financial highlights for the group - gabriel · 2019. 3. 21. · prox. 50 selected key account...

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Key figures Unit 2008/09 2007/08 2006/07 2005/06 2004/05

Revenue DKKmillion 204.7 279.7 278.2 240.7 218.2 Index 94 128 127 110 100

Ofthisamount,export DKKmillion 182.8 243.8 236.5 198.2 179.3Exportshare % 89 87 85 82 82Operatingprofit(EBIT) DKKmillion 2.0 23.0 24.9 22.2 20.8Netfinancing,etc. DKKmillion -0.3 0.0 0.1 0.3 2.0Profitbeforetax DKKmillion 1.7 23.0 25.0 22.5 22.8Tax DKKmillion -0.4 -5.9 -6.1 -6.3 -6.3Profitaftertax DKKmillion 1.3 17.1 18.9 16.2 16.5Cashflowsfrom: Operatingactivities DKKmillion 18.5 23.3 15.3 13.6 19.1 Investingactivities DKKmillion -58.5 -35.0 5.7 -18.9 -4.3 Financingactivities DKKmillion 34.5 -8.4 -7.6 -7.6 -5.9 Cashflowsfortheyear DKKmillion -5.5 -20.1 -13.4 -12.9 8.9Investmentsinpropertyplantandequipment DKKmillion 24.3 32.1 7.2 5.6 2.7Depreciation/amortisationandimpairment DKKmillion 4.4 4.9 3.9 4.9 4.5Equity DKKmillion 115.4 122.6 113.8 102.5 95.6Balancesheettotal DKKmillion 197.1 154.5 147.7 135.8 128.2Investedcapital DKKmillion 163.9 122.7 113.8 102.7 97.4Numberofemployees Number 92 117 119 114 100Revenueperemployee DKK‘000 2,225 2,391 2,338 2,111 2,182 Index 102 123 120 108 112

Financial ratios Operatingmargin(EBITmargin) % 1.0 8.2 9.0 9.3 9.5Returnoninvestedcapital(ROIC) % 1.4 19.5 23.0 22.2 22.6Earningspershare(EPS) DKK 0.7 9.0 10.0 8,5 8.7Returnonequity % 1.1 14.5 17.5 16.4 18.3

Equityratio % 59 79 77 75 75Netassetvalueatyearend DKK 61 64 60 54 50Marketpriceatyearend DKK 69 118 182 153 110Price/bookvalue 1.1 1.8 3.0 2.8 2.2

PriceEarnings(PE) DKK 99 13.1 18.3 18.0 12.6PriceCashFlow(PCF) DKK 6.5 9.6 22.6 21.5 10.9

DividendsproposedpershareofDKK20 DKK 0 4.0 4.4 4.0 4.0DividendYield % 0 3.4 2.4 2.6 3.6PayoutRatio % 0 49 49 52 51

Thebasicyearappliedfortheindexfiguresis2004/05.EarningspersharewerecalculatedinaccordancewithIAS33.OtherfinancialratiosarecalculatedinaccordancewiththeDanishSocietyofFinancialAnalysts’guidelinesonthecal-culationoffinancialratios“RecommendationsandFinancialRatios2005“.Thekeyfigureswererestatedtoreflectthesharesplitin2007/08,reducingthefacevalueofthesharefromDKK100persharetoDKK20pershare.ROFIT FOR THE Y

BUSINESS ACTIVITIES .......................................................................................... 3

FINANCIAL HIGHLIGHTS FOR THE GROUP

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MANAGEMENT‘S REVIEW .................................................................................... 4

SALES AND EARNINGS FOR 2008/09 ...................................................... 4

HIGHLIGHTS OF THE 2008/09 FINANCIAL YEAR .................................... 4

OUTLOOK FOR 2009/10 .............................................................................. 6

SALES ........................................................................................................... 6

PRODUCT DEVELOPMENT AND INNOVATION IN GABRIEL ................... 6

GABRIEL CHINA .......................................................................................... 7

RELOCATION OF GABRIEL‘S DYE FACTORY FROM AALBORG ................ 8

GROUP BUILDING COMPLEX IN AALBORG – GABRIEL BUSINESS PARK ..................................................................... 8

INTELLECTUAL CAPITAL, RESEARCH AND DEVELOPMENT ................... 8

MANAGEMENT OF BUSINESS RISKS ................................................................. 9

GABRIEL AND CORPORATE GOVERNANCE ........................................................ 11

CORPORATE SOCIAL RESPONSIBILITY ............................................................. 13

SHAREHOLDER INFORMATION ........................................................................... 14

COMPANY DETAILS .............................................................................................. 16

STATEMENT BY THE EXECUTIVE AND SUPERVISORY BOARDS ..................... 17

INDEPENDENT AUDITORS‘ REPORT ................................................................. 18

INCOME STATEMENT FOR 01.10.2008 - 30.09.2009 ....................................... 19

BALANCE SHEET AT 30.09.2009 – ASSETS ...................................................... 20

BALANCE SHEET AT 30.09.2009 – EQUITY AND LIABILITIES ........................ 21

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................. 22

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY ............................. 23

CASH FLOW STATEMENT .................................................................................... 24

NOTES TO THE FINANCIAL STATEMENTS ......................................................... 27

CONTENTS

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bUSINESS ACTIvITIES

Innovationandvalue-addingco-operationarekeywordsofGabriel‘smissionstatement.Gabrielisanichecompanywhichdevelops,manufacturesandsellsuphol-steryfabricsandrelatedtextileproductsandservicestobeusedinfieldsofapplicationwhereproductfeatures,designandlogisticshavetomeetinvariablerequirementsandwherequalityandenvironmentalmanagementmustbedocumented.

In2005,Managementlaiddownthefollowingvisionfor2010:• GabrielistoobtainBlueOceanStatusthroughanin-

novativebusinessconcept,patents,licences,exclusiveagreements,etc.

• Gabrielistobethepreferreddevelopmentpartnerandsuppliertoleadinginternationalmanufacturersandleadusersofupholsteredfurniture,seatsanduphol-steredsurfaces.

• Gabrielistoenjoyastatusasanattractiveworkplaceforandpartnerofqualifiedemployeesandenterprises.

Inastablefinancialclimate,Gabrieltargets:• Areturnoninvestedcapital(ROIC)ofatleast15%

beforetax.• Anincreasingoperatingmargin(EBITmargin).• Anaverageannualriseinearningspershareofa

minimumof15%.• Anaverageannualrevenueincreaseofatleast10%.

Gabriel‘sservicesaredirectedtowardsthefollowingfieldsofapplication:Contractfurniture,seatsformeansoftransportation,theatres,concerthalls,cinemas,educationalinstitutions,hotels,restaurants,hospitals,nursinghomesaswellasfurniturefordomesticuse.

Gabrielisgrowingwiththelargestmarketparticipants.Gabriel‘sgrowthisensuredincloseco-operationwithap-prox.50selectedkeyaccountcustomersinaglobalstrat-egy.Gabrielstrivestoaccountforthelargestshareoftheselectedkeyaccountcustomers‘purchasesoffurnishingfabrics,othercomponentsandservicesinthevaluechain.

Gabrielisconstantlyattentivetopotentialacquisitions,alliancesandbusinessareastooptimiseitscompetitive-nessandvalueadding.

Gabrielaimsatrealisingitsvisionandachievingitsob-jectivesrelyingongroupstrategy,whichisbasedonfourcoreprocesses:• Globalkeyaccountsalesactivities• Productandprocessinnovation• Logistics• Pricecompetitiveness.

Gabriel‘svalueaddingmodelandprocessoutlineareaccessibleatwww.gabriel.dk.

TheGabrielGroupappliesthefollowingmanagementsystems:

• Qualitymanagement–DS/ISO9001certificationsince1991(Chinasince2006).

• Environmentalmanagement–EMAS/ISO14001certificationsince1996(Chinasince2006).

• Businessmodel–BalancedScoreCardsince2002.• Ecolabelscarriedbyitsmainproductssince2003.• Developmentandstrategy–BlueOceanStrategy

since2005.• InnovationCupparticipantin2006(cameinfifth),

2007(winneroftheCup)and2009(cameinsecond).• GabrielhasbeendividedintoindependentMASTER

unitsfrom2006/07.

Gabrielmakeseffortstoensurethatatleast30%ofreve-nuederivesfromproductsandserviceslaunchedwithinthepastfiveyears.In2008/09,theshareaccountedfor31%asagainst27%lastyear.

Gabriel’spricecompetitivenessismeasuredusingacostindexcomprisingallcostsrelatingtoeachproduct.Thedevelopmentintheindexisaffectedbytheeffortswithmaterialcontributors,whichinclude:

• Processinnovationinthevaluechain• Productandmaterialsinnovation• Outsourcingandvendoragreements• Optimisationofmaterials• Qualityandenvironmentalmanagement

Gabriel‘semployeesarefamiliarwiththegroup‘sbusi-nessmodel,overallmissionstatement,visionandstrategyandworktowardscommongoals.Throughtheworkwithintheirownspecificbusinessunits,allemployeesstrivetosupportGabriel‘scoreprocessesandvalueadding.

Gabrielintendstoattractandretainambitious,qualifiedemployeesseekingandacceptingchallenges.Jobexpan-sionandrelevanttrainingensurethatthequalificationsandprofessionalexpertiseoftheindividualemployeeareup-to-date.

Forinformationonenvironmentalissues,includingtheen-vironmentalactionprogrammefor2009/10,pleaseseeGabriel‘senvironmentalreport,whichcanbedownloadedfromthewebsite,www.gabriel.dk.Theenvironmentalre-portfor2008/09willpresumablybepublishedinJanuary2010aftercertificationinaccordancewithDanishStan-dards.

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SALES AND EARNINGS FOR 2008/09

Themarkettrendsevidencedinthelastquarterof2007/08indicatedthatthe2008/09financialyearcouldproveadifficultyear.Accordingly,ManagementhadpreparedanactionplanwhichwaslaunchedwhenthefinancialcrisisreallygainedmomentuminOctober2008.

AssetoutintheAnnouncementoftheAnnualReportinNovember2008,ManagementanticipatedtogeneraterevenueofDKK210-220millionandtoreportanoperatingprofit(EBIT)ofapprox.DKK10-12millionfor2008/09.However,thisforecastwassubjecttomajoruncertaintyarisingfromtheinternationaleconomicdownturn,whichslasheddemandforGabriel‘sprimarysegment,contractfurniture.

In2008/09,revenuecameinatDKK204.7millionasagainstrecordrevenueofDKK279.7millionfor2007/08,equivalenttoadropof27%.Thisnegativeearningsper-formancewaspromptedbythedrasticdeclineininterna-tionaldemandforcontractfurnitureandconsumerdura-blessuchasupholsteredfurniture.

Operatingprofit(EBIT)reachedDKK2.0millionasagainstDKK23.0millionlastyear.Heldupagainsttheinitialforecast,theprofitfor2008/09wasadverselyaffectedbyrevenuebeingdownonforecast.Inaddition,theexchan-geratemovements,separateitemsattributabletoemplo-yeesdismissedandextraordinarypayrollarisingfromtherelocationofthedyefactorytoLithuaniahadanegativeimpactontheprofitfortheyear.

TheQ3reportfor2008/09forecastedrevenueofDKK200-205millionandanoperatingprofit(EBIT)forthefull2008/09financialyear.Gabrielmanagedtodeliveraper-formanceinlinewithforecast.

TheprofitbeforetaxamountedtoDKK1.7millionasagainstDKK23.1million.Comparedwithlastyeartheassociate,ScandyeUAB,enjoyedapositiveearningsperformance,whileinterestexpenseswereontheincreasetriggeredbythedevelopmentofGabriel‘sbuildingcomplexinAalborg.

Unfortunately,the2008/09financialyeardidinfactprovetobeadifficultyear.Gabrielfailedtomeetitsstand-ardtargetsforrevenueandearnings.Additionally,GabrielfailedtoreportinitiallyforecastedEBIT,whichwasreviseddownwardsintheyearunderreview.Viewedseparate-ly,theprofitfortheyearisnotinlinewithexpectations.However,allowancebeingmadefortheunusualglobal,financialandeconomicdownturn,apositiveearningsper-formanceisacceptableinthepresentdifficultfinancialclimate.

HIGHLIGHTS OF THE 2008/09 FINANCIAL STATEMENTS

RevenueRevenuewasdownby27%toDKK204.7millionasagainstDKK279.7millionlastyear.

Other operating incomeAspartoftherelocationofthedyemachinerytoScandyeUABinLithuania,thecompanyenteredintofinancelea-sesofferinganaccountingprofitofDKK1.2million.

Cost of sales – gross profit Theconsolidatedgrossprofitaccountedfor40.9%in2008/09asagainst44.6%in2007/08.Thegrossprofitwasadverselyaffectedbyexchangeratemovements,in-ventoryadjustmentsandseparateitemsarisingfromtherelocationofthedyefactorytoLithuania.Overall,therelo-cationofthedyefactoryisdeemedtohaveapositiveim-pactonfutureproductioncosts.

MANAGEMENT‘S REvIEW 2008/09

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Other external costs Promptedbysavingsandcostcontainment,Gabrielma-nagedtoreduceexternalcostsby17%toDKK35.0mil-lionasagainstDKK42millionlastyear.

Staff costsConsolidatedstaffcostswerereducedby28%toDKK39.9millionin2008/09asagainstDKK55.3millionlastyear.Thenumberofemployeeswasreducedfromanaverageof117employeesin2007/08to92employeesin2008/09owingtotherelocationofthedyefactorytoLithuaniaanddownsizingduetothefinancialcrisis.The2008/09financialyearclosedwithanumberof75employeesintheGabrielGroup.

Separate items InOctober2008,thegroupengagedinorganisationaldownsizingtoreducecapacitytotheforecastdropinde-mand.Upontherelocationofthedyefactory,therelevantemployeesreceivedproperseverancepays.Payrollandseverancepayofemployeesdismissedanddisemployedandotherrelevantcostswererecognisedasseparateitems.TotalcostscameinatDKK3.9millionin2008/09.

Depreciation/amortisation Consolidateddepreciation/amortisationreachedDKK4.4millionasagainstDKK4.9millionlastyear.

Profit/loss from investment in Scandye UABTheprofitfromtheinvestmentinScandyeUAB(40%)ofDKK248thousandwasrecognisedintheprofitfortheyear.Lastyear,theinvestmentproducedalossofDKK478thousand.Referenceismadetothesectionontherelocationofthedyefactory(page8).

Financial income and expenses as well as tax Financialincomeandexpensesrepresentedexpensesof

DKK0.5millionasagainstincomeofDKK0.5millionlastyear,promptedbyincreasinginterestexpensestobanksandmortgagebanksarisingfromtheraisingofmortgageloans.

Theeffectivetaxrateofthegroupwas23.8%asagainst25.7%lastyear.ThetaxratewasreducedasaresultoftherecognitionofthepositiveresultsaftertaxinScandyeUAB.

Balance sheetTheconsolidatedbalancesheettotalamountedtoDKK197.1millionasagainstDKK154.5millionlastyear.Thebalancesheettotalwasprimarilyontheincreaseduetotheraisingofamortgageloanwithmostoftheproceedsbeingplacedinmortgagebonds.

Inventories ConsolidatedinventorieswerereducedfromDKK42.9milliontoDKK38.1million.

Receivables TradereceivablestotalledDKK22.1millionasagainstDKK33.1millionlastyear.Throughout2008/09,thegrouptighteneditscredit-grantingpoliciesanditscreditmanagement.

InvestmentsIntheyearunderreview,investmentsinproperty,plantandequipmentaccountedforDKK24.3millionasagainstDKK32.1millionlastyear,whichinbothyearsprimarilywereusedforthedevelopmentofthebuildingcomplexofthegroupassetoutunderGabrielBusinessPark.ThecarryingamountoflandandbuildingsstoodatDKK65.5millionat30September2009.

ThevalueofdevelopmentprojectsrosebyDKK0.4mil-lionintheyearunderreview,whileplantandequipmentwerereducedbyDKK1.4milliontoatotalvalueofDKK5.7million.

Financing ConsolidatedcashflowsfromoperatingactivitiescameinatDKK18.5millionin2008/09asagainstDKK23.3millionlastyear.InMay2009,thegroupchosetoraiseamortgageloanofDKK43.5milliontofinanceaconstruc-tionprojectandtostrengthencashresources.

CashflowsfortheyearfrominvestingactivitiesamountedtoDKK58.5million,withanamountofDKK32.5millionspurredbythepurchaseofbonds,whilefinancingactivi-tiesgeneratedpositiveliquidityofDKK34.5million.

TheyearclosedwithbankdebtofDKK5.6million.Thegrouphasmajorundrawncreditfacilitieswithitsbankers.


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EquityConsolidatedequitystoodatDKK115.4millionat30September2009asagainstDKK122.6million–beforethedistributionofdividends–onthesamedatelastyear.Followingtheraisingofthemortgageloan,theequityratiowasreducedto59%asagainst79%onthesamedatelastyear.

Dividends Theprofitfortheyearisnotdeemedtopromotethedistri-butionofdividends.Inaddition,referenceismadetotheSupervisoryBoard‘smotionforacapitalreduction.

OUTLOOK FOR 2009/10

Intheyearunderreview,Gabrielengagedinactivitiestoenhancefuturecompetitivenessandearnings.Inad-dition,Gabrielfurtheroptimiseditsbusinessmodeltoensurethehighestdegreeofflexibilityandresistancetosuddenchangesinbusinessclimate,producttrends,marketstructureandcompetitivesituation.Forinstance,Gabriel‘sorganisationwasadjustedtopresentdemand,butstillofferspotentialforgrowthandhigherearnings.Furthermore,Gabriel‘sdyeingactivitieswererelocatedtothe40%-ownedScandyeUAB,Lithuania,andlogisticswereoptimisedbythepreparedoutsourcingofGabriel‘sinventoryanddispatchfacilitiesfromAalborgtoanexter-nalpartnerinLithuania.TheoutsourcingisexpectedtotakeeffectfromtheendofDecember2009.Inaddition,Gabrielhasgainedaccesstocustomerandproductport-foliosdeemedtoofferinterestingpotential.Followingex-tensivedeliberations,GabrielmoreoveracquiredanewERPsystemsupportingthebusinessmodelandensuringrealisationofidentifiedearningspotential.Finally,GabrielfinalisedandfinancedaconstructionprojectinAalborgofferinganoptimumworkingenvironmenttoitsownbusi-nessunitsandexternaltenants.

Gabriel‘sprimaryproduct,contractfurniturefabrics,ope-ratesonacyclicallysensitivemarket,whichhasverymuchfallenvictimtotheinternationaleconomicdownturn.Thepresentfinancialyearisnotdeemedtoseeanyincreaseindemand.

In2009/10,revenueisforecastedatapprox.DKK180millionasagainstDKK205millionlastyear,andthepro-fitfortheyearisanticipatedtobeupon2008/09.Theseforecastsaresubjecttouncertainty,butManagementisoftheopinionthatwiththemeasurestaken,Gabrielhasanexcellentpotentialfordefendingitsearnings.Liquidityandcapitalresourcesaresufficienttoallowthegrouptoactonanyrelevantbusinesspotential.

SALES

Intheyearunderreview,revenueoftheGabrielGroupwasdownby27%toDKK204.7millionasagainstDKK279.7millionlastyear.Consolidatedrevenuereflectsthepersistentlynegativeimpactoftheeconomicdown,pro-ducingaslowdowninthesaleofGabriel‘smainproduct,contractfurniture.

Revenuefromexportsfellby25%toDKK182.8millionasagainstDKK243.8millionlastyear.Exportsroseto89%.SalesinDenmarkdroppedby39%toDKK21.9millionasagainstDKK35.9lastyear.Thedrasticdeclinewastheoutcomeofaheavydeclineinconsumerspen-dingandtherelocationofproductiontoothercountriesbyDanishcustomersthroughout2008.Gabrielstillser-vesasthesupplieroffabricstotheforeignproductionfacilitiesofthesefurnituremanufacturers.

InManagement‘sopinion,revenueforQ4ofthe2008/09financialyearstabilisedatthelevelofQ3ofthefinancialyear.Additionally,ManagementisoftheopinionthatGabri-elhasmanagedtomaintainand,tosomeextent,captureadditionalmarketsharesinthecyclicallysensitivemarket.

Gabrielmaintainsitsstrategyandbusinessmodelensur-ingtheproperserviceofitskeyaccountcustomerstocontinuouslyserveasthepreferredsupplieroftextilesandtextilesolutionstoleadinginternationalcontractfurnituremanufacturers.

InOctober2008,GabrielwasrepresentedatOrgatecinGermany(theworld‘slargestfairforcontractfurniture).Thefairmarkedthelaunchoftheproduct,SilentSolution,whichisavailableforuseinnumerousdesignsandholdsoutstandingsound-absorbingproperties.Moreover,oneofthemainattractionsatthefairwasatextilesolutiondevel-opedforaproductlaunchedbyaleadingglobalmanufac-turer.Inaddition,theyearunderreviewsawthesuccessfulinvolvementofallbusinessunitsinproductandprocessinnovationfromconceptiontoupholsteredproduct.

Furthermore,in2008/09,Gabriellaunchednumerousde-signsandupholsterysolutionsaswellasnewprojects.

PRODUCT DEVELOPMENT AND INNOVATION IN GABRIEL

The2008/09financialyearmarkedthelaunchoffivenewproductsand20productupdates(updatedtechnologi-calsolutions),allcontributingtoGabriel‘sstrongmarketposition.Additionally,Gabriellaunchednewmeshtexti-les,electro-weldedtextiledesignsandnewupholsterytechniquesappliedbykeyaccountcustomersandothers.(Referenceismadetowww.gabriel.dkformoreproductupdatesandcustomercases).

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Duringtheyearunderreview,Gabrielenjoyedundimin-isheddemandforinnovativetextileandupholsterysolu-tions.Astrongfocusonproductandprocessinnovation–fromconceptiontoupholsteredfurnitureproduct–hasallowedGabrieltotakeupthestatusasthepreferredde-velopmentpartnerofitsinternationalstrategiccustomers.

Basedonitscloseco-operationinitiatedwithleadingfurnituremanufactures,Gabrielengagesininnovationanddevelopmentintendedtofostervalueaddingforthecustomers.Marketinsightandtargetedresearchasdefi-nedbythedemandsandbehaviourofcustomersandendusersareusedasthebasisforthedevelopmentofnewprofitableproductsandbusinessareas.

Gabrielhasincreaseditsnumberofservicesassetoutinitsoverallvisionandstrategy.Today,fieldsofapplicationanduserrequirementsserveasthebasisforanyproductde-velopment.Furniturefabricsandrelatedproducts,furniturecomponents,upholsterytechniques,servicesandsupportareallcoreareasofferedtoselectedkeyaccountcustom-ersservicedbytheindividualbusinessunitsofGabriel.

Developmentactivitieswitha“time-to-market”horizonof3-18monthsarevastlyconductedbyGabriel‘sbusinessunit,DesignMaster,withtheparticipationofotherrelevantbusinessunits.Inaddition,DesignMasteroffersadvisoryserviceswithincollections,dyemix,selectionofmaterialsandcomponentsaswellasupholsterytechnologyandtechnique.

Marketinsight,technologicalknow-how,analysisofuserbehaviourandinteractionwithusersaredecisivetocom-mercialsuccess.Researchandnetworkingarerequiredtoensureinnovationandahighsuccessrateofitsownproductportfolioanditsfootholdontheworldmarket.Accordingly,value-addingco-operationwithexternalde-signers,engineers,businesspartnersandeducationalin-stitutionsisaprerequisiteofdesignandproductdevelop-ment.

Followingtargetedefforts,FurnMaster‘sproductandtech-nologyportfolionowmastersanumberofspecialitiessuchas“welding“(miscellaneousweldingtechniquesforbothdecorativeandfunctionaluses),lamination,prints,embroideryandclassicfurnitureupholstering.Bycon-stantlychallengingthetechnologies,FurnMasterdevel-opsnewproducts,furniturecomponents,upholsterytech-niquesandnewfieldsofapplicationfortextiles,resultingindesigns,technicalsolutionsandproductofferingsopti-misingandupdatingthecustomers‘productportfolios.

Throughout2008/09,Gabriellaunchednumerousde-signsandupholsterysolutionsaswellasnewprojects.Theclearlessontobelearnedfromtheselaunchesisthat

alargepartofGabriel‘sentirevaluechainisinvolvedintheprojectsolutionsandportfolioschosenbythecusto-mers.

Managementisoftheopinionthatthegroup–alsointhepresentdifficultmarketsituation–constantlystrengthensitsvalueadding,competitivenessandfuturegrowthpo-tentialthroughitsproductdevelopmentandinnovation.

“Gabrielhasdoneitagain”madeittotheheadlineinJune2009.GabrielcameinsecondinInnovationCup2009onlysurpassedbyLego.InnovationCupisanationwidecompetitionforprivateandpublicenterprises.Theparti-cipantsaremeasuredonthebasisofawidevarietyofpa-rametersidentifyingthestrengthsandweaknessesofthemanagerialframeworkandprocessesforthecompany‘sinnovativeness.

Developmentactivitieswitha“time-to-market”horizonof3-5yearsarehandledbyGabriel‘sbusinessunit,Innova-tionMaster,whichin2008/09workedonanumberofde-velopmentprojectsofferingmajor,buthowever,uncertainearningspotentialatyearend.Theprojectstargetthede-velopmentoftechnicaltextilesforanticipateduseprima-rilywithinGabriel‘sexistingvaluechain.

GabrielInnovationA/SwasestablishedinDecember2008.Theobjectiveofthisset-upwastotransferfinan-ciallyviableprojectsinitiatedinGabriel‘sbusinessunit,InnovationMaster,toGabrielInnovationA/S.Gabriel‘sin-tellectualrightsandinnovativeactivitiesaretobeconcen-tratedinGabrielInnovationA/S,highlightingtheactualvaluesrelatedtoGabrielInnovationA/S.

GABRIEL CHINA

GabrielChinadeliveredastrongperformance,reportingarevenueincreaseof40%.During2008/09,GabrielChinasetuptraderelationswithanumberofleadingfurnituremanufacturersinChina,andthesubsidiaryac-countsincreasinglyfortheentirevaluechainfromideatofinalisedfurniturefabricorupholsteredfurniturepart.CustomerswithactualfurnitureproductioninChinabutwithheadquarterseitherinEuropeortheUSAaccountforthevastpartofrevenue.Throughitsrepresentationatfairsandothersalesactivities,GabrielChina,whichwasestablishedin2003,hasbecomearecognised,innova-tivesupplierofhigh-standardproductswithinitsniche–contractfurniture.

Conceptsolutionsareforthebenefitofallparticipantsinthevaluechain,pavingthewayfortheincreaseinrevenueandearningsenjoyedbyGabrielChina.Thesubsidiary‘sabilitytodevelopanddeliverfinalisedfurniturefabrics/up-holsterysolutionsforseveralleading,globalfurniturema-


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nufacturers/distributorsremainsdecisivetofuturegrowth.Intheyearunderreview,Gabrielcommencedtheestab-lishmentofitsowninventoryfacilitiesinShanghaitoim-provelocalcustomerservice.

GabrielChinacontinuouslystrivestooptimiseproductionquality,sourcingofnewenvironmentallyfriendlyproducttypesandthedevelopmentofnewproductsincloseco-operationwithGabriel‘sdevelopmentunit,DesignMaster.The2008/09yearsawanincreaseinthenumberofproductsinthepipeline,whichisdeemedtospuranin-creaseinconsolidatedsalesandearningsinthecomingfinancialyear.

Inco-operationwithpartnerswithintheproductionoffur-niturecomponents,GabrielChinaisabletodevelop,ma-nufactureandsupplyOEMsolutionsreadypackedwithend-userlogosandinstructionmanualsandwithdirectdispatchfromChinatoglobaldistributionchannels.

GabrielChinahadapositiveimpactonconsolidatednetincomefor2008/09.

RELOCATION OF GABRIEL‘S DYE FACTORY FROM AALBORG

Atthebeginningofthesecondhalfofthefinancialyear,almostalldyeingandfinishingmachineryhadbeentrans-ferredfromGabrielinAalborgtoScandyeUABinLithua-nia.InManagement‘sopinion,thetransferprogressedsa-tisfactorily.Inthecomingyear,furtherknowledgewillbetransferred,andthetechnicalstaffwillbetrained.

InlinewithGabrielA/S,ScandyeUABiscertifiedtoISO9001(qualitymanagement)andISO14001(environmen-talmanagement).Gabrielholdsa40%stakeinScandyeUAB.Forthe2008/09financialyear,whichsawthetrans-ferofthevastpartofthemachineryfromAalborg,Scan-dyeUABrealisedpositivenetresultsofDKK0.8million.

GROUP BUILDING COMPLEX IN AALBORG – GABRIEL BUSINESS PARK

Gabrielhasfinalisedthedevelopmentofapprox.6,000squaremetresformerlyusedforproduction,inventoryandofficesfacilitiesandnowhasatitsdisposalmodernofficefacilitieslocatedincentralAalborg.Forthesamepurpose,securitysystemsandoutdoorparkingspacewerechangedtomatchthenewfacilities.

Managementmaintainsandimplementsitsplantodevelopandleaseoutamajorpartofthebuildingcomplextootherinnovativeenterprises,universitiesandrelevantinstitutions.

Followingtherelocationoftheremainingproductionoffur-niturefabrics,Gabrielhascommenceddecommissioningof

plantandmachineryplacedontheresidualapprox.7,000squaremetresofproductionandinventoryfacilities.GabrielstrivestodevelopandleaseoutitsentirebuildingcomplexpresentlyreferredtoasGabrielBusinessPark.

At30September2009,thebuildingcomplexwasrec-ognisedatavalueofDKK65.5millionandfinancedbyamortgageloanofDKK43.5millionandbytheopenbankcredit.Theshort-termtargetistoachieveaneutralreturnonthecapitalinvestedinthebuildingcomplex.Inastableeconomicclimate,Gabrielwouldtargetareturnonthecapitalinvestedinthebuildingcomplexinlinewiththatofferedonthemarketforattractivelylocatedcommercialproperties.

INTELLECTUAL CAPITAL, RESEARCH AND DEVELOPMENT

Gabrieldevelopsitsproductsandservicesininteractionwithitsownemployeesandexternalpartners–especiallycustomers,usersandsuppliers.Thegroupisconstantlytoensuretheavailabilityofitsowncompetenciesinthecoreprocesses(1)Productandprocessinnovation(2)Logisticsand(3)KeyAccountManagement.

Gabrielintendstoattractandretainhighlyqualifiedandambitiousemployeeswhoarereadytotakeresponsibility.Gabrielregularlyassessesthequalificationsoftheindivi-dualemployeetoensureoptimumskills.In2006,thebusinessunitInnovationMasterwassetuptosupportGabriel‘sBlueOceanstrategy.Innovation-Masterinitiatesandisinchargeofthegroup‘sdevelop-mentactivitieswitha“time-to-market”horizonof3-5years.ThisworkreliesontheinvolvementofexternaldevelopmentpartnersholdingcompetenciesunavailableinGabrielandrequiredforutilisingthepotentialwithinGabriel‘svaluechain.

Referenceismadetothesection“Productiondevelop-mentandinnovationinGabriel“(page6).ThefinalrelocationofGabriel‘sdyeingactivityandtheongoingrelocationofthedispatchandinventoryfacilitiesfromAalborgenabletheretentionofprofessionalcom-petencies.Keyemployeesfromtherelocatedfunctionsaretransferredtotherelevantbusinessunitstoincreasevaluecreationinthebusinessunitsinchargeoflogistics,productdevelopmentandqualitymanagement.

InnovationandvaluecreationarethekeywordsofGabriel‘smissionstatement.Specificactivitiesensurethatallemployeespossestherelevantcompetenciestodeliveronthemissionstatement,includingtheannualpar-ticipationinInnovationCupandinnovationworkshopsforGabriel‘sownemployeesandexternalpartners.

MANAGEMENT‘S REvIEW

9

MANAGEMENT OF bUSINESS RISkS

ThenatureofGabriel‘sbusinessareaincludesanumberofcommercialandfinancialrisksofimportancetothegroup‘sfuture.Gabrielmakesanefforttocounterandminimisetheriskswhichcanbecontrolled.Gabrielpolicyisnottoengageinactivespeculationinfinancialrisks.Riskmanagementonlycoversrisksarisingdirectlyfromthegroup‘soperations,investmentsandfinancing.

Competitive situation Gabrielisanichecompanydevelopingandmanufactu-ringupholsteryfabricsandrelatedtextileproductsandservicestobeusedinfieldsofapplicationwhereproductfeatures,designandlogisticshavetomeetinvariablere-quirementsandwherequalityandenvironmentalmanage-mentmustbedocumented.Gabrielisawell-known,glo-balbrandwithinitsniche.

Gabrielconstantlystrivestodevelopandconsolidateitspositionasthepreferredsupplieroffurnishingfabricsandrelatedcomponentstostrategicallydesignated,interna-tionalfurnituremanufacturers.Accordingly,Gabrielprio-ritisesthedevelopmentofBlueOceanproductsandser-viceswithinitsentirevaluechain.

Competitivenessistobestrengthenedthroughtheregu-lardevelopmentofthebusinessmodelallowingGabrieltovastlymeetmarketdemandandstructuraldevelopment.Outsourcingofsupportingprocesseswiththeoptimumlocationinlow-wagecountriesandfocusonselectedcoreprocesseshasstrengthenedGabriel‘spositionasthepreferredsupplierandco-operator.

Customers and markets Gabrieltargetsitsproductdevelopmentatapprox.50selectedkeyaccountcustomers,whoaccountsforap-prox.60%ofrevenue.Thelargest,individualcustomeraccountedfor9%ofrevenue–withthesecondlargestcominginat4%for2008/09.Exportsaccountforap-prox.89%ofrevenue–withtheEuropeancountriesac-countingforthevastpart,butwithoverseascountriessuchastheUSAandChinabeingontheincrease.

Products Gabrielaimsatdiversifyingrisksbyofferingnewproductsolutionsthroughoutalargepartofthevaluechain.Thistakesplaceinco-operationwithstrategicallydesignatedkeyaccountcustomersbydevelopingfurnishingfabrics,furniturepartsandservicesforfutureuse.

Currency risks Thegrouphedgescurrencyexposureconsideringpro-jectedfuturecashflowsandprojectedfutureexchangeratemovements.ThemajorityofsalesinEuropeareset-tledinthecustomer‘scurrency,whileseveralinternationalcustomersoptforsettlementineuros.Currencyexposuregeneratedbyincomeisonlyofalimitedscale,asthevastpartofincomeisinvoicedineuros.AllfinancialreceivablesandtheconsolidatedbondportfolioaredenominatedinDanishkroner.

ThemostimportantpartofcorporatepurchasesissettledinDanishkroneroreuros.Toensureanoptimuminterestlevelandtomatchfinancingineuros,thegroupchoseto

Sweden 26%

Germany14%

Denmark11%

Finland8%

France 7%

Norway 6%

Holland 6%

Other countries 18%

Revenue broken down by country

Lithuania 4%

10

MANAGEMENT OF bUSINESS RISkS

raiseamortgageloantofinanceaconstructionprojectdenominatedineuros.BankfinancingisintheformofopencreditsdenominatedineurosorDanishkroner.

Interest rate risksThegroup‘sbankloansareopen,floating-ratebusinesscredits,whilethemortgageloanisanadjustable-rateloandenominatedineurossubjecttoannualadjustment.Thebondportfolioconsistsprimarilyofshort-datedbondsdenominatedinDanishkroner,adjustinginteresttothegeneralsocietalinterestlevel.Groupreceivablescarryafixedinterestrateduringtheirentirelifeaslaiddownbycontract.

Credit risksInlinewithgrouppolicyfortheassumptionofcreditrisks,allmajorcustomersandotherco-operatorsarere-gularlycreditrated.Thegroupmanagesitscreditriskbydefininginternalcreditlinesforcustomersandcounter-parties.Triggeredbytheimminentfinancialcrisisfromtheoutsetof2008/09,thegroupintensifieditsfocusontheapprovalofcreditlinesforcustomersaswellasonthemanagementandmonitoringofcustomers.Grouptradereceivablesaredistributedonnumerouscusto-mers,countriesandmarkets,ensuringahighdegreeofriskdiversification.Gabrielhassecurityinequipmentleasedouttootherparties.

Capital resourcesThroughoutmanyyears,thegrouphasmanagedtogene-ratepositivecashflowsandhas,therefore,solidcapitalresources.Thegroupregularlyassessestheneedforad-justingitscapitalstructuretoholdtherequiredhigherre-turnonequityupagainstthehigherdegreeofuncertaintysurroundingexternalfinancing.In2009,thecompanycho-setoraiseamortgageloanofDKK43.5milliontofinanceaconstructionprojectandtostrengthenthegroup‘scashresources.Mostoftheproceeds,equivalenttoDKK32.5million,areinvestedinDanishmortgagebonds.Atyearend2008/09,Gabriel‘sbankloansrepresentedDKK5.6million.Inaddition,Gabrielhasundrawnbankcreditfa-cilities.Againstthisbackground,thegroupisdeemedto

havesufficientliquiditytofinancefutureoperationsandin-vestments.

InsuranceItisGabriel’spolicytotakeoutinsuranceagainstrisksofmaterialimportancetothefinancialpositionofthegroup.Insurancehasbeentakenoutagainstoperatinglossesandproductliability.Moreover,thecompanyhastakenoutall-riskinsurancecoveringproperty,plantandequipmentaswellasinventories.

Environmental risksCertificationsfortheEnvironmentalManagementStand-ardISO14001,theEcoManagementandAuditScheme(EMAS),theEUFlowereco-labelscheme,Oeko-TexaswellasfortheQualityManagementStandardISO9001ensurethatneithertheactivitiesnortheproductsofthecompanyareexposedtoanyimportantenvironmentalrisks.TheobjectivesofGabriel‘senvironmentalstrategyaretopreventspillage/accidentsandtoensurethatthecompany‘sproductsdonotcontainanyhealthhazardoussubstances.

IT risksThegrouphaschosentooutsourcetheoperationofitsITplatformtoexternalservicepartners,ensuringregularupdateofsecuritysystemsandminimisingtheriskofma-joroperationalbreak-down.

Trade risks Themajorityofrawmaterials,semi-manufacturedprod-uctsandfinishedgoodsusedbyGabrielareavailablefromalternativesuppliersincaseofnon-deliverybytheusualsuppliers.

Contingency plansInaccordancewiththequalityandenvironmentalmanage-mentsystems,GabrielinAalborgcontinuestoenhanceandinformaboutitscontingencyplans.Gabrielhasregularfirst-aidandfire-fightingcourses,andallareashavepreparedanoperationalcontingencyplanincaseofspillage/accidents.

11

Throughouttheyears,Gabrielhasstriventodefineandmaintainexplicitmissionstatements,visions,objectivesandstrategies.Executingstrategyandperformingplan-nedactivitiesaddvalueforcustomers,employees,share-holdersandotherstakeholders.

CORPORATE GOVERNANCE RECOMMENDATIONS BY NASDAQ OMX COPENHAGEN A/S

NASDAQOMXCopenhagenA/Shasadoptedasetofcorporategovernancerecommendations.Companiesaretoaddresstheserecommendationsandinparticularaccountforanynon-compliance.TheSupervi-soryandExecutiveBoardshavecarefullyconsideredtherecommendations,whicharewidelyappliedbyGabriel.TheSupervisoryBoardhaschosenadifferentapproachwithinthefollowingareas:

1. Supervisory Board Thecompanyhasnotdefinedanylimitforthenumberofpositionsheldbyitssupervisoryboardmembers.Gabrielisoftheopinionthattheindividualboardmember‘scapa-city,qualificationsandcontributiontothemanagerialpro-cessmustbethedecisiveelement.Inlinewiththisview,thecompanyhasnotlaiddownanyagelimitforitssuper-visoryboardmembers.Assupervisoryboardmemberselectedbythegeneralmeetingareelectedforoneyearofservice,theannualre-portdoesnotdisclosethedateofjoiningthesupervisoryboardortermofoffice.

2. Remuneration of the Supervisory and Executive Boards GabrieldisclosesremunerationofitsSupervisoryandEx-ecutiveBoardsintheannualreport.Theannualreportdis-closesthetotalfiguresfortheExecutiveandSupervisoryBoardsanddoesnotspecifyanyindividualremunerationasthisispersonalinformationoflimitedrelevancetotheshareholders.ThecompanyhasnottakenoutanyincentiveschemesorredundancypackagesfortheExecutiveBoard.

AmorethoroughdescriptionofGabriel‘smanagementpracticeinrelationtotherecommendationsbyNASDAQOMXCopenhagenA/Sisavailableatthecompany‘sweb-site,www.gabriel.dk.

REPORTING ON INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS

TheSupervisoryandExecutiveBoardsofGabrielisover-allresponsibleforthegroup‘sriskmanagementandinternalcontrolinrelationtofinancialreporting,includingcompli-ancewithrelevantlegislationandotherfinancialreportingregulations.

Theobjectiveofthegroup‘sriskmanagementandinter-nalcontrolsistoavoidanymaterialerrorsandomissionsduringthefinancialreportingprocess.TheSupervisoryBoard/auditcommitteeandtheExecutiveBoardregularlyassessrisksandinternalcontrolsarisingfromthegroup‘sactivitiesandanyimpactonthefinancialreportingpro-cess.

Control environmentManagementregularlyassessestheorganisationalstruc-tureandstaffingofthegroupandlaysdownandappro-vesoverallpolicies,proceduresandcontrolsinrelationtothefinancialreportingprocess,includingspecificreportingpoliciesandsegregationofduties.

Risk assessmentWhentheannualbusinessplanisprepared,materialbusi-nessrisksareidentified,andagainstthisbackgroundMa-nagementcarriesoutanoverallriskmanagement,includinganassessmentofmaterialrisksarisingfromthefinancialreportingprocess.Aspartoftheriskassessment,Manage-mentisannuallytoconsidertheriskoffraudandanyotherimproperimpactonthefinancialreportingprocess.

Thegroup‘sRiskManagementpolicystrivestoeliminateand/orreducetherisksidentifiedbasedonanassess-mentofmaterialityandcost-benefitanalyses.TheSupervisoryBoardannuallyassessesGabriel‘sITsecurityandinsurancecoverage.Themostimportantrisksarisingfromthefinancialrepor-tingprocessaredisclosedintheManagement‘sreviewandnotestothefinancialstatements,towhichreferenceismade.

Control activities Atthesupervisoryboardmeetings,theExecutiveBoardreportsonthestatusofanyrisksfactorsattributabletostrategy,organisationoroperations.Thegrouphasasys-tematicinternalreportingsystemcomparingmonthlyre-portingtobudgetandregularlyevaluatingperformanceandmeetingofspecifictargetsthroughKeyPerformanceIndicators,etc.Thesystemhighlightsthedifferentcorpo-rateactivitiesandallowsManagementtogaininsightintoandknowledgeaboutissuesrelatingtotheentirefinancialreportingprocess.

Eachquarter,theSupervisoryBoardisprovidedwithathoroughaccountoffinancialperformancecomparedwithbudgetandpriorperiods.Furthermore,thereportingde-scribesandassessesmaterialbalancesheetitems,cashflows,forecastfutureactivitiesandearningsandothermatterswithanimpactonoperations.

GAbRIEL AND CORPORATE GOvERNANCE

12

InformationGenerally,theSupervisoryBoardlaysdownrequiredforecastfutureresultsandestablishestherequirementsofthefinancialreportinginaccordancewithrelevantle-gislationandregulations.Inaddition,thegroupaimsatof-feringadequate,completeandpreciseinformationreflec-tingcorporateperformance.

Withintheframeworkforlistedcompanies,theSuperviso-ryBoardstrivesatfosteringopencommunicationandatensuringthateachemployeeisfamiliarwithhis/herfunc-tionintheinternalcontrolprocess.Thegrouphaschosentodivideoperationsandinternalreportingintoindepend-entstrategicbusinessunits.Thestrategicbusinessunitsarerunasindependentprofitcentreswiththeirownmis-sionstatements,visions,targets,strategies,actionplansandbudgets,ensuringthatskills,follow-upanddivisionofresponsibilitiesaredistributedonallorganisationallevelsandthatrelevantinformationiscommunicatedeffectivelyandreliablythroughouttheentiresystem.

Monitoring Gabrielmonitorsthefunctioningofitsinternalcontrolandriskmanagementsystematallgrouplevelsonaregularbasisandforeachquarter.Thescopethereofisdetermi-nedprimarilyonthebasisoftheriskassessmentandtheeffectivenessofcontrolsandprocedures.

Weaknesses,controlsnotoperatingeffectivelyornon-compliancewithguidelinesarereportedtotheExecutiveBoardortheSupervisoryBoardonthebasisofmateriality.Thereportingistypicallydiscussedatthenextsupervisoryboardmeeting,atwhichtheSupervisoryBoardisinformedofactualfindingsandrecommendationsforprocedureup-dates,etc.

Intheirlong-formauditreporttotheSupervisoryBoard,theauditorsappointedbytheannualgeneralmeetingre-portmaterialweaknessesinthegroup‘sinternalcontrolsystemsinrelationtothefinancialreportingprocess.

TheSupervisoryBoardfollowsupontheimplementationofanyplannedimprovementoftheriskmanagementandinternalcontrolsinrelationtothefinancialreportingpro-cess.

SET-UP OF AN AUDIT COMMITTEE

Inaccordancewithsection31oftheDanishActonApprovedAuditorsandAuditFirms,GabrielHoldingA/ShasasetupanauditcommitteeonwhichtheentireSupervisoryBoardserves,seesection31(5)oftheAct.ThecompanycomplieswithNASDAQOMXCopenhagenA/S’recommendationsforcorporategovernance.

Theauditcommitteeisto:

1) monitorthefinancialreportingprocess,2) monitortheeffectivefunctioningofthecompany‘s

internalcontrolandriskmanagementsystems,3) monitorthestatutoryauditofthefinancialstatements,

etc.and4) monitorandchecktheauditor‘sindependence.

Whenthedatesforsupervisoryboardmeetingsarefixed,ameetingscheduleandagendaarefixedfortheauditcommittee.Atleastfourmeetingsaretobescheduledforeachyear.Theauditcommitteewillinitiallyconveneon19November2009.

GAbRIEL AND CORPORATE GOvERNANCE

CSRCorporatesocialresponsibilityinGabrielappliestothefollowingareas:

• CodeofConduct• Environment• Quality• Vendorco-operation.

Code of ConductFormanyyears,GabrielhasappliedaCodeofConductensuringthatitsproductsdonotcontainanyenvironmen-tallydangerousorharmfulsubstancestothedetrimentofitsusers.Atthesametime,itisaninvariablerequirementthatallemployeesengagedinservicefunctionsandpro-ductionhaveasafeworkingenvironment,whichisrea-lisedbyvendoraudits.

GabrielcomplieswiththeCodeofConductpreparedbyGabriel‘stradeassociation,DanishFashionandTextile.Additionally,Gabrielisalsoamemberoftheassociation‘sCSRcommittee.Thestandardcontains13principlesandisavailableatwww.gabriel.dk.

Environment Environmentalmanagementisanimportanttooltostrengthencompetitiveness.Gabriel‘senvironmentalmanagementisgovernedbyISO14001,EMAS,theEUFlowereco-labelschemeandOeko-Tex.Inaddition,du-ringtheyearunderreview,Gabrielworkedoncradle-to-cradlecertification.

GabrielensurescompliancewiththeEuropeanCommuni-tyRegulationonchemicalsandtheirsafeuse,REACH,incloseco-operationwithvendorsofchemicalsanddyes.

Duringthe2009/10financialyear,Gabrielwilllaydownguidelinesforareductioninitsemissionofgreenhousegases.

Quality Gabriel‘squalitymanagementisgovernedbyISO9001.Oneoftheprimarytasksin2008/09wastomaintaintheusualstandardforqualityandenvironmentalmanagementwhendyeingandfinishedwereoutsourcedtoScandyeUAB.Gabrielhasbeensuccessfulinthisrespectseeninrelationtothechangespromptedbytherelocationofpro-duction.

Vendor co-operationDrivenbytheannualadmittanceofnewvendors,Gabrielhasfocuseditseffortsonpartnershipsactivelycomplyingwithallrequirementsintermsofenvironment,qualityandCSR.

CORPORATE SOCIAL RESPONSIbILITy (CSR)

13

14

SHAREHOLDER INFORMATION 2008/09

Share capital Thesharecapitalcomprises2,100,000sharesofDKK20each.GabrielHoldingA/Shasoneclassofshares.Allsharesarefreelynegotiablesecurities.GabrielHoldingA/SisadmittedfortradingatNASDAQOMXCopenha-genA/SunderthetickersymbolGABRandtheIDcodeDK0010049568.TheshareistradedundertheSmallCapIndex.

Price movementThe2008/09financialyearopenedwithapriceof118andclosedwithapriceof69,representingadeclineof41%.MarketcapitalisationcameinatDKK145millionat30September2009.

Treasury shares Inlinewiththeauthoritygrantedbythegeneralmeeting,thecompanyhasexerciseditsrighttoacquiretreasurysharesofupto10%ofthesharecapital.Gabriel‘sportfoliooftreasurysharesnumbered210,000atthefinancialyearend,whichwasequivalentto10%ofthesharecapital.ThemarketpriceoftreasurysharescameinatDKK14millionat30September2009.ThenoticeoftheAnnualGeneralMeetingofGabrielHoldingA/ScontainsamotionputforwardbyManage-mentforareductionofthesharecapitalfromanominalamountofDKK42,000,000toanominalamountofDKK37,800,000bycancelling210,000treasurysharesofDKK20eachfromthecompany‘sownportfolio,repre-sentinganominalvalueofDKK4,200,000andequiva-lentto10%ofsharecapital.

Capital management Thegroup‘sprimaryoperationscontinuouslygeneratehighcashflows,ensuringsoundcapitalresources.Intheyearunderreview,Gabrielinvestedfurtherinanewinnovationcentreandrefurbishedotherpremisesofthebuildingcom-plexlocatedincentralAalborg.InMay2009,thegroupchosetoraiseamortgageloanofDKK43.5milliontofi-nanceaconstructionprojectandtostrengthenthecashresourcesofthegroup.Mostoftheproceeds,equivalenttoDKK32.5million,wereinvestedinDanishmortgagebonds.

Thegroupregularlyassessestheneedforadjustingitscapitalstructuretoholdtherequiredhigherreturnonequityupagainstthehigherdegreeofuncertaintysur-roundingexternalfinancing.AhighequityratiohasalwaysbeenatoppriorityofGabrielinordertoensureplentyofroomformanoeuvre.Asaconsequenceoftheraisingofthemortgageloan,theequityratiowasreducedto59%asagainst79%lastyear.Duringthepastyears,theequityratiohasaccountedfor75-79%.Furthermore,reducingfundstiedupisconstantlyonthegroup‘sagenda,contri-butingtothehighcashflowsfromoperatingactivities.

25

50

100

150

200

75

125

175

Market price i n DKK Net asset value per share i n DKK

04/05 05/06 06/07 07/08 08/09

1

2

4

6

8

10

3

5

7

9

04/05 05/06 06/07 07/08 08/09

Dividends per share i n DKK

Earnings per share i n DKK

0

50

100

150

200

250

300

350

400

Closing market capitalisation in DKK million

04/05 05/06 06/07 07/08 08/09

15

ROICtargetedataminimumof15%hasrepresented17-23%duringthepastyears.Duetotheeconomicdownturn,Gabrielfailedtomeetthetarget,reportingROICof1.4%.

Inrecentyears,Gabrielhasdistributeddividendstoitsshareholders,equivalenttoapayoutratioofapprox.50%eachyear.Withthisgesture,Gabrieldesirestoprovideitsshareholderswithareturnontheirinvestmentwhilemain-taininganappropriateequityleveltoensurethecompany‘sfutureoperations.Owingtothemodestprofit,theSuper-visoryBoardproposesthatnodividendsbedistributedfor2008/09.Againstthisbackground,thepresentcapitalresourcesaredeemedadequateinthepresenteconomicclimate.

Stock Exchange Announcements in the 2008/09 financial year

20.11.08 Announcementoftheannualreportfor2007/08: Gabriel‘sprofitfor2007/08inlinewithforecast. 01.12.08 NoticeofAnnualGeneralMeeting 08.12.08 Annualreportfor2007/08 16.12.08 Set-upofGabrielInnovationA/S 16.12.08 MinutesofAnnualGeneralMeeting 26.02.09 Q1interimreportfor2008/09: OperatingprofitforQ1ofGabrielinlinewithforecast,butpersistentslowdown ontheinternationalmarketforcontractfurniture. 28.05.09 Interimreport,firsthalfof2008/09: Gabrielalsoaffectedbytheeconomicdownturn,butreportsoperatingprofit forthefirsthalfof2008/09andenjoysimprovedliquidity. 08.06.09 GabrielHoldingA/Sexercisesitsrighttoacquiretreasurysharesrepresenting10%of thesharecapital. 27.08.09 Q3Interimreportfor2008/09: Forecastoperatingprofitforthefull2008/09financialyear. 27.08.09 Financialcalendarfor2009/10

Financial calendar for 2009/10

19.11.09 Announcementoftheannualreport 09.12.09 Theprintedannualreportfor2008/09isavailable 17.12.09 AnnualGeneralMeeting 25.02.10 Q1report 27.05.10 Interimreport,firsthalfoftheyear 26.08.10 Q3report 23.11.10 Announcementoftheannualreport 16.12.10 AnnualGeneralMeeting

Investor relationsGabrielHoldingaimsatprovidingasatisfactoryanduni-forminformationleveltoitsinvestorsandanalystsensu-ringstablepricemovementsandreflectingforecastcor-porateperformanceatanytime.Gabriel‘swebsite,www.gabriel.dk,isthestakeholders‘primarysourceofinformationandisregularlyupdatedwithnewandrelevantinformationonGabriel‘sprofile,activities,lineofbusinessandresults.

Investorrelationscontact:JørgenKjærJacobsen,CEOPhone:+4596303100E-mail:[email protected]

Annual general meeting TheAnnualGeneralMeetingistobeheldonthecompany‘spremisesinAalborg,Denmark,onThursday,17December2009at2pm.

SHAREHOLDER INFORMATION 2008/09

Treasury shares

Gabol A/S, Aarhus

Shareholder mix

10%

28%

36%10%

Othershareholders

16%Registeredshareholders

Fulma A/S, Aarhus

16

COMPANy DETAILS

SUPERVISORY BOARD

Poul H. Lauritsen(76),LaywerandChairman

Directorships:BKIFoodsA/SDefco-FoodA/SGabolA/SMozamiA/SONE-MarketingA/SPoulRasmussenBil-centerÅrhusA/SPoulRasmussenHoldingA/SRaskierA/SStanesøA/SStentorA/SSvendMathiesenA/S2KroghAS

Kaj Taidal(50),GeneralManagerandDeputyChairman

Directorships:A/SV.SørensenImpartexA/SBladtHoldingA/SBladtIndustriesA/SDan-IsoHoldingA/SDan-IsoA/SErnitecA/SHydraulicoHoldingA/SHydraulicoA/SKK-GroupA/SKK-ElectronicA/SElogicA/S

SlovakianFarmInvestA/SUlvecoHoldingA/SUlvecoA/SArtemisA/SDFaf1.januar2009A/S

Karen Mathiesen(55),GeneralManager

Executivepositions:FulmaA/SGabolA/SSvendMathiesenA/SDirectorships:BKIFoodsA/SSvendMathiesenA/SFulmaA/SGabolA/S

Claus Christensen(47),GeneralManager

Executivepositions:HCProjectsA/SHCHA/SDirectorships:DanPhoneA/SErnitecA/SHCProjectsA/SHCHA/SInMoTxInc.Inter-DataA/SJudexHoldingA/SJudexA/SM1A/SKPFArkitekterA/S

M-TecA/SNoviA/SNoviInnovationA/SNoviSeedA/SStrømHansenA/S

Tina Mai Kristensen(42),MarketingCoordinator(Electedbytheemployees)

Directorships:A/SPederNielsenBeslagfabrik

Ole Thomsen(57),MachineOperator(Electedbytheemployees)

EXECUTIVE BOARD

Jørgen Kjær Jacobsen(57),CEO

Executivepositions:RaskierA/SDirectorships:GabolA/SBKIFoodsA/SMekoprintHoldingA/SMekoprintA/SMekoprintEjendommeA/SNordjyskeHoldingA/SNordjyskeMedierA/SAMProductionA/SAvitSystemsA/SRaskierA/S

Auditors: KPMG,StatsautoriseretRevisionspartnerselskabBankers: SydbankA/SSubsidiaries: GabrielA/S,Aalborg GabrielInnovationA/S,Aalborg Gabriel(Tianjin)InternationalTradingCo.Ltd.,China Sellgren-TekstiiliOY2005,Finland(inliquidation)Associate: ScandyeUAB,Lithuania

Registered office and representation Theregisteredofficewithsales,logistics,development,innovationandaccountsdepartmentsarelocatedinAalborg.

GabrielhasitsownrepresentativesinDenmark,Sweden/Finland,Norway,Germany,theNetherlands,France,Spain,ItalyandChina.

The registered office in Aalborg is located at the following address:

GabrielHoldingA/SReg.No.58868728

Hjulmagervej559000Aalborg,DenmarkPhone:+4596303100Fax:[email protected]

17

TheExecutiveandSupervisoryBoardshavetodaydiscus-sedandapprovedtheannualreportofGabrielHoldingA/Sfor2008/09.

TheannualreporthasbeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)asadoptedbytheEUandadditionalDanishdisclosurerequire-mentsforannualreportsoflistedcompanies.

Itisouropinionthattheconsolidatedfinancialstatementsandparentcompanyfinancialstatementsgiveatrueandfairviewofthegroup‘sandtheparentcompany‘sfinancialposi-tionat30September2009andoftheresultsofthegroup‘s

andtheparentcompany‘soperationsandcashflowsforthefinancialyear1October2008-30September2009.

Further,inouropiniontheManagement‘sreviewgivesatrueandfairreviewofthedevelopmentinthegroup‘sandtheparentcompany‘soperationsandfinancialmatters,there-sultsofthegroup‘sandtheparentcompany‘soperationsandfinancialpositionanddescribesthematerialrisksanduncer-taintiesaffectingthegroupandtheparentcompany.

Werecommendthattheannualreportbeapprovedattheannualgeneralmeeting.

STATEMENT by THE EXECUTIvE AND SUPERvISORy bOARDS

Aalborg,19November2009

Executive Board

JørgenKjærJacobsenCEO

Supervisory Board

PoulH.Lauritsen KajTaidal ClausChristensen Chairman DeputyChairman

KarenSkottMathiesen TinaMaiKristensen OleThomsen Electedbytheemployees Electedbytheemployees

18

INDEPENDENT AUDITORS‘ REPORT

To the shareholders of Gabriel Holding A/SWehaveauditedtheconsolidatedfinancialstatementsandparentcompanyfinancialstatementsofGabrielHol-dingA/Sfor2008/09,pages19-44.Theconsolidatedfinancialstatementsandparentcompanyfinancialstate-mentscompriseincomestatement,balancesheet,state-mentofchangesinequity,cashflowstatementandnotesforthegroupaswellasfortheparentcompany.Thecon-solidatedfinancialstatementsandparentcompanyfinan-cialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEUandadditionalDanishdisclosurerequirementsforconsolidatedfinancialstatementsandparentcompanyfinancialstatementsoflistedcompanies.Inadditiontoouraudit,wehavereadtheManagement‘sreview,whichhasbeenpreparedinaccordancewithDa-nishdisclosurerequirementsforconsolidatedfinancialstatementsandparentcompanyfinancialstatementsoflistedcompanies,andissuedastatementinthisregard.

Management‘s responsibility Managementisresponsibleforthepreparationandfairpresentationofconsolidatedfinancialstatementsandpar-entcompanyfinancialstatementsinaccordancewithIn-ternationalFinancialReportingStandardsasadoptedbytheEUandadditionalDanishdisclosurerequirementsforconsolidatedfi-nancialstatementsandparentcompanyfinancialstatementsoflistedcompanies.Thisresponsi-bilityincludes:designing,implementingandmaintaininginternalcontrolrelevanttothepreparationandfairpre-sentationofconsolidatedfinancialstatementsandparentcompanyfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandusingappropriateaccountingpolicies;andmakingac-countingestimatesthatarereasonableinthecircumstan-ces.Further,itistheresponsibilityofManagementtopre-pareandissueaManagement‘sreviewthatgivesafairreviewofthedevelopmentinthegroup‘sandtheparentcompany‘soperationsinaccordancewithDanishdisclosu-rerequirementsforconsolidatedfinancialstatementsandparentcompanyfinancialstatementsoflistedcompanies.

Auditors‘ responsibility Ourresponsibilityistoexpressanopinionontheconsoli-datedfinancialstatementsandparentcompanyfinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithDanishStandardsonAuditing.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableas-

surancewhethertheconsolidatedfinancialstatementsandparentcompanyfinancialstatementsarefreefrommaterialmisstatement.Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthecon-solidatedfinancialstatementsandparentcompanyfi-nancialstatement.Theproceduresselecteddependontheauditors‘judgment,includingtheassessmentoftherisksofmaterialmisstatementoftheconsolidatedfinan-cialstatementsandparentcompanyfinancialstatements,whetherduetofraudorerror.Inmakingthoseriskas-sessments,theauditorsconsiderinternalcontrolrelevanttothecompany‘spreparationandfairpresentationoftheconsolidatedfinancialstatementsandparentcompanyfinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofthecompany‘sinternalcontrol.AnauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebyManagement,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatementsandparentcompanyfinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.Ourauditdidnotresultinanyqualification.

Opinion Inouropinion,theconsolidatedfinancialstatementsandparentcompanyfinancialstatementsgiveatrueandfairviewofthegroup’sandtheparentcompany’sfinancialpositionat30September2009andoftheresultsofthegroup’sandtheparentcompany’soperationsandcashflowsforthefinancialyear1October2008-30Septem-ber2009inaccordancewithInternationalFinancialRe-portingStandardsasadoptedbytheEUandadditionalDanishdisclosurerequirementsforconsolidatedfinancialstatementsandparentcompanyfinancialstatementsoflistedcompanies.

Statement on the Management‘s reviewPursuanttotheDanishFinancialStatementsAct,wehavereadtheManagement‘sreviewintheannualreport.Wehavenotperformedanyadditionalproceduresinadditiontotheauditoftheconsolidatedfinancialstatementsandparentcompanyfinancialstatements.Onthisbasis,itisouropinionthattheinformationgivenintheManagement‘sreviewisconsistentwiththeconsolidatedfinancialstate-mentsandparentcompanyfinancialstatements.

Aalborg,19November2009KPMG

Statsautoriseret HansB.Vistisen Revisionspartnerselskab SvendSkovStateAuthorisedPublicAccountant StateAuthorisedPublicAccountant

19

Note Consolidated Parent company

DKK‘000 2008/09 2007/08 2008/09 2007/08

Revenue 204,710 279,734 3,121 2,981 Changesininventoriesof finishedgoodsandworkinprogress -2,885 5,152 - -1 Otheroperatingincome 1,645 401 - -2 Costofsales -118,174 -159,988 - -3 Otherexternalcosts -35,011 -42,022 -1,288 -1,2834 Staffcosts -39,921 -55,307 -835 -1,13510 Depreciation/amortisationof intangibleassetsandproperty, plantandequipment -4,394 -4,927 -190 -1905 Separateitems -3,949 - - -

Operating profit (EBIT) 2,021 23,043 808 37312 Shareofprofitaftertax inassociate 248 -478 - -6 Financialincome 767 754 10,644 11,4587 Financialexpenses -1,331 -245 -640 -

Profit before tax 1,705 23,074 10,812 11,8318 Taxonprofitfortheyear -405 -5,928 -203 -458

Profit for the year 1,300 17,146 10,609 11,373

Proposed profit appropriation Proposeddividends,0%(20%) 0 8,400 Retainedearnings 10,609 2,973

10,609 11,373

9 Earnings per share (DKK) Earningspersharebasic(EPSbasic) 0.7 9 Earningspersharediluted(EPS-D) 0.7 9

INCOME STATEMENT 01.10.2008 - 30.09.2009

20


DKK‘000 2008/09 2007/08 2008/09 2007/08

10 Non-current assets Intangibleassets: Developmentprojects 6,196 5,825 - -

Intangibleassets: Developmentprojects 65,475 48,046 65,475 48,046 Plantandmachinery 2,401 3.768 - - Fixturesandfittings, otherplantandequipment 3,325 3,372 - -

71,201 55,186 65,475 48,049

Othernon-currentassets:11 Investmentsinsubsidiaries - - 36,419 35,41912 Investmentsinassociates 9,828 10,401 - -13 Amountsowedbyassociates 9,258 2,227 - -14 Otherreceivables 1,512 1,100 - -15 Securities 32,517 - 32,517 -

53,115 13,728 68,936 35,419

Total non-current assets 130,512 74,739 134,411 83,465

Current assets16 Inventories 38,063 42,924 - -17 Receivables 28,564 36,834 10,310 17,066 Cashatbankandinhand - - 146 -

Total current assets 66,627 79,758 10,456 17,066

Total assets 197,139 154,497 144,867 100,531

bALANCE SHEET at 30.09.2009ASSETS

21

bALANCE SHEET at 30.09.2009EQUITy AND LIAbILITIES Note Consolidated Parent company

DKK‘000 2008/09 2007/08 2008/09 2007/08

Equity 19 Sharecapital 42,000 42,000 42,000 42,000 Translationreserve 30 30 - - Reserveforfair valueadjustment 12 - 12 - Hedgingreserve -54 - - - Retainedearnings 73,451 72,126 55,042 44,408 Proposeddividends - 8,400 - 8,400

Total equity 115,439 122,556 97,054 94,808

Liabilities Non-current liabilities20 Deferredtax 4,509 4,104 2,078 1,87521 Creditinstitutions 41,030 - 41,030 -

Total non-current liabilities 45,539 4,104 43,108 1,875

Current liabilities21 Creditinstitutions 1,807 - 1,807 - Bankloansandoverdrafts 5,578 67 - - Tradepayables 13,413 13,145 - - Corporationtax - 97 - 97 Otherpayables 15,363 14,528 2,898 3,751

Total current liabilities 36,161 27,837 4,705 3,848

Total liabilities 81,700 31,941 47,813 5,723

Total equity and liabilities 197,139 154,497 144,867 100,531

18 Research and development costs

19 Treasury shares

22 Financial risks

23 Operating leases

24 Contingent liabilities and security

25 Transactions with group companies, major shareholders, Supervisory Board and Executive Board

26 Accounting estimates and judgements

27 New financial reporting regulations

28 Accounting policies

22

CONSOLIDATED STATEMENT OF CHANGES IN EQUITy Reservefor Translation fairvalue- Hedging Retained Proposed TotalDKK‘000 Sharecapital reserve adjustment reserve earnings dividends equity

2007/08

Equity 01.10.07 42,000 30 - - 62,515 9,240 113,785 Changes in equity for 2007/08

Profitfor2007/08 - - - - 8,746 8,400 17,146

Total income - - - - 8,746 8,400 17,146

Dividendsdistributed - - - - - -8,375 -8,375Dividends,treasuryshares - - - - 865 -865 0

Total changes in equityfor 2007/08 - - - - 9,611 -840 8,771

Equity at 30.09.08 42,000 30 - - 72,126 8,400 122,556

2008/09Equity at 01.10.08 42,000 30 - - 72,126 8,400 122,556 Changes in equity for 2008/09

Profitfor2008/09 - - - - 1,300 - 1,300Valueadjustments - - 12 -54 - - -42

Total income - - 12 -54 1,300 - 1,258

Dividendsdistributed - - - - - -7,614 -7,614Dividends,treasuryshares - - - - 786 -786 0Acquisitionoftreasuryshares - - - - -761 - -761

Total changes in equityfor 2008/09 - - 12 -54 1,325 -8,400 -7,117

Equity at 30.09.09 42,000 30 12 -54 73,451 0 115,439

23

Reservefor fairvalue Retained Proposed TotalDKK‘000 Sharecapital adjustment earnings dividends equity

2007/08

Equity 01.10.07 42,000 - 40,570 9,240 91,810

Changes in equity for 2007/08

Profitfor2007/08 - - 2,973 8,400 11,373

Total income - - 2,973 8,400 11,373Dividendsdistributed - - - -8,375 -8,375Dividends,treasuryshares - - 865 -865 0

Total changes in equityfor 2007/08 - - 3,838 -840 2,998

Equity at 30.09.08 42,000 - 44,408 8,400 94,808

2008/09 Equity at 01.10.08 42,000 - 44,408 8,400 94,808

Changes in equity for 2008/09

Profitfor2008/09 - - 10,609 - 10,609Priceadjustmentofbonds - 12 - - 12

Total income - 12 10,609 - 10,821

Dividendsdistributed - - - -7,614 -7,614Dividends,treasuryshares - - 786 -786 0Acquisitionoftreasuryshares - - -761 - -761

Total changes in equityfor 2008/09 - 12 10,634 -8,400 2,246

Equity at 30.09.09 42,000 12 55,042 0 97,054

PARENT COMPANy STATEMENT OF CHANGES IN EQUITy

24

Consolidated Parent company

DKK‘000 2008/09 2007/08 2008/09 2007/08

Cash flows from operating activitiesOperatingprofit(EBIT) 2,021 23,043 808 373Adjustmentfornon-cashitems:Depreciation/amortisation 4,394 4,927 190 190Gainonthedisposalofnon-currentassets -1,440 - - -

Cashgeneratedfromoperations(operatingactivities)beforechangesinworkingcapital 4,975 27,970 998 563Interestincome,paid 767 754 10,644 11,458Interestexpense,paid -1,331 -245 -640 -Changesininventories 4,861 1,233 - -Changesinreceivables 10,322 1,514 8,808 24,278Changesintradeandotherpayables 1,026 -3,022 -878 -2,378Corporationtaxpaid -2,147 -4,862 -2,147 505

18,473 23,342 16,785 39,182

Cash flows from investing activitiesAcquisitionofintangibleassets -1,893 -1,995 - -Acquisitionofproperty,plantandequipment -24,307 -32,122 -17,619 -30,807Disposalofproperty,plantandequipment 7,680 - - -Financeleases,associate -7,032 183 - -Financeleases,otherreceivables -412 -1,100 - -Acquisitionofsecurities -32,506 - -32,506 -EstablishmentofGabrielInnovationA/S - - -1,000 -

-58,470 -35,034 -51,125 -30,807

Cash flows from financing activitiesExternalfinancing:Raisingofmortgageloans 43,523 - 43,523 -Repaymentoflong-termdebt -662 - -662 -

Shareholders:Acquisitionof/dividendsfromtreasuryshares 25 865 25 865Dividendsdistributed -8,400 -9,240 -8,400 -9,240

34,486 -8,375 34,486 -8,375

Changes for the year in cash and cash equivalents -5,511 -20,067 146 0

Opening cash and cash equivalent -67 20,000 0 0

Closing bank loans/cash and cash equivalents -5,578 -67 146 0

Thecashflowstatementcannotbedirectlyderivedfromthestatutoryannualreport.

CASH FLOW STATEMENT

NOTES TO THE FINANCIAL STATEMENTS

27


DKK‘000 2008/09 2007/08 2008/09 2007/08

1 Other operating income Governmentgrants 112 123 - - Leaseincome 93 278 - - Gainsonthedisposalofproperty, plantandequipment 1,440 - - -

1,645 401 - -

2 Cost of sales Costofsalesfortheyear -115,332 -157,371 - - Write-downfortheyearof inventories -2,842 -2,617 - -

-118,174 -159,988 - -

Write-downofinventorieshasnotbeenreversed.

3 Other external costs Feestotheauditorsappointedattheannualgeneralmeetingwererecognisedatthefollowingamounts:

Statutoryaudit 290 285 55 52 Otherassuranceengagements 9 12 - - Taxadvisoryservices 34 32 19 19 Otherservices 108 131 98 74

441 460 172 145

4 Staff costs Payroll,etc. -42,916 -52,538 -835 -1,135 Definedcontributionpensionschemes -2,573 -3,004 - - Othersocialsecuritycosts -414 -477 - - Otherpayroll-relatedcosts -210 -188 - -

-46,113 -56,207 -835 -1,135

Payrollcostscapitalisedregarding developmentprojectsandadditions toproperty,plantandequipment 2,698 900 - - Restructuringcosts 3,494 - - -

-39,921 -55,307 -835 -1,135

RemunerationoftheSupervisoryBoard oftheparentcompany -545 -545 -435 -435 RemunerationoftheExecutiveBoard oftheparentcompany -1,929 -2,111 -400 -700 Remunerationofotherexecutives -7,322 -8,293 - -

Averagenumberofemployees 92 117 - -


28

NOTES TO THE FINANCIAL STATEMENTS 2008/09

Note

5 Separate items Separateitemscompriseremunerationandseverancepayforemployeesdismissedanddisemployed

andotherrelevantcosts.

Consolidated Parent company DKK‘000 2008/09 2007/08 2008/09 2007/086 Financial income Dividendsfromsubsidiary - - 10,000 10,000 Interestincome,cash,bonds,etc. 767 754 481 84 Interestincomefromsubsidiary - - 163 1,374

767 754 10,644 11,458

7 Financial expenses Interestexpense,etc. -1,077 - -640 - Exchangelosses -254 -245 - -

-1,331 -245 -640 -

8 Tax on profit for the year Currenttax 0 -5,026 0 341 Adjustmentofdeferredtax -405 -902 -203 -799

-405 -5.928 -203 -458

Tax on profit for the year is specified as follows: Computedtaxonprofitbeforetax,25% -426 -5,769 -2.,703 -2,958 Taxeffectof: Non-deductiblecosts -20 -27 - - Non-taxabledividends - 2,500 2,500 Shareofresultsaftertaxinassociates 62 -132 - - Adjustmentoftaxinforeign subsidiariesto25% -21 - - -

-405 -5,928 -203 -458

Effectivetaxrate 23.8% 25.7% 1.9% 3.9%

9 Earnings per share Profitfortheyearaftertax 1.300 17,146

Averagenumberofshares 2,100,000 2,100,000 Averagenumberoftreasuryshares -210,000 -196,625

Averagenumberofshares 1,890,000 1,903,375

Earningspershare(EPS), basicofDKK100 0.7 9 Earningspershare(EPS-D) dilutedofDKK100 0.7 9

29

Note

10 Non-current assets Fixturesandfittings, Development Landand Plantand otherplant DKK‘000 projects buildings machinery andequipment

2007/08 Costat01.10.2007 6,019 46,706 67,619 24,312 Additionsfortheyear 1,995 30,807 613 1,700 Disposalsfortheyear -588 - -1,128 -372

Costat30.09.2008 7,426 77,513 67,104 25,640

Depreciation/amortisation at01.10.2007 925 29,277 61,603 20,850 Disposalsfortheyear - - - -322 Depreciation/amortisationfortheyear 676 190 1,733 1,740

Depreciation/amortisation at30.09.2008 1,601 29,467 63,336 22,268

Carryingamountat30.09.2008 5,825 48,046 3,768 3,372

Thereofdevelopmentprojects inprogress/assetsunderconstruction 1,769 36,333 Depreciated/amortisedover 5years 10-25years 3-8years 3-8years

2008/09 Costat01.10.2008 7,426 77,513 67,104 25,640 Additionsfortheyear 1,893 17,619 4,996 1,692 Disposalsfortheyear -497 - -43,246 -3,907

Costat30.09.2009 8,822 95,132 28,854 23,425

Depreciation/amortisation at01.10.2008 1,601 29,467 63,336 22,268 Disposalsfortheyear -497 - -37,917 -3,816 Depreciation/amortisationfortheyear 1,048 190 1,034 1,648 Impairmentfortheyear 474 - - -

Depreciation/amortisation at30.09.2009 2,626 29,657 26,453 20,100

Carryingamountat30.09.2009 6,196 65,475 2,401 3,325

Thereofdevelopmentprojects inprogress/assetsunderconstruction 2,434 53,951 Depreciated/amortisedover 5 years 10-25 years 3-8 years 3-8 years

In2008/09,thegroupcarriedoutanimpairmenttestofthecarryingamountofrecogniseddevelopmentprojectsinprogressandforthatpurposecomparedtheprogressofprojectdevelopmentintheformofcostsincurredandresultswithprojectandbusinessplansapproved.Againstthisbackground,therecoverableamountisdeemedtobehigherthanthecarryingamount.Aspartoftherelocationofthedyefactory,adjust-mentsweremadetotheregisterofnon-currentassets,withtheoutcomethatequipmentnolongerinuseandwrittendowntoDKK0arederecognisedfromtheregisterofnon-currentassets.


30


Note Parent company

DKK‘000 2008/09 2007/08

11 Investments in subsidiaries Costat01.10. 35,419 35,419 Additionsfortheyear 1,000 0

Costat30.09. 36,419 35,419

Registered Ownership Company Profit/loss Profit/loss Name office interest capital Equity beforetax fortheyear DKK‘000 DKK‘000 DKK‘000 DKK‘000

GabrielA/S Aalborg 100% 25,500 54,155 1,553 1,145 GabrielInnovationA/S Aalborg 100% 1,000 1,001 1 1 Sellgren-TekstiiliOY Finland 100% 59 59 0 0 Gabriel(Tianjin) China 100% 1,240 882 -78 -78

56,097 1,476 1,068

Consolidated DKK‘000 2008/09 2007/0812 Investments in associates Costat01.10. 11,553 11,553

Costat30.09. 11,553 11,553

Adjustmentsat01.10. -1,152 674 Shareofprofitfortheyear 248 -478 Intra-groupprofit -821 -

Adjustmentsat30.09. -1,725 -1,152

Carryingamountat30.09. 9,828 10,401

Gabriel‘s share Registered Owner- Profitfor Profitfor Name office ship Revenue theyear Assets Liabilities Equity theyear interest DKK‘000 DKK‘000 DKK‘000 DKK‘000 DKK‘000 DKK‘000

ScandyeUAB Lithuania 40% 20,494 790 47,456 36,520 4,374 316 Valueadjustments,property 1,370 -68 Intra-groupprofit -821 Goodwillat30.09.2009 4,905 0

Carryingamountat30September2009 9,828 248

31

Note Consolidated

DKK‘000 2008/09 2007/08

13 Amount owed by associates Costat01.10. 2,227 2,230 Additions 7,287 180 Disposals -256 -183


Thegrossreceivableisspecifiedasfollows: Duewithin1year 1,500 348 Duewithin1-5years 6,160 1,755 Dueafter5years 3,638 437 Unearnedfuturefinancingincome -2,040 -313

Totalreceivable 9,258 2,227

Thenetreceivableisspecifiedasfollows: Duewithin1year 1,021 247 Duewithin1-5years 4,864 1,634 Dueafter5years 3,373 346


ThereceivableisattributabletofinanceleasingofproductiveequipmenttoScandyeUAB.Attheendoftheleasetermof5-8years,thelesseehastheoptionofacquiringtheproductiveequipment.Theassetsleasedouthavebeenprovidedassecurityforthecompany‘sreceivables.

14 Other receivables Costat01.10. 1,100 - Additions 412 1,100 Disposals - -


Thegrossreceivablearespecifiedasfollows: Duewithin1year 276 166 Duewithin1-5years 1,102 1,066 Dueafter5years 500 - Unearnedfuturefinancingincome -366 -132


Thenetreceivableisspecifiedasfollows: Duewithin1year 175 121 Duewithin1-5years 837 979 Dueafter5years 500 -


Thereceivablearisesfromfinanceleasingofproductiveequipmentandloantoaco-operator.


32



DKK‘000 2008/09 2007/08 2008/09 2007/08

15 Securities Costat01.10. - - - - Additionsfortheyear 32,505 - 32,505 -

Costat30.09. 32,505 - 32,505 -

Adjustmentat01.01. - - - - Adjustmentfortheyear 12 - 12 -

Adjustmentsat30.09. 12 - 12 -

Carryingamountat30.09. 32,517 - 32,517 -

Theinvestmentportfoliocomprisesfixed-interest,Danishmortgagebonds.

16 Inventories Rawmaterialsandconsumables 10,089 10,453 - - Workinprogress 5,610 8,084 - - Finishedgoodsandgoodsforresale 22,364 24,387 - -

38,063 42,924 - -

17 Receivables Tradereceivables 22,064 33,106 - - Amountowedbysubsidiary - - 6,741 14,404 Otherreceivables 4,448 3,728 1,517 2,662 Corporationtaxreceivable 2,052 - 2,052 -

28,564 36,834 10,310 17,066

Creditrisksvastlydependonthehomecountryofthedebtor.Basedonthegroup‘sinternalcreditratingpro-ceduresandexternalcreditrating,receivablesnotsubjecttoanywrite-downaredeemedtoholdhighcredit-worthinessandtoposealowriskofloss,seealsonote22forinformationoncreditrisks.

Tradereceivablesofthegrouparebrokendownasfollowsongeographicalareas:

2008/09 2007/08

Scandinavia 9,287 15,745 EU 10,617 14,437 Othercountries 2,160 2,924

22,064 33,106

Thegroup‘stradereceivablesat30September2009includereceivablesofDKK1,015thousand(2007/08:DKK528thousand),whichhavebeenwrittendowntoDKK604thousand,basedonanindividualassess-ment(2007/08:DKK340thousand).OtherexternalcostsincludebaddebtlossesofDKK583thousand(2007/08:DKK560thousand).Write-downoftradereceivablesisduetocustomers‘bankruptciesortheiranticipatedpaymentdefault.

33

Consolidated

DKK‘000 2008/09 2007/08

Individuallywritten-downreceivablesarebrokendownasfollowsongeographicalareas:

Scandinavia 110 18 EU 115 118 Othercountries 379 204

604 340

Tradereceivablesdueat30September2008,butnotwrittendown,wererecognisedasfollows:

Maturity: Upto30days 2,278 5,108 Between30and90days 108 1,460 Morethan90days 153 465

2,539 7,033

Interestincomearisingfromreceivableswrittendownisnotrecognised.18 Research and development costs Thecorrelationbetweenresearchanddevelopmentcostsincurredandexpensedisspecifiedasfollows:

Researchanddevelopmentcosts incurred 6,750 9,745 Developmentcostsrecognisedas intangibleassets -1,893 -1,995 Amortisationandimpairmentof developmentprojects 1,522 1,264

Researchanddevelopmentcosts fortheyearrecognisedintheincome statement 6,379 9,014

19 Share capital Thesharecapitalcomprises2,100,000sharesofDKK20each. Marketprice Percentageof Treasury shares Number Nominalvalue Cost at30.09.09 sharecapital Portfolioat01.10.08 196,625 3,933 5,612 12,977 9.4% Disposal/purchase 13,375 268 761 883 0.6%

Portfolioat30.09.09 210,000 4,201 6,373 13,860 10.0%

Capital managementThegroup‘sprimaryoperationscontinuouslygeneratehighcashflowsensuringsoundcapitalresources.Intheyearunderreview,GabrielinvestedfurtherinanewinnovationcentreandrefurbishedotherpremisesofthebuildingcomplexlocatedincentralAalborg.Allprojectsareexpectedtobefinalisedatthebeginningofthe2009/10financialyear.InMay2009,thegroupchosetoraiseamortgageloanofDKK43.5milliontofinancetheconstructionprojectandtostrengthenthegroup‘scashresources.Mostoftheproceeds,equiva-lenttoDKK32.5million,wereinvestedinDanishmortgagebonds.


Note

17cont.

34


Thegroupregularlyassessestheneedforadjustingitscapitalstructuretoholdtherequiredhigherreturnonequityupagainstthehigherdegreeofuncertaintysurroundingexternalfinancing.Ahighequityratiohasal-waysbeenatoppriorityofGabrielinordertoensureplentyofroomformanoeuvre.Asaconsequenceoftheraisingofthemortgageloan,theequityratiowasreducedto59%asagainst79%lastyear.Duringthepastyears,theequityratiohasaccountedfor75-79%.Furthermore,reducingfundstiedupisconstantlyonthegroup‘sagenda,contributingtothehighcashflowsfromoperatingactivities.

ROICtargetedataminimumof15%hasrepresented17-23%duringthepastyears.Duetotheeconomicdownturn,Gabrielfailedtomeetthetarget,reportingROICof1.4%.

Inrecentyears,Gabrielhasdistributeddividendstoitsshareholders,equivalenttoapayoutratioofapprox.50%eachyear.Withthisgesture,Gabrieldesirestoprovideitsshareholderswithareturnontheirinvestmentwhilemaintaininganappropriateequityleveltoensurethecompany‘sfutureoperations.Owingtothemodestprofit,theSupervisoryBoardproposesthatnodividendsbedistributedfor2008/09.

Againstthisbackground,thepresentcapitalresourcesaredeemedadequateinthepresenteconomicclimate.

Consolidated Parent company DKK‘000 2008/09 2007/08 2008/09 2007/0820 Deferred tax Deferredtaxat01.10. 4,104 3,202 1,875 1,076 Deferredtaxfortheyear 405 902 203 799

Deferredtaxat30.09. 4,509 4,104 2,078 1,875

Deferredtaxisincumbenton: Intangibleassets 1,549 1,456 - - Landandbuildings 2,824 1,875 2,824 1,875 Plantandmachinery,etc. 1,599 612 - - Currentassets -19 161 - - Taxlosses -1,422 - -746 -

4,509 4,104 2,078 1,875

21 Credit institutions Amountsowedtocreditinstitutionswererecognisedinthebalancesheetasfollows: Non-currentliabilities 41,030 - 41,030 - Currentliabilities 1,807 - 1,807 -

Totalcarryingamount 42,837 - 42,837 -

Fairvalue 43,212 - 43,212 -

Note

19cont.

35

Consolidated Parent company

DKK‘000 2008/09 2007/08 2008/09 2007/08 Debtfallsdueasfollows: 0-1year 1,807 - 1,807 - 1-5years 7,666 - 7,666 - >5years 33,364 - 33,364 -

Grosspaymentsfalldueasfollows: 0-1year 2,578 - 2,578 - 1-5year 10,156 - 10,156 - >5year 38,831 - 38,831 -

Theloanisafloating-ratemortgageloaninEUR(F1)subjecttoannualadjustment.Thecurrentlevelofinterestis2.3%p.a.withtheprincipalaccountingforEUR5,920thousand.

22 Financial risksPromptedbyitsoperations,investmentsandfinancing,thegroupisexposedtoanumberoffinancialrisks,includingmarketrisks(currencyrisks,interestraterisksandrisksrelatingtorawmaterials),creditrisksandliquidityrisks.

Gabrielpolicyisnottoengageinactivespeculationinfinancialrisks.Riskmanagementonlycoversrisksarisingdirectlyfromthegroup‘soperations,investmentsandfinancing.

Managementmonitorsthegroup‘sriskconcentrationbrokendownbycustomers,geographicalareas,cur-rencies,etc.Moreover,Managementmonitorswhethertherisksofthegrouparecorrelated,andwhetherthegroup‘sriskconcentrationhasundergoneanychanges.

Thegroup‘sriskexposureandriskmanagementremainedunchangedfrom2007/08.

Referenceismadetothebalancesheetforaspecificationofthedifferentcategoriesoffinancialassetsandliabilities.Thefairvalueoffinancialassetsandliabilitiesisinlinewithcarryingamount–apartfromamountsowedtocreditinstitutions,seenote21.

Currency risks Thegroup‘sforeignexchangepositionsinDanishkronerarespecifiedasfollowsat30September2009:

Bankloans DKK‘000 Trade Tradepayables/ Hedgedby Currency receivables creditinstitutions forwardcontracts Netposition

DKK 6,782 -7,582 - -800

EUR 11,307 -54,953 - -43,646 SEK 1,644 277 - 1,921 NOK 408 118 -1,373 -847 Othercurrencies 1,923 312 - 2,235

Abroad 15,282 -54,246 -1,373 -40,337

Forwardcontractsfallduewithinonemonth.

Note

21cont.


36


Thegroup‘sforeignexchangepositionsinDanishkronerarespecifiedasfollowsat30September2008:

DKK‘000 Trade Hedgedby Currency receivables/cash Tradepayables forwardcontracts Netposition

DKK 4,172 4,758 - -586

EUR 19,295 8,116 - 11,179 SEK 5,233 31 - 5,202 NOK 2,105 60 - 2,045 Othercurrencies 2,234 180 - 2,054

Abroad 28,867 8,387 - 20,480

Thegrouphedgescurrencyrisksconsideringprojectedfuturecashflowsandprojectedfutureexchangeratemovements.ThemajorityofsalesinEuropearesettledinthecustomer‘scurrency,whiletheeuroisprimarilyusedforsettlementwithotherinternationalcustomers.Currencyrisksgeneratedbyincomeareonlyofalimitedscale,asthevastpartofincomeisinvoicedintheScandinaviancurrenciesoreuros.ThevastpartofpurchasesissettledinDanishkroneroreuros.

Anychangesintheexchangeratesat30September2009arenotdeemedtohaveanymaterialimpactonresultsorequityasresultofthelowcurrencyexposureat30September2009.

Currencyexposurefor2009/10is,inallmaterialrespects,deemedtoremainunchangedfrom2008/09.

Liquidity and interest rate risksThroughoutmanyyears,thegrouphasmanagedtogeneratepositivecashflowsandhas,therefore,notreliedonexternalfinancing.InMay2009,thecompanychoseraiseamortgageloanofDKK43.5milliontofinanceaconstructionprojectandtostrengthenthegroup‘scashresources.Mostoftheproceeds,equivalenttoDKK32.5million,areinvestedinDanishmortgagebonds.Atyearend2008/09,Gabriel‘sbankloansrepresentedDKK5.6million.Inaddition,GabrielhasundrawnbankcreditfacilitiesandaportfoliooftreasuryshareswithacurrentmarketpriceofDKK14million.Againstthisbackground,thegroupisdeemedtohavesufficientliquid-itytofinancefutureoperationsandinvestments.

Thegroup‘sbankloansofDKK5.6millionareopenbusinesscredits,whilethemortgageloanisanadjustable-rateloandenominatedineurossubjecttoannualadjustment.Thebondportfolioconsistsprimarilyofshort-datedbondsdenominatedinDanishkroner,adjustinginteresttothegeneralsocietalinterestlevel.Groupre-ceivablescarryafixedinterestrateduringtheirentirelifeaslaiddownbycontract.Accordingly,adroporanincreaseinthemarketrateofinterestofonepercentagepointisgenerallynotdeemedtomateriallyaffectcon-solidatedresults.

Risks relating to raw materialsThegrouptypicallyentersintoco-operativeagreementswithitsmostimportantsupplierstoensurereliabilityofdeliveryandtofixprices.Note24disclosesthatGabrielhasconcludedpurchaseagreementsforrawmate-rialsuppliesin2009/10.Thegroupisnotexposedtoanymajorpricerisksarisingfromtheuseofrawmaterials.

Credit risks Thecreditriskpolicyofthegroupensuresthatallmajorcustomersandco-operativepartnersareregularlycreditrated.Themanagementofcreditrisksisbasedoninternalcreditlimitsforcustomersandcounterpar-ties.Triggeredbytheimminentfinancialcrisisfromtheoutsetof2008/09,thegroupintensifieditsfocusontheapprovalofcreditlinesforcustomersaswellasonthemanagementandmonitoringofcustomers.

Note

22cont.

37

Grouptradereceivablesaredistributedonnumerouscustomers,countriesandmarkets,ensuringahighde-greeofriskdiversification.Basedonthegroup‘sinternalcreditprocedures,thecreditworthinessofgroupre-ceivablesprimarilydependsonthehomecountryofthedebtors.ThecreditworthinessofdebtorsfromScandi-naviaandtheEUareusuallyhigherthanthatofdebtorsfromothercountries.

Thegroupaimsatreducingriskthroughefficientmonitoringandfollow-upandcreditinsuranceofmajor,foreignanddomesticreceivablesortheprovisionofalternativesecurity.Creditinsurancehasbeentakenoutforallmajorforeignanddomesticreceivablesat30September2009.Groupreceivablesareusuallydueforpaymentnolaterthanthreemonthsafterdelivery.Thegrouphasapastrecordofminorbaddebtsandisusu-allyexposedtoonlyalimitedriskofmajorlosses.Werefertonote17.

Thegrouprecognisedproductiveequipmentfortheassociate,ScandyeUAB,andanotherco-operativepart-nerasinvestments.Gabrielhasbeenprovidedsecurityintheleasedequipmentandwithaguaranteefortheamount.Thelesseesmayperformthecontractsattheirresidualvalues.

23 Operating leasesAt30September2009,thegroupheldoperatingleaseswitharesidualleaseliabilityofDKK1,203thousand.Ofthisamount,DKK638thousandfallsduewithinoneyear,whiletherestfallsduewithinonetothreeyears.

24 Contingent liabilities and securityTheparentcompanyhasissuedaletterofsubordinationtothebankersofasubsidiarycoveringthesubsidia-ry‘sbankloansatanytime.Thesubsidiary,GabrielA/S,hasissuedaguaranteeofDKK6,500thousandtoScandyeUAB‘sbankersinLithuaniaassecurityforScandyeUAB‘sbankbusiness.Aspartofusualgroupoperations,thegrouphasenteredintopurchaseagreementsforfuturerawmaterialsuppliesatanamountofDKK11,400thousandtoensurerawmaterialsuppliesin2009/10.Claimsandwarrantiesdonotrepresentamajorexpenseofthegroup.ThisistheresultofthecertificationsfortheISO9001QualityManagementStandardsince1991andfortheEnvironmentalManagementStandardISO14001since1996.

Assecurityforamountsowedtocreditinstitutions,GabrielhasprovidedsecurityatanamountofDKK44,100thousandinlandandbuildings.ThecarryingamountoflandandbuildingswereDKK65,475thousandat30September2009,whileamountsowedtocreditinstitutionsreachedDKK42,837thousand.

25 Transactions with group companies, major shareholders, Executive and Supervisory Boards Theparentcompany‘srelatedpartiescomprisesubsidiariesaswellastheirExecutiveandSupervisoryBoards.Further,relatedpartiescomprisecompaniesinwhichtheabovepersonshavesubstantialinterests.GabrielHoldingA/Shasnorelatedpartiesexercisingcontrol.

Tradingwithgroupenterprisesisspecifiedasfollows:

Parent company DKK‘000 2008/09 2007/08

Rentfromgroupenterprises 2,981 2,981 Interest,etc.fromgroupenterprises 163 1,529 Dividendsfromgroupenterprises 10,000 10,000

Transactionswithgroupenterpriseswereeliminatedintheconsolidatedfinancialstatementsassetoutintheaccountingpolicies.

Note

22cont.


38

RelatedpartiescompriseassociatesoverwhichGabrielexercisessignificantinfluence.

Tradingwiththeassociate,ScandyeUAB,comprisedthefollowing: Parent company DKK‘000 2008/09 2007/08

Purchasesfromassociates 13,575 4,937 Interest,etc.fromgroupenterprises 161 155

Apartfromexecutiveremunerationdisclosedinnote4,thegroupdidnotengageinanytransactionswiththeSupervisoryBoard,ExecutiveBoard,executiveemployees,majorshareholdersandotherrelatedpartiesintheyearunderreview.

26 Accounting estimates and judgementsThecarryingamountofcertainassetsandliabilitiesisstatedonthebasisofManagement‘sestimatedimpactoffutureeventsonthevalueoftheseassetsandliabilitiesatthebalancesheetdate.Estimatesimportanttothefi-nancialreportingincludethecalculationofprovisionsforobsolescence,write-downofbaddebts,depreciation/amortisationandimpairmentaswellascontingentliabilities.

27 New financial reporting regulations IASBhasissuedthefollowingnewfinancialreportingregulations(IASandIFRS)andIFRICs,whicharenotmandatoryforadoptionbyGabrielHoldingA/Sinthepreparationoftheannualreportfor2008/09:IAS1,23and27,IFRS2,3,8andIFRIC14-17.

GabrielHoldingA/SexpectstoimplementthenewstandardsandIFRICsupontheirmandatoryadoptioninthe2009/10financialyear.ThenewstandardsandIFRICsarenotdeemedtoimpactonGabrielHoldingA/S‘futurefinancialreporting.IFRS8“Operatingsegments“willimpactonsegmentreporting,whileIAS1“PresentationofFinancialStatements“willaffectthepresentationoftheprimarystatementsfor2009/10.

28 ACCOUNTING POLICIES

GabrielHoldingA/SisalimitedliabilitycompanydomiciledinDenmark.Theannualreportfortheperiod1October2008-30September2009comprisestheconsolidatedfinancialstatementsofGabrielHoldingA/Sanditssubsidiaries(group)andseparateparentcompanyfinancialstatements.TheannualreportofGabrielHoldingA/Sfor2008/09hasbeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)asadoptedbytheEUandadditionalDanishdisclosurerequirementsforconsolidatedfinancialstatementsandparentcompanyfinancialstatementsoflistedcompanies,seetheNASDAQOMXCopenhagenA/SdisclosurerequirementsforconsolidatedfinancialstatementsandparentcompanyfinancialstatementsoflistedcompaniesandthestatutoryorderontheadoptionofIFRSbyenterpri-sessubjecttotheDanishFinancialStatementsActissuedpursuanttotheDanishFinancialStatementsAct.

Furthermore,theannualreportcomplieswithInternationalFinancialReportingStandardsissuedbytheIASB.

TheannualreportispresentedinDKKroundedtothenearestDKK1,000.

Witheffectfrom1October2008,GabrielHoldingA/ShasimplementedIFRICs11-14,whichdidnotaffecttherecognitionandmeasurementintheannualreport.Accordingly,theaccountingpoliciesareconsistentwiththoseoflastyear.

Note

25cont.


39

Consolidated financial statements TheconsolidatedfinancialstatementscomprisetheparentcompanyGabrielHoldingA/SandsubsidiariesinwhichGabrielHoldingA/Sexercisescontrol,i.e.thepowertogovernthefinancialandoperatingpoliciessoastoobtainbenefitsfromitsactivities.Controlisobtainedwhenthecompanydirectlyorindirectlyholdsmorethan50%ofthevotingrightsinthesubsidiaryorwhichit,insomeotherway,controls.

Enterprisesoverwhichthegroupexercisessignificantinfluence,butwhichitdoesnotcontrol,areconsideredassociates.Significantinfluenceisgenerallyobtainedbydirectorindirectownershiporcontrolofmorethan20%ofthevotingrightsbutlessthan50%.

AstowhetherGabrielHoldingA/Sexercisescontrolorsignificantinfluenceisdeterminedonthebasisofthepotentialvotingrightsexercisableatthebalancesheetdate.

Theconsolidatedfinancialstatementscomprisetheparentcompany,GabrielHoldingA/S,andthesubsidiari-es,GabrielA/S,GabrielInnovationA/S,Gabriel(Tianjin)InternationalTradingCo.LtdandSellgrenTekstiiliOY2005(inliquidation).ScandyeUABisconsideredanassociateandwasrecognisedasaninvestmentinasso-ciatesintheannualreport.

Theconsolidatedfinancialstatementshavebeenpreparedasaconsolidationoftheparentcompany‘sandtheindividualsubsidiariesfinancialstatementspreparedaccordingtothegroupaccountingpolicies.Onconsolida-tion,intra-groupincomeandexpenses,shareholdings,intra-groupbalancesanddividends,andrealisedandun-realisedgainsonintra-grouptransactionsareeliminated.Unrealisedgainsontransactionswithassociatesareeliminatedinproportiontothegroup‘sownershipshareoftheenterprise.Unrealisedlossesareeliminatedinthesamewayasunrealisedgainstotheextentthatimpairmenthasnottakenplace.

Foreign currency translation Atinitialrecognition,transactionsdenominatedinforeigncurrenciesaretranslatedtothefunctionalcurrencyattheexchangeratesrulingatthetransactiondate.Foreignexchangedifferencesarisingbetweentheexchangeratesatthetransactiondateandatthedateofpaymentarerecognisedintheincomestatementasfinancialin-comeorfinancialexpenses.

Receivables,payablesandothermonetaryitemsdenominatedinforeigncurrenciesaretranslatedtothefunc-tionalcurrencyattheexchangeratesatthebalancesheetdate.Thedifferencebetweentheexchangeratesatthebalancesheetdateandatthedateatwhichthereceivableorpayablearoseorwasrecognisedinthelatestannualreportisrecognisedintheincomestatementasfinancialincomeorfinancialexpenses.

OnrecognitionintheconsolidatedfinancialstatementsofsubsidiarieswithanotherfunctionalcurrencythanDKK,theincomestatementsaretranslatedattheexchangeratesatthetransactiondateandthebalancesheetitemsaretranslatedattheexchangeratesatthebalancesheetdate.Anaverageexchangerateforthemonthisusedastheexchangerateatthetransactiondatetotheextentthatthisdoesnotsignificantlydistortthepresen-tationoftheunderlyingtransactions.

Foreignexchangedifferencesarisingonthetranslationoftheshareoftheopeningbalanceofequityoftheseenterprisesattheexchangeratesatthebalancesheetdate,andontranslationoftheincomestatementsfromtheexchangeratesatthetransactiondatetotheexchangeratesatthebalancesheetdatearerecogniseddi-rectlyinaseparatetranslationreserveinequity.

OnrecognitionintheconsolidatedfinancialstatementsofassociateswithadifferentfunctionalcurrencythanDKK,theshareoftheprofit/lossfortheyearistranslatedataverageexchangerates,andtheshareofequityincludinggoodwillistranslatedattheexchangeratesatthebalancesheetdate.Foreignexchangedifferencesarisingontranslationoftheopeningequityofforeignassociatesattheexchangeratesatthebalancesheetdateandontranslationoftheshareofprofit/lossfortheyearfromaverageexchangeratestotheexchangeratesatthebalancesheetdatearerecogniseddirectlyinaseparatetranslationreserveinequity.

Note

28cont.


40


Derivative financial instruments Derivativefinancialinstrumentsarerecognisedandmeasuredonthebalancesheetatfairvalue.Positiveandne-gativefairvaluesofderivativefinancialinstrumentsareincludedinotherreceivablesandpayables,respectively.

Forderivativefinancialinstrumentsthatdonotqualifyforhedgeaccounting,changesinfairvaluearerecogni-sedintheincomestatementasfinancialincomeorfinancialexpenses.

INCOME STATEMENT

RevenueRevenuefromthesaleofgoodsforresaleandfinishedgoodsisrecognisedintheincomestatementprovidedthatdeliveryandtransferofrisktothebuyerhastakenplacebeforeyearendandthattheincomecanbereli-ablymeasuredandisexpectedtobereceived.RevenueismeasuredexVAT,taxesanddiscountsinrelationtothesale.

Other operating incomeOtheroperatingincomecompriseitemssecondarytotheprincipalactivitiesoftheenterprise,includingrentalincome,grantsandgainsonthedisposalofnon-currentassets.

Governmentgrantsfortheacquisitionofassetsanddevelopmentprojectsarerecognisedasdeferredincomeonthebalancesheetandsubsequentlyasotheroperatingincomeintheincomestatementconcurrentlywiththedepreciation/amortisationoftheasset.

Cost of sales Costofsalescomprisecostsincurredingeneratingrevenuefortheyear,includingdirectandindirectcostsofrawmaterials,consumables,goodsforresale,power,etc.

Other external costsSales,distribution,maintenance,premisesandadministrationaccountforthevastpartofotherexternalcosts.

Separate items Separateitemscomprisematerialone-offitemstypicallynotrecognisedinpreviousyearsandnotexpectedtoberecognisedinthecomingfinancialyearsand/orextraordinaryitemsnotpartofthegroup‘sordinaryactivities.

Profit/loss from investments in associates recognised in the consolidated financial statements Theproportionateshareoftheresultsaftertaxoftheindividualassociatesisrecognisedintheconsolidatedincomestatementafterfulleliminationoftheproportionateshareofintra-groupprofits/losses.

Financial income and expensesFinancialincomeandexpensescompriseinterestincomeandexpense,gainsandlossesonsecuritiesandwrite-downofsecurities,payablesandtransactionsdenominatedinforeigncurrencies,amortisationoffinan-cialassetsandliabilitiesaswellassurchargesandrefundsundertheon-accounttaxscheme,etc.Further-more,realisedandunrealisedgainsandlossesonderivativefinancialinstrumentswhicharenotdesignatedashedgingarrangementsareincluded.

Dividendsreceivedfrominvestmentsinsubsidiariesandassociatesarerecognisedintheparentcompanyin-comestatementinthefinancialyearwhenthedividendsaredeclared.Totheextentthatdistributeddividendsexceedaccumulatedearningsaftertheacquisitiondate,thedividendsare,however,recognisedasawrite-downofthecostoftheinvestment.

Tax on profit/loss for the yearGabrielHoldingA/Sisjointlytaxedwiththesubsidiaries,GabrielA/SandGabrielInnovationA/S.ThecurrentDanishcorporationtaxisallocatedbetweenthejointlytaxedDanishcompaniesinproportiontotheirtaxable

Note

28cont.

41

income(fullabsorptionwithdeductionfortaxlosses).Thejointlytaxedcompaniesaretaxedundertheon-accounttaxscheme.

Taxfortheyearcomprisescurrenttaxandchangesindeferredtaxfortheyear.Thetaxexpenserelatingtotheprofit/lossfortheyearisrecognisedintheincomestatement,andthetaxexpenserelatingtochangesdirectlyrecognisedinequityisrecogniseddirectlyinequity.

BALANCE SHEET

Development costs Developmentcostscomprisesalaries,amortisationandothercostsdirectlyorindirectlyattributabletothecompany‘sdevelopmentactivities.

Developmentprojectsthatareclearlydefinedandidentifiable,wherethetechnicalutilisationdegree,sufficientresourcesandapotentialfuturemarketordevelopmentopportunitiesinthecompanyisevidenced,andwherethecompanyintendstoproduce,marketorusetheproject,arerecognisedasintangibleassetsprovidedthatthecostcanbemeasuredreliablyandthatthereissufficientassurancethatfutureearningscancoverproduc-tionanddistributioncosts,administrativeexpensesanddevelopmentcosts.Otherdevelopmentcostsarerec-ognisedintheincomestatementasincurred.

Capitaliseddevelopmentcostsaremeasuredatthelowerofcostlessaccumulatedamortisationandimpair-mentlossesandrecoverableamount.

Followingthecompletionofthedevelopmentwork,developmentcostsareamortisedonastraight-linebasisovertheestimatedusefullife.Theamortisationperiodisusuallyfiveyears.

Property, plant and equipment Landandbuildings,plantandmachineryandfixturesandfittings,otherplantandequipmentaremeasuredatcostlessaccumulateddepreciationandimpairment.

Costcomprisesthepurchasepriceandanycostsdirectlyattributabletotheacquisitionuntilthedateonwhichtheassetisavailableforuse.Whereindividualcomponentsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitems,whicharedepreciatedseparately.

Subsequentcostsarisingfrom,forinstance,thereplacementofcomponentsofproperty,plantandequipmentarerecognisedinthecarryingamountoftherelevantassetwhenitisprobablethatfutureeconomicbenefitswillflowtothegroup.Thecomponentsreplacedwillbederecognisedonthebalancesheet,andthecarryingamountwillbetransferredtotheincomestatement.Allotherordinarycostsofrepairandmaintenancewillberecognisedintheincomestatementasincurred.

Depreciationisprovidedonastraight-linebasisovertheexpectedusefullivesoftheassets/components.Theexpectedusefullivesareasfollows:

Buildings 10-25yearsPlantandmachinery 3-8yearsFixturesandfittings,otherplantandequipment 3-8years

Landisnotdepreciated.

Thebasisofdepreciationiscalculatedonthebasisoftheresidualvaluelessimpairmentlosses.Theresidualvalueisdeterminedattheacquisitiondateandreassessedannually.Iftheresidualvalueexceedsthecarryingamount,depreciationisdiscontinued.Whenthedepreciationperiodortheresidualvalueischanged,theeffectondepreciationisrecognisedprospectivelyasachangeinaccountingestimates.

Note

28cont.


42

Gainsandlossesonthedisposalofproperty,plantandequipmentaredeterminedasthedifferencebetweenthesalespricelessdisposalcostsandthecarryingamountatthedateofdisposal.Thegainsorlossesarerecognisedintheincomestatementasotheroperatingincomeorotheroperatingcosts,respectively.

Impairment of non-current assets Thecarryingamountofnon-currentassetsissubjecttoanannualimpairmenttest.Whenthereisanindicationthatassetsmaybeimpaired,therecoverableamountoftheassetisdetermined.Therecoverableamountisthehigherofanasset‘snetsellingpricelessanticipateddisposalcostsanditsvalueinuse.Thevalueinuseiscal-culatedasthenetpresentvalueofforecastfuturecashflowsfromthecash-generatingunittowhichtheassetbelongs.

Animpairmentlossisrecognisedifthecarryingamountofthenetassetsofacash-generatingunit,respectively,exceedstherecoverableamountoftheassets

Investments in associates in the consolidated financial statements Investmentsinassociatesaremeasuredaccordingtotheequitymethod.

Investmentsinassociatesaremeasuredattheproportionateshareoftheenterprises‘netassetvaluescalcu-latedinaccordancewiththegroup‘saccountingpoliciesminusorplustheproportionateshareofunrealisedintra-groupprofitsandlossesandplusorminusthecarryingamountofgoodwill.

Amountsowedbyassociatesaremeasuredatamortisedcost.Write-downismadeforbaddebtlosses.

Investments in subsidiaries in the parent company financial statementsInvestmentsinsubsidiariesaremeasuredatcost.Wheretherecoverableamountislowerthancost,invest-mentsarewrittendowntothislowervalue.Costisreducedbydividendsreceivedthatexceedaccumulatedearningsaftertheacquisitiondate.

Amounts owed by associatesAmountsowedbyassociatesareattributabletoleasecontractsforassetsofwhichthegroupistheowner,butofwhichallmajorrisksandmaintenanceliabilitiesareincumbentontheassociate.Financeleasesarerec-ognisedonthebalancesheetatthenetpresentvalueoffutureleasepayments.Forthecalculationofthenetpresentvalue,theinterestrateimplicitintheleaseisused.

Securities Sharesandbondsnotincludedinthegroup‘stradingportfolio(available-for-sale)arerecognisedasnon-cur-rentassetsatcostatthetradedateandaremeasuredatfairvaluecorrespondingtothemarketprice.Unrea-lisedvalueadjustmentsarerecogniseddirectlyinequityexceptforforeignexchangeadjustmentsofbondsdenominatedinforeigncurrencies,whicharerecognisedintheincomestatementasfinancialincomeorfinan-cialexpenses.Onrealisation,theaccumulatedvalueadjustmentrecognisedinequityistransferredtofinancialincomeorfinancialexpensesintheincomestatement.

Inventories InventoriesaremeasuredatcostinaccordancewiththeFIFOmethod.Wherethenetrealisablevalueislowerthancost,inventoriesarewrittendowntothislowervalue.

Goodsforresale,rawmaterialsaswellasconsumablesaremeasuredatcost,comprisingpurchasepriceplusdeliverycosts.

Finishedgoodsandworkinprogressaremeasuredatcost,comprisingthecostofrawmaterials,consuma-bles,directwages/salariesandindirectproductionoverheads.Indirectproductionoverheadscompriseindi-rectmaterials,wages/salariesandmaintenanceaswellasdepreciationofproductiveequipment,buildingsandequipmentaswellasfactoryadministrationandmanagement.


Note

28cont.

Thenetrealisablevalueofinventoriesiscalculatedasthesalesamountlesscostsofcompletionandcostsnecessarytomakethesaleandisdeterminedtakingintoaccountmarketability,obsolescenceanddevelop-mentinexpectedsalesprice.

Receivables Receivablesaremeasuredatamortisedcost.Write-downismadeforbaddebtlosseswhenthereisanobjec-tiveindicationofanimpairmentloss.Insuchcases,write-downismadeindividuallyforeachspecificreceivable.

Write-downisdeterminedasthedifferencebetweenthecarryingamountandthenetpresentvalueofprojectedcashflows,includingthenetrealisablevalueofanysecurity.

DividendsProposeddividendsarerecognisedasaliabilityatthedateonwhichtheyareadoptedattheannualgeneralmeeting(declarationdate).Theexpecteddividendpaymentfortheyearisdisclosedasaseparateitemunderequity.

Treasury shares Costofacquisitionof,considerationreceivedforanddividendsreceivedfromtreasurysharesarerecogniseddirectlyasretainedearningsinequity.Gainsandlossesondisposalarenotrecognisedintheincomestate-ment.

Translation reserve Thetranslationreserveintheconsolidatedfinancialstatementscomprisesforeignexchangedifferencesarisingontranslationoffinancialstatementsofforeignentitiesfromtheirfunctionalcurrenciesintothepresen-tationcurrencyusedbyGabrielHoldingA/S(Danishkroner).

Hedging reserveThehedgingreservecomprisesthecumulativenetchangeinthefairvalueofhedgingtransactionsthatqualifyforrecognitionasacashflowhedgeandwherethehedgedtransactionhasnotbeenrealised.

Reserve for fair value adjustment Reserveforfairvalueadjustmentcomprisesthecumulativechangeinthefairvalueoffinancialassetsavailableforsale.Thereserve,whichformspartofthecompany‘sdistributablereserves,iseliminatedandtransferredtotheincomestatementastheinvestmentissoldorwrittendown.

Corporation tax and deferred tax Currenttaxpayableandreceivableisrecognisedonthebalancesheetastaxcomputedonthetaxablein-comefortheyear,adjustedfortaxonthetaxableincomeofprioryearsandfortaxpaidonaccount.

Deferredtaxismeasuredusingthebalancesheetliabilitymethodonalltemporarydifferencesbetweenthecarryingamountandthetaxbaseofassetsandliabilities.Wherealternativetaxrulescanbeappliedtodeterminethetaxbase,deferredtaxismeasuredbasedontheplanneduseoftheassetorsettlementoftheliability,respectively.

Deferredtaxassetsarerecognisedattheexpectedvalueoftheirutilisation;eitherasaset-offagainsttaxonfutureincomeorasaset-offagainstdeferredtaxliabilitiesinthesamelegaltaxentityandjurisdiction.

Deferredtaxismeasuredaccordingtothetaxrulesandatthetaxratesapplicableatthebalancesheetdatewhenthedeferredtaxisexpectedtocrystalliseascurrenttax.Thechangeindeferredtaxasaresultofchan-gesintaxratesisrecognisedintheincomestatement.

43

Note

28cont.


44

Non-current liabilitiesAmountsowedtomortgagecreditinstitutions,etc.arerecognisedatthedateofborrowingatthenetpro-ceedsreceivedlesstransactioncostspaid.Insubsequentperiods,thefinancialliabilitiesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Accordingly,thedifferencebetweentheproceedsandthenominalvalueisrecognisedintheincomestatementunderfinancialexpensesoverthetermoftheloan.

Current liabilities Liabilitiescomprisingtradepayables,amountsowedtogroupenterprisesandotherpayablesaremeasuredatnominalvalue.

CASH FLOW STATEMENT

Thecashflowstatementshowsthecashflowsfromoperating,investingandfinancingactivitiesfortheyear,theyear‘schangesincashandcashequivalentsaswellasthecashandcashequivalentsatthebeginningandendoftheyear.

Cash flows from operating activities Cashflowsfromoperatingactivitiesarecalculatedastheshareoftheprofit/lossadjustedfornon-cashopera-tingitems,changesinworkingcapitalandcorporationtaxpaid.

Cash flows from investing activities Cashflowsfrominvestingactivitiescomprisepaymentsinconnectionwithacquisitionsanddisposalsofen-terprisesandactivitiesandofintangibleassets,property,plantandequipmentandothernon-currentassetsaswellastheacquisitionanddisposalofsecuritiesnotrecognisedascashandcashequivalents.

Cash flows from financing activities Cashflowsfromfinancingactivitiescomprisetheraisingofloans,repaymentofinterest-bearingdebt,acquisi-tionoftreasurysharesandpaymentofdividendstoshareholders.

Bank loans/cash and cash equivalents Theitemcomprisescashandbankloans(overdraftfacilities).

SEGMENT INFORMATION

TheGabrielGroupoperatesonlywithinonebusinesssegmentandonegeographicalsegment.

Thegroupcarriesonbusinessonlywithinonesegmentasallitsproductsarewithinthesegmentoffurnishingfabricsandrelatedtextileproducts.Theproductsaresoldtoleading,internationalmanufacturersandleadusersofupholsteredfurniture,seatsandupholsteredsurfaces.GabrielA/Sisinchargeofthevastnumberofactivities.Themanufacturingprocessesarepracticallyidenticalfortheindividualbusinessareas,andthesalesdivisionsservicethesametypeofcustomergroups.Inaddition,theproductdistributionchannelsarethesame.

Thegroupoperatesonlywithinonegeographicalsegment,astheeconomicandpoliticalclimates,activities,risksandcurrencyexposureonthegroup‘sprimarymarket,WesternEurope,remainundifferentiated.RevenuegeneratedbytheWesternEuropeanmarketsaccountsformorethan90%oftotalrevenue.

Note

28cont.


financial highlights for the group - gabriel · 2019. 3. 21. · prox. 50 selected key account...

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