APC Logistics Germany, Zweigniederlassung der APC Logistics AB

APC Logistics Germany, Zweigniederlassung der APC Logistics AB

Düsseldorf

Befreiender Jahresabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

APC Logistics AB

Lidingö/Schwedden

AUDITOR'S REPORT

To the general meeting of the shareholders of APC Logistics AB corporate identity number 556634-1748

Report on the annual accounts

Opinions

We have audited the annual accounts of APC Logistics AB for the financial year 2023-01-01 - 2023-12-31.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of APC Logistics AB as of 31 December 2023 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of APC Logistics AB in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

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

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and that they give a fair presentation in accordance with the Annual Accounts Act. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

Auditor's responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform of significant audit findings during our audit, including any significant deficiencies in internal control that we identified.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts, we have also audited the administration of the Board of Directors and the Managing Director of APC Logistics AB for the financial year 2023- 01-01 - 2023-12-31 and the proposed appropriations of the company's profit or loss.

We recommend to the general meeting of shareholders that the profit to be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for Opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of APC Logistics AB in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

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

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's type of operations, size and risks place on the size of the company's equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.

As part of an audit in accordance with generally accepted auditing standards in Sweden, we exercise professional judgment and maintain professional scepticism throughout the audit. The examination of the administration and the proposed appropriations of the company's profit or loss is based primarily on the audit of the accounts. Additional audit procedures performed are based on our professional judgment with starting point in risk and materiality. This means that we focus the examination on such actions, areas and relationships that are material for the operations and where deviations and violations would have particular importance for the company's situation. We examine and test decisions undertaken, support for decisions, actions taken and other circumstances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss we examined whether the proposal is in accordance with the Companies Act.

Management Report

The Board and CEO of APC Logistics AB, based in Stockholm, hereby submit the annual report for the fiscal year ending 31st December 2023.

General information about the business

APC Logistics AB was founded in 2006 and is a wholly owned subsidiary of Asia Pacific Cargo Pvt Ltd, which in turn has been owned since November 1, 2012, by the Japanese group Nippon Express. APC Logistics is run as a separate company in its unchanged form.

The APC Logistics group is represented in 7 countries and includes more than 20 offices and 300 employees.

The Company conducts international air and sea transport, mainly with the Far East. The operational activities, with offices in Stockholm, Gothenburg and Malmö, have continued to focus on customer-oriented, cost-effective and environmentally friendly logistics services.

As an IATA member, The APC Logistics AB has a very close collaboration with a selected group of highquality airlines, which makes it possible for the company to offer a first-class Airfreight product and service to our customers.

The sustainability report has been prepared by the parent company in the largest group Nippon Express Co. Ltd, based in Tokyo, Japan, of which APC Logistics AB is a part. https://www.nipponexpressholdings.com/en/sustainability/

Events during the financial year

A large part of APC's results, just like the previous three years, depends on the market conditions that have been, with severe supply chain problems for both manufacturing customers and transport companies.

In the past two years, it has been difficult to obtain raw materials for manufacturing companies. Global shutdowns have created imbalances in air and sea capacity between different markets. The war between Russia and Ukraine has affected train and air products for all companies in the industry.

All the imbalances that existed during 2021 and 2022 began to balance out at the end of 2022 and continued to improve even more during 2023, and the freight market began to function more normally in 2023.

Furthermore, the trend from the end of 2022 of a declining global demand in the freight market continued as many customers built up large inventories during the turbulent period, which then needed to be sold off before they could order more goods. This led to APC losing assignments compared to the previous year, with existing customers booking about 30% fewer transports than the previous year. APC mitigated this downturn by hiring new salespeople and continued to be successful in winning new customers.

Global freight prices continued to decline throughout most of 2023, making it harder to maintain the margins the company had over the previous three years.

The company has worked extensively on sales and commercial activities and as previously mentioned, hired 2 new salespeople in 2023 and continued to win new customers. The focus on commercial activities was very strong in 2023 but work on system improvements and automation has also been initiated to ensure that customers receive high-quality service when they work with us.

Despite the company winning more new customers than it lost, it was a tougher situation during the year due to the declining freight market. However, we began to see a turnaround at the end of 2023, where existing customers started booking shipments again. By the end of the year, there was a good recovery of existing customers plus a positive inflow of new customers.

The attacks on shipping in the Red Sea led shipping companies to take the detour around Africa instead of through the Suez Canal. This has led to delays in goods and higher freight prices, primarily at the end of 2023, but it also affects the beginning of 2024.

Expected future development and significant risks and uncertainties

APC Logistics AB being an "asset-light" company gives it the ability to act quickly on market shifts, with employees being the company's most important component, allowing APC Logistics AB to continue offering its customers first-class and personal service even under weaker market conditions. In 2023, the company both broadened and expanded its customer base, which has helped in a declining economy. This has led us to believe that at the beginning of 2024, the company will be in a much better situation as the market has started to stabilize, and customers are beginning to book at normal levels again.

APC Logistics AB has a stable workforce that, with great knowledge, works for better quality and provides good service close to its customers.

The risks and uncertainties that APC Logistics AB is exposed to include various operational and financial risks, including major market changes, customer structures, purchasing and supplier risks, as well as financing, currency, and customer credit risks.

The risks considered significant for the company's operations primarily include sales area, market risks, supplier risks, and customer credit risks.

Foreign branches

APC Logistics' branches in Finland and Germany, despite challenges with the global market, have not significantly lost profitability but have not been able to develop as before, and they have had to review their cost base much more carefully.

Belgium had a tough 2023 in terms of results and had to make significant personnel cuts.

The branches have now turned the economic development around and are included in the company's 2023 results with a minus of SEK 1,576,377.

Regarding the results and financial position otherwise, reference is made to the following income and balance sheets with associated notes.

In the annual report, SEK is the applied currency.

Multi-year review

All amounts in the multi-year review are in SEK-thousands (KKR).

EQUITY CAPITAL

INCOME DISPOSITION

Proposed dealing with the Company's profit

The board of directors and Managing Director propose that the accumulated profit, be dealt with as follows:

The company's results and financial position are shown in the following income statements, balance sheets and additional information.

Cash flow analysis

NOTES TO THE FINANCIAL STATEMENTS

Note 1 Accounting principles

The annual report is prepared in accordance with the Annual Accounts Act and BFNAR 2012:1 Annual Report and Consolidated (K3).

Valuation principles

Receivables

Receivables are recognized at the amounts expected to be received.

Assets, provisions and liabilities

Assets, provisions and liabilities are valued at cost unless otherwise stated below.

Leasing

Leasing agreements where the economic benefits and risks attributable to the leasing object remain essentially with the lessee are classified as operating leases.

All leasing agreements are recognized straight-line over the lease term.

Revenue recognition

Revenue of an import service is taken when the shipment is in the company’s possession. Revenues of an export service is taken when the goods are handed over to the carrier. In this way, revenue is recognized in the period it is considered to be reliable to calculate to the company.

Similarly, costs of importing services are taken when the senders goods are in the company's possession, and for export services once the shipment has been booked by the company. By this method matching is achieved in the same period between costs and revenues.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and any impairment losses. Assets are recorded linearly over the asset's useful life. The useful life is reviewed at each reporting date. The following useful lives are applied:

Financial instruments

Financial instruments are reported in accordance with the rules in K3 of Chapter 11, which means that valuation is based on the acquisition value.

A financial asset or financial liability is recognized in the balance sheet to the instrument's contractual terms. A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, regulated or when the Group loses control over it. A financial liability or part of the financial liability is derecognized when the contractual obligation is fulfilled or otherwise ceases.

At the initial recognition, current assets and current liabilities at cost. Long-term receivables and long-term liabilities are measured at initial recognition at amortized cost. Trade receivables are measured at cost less any anticipated losses. Accounts payable and other non-interest-bearing liabilities are valued at nominal amounts.

The valuation after the initial recognition assets is made at the lower cost, i.e. the lower of cost and net sales at closing. Current liabilities are valued at nominal value. Long-term liabilities are measured after initial recognition at amortized cost.

Impairment of financial instruments

At each balance sheet analyzes the carrying values of financial assets to determine whether there is any indication that those assets are impaired. Examples of such indications the financial difficulties of the borrower, breach of contract or if it is probable that the borrower will go bankrupt.

Provisions

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

A provision is reviewed at each balance sheet date and adjusted to reflect the best estimate of the amount required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties associated with the obligation. The provision is recognized at the present value of the future payments required to settle the obligation.

Income tax

Income tax expense comprises current and deferred tax. Income tax is recognized in the income statement except where the underlying transaction is recognized directly in equity, whereby the related tax effect is recognized in equity.

Current tax is the income tax for the current financial year relating to the taxable income and the part of the previous financial income not yet recognized. Current taxes are valued at the probable amount according to the tax rates at the balance sheet date.

Deferred tax is the tax on taxable income relating to future financial years as a result of past transactions and events.

Deferred tax is provided on temporary differences. A temporary difference exists when the carrying amount of an asset or liability differs from the tax value. Temporary differences are not considered in differences relation to investments in subsidiaries, branches, associates or joint ventures if the company can control the reversal of the temporary differences and it is not clear that the temporary difference will not reverse in the foreseeable future. Differences arising from the initial recognition of goodwill or from the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting performance is not temporary differences.

Deferred tax loss carryforwards or other future tax deductions are recognized to the extent that it is probable that the deduction can be offset against future taxable profits.

Employee benefits

Employee benefits in the form of salaries, bonuses, paid holidays, paid sick of goods, etc. and pensions is recognized as earned. Pensions and other post-employment benefits are classified as defined contribution or defined benefit pension plans. The Company has only defined contribution pension plans. There are no long-term employee benefits.

Pensions

Defined contributions pension plans

Fees for defined contribution pension plans are expensed as incurred.

Receivables and payables in foreign currencies

Exchange differences arising on the settlement or translation of monetary items are recognized in the income statement the year they are incurred, either as an operating item or a financial item based on the underlying business event.

Valuation of foreign branch

The Branches monetary items have been valued at the closing dates rates.

Cash Flow Analysis

Cash flow statement is prepared according to indirect method. The reported cash flow comprises only transactions that have resulted in deposits or payments.

Note 2 Estimates and judgments

The company makes estimates of the future. The estimates for accounting purposes resulting from this will, by definition, rarely correspond to the actual result. The estimates and assumptions that involve a risk of adjustments in the reported values of assets and liabilities in the following year are discussed in the main section below. There is some assessment when calculating the terms of recognition of income in the period, where it is considered to be reliable.

Doubtful receivables are valued individually based on the age of the claim, the customer's payment history and ability to pay according to the company UC's rating.

Note 3 Purchases and sales within the Group

Note 4 Other Operating Income & Other Operating Expenses

Previously, no distinction was made between exchange rate effects of an operational nature and those from financial activities. For the current financial year, an update to the classification of the company's operational exchange rate effects has been carried out. The reclassification has been done in line with (BFNAR 2012:1), which has resulted in the annual report presenting a more accurate picture. Operational exchange rate effects refer to exchange losses and gains on receivables and liabilities of an operational nature.

Note 5 Leases - Operating Leases

Note 6 Auditing

Note 7 Employees, Personnel costs

Note 8 Interest income and similar income

Note 9 Interest expense and similar charges

Note 10 Tax of profit for the year

Note 11 Equipment, computers, fixtures and fittings

Note 12 Rental deposit

Note 13 Prepayments and accrued income

Note 14 Information on share capital

Note 15 Currency translation difference

Note 16 Direct Pension

Note 17 Accrued costs and prepaid income

Other notes

Note 18 Pledged assets

Note 19 Income disposition

Means to dispose:

Proposed dealing with the company profits

The board of directors and Managing Director propose that the accumulated profit will be dealt with as follows:

Note 20 Group relations

Minimum consolidated is issued by:

APC Asia Pacific Cargo (H.K.) Ltd., based in Hong Kong S.A.R.

Overall consolidated is issued by:

Nippon Express Co. Ltd, Tokyo, Japan

Consolidated is available at:

NIPPON EXPRESS (H.K.) CO., LTD.

RM.1101 CHINACHEM GOLDEN PLAZA,

77 MODY ROAD, T.S.T. EAST, KOWLOON, HONG KONG.

Not 21 Definition of key ratios

Solidity

Adjusted equity as a percentage of total assets

Note 22 Events after the balance sheet date

After the end of the financial year, the market has gained significant momentum combined with the unrest in the Middle East and the problems in the Red Sea, which are extending transit times and creating market pressure that hasn't been seen for some time.

This trend looks set to continue during Q1 and Q2 of 2024, and the uncertainties are leading to quite a turbulent first 6 months. However, it is very difficult to predict the exact impact on APC.

Apart from this, there have been no significant events affecting APC's business.

The Board's assessment is that the effects on the company's/group's results and position are manageable, but it cannot be ruled out that the effects could be significant.

AUDITOR

Our audit report was submitted in

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