Financial statements release 1 January - 31 December 2007 

LASSILA & TIKANOJA PLC   ANNUAL FINANCIAL STATEMENT    5 FEBRUARY 2008

  Financial statements release 2007

FINANCIAL STATEMENTS 1 JANUARY – 31 DECEMBER 2007

- Net sales for the fourth quarter EUR 148.2 million (EUR 115.4 million); operating profit EUR 12.1 million (EUR 10.3 million); earnings per share EUR 0.20 (EUR 0.18)
- Net sales for the year 2007 EUR 554.6 million (EUR 436.0 million); operating profit EUR 48.8 million (EUR 50.2 million); earnings per share EUR 0.83 (EUR 0.90); operating profit excluding non-recurring and imputed items EUR 54.3 million (EUR 47.3 million)
- A dividend of EUR 0.55 per share is proposed.
- Net sales for the year 2008 are expected to increase in line with the long-term target, which is more than 10%, and earnings are expected to improve clearly. Also the operating profit excluding non-recurring and imputed items is expected to improve.


GROUP NET SALES AND FINANCIAL PERFORMANCE

Fourth quarter net sales and financial performance

Net sales for the final quarter stood at EUR 148.2 million (EUR 115.4 million). This represented an increase of 28.4%, 17.9 percentage points of which came from corporate acquisitions. The operating profit was EUR 12.1 million (EUR 10.3 million), which is 8.2% (8.9%) of net sales. The operating profit excluding non-recurring and imputed items was EUR 13.3 million (EUR 9.3 million).

The fourth-quarter result was improved by strong organic growth, successful management of production and lower than expected social security costs. The operating profit was burdened by non-recurring expenses arising from the integration of Salvor’s business (EUR 0.5 million), as well as imputed changes in the fair values of oil derivatives purchased for hedging the oil re-refinery business to be started in 2008 (EUR -0.7 million). In the comparison period, non-recurring income of EUR 1.0 million was recognised.

Net sales and financial performance for 2007

The full-year net sales increased by 27.2% and stood at EUR 554.6 million (EUR 436.0 million), 18.3 percentage points of this growth coming from corporate acquisitions. Earnings per share were EUR 0.83 (EUR 0.90). The operating profit totalled EUR 48.8 million (EUR 50.2 million). The operating profit excluding non-recurring and imputed items was EUR 54.3 million (EUR 47.3 million).

Organic growth exceeded market growth, and the company’s market position strengthened. This was primarily attributable to well-functioning product development, marketing and sales operations, as well as improved customer satisfaction. Several new service products were introduced to the market, and new outsourcing deals were signed particularly in the forest industry. The operating profit was burdened by losses in Salvor (EUR 2.3 million), as well as imputed changes in the fair values of oil derivatives (EUR -2.8 million). In the previous year, non-recurring income of EUR 2.9 million was recognised.

* Breakdown of operating profit excluding non-recurring and imputed items is presented at the end of the explanatory statement.
** Proposal by the Board of Directors


NET SALES AND FINANCIAL PERFORMANCE BY DIVISION

Environmental Services

October to December

The net sales of Environmental Services (waste management, recycling services, L&T Biowatti, environmental products) in the fourth quarter amounted to EUR 74.8 million (EUR 53.8 million), an increase of 39.1%. The operating profit was EUR 8.4 million (EUR 7.1 million).

Organic growth in waste management and recycling services was strong both in Finland and in other countries. The financial performance of waste management improved clearly, due to increased net sales and improved productivity. Recycling services exceeded its target even though the mild start to the winter held down the level of recovered fuel deliveries.
 
At the Joensuu recycling plant and the extension to the Turku plant, which were introduced into production early in the autumn, degrees of utilisation quickly rose to the planned levels. The planning of an extension to the Kerava plant is underway. The completion of the Dubna plant in Russia has been postponed to the latter half of 2008 due to slowpermitting processes. A landfill for industrial waste will be constructed in Kotka and completed in the latter half of 2008.

The net sales and earnings of L&T Biowatti were burdened by the mild start to the winter and production restrictions in the mechanical forest industry. The delivery ability was further improved through the construction of new terminals and improvements to resources used for acquiring forest processed chips. L&T Biowatti will build a wood pellet plant at Suonenjoki, with expected completion in late 2008.

International business developed favourably. Operations in Russia expanded according to plan. Price increases substantially improved the profitability of operations in Latvia but the high Latvian inflation rate will impose challenges on profitability.

Environmental products’ financial performance improved as a result of strong growth in net sales.

Year 2007

Environmental Services’ net sales for 2007 amounted to EUR 279.8 million (EUR 204.8 million), an increase of 36.6%. The operating profit was EUR 35.0 million (EUR 32.8 million).

Organic growth was strong and customer loyalty was good. The profitability of waste management was burdened by proportional growth in the number of municipal contracts. The volume of recycling services increased thanks to new sales and added plant capacity. The Bajamaja rental service clearly increased its net sales and improved profitability. Losses on Salvor’s landfill construction operations substantially weakened the earnings of recycling services. A part of Salvor’s business was sold to the joint venture partner, joint holding was dissolved, and Salvor transferred to L&T’s sole ownership on 1 September 2007. Salvor’s remaining business was integrated into Industrial Services.

During the year, additional capacity for the recycling of waste material and by-products was built and introduced at Turku, Tampere and Valkeakoski, and a completely new recycling plant was built in Joensuu. The situation with environmental permits developed favourably even though appeals against environmental permits are slowing down plant and processing site projects to some extent. The planning and implementation of new plants and processing sites will continue in Finland as well as in Russia. The largest project is related to expanding the capacity of the Kerava plant. The first stage is expected to be completed in the latter half of 2009.

A majority holding in Biowatti Oy was acquired on 1 February 2007. L&T Biowatti is the leading bioenergy company utilising renewable sources of energy in Finland. It engages in the procurement, processing, marketing and delivery of wood-based fuels for customers. L&T Biowatti’s net sales and earnings developed almost as planned. It has improved its procurement and delivery capacity through constructing new terminals and strengthening its procurement organisation. In late 2007, a decision was made to expand L&T Biowatti’s operations to the production of wood pellets.

Waste management operations in the Moscow region expanded to a new town in May with the commencement of a gradual transfer of waste management in the town of Sergiev Posad to L&T’s responsibility. L&T currently has waste management operations at two locations in Russia: Dubna and Sergiev Posad. However, the operations are going to be expanded to larger cities in a controlled manner.

The net sales and earnings of environmental products improved clearly. Net sales increased in Finland as well as in other countries. Particular effort abroad was put into expanding the Russian operations.



Property and Office Support Services

October to December

The net sales of Property and Office Support Services (property maintenance and cleaning services) in the fourth quarter totalled EUR 54.8 million (EUR 44.6 million), an increase of 22.9%. The operating profit was EUR 4.0 million (EUR 1.2 million).

Net sales in Finland increased thanks to acquisitions in the beginning of June and good organic growth particularly in property maintenance. Day-to-day operations went well in both product lines, with a clear improvement in earnings. Cleaning services were particularly successful in Finland. Earnings were improved by low social security costs. Sales of additional services were successful. The profitability of maintenance of technical systems improved clearly on the comparison period. During the period, new outsourcing contracts were signed particularly with the forest industry.

Net sales from international operations increased and the loss was smaller than in the previous year. The winning of new customers in Russia, which had developed in a promising fashion, continued further. The challenge in Latvia is high cost inflation, the impact of which could not be fully transferred to sales prices.

Year 2007

The full-year net sales of Property and Office Support Services totalled EUR 204.1 million (EUR 168.4 million), an increase of 21.2%. The operating profit was EUR 11.0 million (EUR 8.8 million).

Organic growth continued in Finland, with net sales growing particularly in property maintenance. Additional sales to existing customers were successfully increased. Both product lines improved their profitability thanks to good management of day-to-day operations.

Kiinteistöhuolto Jauhiainen Oy and Siivouspalvelu Ta-Bu Oy were acquired in the beginning of June. Kiinteistöhuolto Jauhiainen Oy is a property maintenance company operating in the Helsinki region that posted net sales of EUR 6.5 million in 2006. Siivouspalvelu Ta-Bu Oy operates in the Helsinki and Varkaus regions. Its net sales in 2006 amounted to EUR 5.3 million. The operations of the acquired companies have been integrated into L&T’s business. Skånsk All Service AB, which operates in Sweden and Norway and specialises in food hygiene services, was acquired in the beginning of the year. Its net sales in 2006 amounted to EUR 10.8 million.

Net sales from international operations increased substantially, in Sweden as a consequence of the acquisition in January, and in Latvia and Russia through organic growth. The operations in Latvia and Russia were reorganised, including recalculations of customer sites and price increases. Sales performance has been good and an earnings improvement is expected. The focus in Sweden is still on integrating the acquired companies into one and building a sales organisation. The division’s operations abroad were still running at a loss.


Industrial Services

October to December

The fourth-quarter net sales of Industrial Services (hazardous waste management, industrial solutions, damage repair services and wastewater services) amounted to EUR 19.9 million (EUR 18.3 million), an increase of 8.8%. The operating profit was EUR 0.2 million (EUR 3.0 million). The division’s operating profit was burdened by imputed changes in the fair values of oil derivatives (EUR -0.7 million), compared to an earnings improvement of EUR 0.7 million from corresponding changes in the comparison period. Earnings were also burdened by the integration of Salvor’s operations (EUR 0.5 million).

Weather was warm for the time of the year, and together with the repairs of major flood damage, this upheld strong demand. Net sales increased in all product lines except hazardous waste management. The growth was entirely organic. Contracts with all major industrial customers were successfully renewed for periods of several years. 

The division’s fourth-quarter profitability was weakened by the fact that the general rise in costs could generally not be transferred to customer prices before the beginning of 2008. The proportion of expensive rented labour was successfully reduced, with increases in in-house staff according to plan, but this caused some overlapping costs during the transition stage. Raw material procurement by the joint venture L&T Recoil clearly outperformed the expectations, which increased storage costs.

As Salvor became fully owned by L&T, its operations were integrated into hazardous waste management and industrial cleaning. The industrial cleaning product line was renamed industrial solutions.

Year 2007

Full-year net sales for Industrial Services stood at EUR 75.5 million (EUR 66.8 million), an increase of 12.9%. The operating profit was EUR 4.8 million (EUR 9.3 million). The division’s operating profit was burdened by imputed changes in the fair values of oil derivatives (EUR -2.8 million), compared to an earnings improvement of EUR 0.7 million from corresponding changes in the previous year.
 
All product lines were successful in increasing their net sales and improving market share, with particular success in damage repair services. Sales of recycled fuels declined as oil suitable for re-refining was put into storage in expectation of the plant to be completed in 2008. Re-refining will substantially improve the value added for waste oil. A new alternative liquid fuel (ALF) was introduced to the market in the spring to replace waste oil that is routed to re-refining.

The division’s growth and earnings were somewhat burdened by the lack of human and equipment resources. Insufficient number of staff increased the costs of overtime and rented labour, and not even rented resources were sufficient to fully satisfy the demand during the season. The division’s operating result was in line with the targets. Wastewater services were the only product line to fall short of its targets, with production difficulties particularly in the first half of the year. Profitability for damage repair services improved.

In hazardous waste management, the construction of a plant for the joint venture L&T Recoil progressed. The general increase in construction costs and stricter safety requirements have increased the costs of construction. The construction schedule has, to some extent, proved to be too tight. The procurement of raw material exceeded the expectations, which resulted in an increase in storage costs that burden the earnings. Supply agreements have practically eliminated the raw material risk. A production interruption of more than three months due to a fire at the Tuusula production plant also increased the costs of logistics and waste disposal.


FINANCING

At the end of the period, interest-bearing liabilities amounted to EUR 39.9 million more than a year earlier. Net interest-bearing liabilities, totalling EUR 86.4 million, increased by EUR 33.9 million. Increase in net liabilities was reduced when the shares of Ekokem Oy Ab which were sold in January 2008 were transferred from available-for-sale non-current investments into current investments and were recognised at fair value.

Net finance costs exceeded those for the comparison period by EUR 0.9 million for the fourth quarter, and by EUR 2.6 million for the whole year. In the fourth quarter, interest expenses increased by EUR 0.8 million as a result of the growth in interest-bearing liabilities and a rise in the interest rate level. The increase in liabilities was due to net cash used in investment activities, which exceeded those for the previous year by EUR 49.6 million.

Due to changes in the fair values of interest rate swaps, EUR 0.2 million was recognised in finance costs in October-December, while EUR 0.1 million was recognised in finance income in the comparison period. With regard to changes in the fair value of interest rate swaps in January-December, EUR 0.3 million was recognised in finance costs, compared to EUR 0.5 million recognised in finance income for the comparison year. Net finance costs were 0.8% (0.4%) of net sales and 8.9% (3.4%) of operating profit.

A total of EUR 0.1 million arising from the change in the fair value of interest rate swaps to which hedge accounting under IAS 39 is applied, was recognised in equity.

The equity ratio was 46.6% (50.4%) and the gearing rate 42.7 (29.7). Net cash from operating activities amounted to EUR 55.4 million (EUR 69.9 million), and EUR 13.2 million  were tied up in the working capital (EUR 2.5 million were released). A significant part of the increase in the working capital was generated by increasing the stocks of L&T Biowatti and L&T Recoil.


CAPITAL EXPENDITURE

Capital expenditure for the year 2007 totalled EUR 93.2 million (EUR 47.2 million. EUR 46.6 million were spent on business acquisitions. The combined annual net sales of the acquired companies totalled EUR 90.6 million. In addition, production plants were built, machinery and equipment were purchased and information systems were replaced.

The following acquisitions were made in the first quarter:
In December 2006 an agreement was signed on the acquisition of the majority (70%) of the shares of Biowatti Oy from the acting management of the company for Environmental Services. The acquisition became effective on 1 February 2007 after the approval of the competition authority. L&T Biowatti is the leading Finnish bio energy supplier utilising renewable energy sources, operating in the procurement, processing, marketing and delivery of wood-based fuels. The main products are by-products of forest and wood processing industries and logging chips. The net sales of Biowatti for the year 2006 amounted to EUR 64.2 million. Bio fuel sales account for two thirds and industrial raw materials sales for one third of the net sales.

A Swedish cleaning services company Skånsk All Service AB together with subsidiaries Hygienutveckling AB and Hygieneutvikling A/S operating in Norway were acquired in January for Property and Office Support Services. The consolidated net sales of the group totalled EUR 10.8 million in 2006, most of which came from hygiene services for the food industry. Kiinteistöhuolto Pentti Nissinen Oy was acquired for property maintenance services.

The remaining portion of the shares of Suomen Keräystuote Oy was purchased for recycling services within Environmental Services. Lassila & Tikanoja held already 94.5% of Suomen Keräystuote shares.

The following acquisitions were made in the second quarter:
In early June, Kiinteistöhuolto Jauhiainen Oy and Siivouspalvelu Ta-Bu Oy were acquired.
Kiinteistöhuolto Jauhiainen Oy specialises in property maintenance services in the Helsinki region, and its net sales for the year 2006 amounted to EUR 6.5 million. It employs 65 people. Siivouspalvelu Ta-Bu Oy is a cleaning services company operating both in the Helsinki region and in Varkaus in Central Finland. Its net sales for the year 2006 amounted to EUR 5.3 million, and it employs some 200 people.

The following acquisitions were made in the third quarter:
In the beginning of June, L&T acquired half of the minority share in L&T Muoviportti (16.5%). The operations of Kuljetus Kummunmäki Oy were acquired for waste management on 1 July. In the beginning of September L&T obtained the full ownership of Salvor Oy when it acquired the remaining 50 percent of the shares.


PERSONNEL

In 2007, the average number of employees converted into full-time equivalents was 7,819 (6,775). At the end of the year, the total number of full-time and part-time employees was 9,387 (8,328). Of them 2,401 (1,822) people worked outside Finland.


PROPOSAL FOR THE DISTRIBUTION OF PROFIT

According to the financial statements, Lassila & Tikanoja plc’s distributable assets amount to EUR 44,312,723.09, of which EUR 24,602,737.17 constitutes profit for the financial period. There were no substantial changes in the financial standing of the company after the end of the financial period, and the solvency test referred to in Chapter 13, Section 2 of the Companies Act does not affect the amount of distributable assets. The Board of Directors proposes to the General Meeting of Shareholders that distributable assets be used as follows:

In accordance with the resolution of the Board of Directors, the record date is 4 April 2008. The Board of Directors proposes to the Annual General Meeting that the dividend be paid on 11 April 2008.

Earnings per share amounted to EUR 0.83. The proposed dividend is 66.7% of the earnings per share.


SHARES AND SHARE CAPITAL

Traded volume and price
The volume of trading in Lassila & Tikanoja plc shares on OMX Nordic Exchange in Helsinki in the year 2007 was 19,802,194, which is 51.2% (33.3%) of the average number of shares. The value of trading was EUR 467.2 million. The trading price varied between EUR 20.03 and EUR 27.96. The closing price was EUR 22.70. The market capitalisation was EUR 880.4 million (EUR 834.5 million) at the end of the period.


Share capital
At the beginning of the year the company’s registered share capital amounted to EUR 19,264,087. During the year, 256,200 shares were subscribed for pursuant to 2002C options. After these subscriptions the share capital is EUR 19,392,187, and the number of the shares 38,784,374. The subscription period for the share options issued in 2002 ended on 30 October 2007.
 
On 4 February 2008, the Board approved the subscriptions of 12,500 new shares made pursuant to the 2005A share options. As a result of these subscriptions, the company’s registered share capital will increase by EUR 6,250 to EUR 19,398,437 and the number of the shares will increase to 38,796,874 shares after the increase has been entered in the Trade Register.

Option plan 2005

In 2005, 600,000 share options were issued, each entitling its holder to subscribe for one share of Lassila & Tikanoja plc. At the beginning of the exercise period, 25 key persons held 162,000 2005A options. 33 key persons hold 178,000 2005B options and 43 key persons hold 228,500 2005C options. L&T Advance Oy, a wholly-owned subsidiary of Lassila & Tikanoja plc, holds 8,000 2005A options, 22,000 2005B options and 1,500 2005C options.

The share subscription price for 2005A options is EUR 14.22, for 2005B options EUR 16.98 and for 2005C options EUR 26.87. The outstanding options issued under the share option plan 2005 entitle their holders to subscribe for a maximum of 1.4% of the current number of shares. 2005A options have been listed on the OMX Nordic Exchange since 2 November 2007.

Shareholders
At the end of the financial period, the company had 4,985 (4,535) shareholders. Nominee-registered holdings accounted for 13.9% (10.4%) of the total number of shares.

Authorisation for the Board of Directors
The Board of Directors is not authorised to effect any share issues or to launch a convertible bond or a bond with warrants. Neither is the Board authorised to decide on the repurchase nor disposal of the company’s own shares.


RESOLUTIONS BY THE ANNUAL GENERAL MEETING

The Annual General Meeting of Lassila & Tikanoja plc, which was held on 26 March 2007, adopted the financial statements for the financial year 2006 and released the members of the Board of Directors and the President and CEO from liability. The AGM resolved that a dividend of EUR 0.55, a total of EUR 21.2 million, as proposed by the Board of Directors, be paid for the financial year 2006. The dividend payment date was 5 April 2007.

The Annual General Meeting confirmed the number of the members of the Board of Directors five (5). The following Board members were re-elected to the Board until the end of the following AGM: Lasse Kurkilahti, Juhani Lassila, Juhani Maijala and Soili Suonoja. Eero Hautaniemi was elected as a new member for the same term.

PricewaterhouseCoopers Oy, Authorised Public Accountants, were elected auditors with Heikki Lassila, Authorised Public Accountant, acting as Principal Auditor.

The Annual General Meeting approved the Board of Directors’ proposal to amend the Articles of Association in order to align them with the new Finnish Companies Act. The provisions on minimum and maximum share capital as well as on minimum and maximum number of shares were also removed.

At its organising meeting following the Annual General Meeting, the Board of Directors re-elected Juhani Maijala as Chairman of the Board and Juhani Lassila as Vice Chairman.


SUMMARY OF STOCK EXCHANGE RELEASES PURSUANT TO ARTICLE 7, CHAPTER 2 OF THE SECURITIES MARKETS ACT

In a release disclosed on 23 July 2007, the company announced that the full-year financial result was estimated to be lower than in the previous year, though the operative result for the final half of the year was expected to remain on the same level as in the previous year. Previously the company had estimated that the full-year financial performance will improve. Full-year net sales were still estimated to increase by clearly more than 20%.

On 14 September 2007, the Board of Directors resolved to apply for listing of 2005A share option rights on the OMX Nordic Exchange in Helsinki starting from 2 November 2007.


EVENTS AFTER THE BALANCE SHEET DATE

On 22 January 2008, Lassila & Tikanoja sold its holding in the shares of Ekokem Oy Ab to Ilmarinen Mutual Pension Insurance Company. Lassila & Tikanoja had obtained possession of the shares over a period of several years and they no longer had any connection to the business operations of the company and were, consequently, not essential for them. A tax-free capital gain arising from the sale will be recognised in the financial statements for the first quarter of the year 2008. The positive effect of the sale on the operating profit and the profit for the period will be EUR 14.2 million.


NEAR-TERM UNCERTAINTIES

Changes in the fair values of oil derivatives associated with L&T Recoil’s business depend on the development of world market prices for oil, and may have a substantial effect on the operating profit of Industrial Services. The costs of procuring raw material for renewable fuels produced by L&T Biowatti have increased due to reasons such as poor forest felling conditions. The continuing mild winter will further impact the supply of forest processed chips. L&T Biowatti strives to mitigate the impact by strengthening its procurement resources for chips. A planned amendment to Latvian waste legislation may have adverse effects on the competition situation for waste management in Riga towards the end of 2008.

PROSPECTS FOR THE YEAR 2008

The prospects for Lassila & Tikanoja’s markets remain mostly good. Organic growth is expected to remain strong. Full-year net sales are expected to increase in line with the long-term target, which is more than 10%, and earnings are expected to improve clearly. Operating profit excluding non-recurring and imputed items is also expected to improve.

Environmental Services will continue to be in demand. Increased plant capacity and a versatile service offering will probably improve L&T’s market position. Increasing the capacity of recycling plants and new landfills will continue along with geographical expansion in Russia.

Actions of EU climate policy will have a positive effect on the demand for L&T’s renewable fuels but this will be allocated over several years. The prices for raw material and subcontracted services required by L&T Biowatti have increased strongly. The second mild winter in a row makes forest felling more difficult and increases the costs. L&T Biowatti will invest in strengthening its procurement organisation for wood chips and build one or two pellet plants that will be completed at the end of the year. Operating profit of Environmental Services is expected to increase.

The market outlook for Property and Office Support Services remains unchanged in Finland, and L&T’s competitiveness is quite good. The outsourcing of support services will continue in the forest industry but the municipal market will only be opened up at a slow pace. Earnings from international operations are expected to improve but the full-year result is expected to remain slightly negative. Increasing net sales are a focal point for improving the profitability of international operations. The division’s operating profit is expected to increase.

The market outlook for Industrial Services is good for the time being. Strong demand seems to continue, and L&T has managed to increase its market shares. Wastewater services and damage repair will increase their capacity and improve their service ability in Finland. The completion of L&T Recoil’s re-refinery will be postponed towards the end of the year due to problems with the supply of critical components. The plant construction costs have exceeded the budget but simultaneously its recovery rate has improved in comparison to the original design level.

Operating profit for Industrial Services is expected to increase clearly provided that the world market price of crude oil will not rise substantially. Comparable operating profit excluding the effect of changes in the value of oil derivatives is also expected to increase. Imputed changes in the fair values of oil derivatives weakened the earnings by EUR 2.8 million in 2007.

Investments in 2008 will go into recycling plants, landfills, pellet plants and increases in machinery and transport capacity. Investments are expected to be smaller than in 2007. The focus is on organic growth.

BREAKDOWN OF OPERATING PROFIT EXCLUDING NON-RECURRING AND IMPUTED ITEMS

CONDENSED FINANCIAL STATEMENTS 1 JANUARY – 31 DECEMBER 2007
 
ACCOUNTING POLICIES

This financial statements report is in compliance with IAS 34, Interim Financial Reporting Standard. The same accounting policies as in the annual financial statements of 31 December 2007 have been applied. These financial statements have been prepared in accordance with the IFRS standards and interpretations being effective. The new IFRIC interpretations (7-11) that became effective in 2007 did not affect the consolidated financial statements. IFRS 7 (effective as of 1 January 2007) does not affect these interim financial statements, because they are condensed.

The preparation of financial statements in accordance with IFRS require the management to make such estimates and assumptions that affect the carrying amounts at the balance sheet date for the assets and liabilities and the amounts of revenues and expenses. Judgements are also made in applying the accounting policies. Actual results may differ from the estimates and assumptions. 

The financial statement report has not been audited.

Earnings per share for profit attributable to the equity holders of the company: