Componenta - Company Announcement

Componenta’s Auditor’s Report for the financial period 1.1- 31.12.2015

Componenta Corporation Stock Exchange Release 11.3.2016 at 19.00

The Auditor of Componenta Corporation has today issued the following Auditor’s
Report for the financial period 1.1 - 31.12.2015. 

In addition to the standard format text the report includes an Emphasis of
Matter paragraph. 

“Auditor’s Report (Translation from the Finnish Original)

To the Annual General Meeting of Componenta Oyj

We have audited the accounting records, the financial statements, the report of
the Board of Directors and the administration of Componenta Oyj for the year
ended 31 December, 2015. The financial statements comprise the consolidated
statement of financial position, income statement, statement of comprehensive
income, statement of changes in equity and statement of cash flows, and notes
to the consolidated financial statements, as well as the parent company’s
balance sheet, income statement, cash flow statement and notes to the financial
statements. 

Responsibility of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the
preparation of consolidated financial statements that give a true and fair view
in accordance with International Financial Reporting Standards (IFRS) as
adopted by the EU, as well as for the preparation of financial statements and
the report of the Board of Directors that give a true and fair view in
accordance with the laws and regulations governing the preparation of the
financial statements and the report of the Board of Directors in Finland. The
Board of Directors is responsible for the appropriate arrangement of the
control of the company’s accounts and finances, and the Managing Director shall
see to it that the accounts of the company are in compliance with the law and
that its financial affairs have been arranged in a reliable manner. 

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statements, on the
consolidated financial statements and on the report of the Board of Directors
based on our audit. The Auditing Act requires that we comply with the
requirements of professional ethics. We conducted our audit in accordance with
good auditing practice in Finland. Good auditing practice requires that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and the report of the Board of Directors are free from
material misstatement, and whether the members of the Board of Directors of the
parent company or the Managing Director are guilty of an act or negligence
which may result in liability in damages towards the company or whether they
have violated the Limited Liability Companies Act or the articles of
association of the company. 

An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements and the report of the Board
of Directors. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement, whether due to
fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation of financial statements
and report of the Board of Directors that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the company’s
internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial
statements and the report of the Board of Directors. 

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. 

Opinion on the Consolidated Financial Statements

In our opinion, the consolidated financial statements give a true and fair view
of the financial position, financial performance, and cash flows of the group
in accordance with International Financial Reporting Standards (IFRS) as
adopted by the EU. 


Opinion on the Company’s Financial Statements and the Report of the Board of
Directors 

In our opinion, the financial statements and the report of the Board of
Directors give a true and fair view of both the consolidated and the parent
company’s financial performance and financial position in accordance with the
laws and regulations governing the preparation of the financial statements and
the report of the Board of Directors in Finland. The information in the report
of the Board of Directors is consistent with the information in the financial
statements. 

Emphasis of Matter

We draw attention to the accounting principles of the consolidated financial
statements, according to which the company’s financial performance has fallen
short of its targets due to poorer developments than expected in productivity,
high quality-related costs, and tight liquidity over a long period. According
to the accounting principles of the consolidated financial statements the
targeted cost savings have not been achieved as expected and the company’s
liquidity and working capital were tight at the end of 2015 and early in 2016.
As described in the accounting principles of the consolidated financial
statements, the net result for the period includes significant write-down
losses on non-current assets and deferred tax assets due to the impact of the
measures in the reorganisation of business operations arising from the strategy
being drawn up, and the inherent uncertainty factors relating to them. Company
also states in the accounting principles of the consolidated financial
statements that during the financial year it has not complied with certain
terms of the Nordic syndicated loan agreement and that the so called standstill
agreement with the parties of the syndicated loan is in force until the end of
April 2016. Failure to comply with certain terms of the syndicated loan
agreement and cross default terms have resulted in certain long-term borrowings
being classified to current liabilities in the company’s balance sheet. 

As described in more detail in the accounting principles of the consolidated
financial statements, the Board of Directors and Management consider that the
company is able to reorganize its business operations and the financing
arrangements during 2016 and to continue as a going concern. As such, the Board
of Directors and Management believe that going concern basis of presentation in
the financial statements is appropriate. In our opinion, the success of the
measures described above to reorganize business operations and the success of
the financing arrangements in a manner described in the accounting principles
to the consolidated financial statements are such uncertainties that may cast
significant doubt on the Company’s and its subsidiaries’ ability to continue as
a going concern. 

Our opinion is not qualified in respect of this matter.

Helsinki 11 March 2016

PricewaterhouseCoopers Oy
Authorised Public Accountants

Samuli Perälä
Authorised Public Accountant”



Helsinki, 11 March 2016

COMPONENTA CORPORATION


Markku Honkasalo
CFO



For more information, please contact:

Markku Honkasalo
CFO
tel. +358 10 403 2710



Componenta is a metal sector company with international operations and
production plants located in Finland, Turkey, the Netherlands and Sweden. The
net sales of Componenta were EUR 495 million in 2015 and its share is listed on
Nasdaq Helsinki. The Group employs approx. 4,250 people. Componenta specializes
in supplying cast and machined components and total solutions made of them to
its global customers, who are manufacturers of vehicles, machines and
equipment.