coffee is sold under the

brand Löfbergs, and here we have come

really far in the transition to certified

coffee. The proportion increased to

92 per cent this year.

2 0

Our sustainability labels

We are working with several different labels with slightly different focus. All of them guarantee

that the farms are controlled by an independent party, and include criteria regarding fair labour

conditions for coffee farmers and farming methods that meet certain environmental criteria. The

labels we choose should make actual difference and be trustworthy towards our customers.

Fairtrade is an independent product label with focus on human and labour rights. The farmer is guaranteed a minimum price, and the cooperative

receives an extra bonus. It creates prerequisites for better working and living conditions.

Organic. The labels show that the coffee comes from organic farms, where for example chemical pesticides and artificial manure are not used.

Rainforest Alliance is an independent label with focus on conserving biodiversity, sustainable farming methods as well as the conditions and

livelihoods of the farmers.

UTZ Certified is an non-profit organisation that through information and education creates the conditions for a more sustainable production,

increased productivity and higher standards of living.

Our sustainability labelsThe labels we work with have a somewhat different focus, but they all contribute to a sustainable development for people

and the environment.

Our own development projects

We carry on several development pro-

jects, often in cooperation with other

operators, to improve competitiveness

and living conditions for small-scale

coffee farmers.

International Coffee Partners

We founded International Coffee

Partners together with four other

family-owned European coffee compa-

nies in 2001. Two more have joined us

since. The vision of International Coffee

Partners is to make small-scale coffee

farming more competitive to improve

living conditions for farmers and their

families. Productivity and profitability

in the short and long term increase in

the cooperatives through specific local

projects. We focus on education and

practical training, in farming methods

and in climate change adaptation. An

important part in many of the projects

is also to strengthen the women's role

in society.

EUR 11 million have been invested

in 23 projects in 12 countries so far.

More than 30,000 farmers are included.

The participants have in many cases

doubled or even trebled their income,

which naturally has great effects on the

standard of living and the local develop-

ment of society.

Coffee & Climate

In the project Coffee & Climate, we are

working together with other coffee

companies and aid organisations in

Sweden (Sida) and Germany (GIZ) to

help small-scale coffee farmers meet

the climate changes and at the same

time increase their income.

The climate changes have evident

effects on coffee farming in many pla-

ces. Unpredictable weather conditions

with heavy rain and prolonged drought

affect quality and crops, and make

it harder for coffee farmers to make

money. It also affects coming genera-

tions' interest for coffee farming, and

therefore threatens the supply of good

coffee in the long run.

Within Coffee & Climate, the

knowledge from international climate

research has been combined with the

coffee farmers' practical experience

to develop a toolbox that can be used

by coffee farmers all over the world.

The toolbox contains means, practical

working methods and educational

materials. It is accessible via the internet

and is regularly updated with results

from pilot areas and case studies.


MORE INITIATIVES FOR REALLY GOOD COFFEE

CAFÉ ORGÁNICO MARCLA (COMSA) - HONDURAS

The cooperative COMSA in western Honduras consists of 800 small-scale coffee far-

mers, who farm high-grown arabica on an altitude of 1,200-1,700 metres. The coffee is

organically farmed and in accordance with Fairtrade, which for example results in:

• investments that have improved quality and productivity

• higher salaries and improved working conditions

• own production of organic fertilizers that have replaced artificial fertilizers

• support to local hospitals and ambulance helicopters

• educational scholarships to children and youth

The coffee from COMSA is well-balanced with nuances of chocolate and tropical fruit.

We use it in Harmony (Löfbergs), Økologisk Fairtrade (Peter Larsen Kaffe) and

All Day Americano (Percol) among others.

Development project for a more sustai-

nable future for closer to 1,800 coffee

farmers in a Fairtrade cooperative in

Kenya. Through local educational ef-

forts at the farming, refining and selling

stages, in cooperation with universi-

ties and the trade of consumer goods

among others, and numerous other

efforts, the programme will strengthen

Coffee is farmed on an altitude of

900-1,400 metres at Balanoor Planta-

tions in southern India. We carry on aid

projects to improve the social situation

for the workers and their families. We

pay an extra bonus of 2.5 per cent of

the sales value, which is used to repair

the coffee cooperative and increase the

farmers' income as well as create more

job opportunities for young people in

the coffee business.

The coffee from the cooperative

has an intense but mild flavour and a

prominent acidity. We sell it under the

brand Peter Larsen Kaffe in Denmark.

the pre-school, schoolbooks as well as

equipment and resources to the local

care centre. The coffee from Balanoor

has an intense aroma with nuances of

spices, nuts and vanilla, and is sold

under the brand Crema in Norway.

CREMA FOUNDATION - SOUTH OF INDIA

COFFEE FOR A BETTER FUTURE - KENYA

2 2

Close relationships with our suppliers

We travel around the world for 150 days

a year. We go up to the mountains and all

the way to the coffee farms, to meet far-

mers and find the very best coffee beans.

We have been doing business with many

of them for several generations. We

guarantee the quality through long-term

relation ships and can see with our own

eyes that certifications and development

projects contribute to a positive develop-

ment.

In addition to high demands

on flavour and quality, we also make

demands that all coffee we purchase

should be farmed with consideration

of people and the environment, All our

suppliers must also sign our own code

of conduct that is based on the UN

Global Impact and the core conven-

tions for human rights of ILO. The code

also means that one pledges oneself

to follow national legislation. The code

of conduct is harmonized with 4C, an

international platform for sustainable

coffee production.

Follow-up of the code of conduct is

done through regular contacts and

supplier visits. The number of visits

vary from the systematic risk assess-

ment based on HDI and BSCI. We visit

our main suppliers with an interval of

one to three years. When we discover

deviations of the code of conduct, we

make sure that they are taken care of.

If it is a serious deviation or if a supplier

does not act to take care of the devia-

tion, we will finish the cooperation.

As many coffee farms are family

farms where everyone in the family

helps out, it is important to guarantee

the children's right to schooling, leisure

and development.

Non-renewable (MWh) Renewable (MWh) Coffee production (metric tons)

E = Electricity U = Heating R = Roasting

MWh

12,000

10,000

8,000

6,000

4,000

2,000

0

Metric tons coffee

30,000

25,000

20,000

15,000

10,000

5,000

02005 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

EE E E E

E

U

UU

U

U U

R

R R R RR

Energy use. The electricity use at our facilities in Sweden, Denmark and Latvia has decreased since 2005, even though that the pro-

duction has increased. Almost 40 per cent of the energy is renewable today. Non-renewable energy is mainly used during roasting.

Heating and a part of the electricity in our Latvian facility are still based on non-renewable energy. The facility in Norway is responsi-

ble for less than one per cent of the production and is not included.

When looking at the whole value chain

from bean to cup, our own refining

business is responsible for quite a small

part of the impact on people and the

environment. At the same time, this is

where we really can and should ensure

responsibility the whole way and steer

the business in a sustainable direction.

Resource efficiency at the refinement

stage, being a responsible and attractive

work place, and local social commit-

ment where we operate are important

Responsibility at home

parts of the sustainability work at home.

Our strongest geographical connection

is in Karlstad, where the Löfbergs Group

was established and where the main of-

fice and the main part of the production

operate. But we are also a local operator

through our businesses in Norway,

Denmark, Latvia and UK.

Resource efficient refinement with renewable energy

Three percent of the total climate impact

of coffee derives from the production in

our roasting houses.

We are still working hard to decrease

the environmental footprint in the

processing stage. We are continuously

working to streamline and reduce our

energy use, and have set an overall goal

to use 100 per cent renewable energy

by 2020. The proportion is almost

40 per cent today.

OUR OWN BUSINESS

2 4

JAN MÖTTÖNEN, TECHNICAL MANAGER About the Löfbergs Group's work to reduce the climate impact.

What is sustainable energy use about for Löfbergs?It is about finding smart solutions for an as efficient energy use as possible, and only using sus-

tainable energy sources. If we look back 20 years, we have accomplished a lot regarding energy

efficiency. Our use of electricity is as low as it was in the beginning of the 1990's while the coffee

production has doubled! The greatest improvement was when we introduced preheating of the

green coffee beans by recycling the hot air from the roasting, a technique we were first in Europe with and

that decreased the energy use with 20 per cent. There is still kWh to save, but it is harder now when the

easier and larger measures have been done.

How far away is the goal 100% renewable? The challenge is above all to switch the LPG that is used when roasting. We are roasting with biogas from the

natural gas network at our Danish facility, but that is not possible in Karlstad. Switching to a natural gas tank

or other solutions in the existing system is not optimal as it would require more transports, and it will not be

as energy efficient. The legislation regarding food safety also limits which fuels can be used for coffee roas-

ting. Together with our LPG supplier, we are trying to find new fuel options. We have our highest hopes on

a "green" LPG made of forest residues, which is under development.

Solar panels with world record

During the spring of 2014, the world's

first large-scale testing facility of solar

panels for both heating and cooling

was built on Löfberg's roof in Karlstad.

The project is a cooperation with

ClimateWell and is partly financed with

EU funds. When the first results were

presented, they showed record levels

of efficiency; for every kWh invested,

10.6 kWh is extracted, which is twice as

much as for previous solar panels.

Transport and delivery – by boat, train and lorry

Coffee is farmed on the green slopes

of the Andes, the precipices of Mount

Kenya and in other exciting places

around the equator. It means that the

coffee beans travel a long way to get

to our part of the world. We have been

working for a long time to streamline

and reduce the climate impact from the

transports, both the incoming transports

of the coffee beans and the distribution

transports of the finished products to

our customers.

Almost all our coffee is transported

as bulk cargo in containers with boat to

Gothenburg and then with train all the

way into our facilities in Karlstad. Using

train saves more than 2,700 metric tons

of carbon dioxide per year compared

to truck transports. Our coffee capsules

from Italy are freighted with train major

parts of the distance since 2014.

A smaller volume of coffee is received in

the ports of Aarhus and Riga for further

transports with trucks to our roasting

houses in Denmark and Latvia.

Some customers pick up their

coffee from us, the rest is delivered

to wholesalers and the customers'

warehouse terminals. We have high

demands on the transport companies

we hire for distribution and delivery. In

Sweden, we use a special procurement

tool for sustainable transports with cri-

teria for work environment, road safety

and environment.

To optimize and reduce the

number of transports, we are regularly

working on planning and packing as

efficient as possible. We are at the same

time actively working to streamline our

order and freight processes.


Roasting

Energy

Business journeys

Own transports

Emissions metric tons per produced coffee (Hagascope)

0.12

0.10

0.16

0.14

0.08

0.06

0.04

0.02

0

Metric tons CO2e/metric tons produced coffee

3,000

4,000

2,000

1,000

0

Metric tons CO2e

2005/ Base year

2010/11 2011/12 2012/13 2013/14 2014/15

Climate impact. Our direct and indirect emissions of greenhouse gases have significantly been reduced since

2005. All electricity and heating in our Swedish and Danish facilities come from renewable energy sources

since last year. Our climate impact has been reduced with 24 per cent since 2005. The fact that it slightly

increased per metric ton of produced coffee is mainly due to a lower production volume.

Our environmental foot print is annually estimated within the scope of our membership in the Haga Ini-

tiative, and includes the business in Sweden and the production in Denmark (which is directed from Sweden).

Estimations according to Greenhouse Gas Protocol scope 1, 2 and business travel scope 3.

Climate compensated business travel

We are climate compensating all our

business travels made by plane. The

cars we use when on duty cannot let

off more than 120 grams of carbon

dioxide per kilometre according to our

car policy. The actual average for the

car journeys during 2014/2015 was 188

grams per kilometre estimated on the

entire life cycle.

Use of materials and packaging

Choice of materials and our packaging

design have an effect from an envi-

ronmental point of view seen to the

consumption of natural resources and

how efficient the transports of our cof-

fee is. By switching from glass jars to

PET cans and zip bags, we have reduced

the freight weight for instant coffee. We

have a high share of vacuum packed

coffee, which means that we freight

less air.

The waste from our business

is mainly combustible material like

packaging material, paper and rests

from green coffee. We have a developed

separation of waste, and our goal is that

as much as possible should be recycled.

The waste from the coffee beans are

pressed to fuel pellets and are used as

biofuel.

2 6

Use of materials. We used 31,786 metric

tons of materials during the year. The

green coffee has a special position and

represents 86 per cent (Karlstad).

Green coffee 86 %

Plastics 4 %

Corrugated cardboard 3 %

Equipment 1 %

Paper 5 %

Other <1 %

Waste treatment. We recycle almost

all waste (99 per cent) as energy,

material or compost (Karlstad).

Energy recovery 74 %

Composting 13 %

Recycling 12 %

Destruction 1 %

Landfill <1 %


Social investments

We contribute to social development in several ways, for example by paying

SEK 13.3 million in taxes and SEK 9.4 million in voluntary investments.

Systematic environment and quality work with support from management systems

Certified management systems for food

safety, quality and environment are

important tools in our daily business.

They are also an acknowledgement

towards customers and other interested

parties that we are working structu-

rally with constant improvements. All

production (except for the micro coffee

roaster Crema in Norway) is covered by

ISO 22000 or FSSC certificates for food

safety. Our Swedish business is also

certified according to ISO 14001 and

ISO 9001.

Social commitment where we operate

We have a strong anchorage in the

local community, especially in Karlstad,

but also in our other core markets. We

want to contribute in different ways to a

positive development where we operate

and commit ourselves beside the core

business to produce and sell coffee. It

can be about sponsoring sports teams

and associations or cooperation with

schools and universities. We invested

about SEK 9.4 million in different local

projects and initiatives during the finan-

cial year of 2014/2015.

In Karlstad, we have been part of infra-

structural investments and the building

of sports arenas, shopping centres and a

congress facility during the years. Right

now, we are participating in the deve-

lopment of an entirely new district with

a central location close to the water.

Financial year 2014/2015 (TSEK)

Revenue 1,745,100

Operating expenses –1,458,043

Salaries and remuneration to employees –206,432

Payments to investors –30,537

Payments to the public sector

Denmark –3,904

Sweden –7,536

Norway –901

Latvia –251

England –757

Investments in society –9,371

Retained economic value 27,368

2 8

Honey with sweet side effects

Löfbergs got beehives on the roasting house's roof in central Karlstad in the summer of 2014. The

aim was foremost to contribute to pollination and a greener urban environment, on top of that the

bees also produced good honey. The honey was then sold at Löfberg's café in aid of charitable

purposes. Everyone that bought a jar got to vote for which organisation should get the surplus.

A total of SEK 10,000 was donated to Julänglarna, a non-profit organisation that collects

contributions to help families that otherwise cannot afford to celebrate Christmas.

Support to cancer research

Our company in UK, Percol, is the official coffee partner of the research fund Cancer

Research UK. A special instant coffee was launched in 2014 as a part of the cooperation,

which is sold in favour of research. The coffee is served at the events of the fund during the

Cancer Awareness Roadshow, which is arranged in all of UK.

97.9 % The attendance rate remains high, the goal is

to always be above 97 per cent.

Development opportunities

We have staff appraisals in all our units.

It is one of the forums where we pick

up development opportunities and

educational needs. Our aim is that all

employees should have an individual

development plan.

We carry out regular employee

satisfaction surveys (next time will be

in 2016). The latest survey gave an Em-

ployee Satisfaction Index of 4.0, where

5 is the highest. We think it is a good

result, but the goal is to be even better.

The employee satisfaction survey shows

that our principal strengths are the work

place as a whole, diversity and sustai-

nability. Among the development areas,

we find competence development.

A secure working environment is a

prioritized area. We are systematically

working with follow-ups and preven-

tive measures. There were no reported

serious incidents during the year.

Competent and committed employees

is key for meeting our customers

demand and make it possible for us to

reach our goals and visions. That is why

it is important for us that we offer a se-

cure, attractive and developing working

environment. Our greatest challenge

from a sustainability and employee

perspective is to improve equality.

Coordinated group with local anchorage

We are 326 employees in five different

countries, which put demands on cen-

tral coordination and local application.

The labour laws are slightly different

in different countries, but we naturally

follow national rules and regulations

as well as collective agreements where

applicable.

We have a common basis of values

that describes the fundamental princip-

les for how we act towards each other

and the world around us. It is based on

our value words: responsibility, com-

mitment, entrepreneurship, long-term

approach and professionalism. The

basis of values is described in a book

that all employees receive in their native

tongue.

We are working after the princi-

ple that all business is local. That is an

explanation to the fact that we do not

have full coordination regarding some

key performance indicators, but we are

continuously working on increasing the

coordination. We planned for a reorga-

nisation during the year, which now has

been carried through, where the global

HR responsibility is more clear. It will

give a better general view, for example

of attendance rates, which remain high.

EMPLOYEES

3 0

EmployeesWomen: 39 % (37 %)

Men: 61 % (63 %)

ManagersWomen: 29 % (28 %)

Men: 71 % (72 %)

Total(326 employees)

Sweden(163 employees)

Women Men

Denmark(53 employees)

Norway(19 employees)

Latvia (51 employees)

England(40 employees)

39 %

37 %

30 %

42 %

51 %

37 % 63 %

48 %

58 %

61 %

63 %

70 %

0 % 20 % 40 % 60 % 80 % 100 %

Focus on gender equality

Becoming a more equal work place is one of our

great challenges. It is important in order to be an

attractive employer for even more people, and

for broadening perspectives and making wiser

decisions.

Of our 326 employees, 61 per cent are men

and 39 per cent are women. It is a marginal dif-

ference compared to previous year. We are most

equal in Latvia where 51 per cent of the em-

ployees are women, and least equal in Denmark

where 70 per cent are men.

On an executive level in the group, there

is an even bigger difference with 71 per cent

men and 29 per cent women. We are not

satisfied with that, our long-term goal is that

half of all managers will be women. We are

actively working with this goal in several

ways, for example when recruiting and with

a new talent programme.

The management team consists of

eleven people, nine men and two women.

The board has nine members including two

employee representatives and two deputy

members. Of the ordinary board members,

44 per cent are women and 56 per cent

are men.

The inequality is to a large extent

due to general traditions in society and

in our line of business. The change is

taking time as we have long periods of

employment and low staff turnover. But

the goal is clear, we want and will be a

more equal company.


This year, we launched an internal

talent programme with the purpose of

encouraging potential leaders and se-

cure the access to future managers and

specialists. At least half of the seats are

reserved for female employees as part

of the work to increase gender equality

in the company.

AWARDED AS A CAREER COMPANY

TALENT PROGRAMME FOR THE LEADERS OF

TOMORROW

The participants of the talent pro-

gramme are educated in leadership,

business sense, communication and

group dynamics. The talent programme

is arranged every other year. The first

round aimed at staff in Sweden, but will

in the long run include all members of

the Löfbergs Group.

– Being selected for the talent

programme strengthened my self-con-

fidence. It was a giving and instructive

training that incites me in my conti-

nuous development, says Anna Myrén,

machine operator.

Every year, Jobtip lists Sweden's most

exciting companies in which to make

a career. The survey includes thou-

sands of companies, and for the first

time we are elected one of the year's

career companies. It is an acknowled-

gement for us that we are an attractive

employer with good development

opportunities. We are extra pleased that

we got top marks when it comes to em-

ployee engagement.

The statement of the jury:

"In its work to reward equality in

the work place, Löfbergs has made

great investments in its talent pro-

gramme that brings out female talents

with potential to management

positions. The global group also offers

international career opportunities for

its employees as it has its own

companies in Sweden, Norway,

Denmark, Latvia and England. Add to

that a solid sustainability work that

permeates the entire organisation and

it is clear that Löfbergs is one of

Sweden's Career Companies 2015."

ABOUT THE SUSTAINABILITY REPORT

This is our fourth sustainability report

and it counts for the fiscal year 1 July

2014 to 30 June 2015. We account for

directions, goals, measures, results and

challenges in the work for a sustainable

development in our entire value chain

from bean to cup.

To guarantee a reliable and relevant

reporting of our sustainability work,

we use the guiding principles of Global

Reporting Initiative. This year, we have for

the first time applied GRI's new version

G4, level Core. It remains some work

and data collection in some areas to be

able to present in full according to the

criteria, our ambition is to continuously

keep developing our presentation.

The contents of the report reflect

the issues that are significant from our

business's impact on people and the

environment through the entire value

chain, our strategic direction and our

interested parties' demands and expecta-

tions. We are continuously valuing which

issues that are most central, on a strategy

level and in dialogue with our interested

parties, for example customers, employ-

ees and other actors. Before the work

with this report, a summarized materiality

analysis has been made in dialogue with

internal key stakeholders.

The reported data applies for the

entire business, where nothing else is

GRI CONTENT INDEXBelow you will find a list of mandatory indicators and indicators chosen from our materiality analysis:

Indicator Description Page/Comments Indicator Description Page/Comments

General information

Strategy and analysis

G4–1 Statements from Chairman of the Board and CEO 3, 8

Organisational profile

G4–3 Name of the organisation 1

G4–4 Primary brands, products, and/or services. 6–7

G4–5 Location of organisation’s headquarters 5

G4–6 Countries in which the organisation operates 6–7

G4–7 Nature of ownership and legal form 5

G4–8 Markets served 5–7

G4–9 Scale of the organisation 5–7

G4–10 Description of workforce

30–31 The majority of the workforce is full-time employees and employees with conditional tenure

G4–11Proportion of employees covered by collective agreements

30 All employees in Sweden are covered by collective agreements

G4–12 The organisation’s supply chain 18–19

G4–13Significant changes in the organisation during the reporting period

No significant changes

G4–14 Approach to the precautionary principle

Through systematic work with risk management and environmental mana-gement.

G4–15Externally developed economic, social environmental charters, principles, or other initiatives to which the organisation subscribes or endorses.

16, 25

G4–16 Memberships and associations 16

Identified material aspects and boundaries

G4–17Units included in the organisation's financial report as well as information whether anyone of these is not included in non-financial report

Financial as well as sustainability report refer to the entire Löfbergs Group.

G4–18 Process for defining report content 34–35

G4–19 Material aspects included in the report 10–11, 34–35

G4–20 Aspect boundary within the organisation 34–35

G4–21 Aspect boundary outside the organisation 10–11, 34–35

G4–22The effects and causes of any restatements of information provided in previous reports

No such changes

G4–23 Significant changes in scope or boundary No such changes

Stakeholder dialogues

G4–24 Stakeholder groups 14–15

G4–25 Identification and selection of stakeholder groups 14–15

G4–26 Stakeholder dialogues 14–15

G4–27 Key topics and concerns raised by stakeholders 14–15

Report profile

G4–28 Reporting period 2014/2015

G4–29 Publication date of most recent report November 2014

G4–30 Reporting cycle Annual

G4–31 Contact person for the report 35

G4–32In Accordance option and GRI Content Index selected by the organisation

34–35

G4–33 Policy and procedures for external assurance 34–35

Governance

G4–34 Governance structure of the organisation 5–7

Ethics and integrity

G4–56Values, codes of conduct and principles of the organisation

8–9

3 4

specified. Work is now being done to

develop uniform tools and systems for

measuring and follow-ups in the entire

group, for the areas where it is missing

today.

Basic data for key performance indi-

cators and statistics is gathered from our

internal operational system. No external

audit of the report has been made. Our

business is however being regularly

audited by external auditors through our

certifications in environment, quality and

food safety. By being a member of the

Haga Initiative, we also receive external

support with the guarantee of quality

regarding climate data. Together with the

other member companies, we publish

a Greenhouse Gas Emissions Disclo-

sure every year according to the GHG

Protocol.

If you have any questions, please

contact me. Eva Eriksson, Director Sustainability

Telephone: +46 (0) 54-14 01 23

[email protected]

Indicator Description Page/Comments Indicator Description Page/Comments

Specific information (Boundaries for selected aspects in parentheses)

ECONOMIC

Economic performance (The Löfbergs Group, owners)

G4–DMA Governance 8–9

G4–EC1 Generated and distributed economic value 28

G4–EC2Financial implications and other risks and opportunities for the organisation's activities due to climate change

18, 21

Sourcing and procurement principles (The Löfbergs Group, suppliers)


G4–FP1Percentage of purchased volume from suppliers compliant with the organisation’s sourcing policy

18–20

G4–FP2Percentage of purchased volume which is verified as being in accordance with credible, internationally recognized responsible production standards

20

Indirect financial effect (Supplier, local community)

G4–DMA Governance 11, 28–29

G4–FP1Indirect positive and negative financial effect as a consequence of the business

18–23, 28–29

ENVIRONMENTAL

Material and raw products (The Löfbergs Group, own business)


G4–EN1 Materials used by weight or volume 27

Energy (The Löfbergs Group, own business)


G4–EN3 Energy consumption in the organisation 24–25

Emissions (The Löfbergs Group, own business, transports, suppliers)


G4–EN15 Direct greenhouse gas emissions (Scope 1) 26

G4–EN16 Indirect greenhouse gas emissions (Scope 2) 26

Transport (The Löfbergs Group,own business, suppliers)


G4–EN30

Significant environmental impacts of transporting products and other goods and materials for the organization's operations, and transporting members of the workforce

25–26

WORKING CONDITIONS(The Löfbergs Group, own business)

Occupational health and security

G4–DMA Governance 30

G4–LA6Rates of injury, occupational disease, lost days, absenteeism, and work-related fatalities

30 No serious injuries that have required hospital treatment have occurred during the year.

Diversity and equal opportunity (The Löfbergs Group, own business)


G4–LA12

Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.

31 Gender balance is presented regarding diversity and equal opportunity

PRODUCT RESPONISBILITY

Customer health and safety (The Löfbergs Group, own business, customers and consumers)


G4–FP5Percentage of production volume manufactured in sites certified for food safety

28

Labelling of products, product information (The Löfbergs Group, own business, customers and consumers)

G4–DMA Governance 15, 20–21

G4–PR5 Results of surveys measuring customer satisfaction 15


General information about the business

AB Anders Löfberg is the parent company in a group whose

business activities includes production, marketing and sale

of coffee and tea. The business mainly turns to grocery

stores, hotels, restaurants, cafés, wholesales and vending

businesses in Sweden, Norway, Denmark, Finland, England,

Estonia, Latvia and Lithuania.

AB Anders Löfberg is a subsidiary to Bröderna Löfberg AB,

556542-9262.

AB Anders Löfberg´s function is to provide services to

the group companies and to manage the shares of the

subsidiaries.

Development of the group and the parent company´s

business, profit and position (thousands SEK)

Group 2014/ 2013/ 2012/ 2011/

Financial overview 2015 2014 2013 2012

Net sales 1,709,316 1,490,163 1,545,779 1,746,301

Profit after financial items 13,130 12,158 32,058 23,053

Total assets 921,231 955,890 990,766 899,282

Solidity % 41.8% 41.6% 39.2% 41.8%

Parent company 2014/ 2013/ 2012/ 2011/

Financial overview 2015 2014 2013 2012

Net sales 11,849 10,532 0 375

Profit after financial items –2,819 27,857 3,687 6,895

Total assets 458,761 476,856 531,640 418,552

Equity ratio % 64.8% 60.0% 47.4% 60.9%

Significant events during and after the financial year.

The group´s sales have increased compared with previous

years due to the development of prices for USD and green

coffe which are important components in pricing against

customers.

During the financial year a decision was made about buil-

ding a new warehouse and a distribution center in Karl-

stad which will be owned and managed by the subsidiary

Löfberg Logistics AB. The investment is significant and will

be completed during the next financial year. Furthermore,

another 30 % of the shares in The Office Café Company Ltd

in England was acquired whereupon the holding amounts to

100%.

The groups investments in tangible fixed assets amounted to

39,9 (35,9 Msek).

The receivable which AB Anders Löfberg had on the parent

company Bröderna Löfberg AB has been finally amortized

during the year.

Future expected development and material risks and

uncertainties

The group and the parent company´s risks and uncertainties

are mainly attributable to the development of green coffe

prices and the development in the foreign exchange market.

Forward arrangements in future contracts are made in order to

protect the group and the parent company against fluctations.

The group focuses on growth in the out of home segment

and to strengthen the business in other areas.

Foreign branch offices

The groups subsidiary Kaffehuset i Karlstad AB, 556657-9578,

has a branch office in Denmark.

Application of finacial instruments

Forward agreements are used in order to protect the group

and the parent company against fluctations in currency and

green coffee prices. The group´s policy is to use currency

futures to secure corresponding outstanding contracted

green coffe purchases.

Non-financial disclosures

Substainability is important to the group and the business is

for exemple certified in accordance with ISO 14000.

Business that requires license or reporting of duty

according to the Environmental Code

The group

The predominant proportion of the business the group

runs in Sweden requires reporting of duty according to the

Environ mental code. The permission includes the processing

of green coffee and regulates emission to air in roasted gas

and cooling air. The permission has no time limit and cover

to process 50.000 ton of green coffee which is more than

enough for the current needs.

The parent company

The parent company runs no business that requires license

or reporting of duty.

Proposed allocation of the company´s profit

The Board of Directors propose that the profit available, SEK

260 890 943, is allocated as shown below:

Dividends

905.112 shares à 17,00 SEK SEK 15,386,904

Profit brought forward SEK 245,504,039

Total SEK 260,890,943

3 6

Consolidated income statement (Amounts in TSEK)

The Board of Director´s proposed allocation of the

companys profit means that the equity ratio in the group

decrease from 41,8 % to 40,8 % and that the parent

company´s equity ratio rereduces from 64,8 % to 63,5 %.

The assessment of the equity ratio is that it´s satisfactory. It

is also belived that it will be possible to maintain liquidity in

the company and the group at a satisfactory level and also

satisfy the need of working capital.

The Board of Directors opinion is that the proposed

appropriation does not prevent the company to fulfill it´s

obligation in short- and long term, nor to carry out required

investments. The proposed appropriation can by that be

justified with reference to the prudence concept in the

Swedisch Companies Act (ABL) chapter 17, 3 § section two

and three.

For further information about the company´s profit and

financial position information can be found in the following

income statement, balance sheet, cash flow statement and

pertaining notes.

Note 2014/2015 2013/2014

Net sales 3 1,709,316 1,490,163

Change in inventories of products in progress,

finished goods and work in progress 38,489 19,121

Other operating income 4 31,692 25,354

1,779,497 1,534,638

Operating expenses

Raw materials and consumables –1,028,803 –794,170

Goods for resale –110,847 –119,216

Other external costs 5 –334,476 –339,029

Employee benefit expenses 6 –206,432 –190,046

Depreciation, amortization and impairment of tangible

and intagible assets 7 –64,167 –58,784

Other operating expenses 8 –13,035 –9,898

Operating profit 9 21,737 23,495

Result from financial items

Interest income and similar income 11 4,092 5,354

Interest expense and similar charges 12 –12,699 –16,691

Profit after financial items 13,130 12,158

Tax on profit for the year 13 –10,716 –9,657

Net profit for the year 2,414 2 501

Attributable to

The parent company shareholders –693 17

Minority shareholding 3,107 2,484

3 7A D M I N I S T R AT I O N R E P O R T 2 0 1 4 / 2 0 1 5

Intangible fixed assets Note 30/06/2015 30/06/2014

Concessions, patents, licenses, trademarks and similar rights 14 1,473 1,912

Rights of tenancy and similar rights 15 1,438 1,513

Goodwill 16 65,827 84,051

68,738 87,476

Inventories etc. 28

Raw materials and consumables 154,004 171,178

Products in progress 83 122

Finished goods and goods for resale 146,249 107,721

Advance payments to suppliers 645 1,729

300,981 280,750

Property, plant and equipment

Land and buildings 17 135,081 137,612

Expenditures incurred on someone else´s property 18 1,724 –

Plant and machinery 19 110,854 125,514

Equipment, tools, fixtures and fittings 20 28,433 19,377

Construction in progress and advance

payments for property, plant and equipment 21 25,844 20,256

301,936 302,759

Financial assets

Receivables from group companies 23 – 50 000

Other securities held as non-current assets 24, 25 4,447 2,967

Deferred tax asset 26 709 471

Other long-term receivables 27 2,995 2,613

8,151 56,051

Total non-current assets 378,825 446,286

ASSETS

Non-current assets

Current assets

Current receivables

Trade receivables 198,384 173,308

Receivables from group companies 31 12

Current tax assets 3,793 5,124

Other receivables 11,189 12,530

Prepaid expenses and accrued income 29 7,812 6,699

221,209 197,673

Cash and bank balances

Cash and bank 20 216 31 181

Total current assets 542,406 509,604

Total assets 921,231 955,984

Consolidated balance sheet (Amounts in TSEK)

3 8

Equity Note 30/06/2015 30/06/2014

30, 31

Share capital (905,112 shares) 18,102 18,102

Reserves 113,593 122,387

Profit brought forward including net profit for the year 240,602 244,921

Equity attributable to the parent company shareholders 372,297 385,410

Provisions

Provisions for pensions and similar obligations 20 20

Deferred tax liability 26 42,701 45,482

42,721 45,502

Minority interest 12,923 12,266

Total equity 385,220 397,676

Non-current liabilities 33

Liabilities to credit institutions 123,392 136,438

Other liabilities 9,967 6,733

133,359 143,171

For own liabilities and provisions

Property mortgages 131,111 131,801

Shares in subsidiaries – 11,601

Pledged assets 3,131 3,291

134,242 146,693

Other pledges and equivalent collaterals None None

Total pledged assets 134,242 146,693

Contingent liabilities

Guarantees 8,497 14,306

8,497 14,306

Current liabilities


Bank overdraft 34 118,061 128,052

Accounts payable 79,351 83,491

Liabilities to group companies 212 –

Current tax liability 9,454 8,142

Other short term liabilities 62,920 48,019

Accrued expenses and deferred income 35 71,365 84,845

359,931 369,541

Total equity and liabilities 921,231 955,890

Pledged assets

EQUITY AND LIABILITIES

3 9T H E B U S I N E S S I N F I G U R E S 2 0 1 4 / 2 0 1 5 – G R O U P

Operating activities Note 2014/2015 2013/2014

Profit after financial items 36 13,130 12,158

Adjustments for non-cash items etc. 68,377 59,037

81,507 71,195

Income tax paid –10,711 –4,761

Cash flow from operating ativities before working capital changes 70,796 66,434

Cash flows from working capital changes

Increase(-)/Decrease(+) of inventories –20,231 –50,339

Increase(-)/Decrease(+) of current receivables –24,867 23,051

Increase(-)/Decrease(+) of current liabilities –2,507 6,034

Cash flow from operating activities 23,191 45,180

Consolidated statement of cash flows (Amounts in TSEK)

Investing activities

Acquisition of property, plant, and equipment –39,913 –35,886

Disposial of property, plant, and equipment 40 435

Acquisition of intangible assets –129 –322

Acquisition of financial assets –3,164 –1,585

Disposial of financial assets 51,283 42,677

Cash flow from investing activities 8,117 5,319

Financing activities

Repayment of borrowings –18,227 –38,494

Acquisition of minority share –6,322 –

Paid dividend to the parent company´s shareholders –15,387 –15,387

Paid dividend to the minority shareholers –2,451 –1,761

Cash flow from financing activities –42,387 –55,642

Cash flow for the year –11,079 –5,143

Cash and cash equivalents at the beginning of the year 31,181 34,705

Exchange rate differences in cash and cash equivalents 114 1,619

Cash and cash equivalents at the end of the year 37 20,216 31,181

4 0

Income statement - parent company (Amounts in TSEK)

Note 2014/2015 2013/2014

Net sales 3 11,849 10,532

11,849 10,532

Operative expenses

Other operating expenses 5 –6,072 –5,123

Employee benefit expenses 6 –11,708 –10,469

Operating loss 9 –5,931 –5,060

Profit from financial items

Profit from participation in subsidiary company 10 1,188 35,904

Other interest income and similiar profit items 11 11,332 10,356

Interest expense and similiar profit items 12 –9,408 –13,343

Profit after financial items –2,819 27,857

Appropriations

Group contribution, received 37,210 26,306

Group contribution, paid –920 –

Profit before tax 33,471 54,163

Tax on profit for the year 13 –7,151 –4,517

Net profit for the year 26,320 49,646

4 1T H E B U S I N E S S I N F I G U R E S 2 0 1 4 / 2 0 1 5 – PA R E N T C O M PA N Y

Intangible assets Note 30/06/2015 30/06/2014

Goodwill 16 – –

– –

Property, plant, equipment

Equipment, tools, fixtures and fittings 20 50 50

Construction in progress and advance

payments for property, plant and equipment 21 – –

50 50

Balance sheet – parent company (Amounts in TSEK)

ASSETS

Non-current assets

Financial assets

Investment in group companies 22 278,844 282,522

Receivables from group companies 23 38,675 54,761

317,519 337,283

Total non-current assets 317,569 337,333

Current receivables

Receivables from group companies 140,447 138,649

Other receivables 216 368

Prepaid expenses and accrued income 29 244 221

140,907 139,238

Cash and bank balances 285 285

Cash and bank 285 285

Total current assets 141,192 139,523

Total assets 458,761 476,856

Current assets

4 2

Note 30/06/2015 30/06/2014

Equity 30, 31

Restricted equity

Share capital (905,112 shares) 18,102 18,102

Statutory reserve 4,060 4,060

22,162 22,162

Non-restricted equity

Profit brought forward 234,571 200,312


260,891 249,958

283,053 272,120

EQUITY AND LIABILITIES

Untaxed reserves

Tax allocation reserves 32 18,000 18,000

18,000 18,000

Pledged assets and contingent liabilities - parent company 30/06/2015 30/06/2014

Pledged assets None None


Guarantees for group companies 110,777 107,863

110,777 107,863

Non-current liabilities 33

Other liabilities to credit institutions 13,000 24,898

13,000 24,898

Current liabilities


Bank overdraft 34 112,038 120,261

Accounts payable 192 167

Liabilities to group companies 6,098 19,224

Current tax liability 4,384 1,854

Other short-term liabilities 218 228

Accrued expenses and deferred income 35 3,637 3,754

144,708 161,838

Total equity and liabilities 458,761 476,856

Balance sheet – parent company (Amounts in TSEK)

4 3T H E B U S I N E S S I N F I G U R E S 2 0 1 4 / 2 0 1 5 – PA R E N T C O M PA N Y

Operating activities 2014/2015 2013/2014

Profit after financial items 36 –2,819 27,857

Adjustments for non-cash items, etc. 10,000 –25,915

7,181 1,942

Income tax paid –4,621 4,471

Cash flow from operating activities before working capital changes 2,560 6,413

Investing activities

Disposial of property, plant and equipment – –50

Acquisition of subsidiary (including minority shares) –6,322 –10,000

Acquisition of financial assets (including group accounts) –58,195 –

Disposial of finacial assets (including group accounts) 50,000 63,958

Cash flow from investing activities –14,517 53,908

Cash flow from working capital changes

Increase(-)/Decrease(+) of current receivables 34,982 –1,560

Increase(-)/Decrease(+) of current liabilities –659 –2,467

Cash flow from operating activities 36,883 2,386

Financing activities

Change in financial liabilities –33,285 –52,456

Recieved group contribution 26,306 11,563

Paid dividend to the parent company´s shareholders –15,387 –15,387

Cash flow from financing activities –22,366 –56,280

Cash flows for the year – 14

Cash and cash equivalents at the beginning of the year 285 271

Cash and cash equivalents at the end of the year 37 285 285

Cash flow statement – parent company (Amounts in TSEK)

4 4

General accounting principles

The parent company applies the same accounting prin-

ciples as the group except those described below in the part

"Accounting principles in the parent company".

The Annual Report has been prepared in accordance with

the Annual Accounts act and for the first year also according

to the Swedish Accounting Standards Board's accounting

principles BFNAR 2012:1 Annual Report and consolidated

accounts (K3).

In accordance to the rules in chapter 35 the group and the

parent company have decided to not account for group

contribution which have occured before the transitiontime

as appropriations. Furthermore the summary covering

several years has not been re-calculated.

Assets, provisions and liabilities have been valued at acquisi-

tion cost unless otherwise is stated below.

Intangible assets

Other intangible assets

Other acquired intangible assets are accounted for as acqui-

sition cost less accumulated amortizations and impairments.

The acquisition value includes, in addition to the purchase

price, other expenditures directly attributable to the acqui-

sition. Expenditures for internally generated goodwill and

brands are recognised in the income statement as expenses

when incurred.

Amortizations

Amortization is made linearly over the asset's estimated

useful life. The depreciation is recognised as an expense in

the income statement.

Useful life

Acquired intangible assets

Consessions, patents, licenses, brands 5 years

Rights of tenancies 33 years

Goodwill 5 years

The right of tenancies are amortized by the term of the contract.

Property, plant and equipment

Property, plant and equipment are accounted for as acquisi-

tion cost less accumulated depreciations and impairments

with adjustments for revaluations. The acquisition value

includes, in addition to the purchase price, other expendit-

ures directly attributable to the acquisition.

Indirect costs of production, which amount to more than

an insignificant part of the total expenditure for the produc-

tion and amount to more than an insignificant figure, are

included in the acquisition value.

Expenditures for dismantling, removal or restoration of loca-

tion are included in the acquisition.

Additional expenditures

Additional expenditures that fulfill the criteria of an asset are

included in the carrying amount of the asset. Expenditures

for ongoing maintenance and repairs are recognised as

expenses when incurred.

Depreciations

Depreciations are done linearly over the asset's estimated

useful life, since it reflects the expected usage of the asset's

future economic benefits. The depreciation is recognised as

an expense in the income statement.

Useful life

Buildings 10–100 years

Incurred expendtures on others properties 7 years

Plant and machineries 3–15 years

Equipment, tools, fixture and fittings 3–15 years

Notes (Amounts in TSEK unless otherwise stated)

Note 1. Accounting principles

4 6

For buildings, plants and machineries the difference in useful

life of significant components have been assessed as signifi-

cant.

The buildings consist of a number of components with

different useful life. The main parts are buildings and land. No

depreciation is made on the land component, whose useful

life is assessed as illimitable. The buildings consists of several

components, which useful lives can vary significantly.

The following main groups of components have been identi-

fied and are the base for depreciation of buildings:

- Framework 80–100 years

- Framework additions, inside walls, etc. 20–40 years

- Installations, heating, electricity, plumbing, ventilation, etc. 20–40 years

- Exterior surfaces, facades, roofs, etc. 20–30 years

- Interior surfaces, equipment of machinery, etc. 10–15 years

Impairments - property, plant, equipment, intangible

assets and shares in group companies

At every closing date, an indication if the asset's value is

lower than the carrying value is assessed. If an indication

exists, the recoverable amount of the asset is calculated.

The recoverable amount is the highest of the fair value less

cost to sell and the value in use. When calculating the value

in use, future expected cash flows that the asset is expected

to generate in the ongoing operations and when it is dis-

posed are discounted to a present value. The discount rate

used is before tax and reflects the marketable assessment of

money's time value and the risks attributable to the asset. A

previous impairment is only reversed if the reasons under-

lying the calculation of the recoverable amount at the latest

impairment have changed.

Leases

All lease contracts are accounted for as financial or operating

lease contracts. A financial lease contract is a contract where

the significant risks and benefits which are associated with

owning the asset transfers from the lessor to the lessee. An

operational lease is a lease contract which is not a financial

lease.

Financial lease contracts where the group is lessee

Rights and obligations according to financial lease contracts

are recognised as assets and liabilities in the balance sheet.

At the initial reporting oportunity the value of the assets

and liabilities is the lowest of the assets actual value and the

present value of the minum lease costs. Expenditures directly

attributable to the agreement adds to the value of the asset.

After the initial accounting oportunity the minimum lease

costs are allocated on interest and repayment on debt in

accordance with effective interest method. Variable fees

accounts for expenses in the financial year they have

incurred.

The amortisations are done over the leased assets useful life

(the lease term).

Operating lease contracts when the company or the group are

lessee

The leasing fees according to operating lease contracts,

including increased first-time rent but excluding expen-

ditures for services, such as insurance and maintance, are

accounted for as expenses linearly over the leasing period.

Financial lease contracts where the group is lessor

At the initial accounting opportunity a recievable are

accounted for the corresponding net investment in the lease

contract. Expenditures directly incurred in connection to

the financial leasing contract are allocated over the leasing

period. After the initial accounting opportunity the financial

income is allocated during the leasing period.

Operating lease contracts when the company or the group are

lessor

The leasing fees according to operating lease contracts,

including increased first-time rent but excluding expen-

ditures for services, such as insurance and maintance, are

accounted for as revenues linearly over the leasing period.

4 7T H E B U S I N E S S I N F I G U R E S 2 0 1 4 / 2 0 1 5 – N O T E S A N D C O M M E N T S

Foreign currencies

Monetary items in foreign currencies are recalculated to

the balance sheet date's rate. Non-monetary items are not

recalculated, instead they are accounted for at the acquisi-

tion date rate.

Foreign currency differences that arise due to settlement

or recalculation of monetary items are recognised in the

income statement for the fiscal year they arise.

Net investments

An exchange rate difference relating to a monetary item and

is a part of a net investment in a foreign operation and is

valued to the aquisition value are accounted for as a sepa-

rate component directly in the equity in the consolidated

accounts.

Re-calculation of foreign operations

Assets and liabilities, including goodwill and other groupwise

surpluses and undervalues, are translated into the carrying

amount at the closing day rate. Revenues and expenses are

translated at the spot rate per each day for business activities

unless an exchange rate that approximates the actual rate is

used (average rates). The translation differences which arise

in the re-calculation are taken directly to equity. The accu-

mulated exchange differences arising from the translation of

a non-wholly owned business are allocated and recognized

as part of the minority interest.

Inventory

The inventory is recognised at the lowest of the acquisition

cost and net realisable value. Thereby risks of obsolescence

have been considered. The acquisition cost is calculated

according to the first-in-first-out principle. The acquisition

cost consists of, except expenditures for purchases, expen-

ditures for bringing the goods to their current location and

condition.

In self semi-manufactured and finished goods, the acqui-

sition cost consists of direct costs of production and the

indirect costs that amounts to more than an insignificant

part of the total expenditures for the production (or amounts

to more than an insignificant amount). At the measurement,

considerations have been taken into account regarding a

normal capacity utilisation.

Financial assets and liabilities

Financial assets and liabilities are accounted for in accor-

dance with chapter 11 (Financial instruments valued at

acquisition cost) in BFNAR 2012:1.

Accounting in and derecognisation from the balance sheet

A financial asset or financial liability is recognised in the

balance sheet when the Company becomes a part of the

instrument's contractual terms. A financial asset is dere-

cognised when the contractual right to cash flows from the

asset has expired or been settled. The same applies when

the risks and benefits associated with the holding has been

transferred to an other party substantially and the Company

does not possess control over the financial asset. A financial

liability is derecognised from the balance sheet when the

contractual obligation has been fulfilled or expired.

Valuation of financial assets

Financial assets are at the first recognition date valued at

their acquisition cost, including possible transaction expen-

ditures that are directly attributable to the acquisition of the

asset.

Financial current assets are after the first recognition date

valued at the lowest of the acqusition cost and the net

selling price at the balance sheet day.

Accounts recievable and other recievables that form current

assets are valued individually to the amount expected to be

recieved.

Financial non-current assets are after the first recognition

date valued at acquisition cost with deduction of potential

impairments and with addition of potential revaluations.

Interest-bearing financial assets are valued at amortised cost

with the application of the effective interest rate method.

When evaluating the lowest of aqcuisition cost or fair value

and when estimating the need for impairment, the groups

financial instruments held for diversification are treated as an

investment portfolio and therefore valued as one item.

Derivative instruments that form financial assets and for which

hedge accounting have not been applied (see below) are after

the first recognition valued at the lowest of the acquisition

cost and the net selling price at the balance sheet date.

Valuation of financial liabilities

Long term financial liabilities are valued at amortised cost.

Expenditures that are directly attributable to borrowings are

adjusted in the loans acquisition value and are allocated to

a particular period using the effective interest rate method.

Short-term liabilities are accounted for at acquisition cost.

4 8

Derivative instruments with negative values and for which

hedge accounting have not been applied (see below) are

accounted for as financial liabilities and are valued at the

amount that for the company is the most favourable if the

obligation is settled or transferred at the balance sheet date.

Hedge accounting

Hedge accounting have not been applied by the parent

company or the group.

Remuneration to employees

Remuneration to employees after terminated employment

Classification

Plans for remunerations after terminated employment are

classified either as defined contribution plans or defined

benefit plans.

For defined contribution plans, determined fees are paid to

another Company, normally an insurance company, and

the Company does not have any obligation to the employee

when the fee is paid. The size of the employee's remunera-

tions after terminated employment is dependent on the fees

that have been paid and the return on capital on those fees

For defined benefit plans, the group has an obligation to

provide the remunerations agreed upon to current and

earlier employees. The Company carries in all material

aspects the risk for the remunerations to be higher than

expected (actuarial risk) and the risk for the return on the

assets to deviate from the expectations (investment risk).

Investment risk also exists if the assets are transferred to

another Company.

Defined contribution plans

The fees for defined contribution plans are recognised as

expenses. Unpaid fees are accounted for as a liability.

Defined benefit plans

The Company has chosen to apply the simplifying rules

presented in BFNAR 2012:1.

In cases when the defined benefit plans are financed in

own management, the pension liability is recognised at the

amount that is received from the company that provides the

information.

Pension commitments in the group´s foreign subsidiary are

accounted for in the same way as the foreign subsidiary.

Remunerations for notice of termination

Remunerations for notice of termination, in the extent to

which the remuneration does not give the Company any

future financial benefits, are only recognised as an liability

and expense when the company has a legal or informal

obligation to either

a) terminate an employee's or group of employees' employ-

ment before the normal time for the employment's termina-

tion, or

b) give remunerations at notice of termination through offe-

rings that encourage voluntary termination.

Remunerations for notice of terminations are accounted for

only when the Company has a detailed plan for the notice

of termination and does not have any realistic possibility to

withdraw the plan.

Tax

Tax on profit for the year in the income statement consists of

current tax and deferred tax. Current tax is the income tax for

the current financial year, which refers to the year's taxable

profit and the part of earlier financial years income tax that

have not been recognised. Deferred tax is the income tax for

taxable profits referring to future financial years due to earlier

transactions or happenings.

Deferred tax liabilities are recognised for all taxable

temporary differences but not for taxable temporarys attribu-

table at the first recognition of Goodwill. Deferred tax assets

are recognised for tax-deductible temporary differences and

for the possibility to in the future use taxable loss carried

forward. The valuation is based on the carrying amount for

the corresponding asset or liability that that is expected to be

recovered or settled. The amounts are based on the tax rates

and tax laws that are determined before the balance sheet

date and have not been estimated to their present value.

A deferred tax liability or deferred tax asset cannot be

recognised for temporary differences that are attributable to

non-transferred profits from foreign subsidiaries, branches,

associated companies or jointly controlled companies, given

that it is not obvious that the temporary difference will be

reversed in the foreseeable future.

Deferred tax liabilities that have arisen due to pure acqui-

sitions of substance are valued at their present value if the

value of the deferred tax liability is a substantial part of the

deal and there is a documented relationship between the


purchase price and the buyer's valuation of the deferred tax

liability. A pure acquisition of substance is an acquisition of

shares in a company where the main identifiable assets are

buildings and lands and where the purchase price almost

exclusively relates to the asset with deduction for property

mortgages and deferred tax.

Deferred tax assets have been valued to the amount that is

likely to be recovered based on current and future taxable

profits. The valuation is reviewed at every balance sheet

date.

In the consolidated accounts the untaxed reserves are

divided into deferred tax and equity.

Provisions

A provision is recognised in the balance sheet when the

Company has a legal or informal obligation due to an

occurred event and it is possible that an outflow of resources

are required in order to settle the obligation and a reliable

estimation of the amount can be made.

At the first reporting date, the provision is valued at the best

estimation of the amount that will be required in order to

settle the obligation at the balance sheet date. The provision

is reviewed at every balance sheet date.


A contingent liability is recognised as an disclosure direct

after the balance sheet when:

- A potential obligation attributable to past events and which

existence only will be confirmed by one or several uncertain

events, which are not wihtin the Company's control, occur

or absent, or

- there is a existing obligation due to past events, but has

not been recognised as a liability or provision ' since it is

not probable that an outflow of resources will be needed to

settle the obligation or the obligation's size cannot be esti-

mated with sufficient reliability.

Revenues

The inflow of financial benefits that the Company receives

or will receive on its own behalf are recognised as revenues.

Revenues are valued at fair value of what has been received

or will be received, with deductions for discounts.

Sale of goods

For sale of goods, the revenue is recognised at delivery.

Service agreements - current account

Revenues from engagements on continuous contracts are

recognised as revenues in line with work performed and

material delivered and consumed.

Service agreement- fixed price

Revenues and expenditures from engagements at fixed

prices are recognised as revenues and expenses with the

basis of the percentage of completion method at the balance

sheet day.

Interest, royalty and dividend

Revenue is recognised when the economic benefits asso-

ciated with the transaction probably will flow to the group

and when the income can be estimated reliably.

Interest is recognised as a revenue using the effective inte-

rest rate method.

Dividend is recognised when the owner's right to receive the

payment has been ensured.

Public grant

A public grant which is not associated with a demand on

future performance is accounted for as a revenue when

the terms for receiving the grant are fulfilled. A public

grant which is combined with demands on future perfor-

mance is recognised as a revenue when the performance is

performed. If the grant has been received before the terms

for recognising the grant as a revenue have been fulfilled, the

grant is recognised as a liability.

Accounting of grants associated to non-current assets

Public grants related to non-current assets are accounted

for in the balance sheet by reducing the asset´s carrying

amount.

Consolidated accounts

Subsidiary

Subsidiaries are companies in which the parent company

directly or indirectly holds more than 50 % of the number of

votes or otherwise has the controlling influence. Controlling

influence means a right to design a company´s financial and

operatively strategies in purpose to get economic benefits.

The accounting of business acquisition is based on the sight

of unity. It means that the acquisition analysis is made on

the time when the acquirer get controlling influence. From

that moment the acquirer and the acquired unit are seen as

5 0

the same accounting unit. The application of this sight of

unity means also that all assets (including goodwill), liabili-

ties, revenues and expenditures are accounted as a whole

even for co-owned subsidiaries.

The acquisition cost for the subsidiary is calculated to the

total of real value at the acqusisition date for the assets paid

with an addition of arise- and overtaken liabilities and issued

instruments of equity, expenditures directly attributable to

the acquisition and possible additional purchase price.

The acquisition analysis determines the fair value, with a

few exceptions, at the acquisition date of aquired identifi-

able assets, overtaken liabilities and the minority interest.

The minority interest is valued to fair value at the acquisi-

tion date. From the aquisition date the acquired company´s

revenues, expenditures, identifiable assets and liabilities and

possible godwill are included in the consolidated accounts.

Goodwill

Groupwise goodwill arise when the acquisition cost in an

acquisition of participations in a subsidiary exceed the deter-

mined value for the acquisition company´s identified net

assets in the acquisition analysis. Goodwill is accounted for

to the acquisition cost with deduction for amortizations and

possible impairments.

Changes in participating interest

An acquisition of additional shares in companies which

already are subsidiaries does not create a new acquisition

analysis since the parent company already has the control-

ling influence. Since the change in the participatings in a

company which is a subsidiary only is a transaction between

the owners no accounting for profit or loss in the income

statement is made. The effects of the transactions is only

accounted for in equity.

In an acquisition of additional shares in a company which

means that the company becomes a subsidiary an acquisi-

tion analysis is made. The already owned participatings

considers to be sold. When the participatings Profit or a

loss, calculated as the difference between market value and

groupwise carrying amount, will be accounted for in the

consolidated income statement.

When participatings in a subsidiary are disposed or the

controlling influence otherwise expires, the assets are treated

as sold in the consolidated accounts. A profit or a loss will

be accounted for in the consolidated income statement. If

there are any participatings left after the expired controlling

influence they will be accounted for with the fair value at the

acquisition time and to aquisition cost.

Elimination of transactions between the group company

Within the group, recievables and liabilities, revenues and

expenditures, unrealized profits or losses that arise in trans-

actions between group companies are eliminated.

Accounting principles in the parent company

The accounting principles in the parent company are in

accordance with the accounting principles in the groups

consolidated accounts (see above) exept in the following

cases.

Lease

Financial lease contracts are accounted for as operating

lease contracts in the parent company.

Foreign currencies

A currency difference which refers to a monetary item and

is part of the parent companys net investment in foreign

operations and is valued to acquisition cost are recognised

in the income statement if the difference has arised in the

parent company.

Shares in subsidiaries

Participations in a subsidiary are accounted for at acquisi-

tion cost, reduced with accumulated impairments. The

acqusition includes, except the purchase price, expenditures

directly attributable to the acquisition.

Tax

In the parent company, the deferred tax relating to untaxed

reserves is not disclosed separately in the accounts.

Group contribution and shareholders contribution

A group contribution recieved/paid are recognised as an

appropriation in the income statement. The recieved/paid

group contribution has affected the company´s current tax.

Shareholder´s contribution that have been paid without

issue of new shares or other equity instruments in exchange

are recognised in the balance sheet as an increase of the

shares carrying amount.


Amounts in TSEK.

Note 2. Estimates and judgments

Note 3. Net sales by geographic market and business segments

Significant estimates for the future, or other sources of uncertainty in estimates, at the balance sheet day that includes a material

risk for significant adjustment of the carrying amount of the assets or liabilities during the next financial year has not been made

according to our judgment.

The group

Net sales by business segments 2014/2015 2013/2014

Coffee and tea 1,709,316 1,490,163

1,709,316 1,490,163

Net sales by geographic market

Sweden 963,984 797,466

Denmark 335,914 305,005

Norway 86,942 79,403

Baltics 124,864 107,971

England 138,603 120,151

Rest of Europé 59,009 80,166

1,709,316 1,490,163

The parent company

Net sales by business segments 2014/2015 2013/2014

Administrative services 11,849 10,532

11,849 10,532

Net sales by geographic market

Sweden 7,184 5,438

Denmark 678 757

Norway 1,608 1,652

Baltics 866 895

England 1,513 1,790

11,849 10,532

5 2

Amounts in TSEK.

The group 2014/2015 2013/2014

Exchange gains on operating receivables/liabilities 23,562 15,087

Others 8,130 10,267

31,692 25,354

The group 2014/2015 2013/2014

KPMG (Sweden and foreign countries)

Audit services 954 1,022

Tax consultancy work 105 109

Other services 419 233

The parent company

KPMG

Audit services 109 104

Tax consultancy work 99 187

Other services 297 82

Audit services refer to the legally required examination of the annual report, book-keeping, the Board of Director's and the

Managing Director's management, other work assignments which rest upon the Company's auditor to conduct, and advising

or other support justified by observations in the course of examination or execution of such other work assignments.

Note 4. Other operating income

Note 5. Audit fees and expenses


Amounts in TSEK.

Whereof Whereof

Average number of employees 2014/2015 men 2013/2014 men

Parent company

Sweden 7 71% 7 71%

Total of parent company 7 71% 7 71%

Subsidiaries

Sweden 156 63% 154 64%

Denmark 53 72% 49 71%

Norway 19 55% 23 57%

Latvia 51 48% 50 46%

England 40 61% 44 64%

Total of subsidiaries 319 60% 320 62%

Group total 326 61% 327 62%

Disclosure of gender distrubution 2015-06-30 2014-06-30

in the company´s management Proportion of women Proportion of women

Parent company

Board of Directors 44% 36%

Other senior management 38% 33%

The group

Board of Directors 27% 36%

Other senior management 27% 33%

Salaries, other remunerations 2014/2015 2013/2014

and social security expenses, Salaries and Social security Salaries and Social security

including pension remunerations expenses remunerations expenses

Parent company 7,658 3,850 7,381 3,344

(of that pension expenses) (1,439) 1) (1,025) 1)

Subsidiaries 133,419 42,886 125,362 41,205

(of that pension expenses) (15,058) (14,338)

The group total 141,077 46,736 132,743 44,549

(of that pension expenses) (16,497) 2) (15,363) 2)

1) Of the parent company´s pension expenses 649 thousands SEK (p.y. 274) relates to the company´s Board of Directors and Managing

Director. The company has no outstanding pension commitments to this group.

2) Of the group´s pension expenses 1 337 thousands SEK (p.y. 764) relates to the company´s Managing Director and members of the

board. The group has no outstanding pension commitments to this group.

Note 6. Employees, personnel costs and remunerations

to Board of Directors

5 4

Amounts in TSEK.

Severance pay

The parent company has eight executives. In case of notice of termination from the employer, a term of notice between

3 – 12 moth applies. The same terms are used in the foreign subsidiaries.

Group 2014/2015 2013/2014

Depreciation and amortisation according to plan divided by asset

Concessions, patents, licenses and trademarks –625 –588

Rights of tenancy and similar rights –75 –76

Goodwill –26,905 –25,077

Land and buildings –4,102 –3,950

Expenditures incurred on someone else´s property –21 –

Plant and machinery –25,138 –23,900

Equipment, tools, fixtures and fittings –7,301 –5,193

–64,167 –58,784

Group 2014/2015 2013/2014

Exchange losses on operating receivables/liabilities –10,283 –8,655

Others –2,752 –1,243

–13,035 –9,898

Note 7. Depreciation, amortisation and impairment of property,

plant and equipment and equipment and intangible assets

Note 8. Other operating expenses

Salaries and other remunerations 2014/2015 2013/2014

divided between board members Board of Directors & Other Board of Directors & Other

et al. and other employees Managing Director employees Managing Director employees

Parent company 3,490 4,168 3,347 4,034

Subsidiaries 8,829 124,590 5,468 119,894

The group total 12,319 128,758 8,815 123,928


Amounts in TSEK.

Lease contracts where the company is the lessee

Group 30/06/2015 30/06/2014

Future minimum lease payments regarding non-cancellable operating lease contracts

Within one year 10,913 11,136

Between one to five years 16,579 15,173

Later than five years 2,500 –

29,992 26,309

Lease contracts where the company is the lessor

Group 30/06/2015 30/06/2014


Within one year 5,462 4,509

Between one to five years 13,763 7,680

Later than five years – 810

19,225 12,999

The compilation above consists of 100 % external rental incomes.

Parent company 30/06/2015 30/06/2014


Within one year 82 124

Between one to five years 48 130

Later than five years – –

130 254

Note 9. Operating lease

2014/2015 2013/2014

The financial year´s recognised lease expenses 13,053 11,831

The compilation above includes rental commitments.

2014/2015 2013/2014

The financial year´s recognised lease expenses 130 254

2014/2015 2013/2014

Dividends from subsidiaries 11,188 43,289

Impairment of shares in subsidiaries –10,000 –7,385

1,188 35,904

Note 10. Profit from participation in group companies

5 6

Amounts in TSEK.

Group 2014/2015 2013/2014

Interest income, group companies 1,289 2,433

Interest income, other 473 411

Exchange rate differences 2,330 2,510

4,092 5,354

Parent company

Interest income, group companies 9,204 7,876

Interest income, other 2 13

Exchange rate differences 2,126 2,467

11,332 10,356

Note 11. Interest income and similiar profit items

Group 2014/2015 2013/2014

Interest expense, group companies –6,948 –10,288

Interest expense, other –966 –659

Exchange rate differences –4,785 –5,744

–12,699 –16,691

Parent company

Interest expense, group companies –1,224 –1,743

Interest expense, other –3,496 –5,746

Other –92 –110

Exchange rate differences –4,596 –5,744

–9,408 –13,343

Group 2014/2015 2013/2014

Current tax expense –13,349 –10,327

Adjustment of tax referable to previous year 5 –551

Deferred tax 2,628 1,221

–10,716 –9,657

Parent company

Current tax expense –7,156 –3,966

Adjustment of tax referable to previous year 5 –551

–7,151 –4,517

Note 12. Interest expense and similar charges

Note 13. Tax on profit for the year


Amounts in TSEK.

Reconcillation of effective tax rate

2014/2015 2013/2014

Group Per cent Amount Per cent Amount


Tax according to Swedish tax rate

for the group 22.0% –2,889 22.0% –2,675

Effect due to other tax rates

for foreign subsidiaries 6.4% –840 1.3% –158

Amortization of groupwise goodwill 45.1% –5,919 45.4% –5,517

Other non-deductible expenses 1.8% –239 1.8% –213

Non-taxable income 0.0% 3 0.0% –

Increase of loss carry-forward without

corresponding recognise of deferred tax 6.2% –811 4.0% –484

Tax attributable to earlier years 0,0% 5 4.5% –551

Standard interest on tax allocation reserve 0.2% –26 0.5% –59

Reported effective tax 81.6% –10,716 79.4% –9,657

2014/2015 2013/2014

Parent company Per cent Amount Per cent Amount


Tax according to current tax rate

for the parent company 22.0% –7,364 22.0% –11,916

Non-deductible expenses 6.7% –2,228 2.8% –1,515

Non-taxable income –7.4% 2,462 –17.6% 9,524

Tax attributable to earlier years 0,0% 5 1.0% –551

Standard interest on tax allocation reserve 0.1% –26 0.1% –59

Reported effective tax 21.4% –7,151 8.3% –4,517

Group

Accumulated acquisition costs 30/06/2015 30/06/2014

At the beginning of the year 3,066 2,852

Other investments 129 55

Exchange rate differences during the year 133 159

At the end of the year 3,328 3,066

Accumulated amortisations

At the beginning of the year –1,154 –508

Amortisation during the year –625 –588

Exchange rate differences during the year –76 –58

At the end of the year –1,855 –1,154

Carrying amount at the end of the year 1,473 1,912

Note 14. Concessions, patents, licenses,

trademarks and similar rights

5 8

Amounts in TSEK.

Group



Disposals – –100

Translation differences during the year – 5

At the end of the year 2,500 25003066

Accumulated amortisation

At the beginning of the year –987 –1,006

Disposals – 100

Amortisation during the year –75 –76

Translation differences during the year – –5

At the end of the year –1,062 –987


Group



Acquisitions – 267

Translation differences during the year 12,343 12,091



At the beginning of the year –137,533 –109,397

Amortisation during the year –26,905 –25,077

Translation differences during the year –3,662 –3,059



Parent company

Accumulated aquisition costs 30/06/2015 30/06/2014






Carrying amount at the end of the year – –

Note 15. Rights of tenancy and similar rights

Note 16. Goodwill


Amounts in TSEK.

Note 18. Expenditures incurred on someone else s property

Group

Accumulated acquisition 30/06/2015 30/06/2014


Acquisitions 1,804 4,356

Exchange rate differences during the year –518 2,336


Accumulated depreciation


Depreciation during the year –4,051 –3,898

Exchange rate differences during the year 285 –699


Accumulated revaluations


Depreciation on revaluations during the year –51 –51



Group


At the beginning of the year – –

Acquisitions 1,745 –

At the end of the year 1,745 –


At the beginning of the year – –

Depreciation during the year –21 –

At the end of the year –21 –

Carrying amount at the end of the year 1,724 –

Note 17. Lands and buildings

6 0

Amounts in TSEK.

Note 19. Plant and machinery

Note 20. Equipment, tools, fixtures and fittings

Group




Disposals –11,358 –2,316

Exchange rate differences during the year 477 2,245




Reversed depreciation on disposals 7,457 2,143


Exchange rate differences during the year –218 –1,517



Group




Disposals –4,382 –1,701





Reverse depreciation on disposals 4,033 1,067


Exchange rate differences during the year –52 –253



Parent company


At the beginning of the year 50 –

Acquisitions – 50

At the end of the year 50 50

Carrying amount at the end of the year 50 50


Amounts in TSEK.

Note 21. Construction in progress and advance

payments for property, plant and equipment

Group 30/06/2015 30/06/2014


Reclassifications –19,179 –13,581

Investments 24,767 17,649


Note 22. Participations in group companies





Accumulated impairments

At the beginning of the year –7,385 –

Impairment during the year –10,000 –7,385



Specification of the parent company´s and the group´s

participation in group companies

30/06/2015 30/06/2014

Number of Share Carrying Carrying

Subsidiary / Corp. Id. No / Registrered office shares in % 1) amount amount

Löfbergs Lila AB, 556290-7088, Karlstad 200,000 100.0 20,000 20,000

Kaffehuset i Karlstad AB, 556657-9578, Karlstad 400,000 100.0 40,007 40,007

Löfberg i Karlstad AB, 556326-6278, Karlstad 1,000 100.0 12,636 12,636

Löfberg Logistic AB, 556968-4532, Karlstad 100,000 100.0 10,000 10,000

Löfberg Lila Fastigheter AB, 556027-5694, Karlstad 26,627 100.0 20,369 20,369

Löfbergs Lila AS, 876862662, Oslo Norway 50 100.0 7,059 7,059

Crema Kaffebrenneri AS, 934459768, Sandefjord, Norway 64 100.0

Peter Larsen Kaffe A/S, CVN-NR 45667219, Viborg, Denmark 900 75.0 36,833 36,833

SIA Melna Kafija, Latvia 2,134,917 100.0 47,007 47,007

The Office Café Company Ltd, England 240 100.0 6,322 –

Food Brands Group Holdings Ltd, England 500,000 100.0 78,611 88,611

Food Brands group Ltd, England 50,000 100.0

278,844 282,522

1) Percentage of shares refers to the owner´s share of capital, which also is consistent with the voting rights

for the total number of shares.

6 2

Amounts in TSEK.

Note 23. Receivables from group companies

Note 24. Other securities held as non-current assets

Note 25. Financial instruments and risk management

Group



Settled receivables –50,000 –41,959

At the end of the year – 50,000

Carrying amount at the end of the year – 50,000

Group



Additional assets 1,500 –

Exchange rate differences during the year – 3


Parent company



Additional receivables 33 300 –

Settled receivables –50,000 –41,836




Accumulated impairments

At the beginning of the year –485 –485

Impairments during the year –20 –

At the end of the year –505 –485


Derivatives and financial risk management

The fair value for currency future contracts is determined

with the basis of quoted prices if available. It not available,

the fair value is measured by discounting the difference

between the agreed forward rate and the forward rate that

can be signed at the reporting date for the remaining period

of the contract. The discounting is conducted with a risk-free

rate based on government bonds.

At the balance sheet day the group´s portfolio with currency

future contracts has a negative net value at 1 074 thousands

SEK. The amount is recognised as a short term liability.


Amounts in TSEK.

Note 26. Deferred tax

Group 30/06/2015

Carrying Tax Temporary

Significant temporary differences amount base difference

Land and buildings in Sweden 81,869 20,287 61,582

Groupwise surplus buildings 8,798 – 8,798

Machinery and equipment in Sweden 113,788 25,751 88,037

Tax allocation reserves – –18,000 18,000

Unrealized loss at financial instruments –1,074 – –1,074

Non-current assets in a foreign country 70,794 50,500 20,294

299,674 104,037 195,637

Taxable loss carry-forward amounts to 10 712 thousands SEK and refers to loss in a foreign country.

The tax value of the loss has not been recognised in the financial statements.

Group 30/06/2014

Carrying Tax Temporary

Significant temporary differences amount base difference

Land and buildings in Sweden 83,077 22,000 61,077

Groupwise surplus buildings 8,798 – 8,798

Machinery and equipment in Sweden 119,376 20,065 99,311

Tax allocation reserves – –18,000 18,000

Non-current assets in a foreign country 71,735 49,851 21,884

311,558 102,488 209,070

Taxable loss carry-forward amounts to 7 171 thousands SEK and refers to loss in a foreign country.

The tax value in the loss has not been recognised in the financial statements.

Group 30/06/2015

Deferred Deferred

Significant temporary differences tax asset tax liability Net

Land and buildings in Sweden – 13,548 –13,548

Groupwise surplus buildings – 698 –698

Machinery and equipment in Sweden – 19,368 –19,368

Tax allocation reserves – 3,960 –3,960

Unrealized loss at financial instruments 236 – 236

Non-current assets in a foreign country 473 5,127 –4,654

Deferred tax asset/liability 709 42,701 –41,992

Group 30/06/2014

Deferred Deferred

Significant temporary differences tax asset tax liability Net

Land and buildings in Sweden – 13,437 –13,437

Groupwise surplus buildings – 698 –698

Machinery and equipment in Sweden – 21,848 –21,848

Tax allocation reserves – 3,960 –3,960

Non-current assets in a foreign country 471 5,539 –5,068

Deferred tax asset/liability 471 45,482 –45,011

6 4

Amounts in TSEK.

Note 27. Other long-term receivables

Note 28. Inventories etc.

Group

Accumulated acquisition 30/06/2015 30/06/2014


Additional receivables 1,664 1,585

Settled receivables –533 –718

Reclassification to short-term receivables –750 –




Inventories has, in all material aspects, been accounted for at acquisition cost, the risk for obsolescence

has been taken into account.

Group 30/06/2015 30/06/2014

Rents, lease and insurance 1,620 1,790

Prepaid invoices of goods 1,943 3,135

Prepaid insurance expenses 810 737

Prepaid PR expenses 1,351 219

Expenses invoices etc. 2,088 818

7,812 6,699

Parent company

Expenses invoices etc. 244 221

244 221

Note 29. Prepaid expenses and accrued income


Amounts in TSEK.

Note 30. Equity in the opening balance sheet Other

Group Share capital paid-in capital Reserves

According to established balance sheet 30/06/2013 18,102 – 122,026

Effects of change of accounting principles (BS) – – –

Adjusted balance after change of accounting principles 01/07/2013 18,102 – 122,026

The translation reserve of the year 361

Equity 30/06/2014 18,102 – 122,387

Profit brought forward Minority

Group incl. net profit for the year interest

According to established balance sheet 30/06/2013 248,723 10,983

Effects of change of accounting principles (BS)

Deferred tax on temporary differences –1,026 –

change of accounting principles 01/07/2013 247,697 10,983

According to decision at annual general meeting

• Dividend –15,387 –1,761

Net profit for the year according to established income statement 80 2,484

The translation differences which are taken directly to equity 12,594 560

Effects of change of accounting principles (P & L)

Component depreciation –923

Transfers between upkeep/investment

based on component depreciation 828

Deferred tax on temporary differences 32

Total effects of change of accounting principles (P & L) –63

Equity 30/06/2014 244,921 12,266

Profit brought

Restricted forward incl. net

Parent company equity Other funds profit for the year

According to established balance sheet 30/06/2013 18,102 4,060 215,699

Effects of change of accounting principles (BS) –

Adjustment balance after change of accounting principles 01/07/2013 18,102 4,060 215,699

According to decision at annual general meeting

• Dividend –15,387

Net profit for the year according to established income statement 29,127

Effects of change of accounting principles (BS)

• Group contribution as appropriations 20,519

Total effects of change of accounting principles (BS) 20,519

Equity 30/06/2014 18,102 4,060 249,958

6 6

Amounts in TSEK.

Note 31. Equity

30/06/2015

Profit brought

forward incl. Total

Group Share capital Reserves net profit Minority equity

Opening balance 18,102 122,387 246,010 12,266 398,765

Effect of retrospective application – – –1,089 – –1,089

Adjusted opening balance 18,102 122,387 244,921 12,266 397,676

Net profit for the year –693 3,107 2,414

Changes in carrying amounts that are accounted for directly in equity

Translation difference – 816 8,474 1 9,291

Total – 816 8,474 1 9,291

Transactions with owners

Dividends –15,387 –2,451 –17,838

Changes of shares in subsidiary – –6,323 – –6,323

Total transactions with owners – – –21,710 –2,451 –24,161

Reallocations of items in equity

Other reallocations – –9,610 9,610 – –

Total reallocations – –9,610 9,610 – –

At year end 18,102 113,593 240,602 12,923 385,220

30/06/2015 Restricted equity Non-restricted equity

Profit brought

forward incl. Total

Parent company Share capital Reserves net profit Minority equity

Opening balance 18,102 4,060 249,958 272,120

Effect of retrospective application – – – –

Adjusted opening balance 18,102 4,060 249,958 272,120


Transactions with owners

Dividend – – –15,387 –15,387

Total transactions with owners – – –15,387 –15,387

At year end 18,102 4,060 260,891 283,053

Note 32. Tax allocation reserves 30/06/2015 30/06/2014

Provision for financial year 2009/2010 18 000 18 000

18,000 18,000


Amounts in TSEK.

Note 33. Non-current liabilities

Note 35. Accrued expenses and deferred income

Note 34. Bank overdraft

Group 30/06/2015 30/06/2014

Liabilities that mature later than one year from the balance sheet day:


Liabilities that mature later than five years from the balance sheet day:

Other liabilities to credit institutions – 3,608

Parent company

Liabilities that mature later than one year from the balance sheet day:


Group 30/06/2015 30/06/2014

Salaries and vacation pay 24,675 26,611

Social security expenses 11,470 14,251

Selling promotion 20,519 30,917

Other items 14,701 13,066

71,365 84,845

Parent company

Salaries and vacation pay 1,585 1,821

Social security expenses 1,101 1,091

Other items 951 842

3,637 3,754

Group 30/06/2015 30/06/2014

Pledged assets for other liabilities

Property mortgages 131,111 131,801

Pledged assets 3,131 3,291

Shares in subsidiary – 11,601

134,242 146,693

Parent company

Pledged assets for other liabilities None None

Group 30/06/2015 30/06/2014

Credit limit 207,775 186,581

Unused –89,714 –58,529

Used credit amount 118,061 128,052

Parent company

Credit limit 190,000 170,000

Unused –77,962 –49,739

Used credit amount 112,038 120,261

6 8

Amounts in TSEK.

Note 36. Paid interest and received dividend

Note 37. Cash equivalents

Note 38. Group information

Group 2014/2015 2013/2014

Received dividend – –

Received interest 1,762 2,844

Paid interest –6,948 –10,288

Parent company

Received dividend 11,188 43,289

Received interest 9,206 7,889

Paid interest –4,720 –7,489

Group 30/06/2015 30/06/2014

The following sub-components are included in cash equivalents:

Bank balance 20,216 31,181

20,216 31,181

Parent company

The following sub-components are included in cash equivalents:

Bank balance 285 285

285 285

The above items have been classified as cash equivalents with the basis that:

- They have an immaterial risk for value fluctuations.

- They can easily be converted into cash.

- They have a maximum duration of 3 months from the acquisition date.

AB Anders Löfberg is a subsidiary to Bröderna Löfberg AB, 556542-9262, with domicile in Karlstad - Sweden. Bröderna Löfberg

AB also prepares consolidated accounts and is owned by a number of individuals.

Purchases and sales within the Group

Of the Group's total purchases and sales, the share between other companies in the Group is insignificant.

Of the parent company's total purchases and sales in SEK, is the purchases from the companies in the group insignificant,

while 100 % of the sales is to other companies in the group that the company belongs to.


Our audit report has been submitted on 30 October 2015.

KPMG AB

Mattias Eriksson

Authorized Public Accountant

Karlstad 20 October 2015

Kathrine Löfberg Lena Andersson Hofsberger

Chairman

Lena Larsson Kasper Lennbroch

Mikael Löfberg Niklas Löfberg

Christian Sievert Bengt Holma

Employee representative

Charlotte Blomquist Lars Appelqvist

Employee representative CEO

7 0

Auditor’s report

To the annual meeting of the shareholders of AB Anders Löfberg, corp. id. 556279-8966

Report on the annual accounts and consolidated accounts

We have conducted an audit of the annual accounts and the con-

solidated accounts for AB Anders Löfberg for the financial year

01/07/2014-30/06/2015.

Responsibilities of the Board of Directors and the Managing Director

for the annual accounts and consolidated accounts

The Board of Directors and the Managing Director are responsible for the

preparation and fair presentation of these annual accounts in accordance

with the Annual Accounts Act, and for such internal control as the Board

of Directors and the Managing Director determine is necessary to enable

the preparation of annual accounts and consolidated accounts that are

free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on the annual account and

the consolidated account based on our audit. We conducted our audit

in accordance with International Standards on Auditing and generally

accepted auditing standards in Sweden. Those standards require that

we comply with ethical requirements and plan and perform the audit to

obtain reasonable assurance about whether the annual accounts and

consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about

the amounts and disclosures in the annual accounts and consolidated

accounts. The procedures selected depend on the auditor’s judgement,

including the assessment of the risks of material misstatement of the

annual accounts and consolidated accounts, whether due to fraud or

error. In making those risk assessments, the auditor considers internal

control relevant to the company’s preparation and fair presentation of

the annual accounts and consolidated accounts 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. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting

estimates made by the Board of Directors and the Managing Director, as

well as evaluating the overall presentation of the annual accounts and

consolidated accounts.

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the annual accounts and consolidated accounts have

been prepared in accordance with the Annual Accounts Act and present

fairly, in all material respects, the financial position of the parent company

and the group as of 30 June 2015 and of their financial performance

and cash flows for the year then ended in accordance with the Annual

Accounts Act. The statutory administration report is consistent with the

other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of shareholders adopt

the income statement and balance sheet for the parent company and

the group.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated

accounts, we have also audited the proposed appropriations of the

company’s profit or loss and the administration of the Board of Directors

and the Managing Director of AB Anders Löfberg for the financial year

01/07/2014-30/06/2015.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropria-

tions of the company’s profit or loss, and the Board of Directors and the

Managing Director are responsible for administration under the Compa-

nies Act.

Auditor's responsibility

Our responsibility is to express an opinion with reasonable assurance on

the proposed appropriations of the company’s profit or loss and on the

administration based on our audit. We conducted the audit in accord-

ance with generally accepted auditing standards in Sweden.

As basis for our opinion on the Board of Directors’ proposed appropria-

tions of the company’s profit or loss, we examined the Board of Directors'

reasoned statement and a selection of supporting evidence in order to be

able to assess whether the proposal is in accordance with the Companies

Act.

As basis for our opinion concerning discharge from liability, in addition

to our audit of the annual accounts and consolidated accounts, we

examined significant decisions, actions taken and circumstances of the

company in order to determine whether any member of the Board of

Directors or the Managing Director is liable to the company. We also

examined whether any member of the Board of Directors or the

Managing Director has, in any other way, acted in contravention of the

Companies Act, the Annual Accounts Act or the Articles of Association.

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinions.

Opinions

We recommend to the annual general meeting that the profit be appro-

priated in accordance with the proposal in the statutory administration

report and that the members of the Board of Directors and the Managing

Director be discharged from liability for the financial year.

Karlstad 30 October 2015

KPMG AB

Mattias Eriksson

Authorized Public Accountant

7 1T H E B U S I N E S S I N F I G U R E S 2 0 1 4 / 2 0 1 5 – S I G N AT U R E S / A U D I T O R ’ S R E P O R T

1906 The company was founded

by the brothers Josef, Anders

and John Löfberg.

1967 Acquired our own

cargo ship.

1993 Started exporting –

initially to the Baltic.

1999 Löfbergs Lila

AS in Norway

was started up.

Partnership in

Peter Larsen Kaffe A/S.

Started our Out Of Home business.

2001 Started up International

Coffee Partners together with

Luigi Lavazza S.p.A, Gustav Paulig Ltd, Neumann

Gruppe GmbH and Tchibo GmbH.

1911 Started our own

coffee roasting.

1980

2002

OUR HISTORY

1920 Packaged coffee replaced loose

coffee. The purple pack rapidly

became the most popular.

1960 "The Coffee Scraper"

was inaugurated.

Major investments in production and

marketing.

2009 Acquisition of Crema

Kaffebrenneri AS.

2010

Acquisition of Melna

roasting house in Latvia.

2008 Lars Appelqvist takes

office as CEO.

2007 Acquisition

of the tea brand Kobbs Tea.

1963 Started up the airline

ABAL Air.

2006 Celebrated our 100th

anniversary.

The company expanded

all over Sweden.

1950

2013 Acquisition of Food Brands Group

UK, including the Percol brand.

2011 Acquisition of Red Cup UK,

including the Green Cup brand.

2015 The entire Löfbergs

assortment is certified.

annual report löfbergs 20142015

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