Consolidated income statement

Revenue from contracts with customers

Disaggregation of revenue from contracts with customers

Performance commitments
The Group’s sales, of both goods sales and services, are invoiced, normally with payment terms of 30-90 days. The Group’s performance commitments are included in agreements with an original expected term of no more than one year. For further information on the Group’s performance commitments, see Note 1 on the consolidated accounts, Accounting and valuation principles.

Segment reporting
The division into business areas reflects Addtech’s internal organisation and reporting system. Addtech reports its business areas as operating segments. Addtech is organised into the following five business areas: Automation, Components, Energy, Industrial Process and Power Solutions.

Automation
Automation markets and sells intelligent solutions, subsystems and components to, for example, industrial automation and infrastructure, including solutions for robotics, control systems, sensors, industrial networks and communication networks.

Components
Components markets and sells components and sub-systems within mechanics, electromechanics, hydraulics and electronics. Customers mainly operate within the Nordic manufacturing industry

Energy
Energy markets and sells products for the transmission and distribution of electricity, as well as products in the areas of electrical safety, electrical installation and connection technology. Its customers mainly operate in the energy and electrical installation market via specifiers and electricity wholesalers.

Industrial Process
Industrial Process markets and sells solutions, sub-systems and components, often under proprietary brands, helping optimise industrial processes and flows. Customers operate mainly in the northern European manufacturing and processing industries.

Power Solutions
Power Solutions develops, markets and sells components and systems solutions that safeguard power supply, as well as steering and controlling movements or energy flows. Customers operate mainly within special vehicles, energy, electronics and telecom. The business area has strong proprietary brands and niche production.

The Group has no single customer from whom income accounts for 10 percent of total revenue, for which reason there is no related reporting.

Other operating income and expenses

Financial risks and risk management

RISK MANAGEMENT POLICY AND OBJECTIVES
Addtech strives for structured and efficient management of the financial risks that arise in operations, which is manifest in the financial policy adopted by the Board of Directors. The financial operations are not conducted as a separate line of the business; they are merely intended to constitute support for the business and reduce risks in the financial operations. The policy stipulates goals and risks in the financial operations, and how they are to be managed. The financial policy expresses the goal of minimising and controlling financial risks. The policy defines and identifies the financial risks that arise at Addtech and how responsibility for managing these risks is distributed in the organisation. The financial risks defined in the financial policy are transaction exposure, translation exposure, refinancing risk, interest rate risk, margin risk, liquidity risk and issuer/borrower risk. Operational risks, that is, financial risks related to operating activities, are managed by each subsidiary’s management according to principles in the financial policy and subordinate process descriptions approved by the Group’s Board of Directors and management. Risks such as translation exposure, refinancing risk and interest rate risk are managed by the Parent Company, Addtech AB. Financial derivatives with external counterparties may only be entered by Addtech AB. The subsidiaries hedge their risk via Addtech AB which, in turn, obtains hedges on the external market.

CURRENCY RISK
The Addtech Group conducts extensive trade abroad and a material currency exposure therefore arises in the Group, which must be managed in such a way as to minimise the impact on earnings resulting from exchange rate fluctuations.

The Group applies decentralised responsibility for currency risk management. This involves risk identification and risk hedging occurring at subsidiary level. It is important to capitalise on the size of the Group and natural conditions to match flows, and the subsidiaries must therefore hedge their risk via the Parent Company which, in turn, obtains hedges on the external market.

For Addtech, currency risk arises 1) as a result of future payment flows in foreign currency, known as transaction exposure, and 2) because parts of the Group’s equity comprise net assets in foreign subsidiaries, known as translation exposure. Monetary financial assets and liabilities in currencies other than each Group company’s functional currency occur to a limited extent.

TRANSACTION EXPOSURE
Transaction exposure comprises all future contracted and forecast ingoing and outgoing payments in foreign currency. The Group’s currency flows usually pertain to flows in foreign currency from purchases, sales and dividends. Transaction exposure also comprises financial transactions and balances. During the year, the Group’s payment flows in foreign currencies were distributed as follows:

The effects of exchange rate fluctuations are reduced by buying and selling in the same currency, through currency clauses in customer contracts and, to a certain degree, by forward purchases or sales of foreign currency. In the industry, currency clauses are a common method for handling uncertainty associated with future cash flows. A currency clause means that compensation is paid for any changes in the exchange rate exceeding a certain predefined level during the contract period. If these thresholds are not reached, for example when the exchange rate changes by less than 2 percentage points, no compensation is paid. The currency clauses adjust the exchange rate change between the time the order is placed and the invoice date. Currency clauses are symmetrically designed, meaning that compensation is charged or credited when the exchange rate rises or falls beyond the predefined thresholds.

Of consolidated net sales, currency clauses cover about 10 percent (12) and sales in the purchasing currency make up about 38 percent (39). In certain transactions, there is a direct link between the customer’s order and the associated purchase order, which is a good basis for effective currency risk management. However, in many cases the dates of the orders do not coincide, which may reduce the effectiveness of these measures. The subsidiaries have reduced their currency exposure by using forward foreign exchange contracts. At the end of the financial year, there were outstanding forward foreign exchange contracts in a gross amount of SEK 183 million (166), of which EUR equalled SEK 115 million (117), JPY SEK 0 million (15), USD SEK 34 million (24), PLN SEK 22 million (4), DKK SEK 2 million (4), GBP SEK 9 million (1) and NOK SEK 1 million (0). Of the total contracts, SEK 148 million (113) matures within six months, SEK 35 million (51) within 12 months and SEK 0 million (2) within 18 months. Hedge accounting does not apply to forward foreign exchange contracts and they are classified as a financial asset measured at fair value through profit or loss. Hedge accounting applies to embedded derivatives consisting of currency clauses, and they are classified as derivatives used in hedge accounting. The cash flow effect from embedded derivatives normally occurs within six months.

The Group has a net exposure in several currencies. If each separate currency pair changes by 5 percent, the aggregate effect on profit would total about SEK 68 million (46), all else being equal. Inflows and outflows in the same currency mean that the Group’s exposure is relatively limited. Currency flows in the Parent Company are mainly in Swedish kronor (SEK). To the extent that internal and external loans and investments in the Parent Company are in foreign currency, 100 percent of the capital amount is hedged.

Translation exposure
The translation exposure of the Addtech Group is currently not hedged.
The Group’s net assets are divided among foreign currencies as follows:

When translating the income statement of units with a functional currency other than SEK, a translation effect arises when exchange rates vary. With the present distribution of Group companies’ different functional currencies, a change of 1 percentage point in the exchange rates would have an effect of SEK +/- 72 million (64) on net sales and SEK +/- 8 million (5) on operating profit.

The exchange rates applied in the financial accounts are shown in the following table:

FINANCING AND LIQUIDITY
The overall objective of Addtech’s financing and debt management is to secure financing for the operations in both the long and short term, and to minimise borrowing costs. The capital requirement is to be secured through an active and professional borrowing procedure comprising overdraft and other credit facilities. Raising of external financing is centralised at Addtech AB. Adequate payment capacity is to be achieved through contractual credit facilities. Surplus liquidity is primarily used to pay down outstanding credits. The Parent Company is responsible for the Group’s long-term financing as well as its supply of liquidity. The Parent Company provides an internal bank which lends to and borrows from the subsidiaries. The Group’s and Parent Company’s non-current and current interest-bearing liabilities are shown in Notes 24 and 25.

To manage surpluses and deficits in different currencies, Addtech uses currency swaps from time to time. This allows the Group to reduce its financing costs and the Company’s liquid funds to be used in an efficient manner.

Refinancing risk
The refinancing risk is the risk of Addtech not having access to sufficient financing on each occasion. The refinancing risk increases if Addtech’s credit rating deteriorates or if Addtech becomes too dependent on one source of financing. If all or a large part of the debt portfolio matures on a single or a few occasions, this could involve the turnover or refinancing of a large proportion of the loan volume having to occur on disadvantageous interest and borrowing terms.

In order to limit the refinancing risk, the procurement of long-term credit facilities is commenced no later than nine months before the credit facility matures. On 31 March 2020, the Group’s credit facilities amounted to SEK 3,800 million (2,001), represented by bank overdraft facilities of SEK 1,300 million (1,301) and other agreed credit facilities of SEK 2,500 million (700). During the year, overdraft facilities increased by SEK 0 million (200) while other agreed credit facilities increased by SEK 1,800 million (300). At 31 March 2020, the Group had utilised SEK 156 million (1,031) of the bank overdraft facilities and SEK 1,600 million (700) of the other credit facilities. Unutilised bank overdraft facilities and credit facilities amounted to SEK 2,028 million (270). The Group’s credit facilities are contingent upon loan covenants, the conditions of which are fulfilled with a wide margin. For covenants, Addtech uses two ratios: EBITDA/net financial items and equity/assets.

INTEREST RATE RISK
The interest rate risk is regulated by ensuring that the average fixed interest term of the debt portfolio varies between 0-3 years. The debt portfolio consists of bank overdraft facilities and outstanding external loans. The interest rate at 31 March 2020 was variable, that is, 0-3 months. Addtech’s main exposure to interest rate risk is in its debt portfolio. Aside from the pension liability, interest-bearing external debt totals SEK 2,616 million (1,996).

With the current net financial debt, the impact on the Group’s net financial items would be SEK +/- 20 million if interest rates were to fluctuate by 1 percentage point.

ISSUER/BORROWER RISK AND CREDIT RISK
Issuer/borrower risk and credit risk are defined as the risk of Addtech’s counterparties failing to fulfil their contractual obligations. Addtech is exposed to credit risk in its financial transactions, that is, in investing its surplus liquidity and executing forward foreign exchange transactions, and in its commercial operations in connection with accounts receivable and advance payments to suppliers. Maximum credit risk exposure from financial assets is consistent with the carrying amount of those assets.

Addtech’s financial function at the Parent Company is responsible for assessing and managing issuer/borrower risk. The financial policy prescribes that surplus liquidity only be invested with counterparties that have a very high credit rating. As in prior years, in 2019/2020 no surplus funds were invested with any counterparties other than Swedish banks, aside from the Group’s normal bank contacts.

To utilise its subsidiaries’ detailed knowledge of Addtech’s customers and suppliers, Addtech has each company assess the credit risk in its commercial transactions. New customers are assessed before credit is granted, and credit limits set are strictly enforced. Short credit periods are the goal, and avoiding excessive concentration of business with individual customers and with specific sectors helps minimise risks. No individual customer accounts for more than 4 percent (3) of total credit exposure during a one-year period. The equivalent figure for the ten largest customers is about 17 percent (12). Exposure per customer segment and geographic market is presented in Note 5.

Bad debt losses totalled SEK 7 million (7) during the year, equal to 0 percent (0) of net sales.

Revenue from contracts with customers

Disaggregation of revenue from contracts with customers

Performance commitments
The Group’s sales, of both goods sales and services, are invoiced, normally with payment terms of 30-90 days. The Group’s performance commitments are included in agreements with an original expected term of no more than one year. For further information on the Group’s performance commitments, see Note 1 on the consolidated accounts, Accounting and valuation principles.

Segment reporting
The division into business areas reflects Addtech’s internal organisation and reporting system. Addtech reports its business areas as operating segments. Addtech is organised into the following five business areas: Automation, Components, Energy, Industrial Process and Power Solutions.

Automation
Automation markets and sells intelligent solutions, subsystems and components to, for example, industrial automation and infrastructure, including solutions for robotics, control systems, sensors, industrial networks and communication networks.

Components
Components markets and sells components and sub-systems within mechanics, electromechanics, hydraulics and electronics. Customers mainly operate within the Nordic manufacturing industry

Energy
Energy markets and sells products for the transmission and distribution of electricity, as well as products in the areas of electrical safety, electrical installation and connection technology. Its customers mainly operate in the energy and electrical installation market via specifiers and electricity wholesalers.

Industrial Process
Industrial Process markets and sells solutions, sub-systems and components, often under proprietary brands, helping optimise industrial processes and flows. Customers operate mainly in the northern European manufacturing and processing industries.

Power Solutions
Power Solutions develops, markets and sells components and systems solutions that safeguard power supply, as well as steering and controlling movements or energy flows. Customers operate mainly within special vehicles, energy, electronics and telecom. The business area has strong proprietary brands and niche production.

The Group has no single customer from whom income accounts for 10 percent of total revenue, for which reason there is no related reporting.

Note 6

Employees and personnel expenses

PROCESS FOR EVALUATING AND DETERMINING REMUNERATIONS TO THE BOARD OF DIRECTORS, THE CEO AND GROUP MANAGEMENT
The guidelines applied to the remuneration of senior executives in the 2019/2020 financial year correspond to those adopted at the 2019 Annual General Meeting and are equivalent, essentially, to the guidelines proposed for the upcoming year, as set out in the Administration Report. The principle for remuneration to the Board of Directors, Chief Executive Officer (CEO) and Group management is that remuneration should be competitive. The Nomination Committee proposes Board fees to the Annual General Meeting. Fees are paid to the Board of Directors in accordance with a resolution by the Annual General Meeting.

For remuneration to the CEO, members of Group Management and other senior executives in the Group, the Board of Directors has appointed a Remuneration Committee consisting of the Chairman of the Board and the Deputy Chairman of the Board, with a Board member and the CEO attending in a reporting capacity. The CEO, members of Group Management and other senior executives are paid a fixed salary, variable remuneration and conventional employment benefits. Pension benefits and incentive programmes also apply as detailed below. The Remuneration Committee follows the guidelines on remunerations for senior executives approved by the Annual General Meeting of Addtech AB.

CALL OPTIONS FOR SENIOR EXECUTIVES
Background and motivation for long-term incentive programmes
The purpose of long-term incentive schemes is to enable Group executives, through an investment of their own, to participate in and work for a favourable trend in the value of the Company’s shares.

The schemes are also expected to generate improved conditions for recruiting and retaining skilled personnel for the Addtech Group, to provide competitive compensation and to unite the interests of the shareholders with those of the executives. The schemes are intended to contribute to executives increasing their shareholding in Addtech over the long term. The executives encompassed by the schemes are those who, in an otherwise heavily decentralised organisation, are able to impact profit positively by means of partnerships between Group subsidiaries. The share-related incentive schemes approved by the Annual General Meeting do not entail a net charge against Company equity.

Similar call option schemes for senior executives and a select number of management members in the Addtech Group were adopted by the 2009-2019 Annual General Meetings. With the exception of the CEO, Board members have not been entitled to acquire call options. The schemes involve call options for shares repurchased by Addtech, with each call option entitling the holder to acquire one repurchased Class B share. As financial instruments, the call options are freely transferable. To encourage participation in the scheme, a subsidy is paid corresponding to the premium paid for each call option. This subsidy will be paid out two years after the Annual General Meeting, providing that the option holder’s employment with the Group has not been terminated and that the call options have not been sold before this time. The expenses for the scheme consist of the subsidy plus social security expenses. The subsidy corresponds to the option premium that the Company receives on the transfer of the call options and, accordingly, the scheme entails no net charge on the Company’s equity.

In the event that the option holder does not wish to exercise all of the call options acquired, the Company is entitled to repurchase call options from the holder. Options are to be acquired at a price corresponding at most to their market value at any given time. Call options may not, however, be repurchased during any period in which trade in the Company’s shares is forbidden.

At the end of the financial year, Addtech had four call option programmes outstanding, involving a total 1,007,000 Class B shares.

2019/2023 scheme
The allotment for 2019 approved by the 2019 Annual General Meeting included 25 executives and a total of 300,000 call options, corresponding to 0.4 percent of the total number of shares and approximately 0.3 percent of the total number of votes in the Company. The allotment varied between 12,500 and 25,000 options per person. The Chief Executive Officer acquired 19,000 and other members of Group Management 102,000.

Each option entitles the holder to acquire one repurchased Class B share between 5 September 2022 and 2 June 2023. The purchase price for shares when exercising options will correspond to 120 percent of the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 30 August 2019 and 12 September 2019. In the event that, on invoking call options, the market price for Class B shares in the Company exceeds 200 percent of the average price during the period 30 August 2019 to 12 September 2019, the exercise price shall be raised by the amount exceeding 200 percent in SEK 1 increments. The premium for the call options will correspond to the market value of the call options in accordance with an external independent valuation applying the Black & Scholes model. The measurement period for calculating the option premium will be based on the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 6 September 2019 and 12 September 2019.

The exercise price for the call options was set at SEK 321.80. The market value of the call options was set at SEK 21.10. The expenses for the scheme consist of the subsidy paid in September 2021, as detailed above, and the social security fees payable on that subsidy. The total cost of the subsidy, including social security fees, is estimated at approximately SEK 6.9 million after corporation tax. The subsidy corresponds to the option premium that the Company receives on the transfer of the call options. The personnel expense accrues over the vesting period.

2018/2022 scheme
The allotment for 2018 approved by the 2018 Annual General Meeting included 24 executives and a total of 300,000 call options, corresponding to 0.4 percent of the total number of shares and approximately 0.3 percent of the total number of votes in the Company. The allotment varied between 12,500 and 27,500 options per person. The Chief Executive Officer acquired 27,500 and other members of Group Management 87,500.

Each option entitles the holder to acquire one repurchased Class B share between 6 September 2021 and 3 June 2022. The purchase price for shares when exercising options will correspond to 120 percent of the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 31 August 2018 and 13 September 2018. In the event that, on invoking call options, the market price for Class B shares in the Company exceeds 200 percent of the average price during the period 31 August 2018 to 13 September 2018, the exercise price shall be raised by the amount exceeding 200 percent in SEK 1 increments. The premium for the call options will correspond to the market value of the call options in accordance with an external independent valuation applying the Black & Scholes model. The measurement period for calculating the option premium will be based on the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 7 September 2018 and 13 September 2018.

The exercise price for the call options was set at SEK 232.90. The market value of the call options was set at SEK 13.30. The expenses for the scheme consist of the subsidy paid in September 2020, as detailed above, and the social security fees payable on that subsidy. The total cost of the subsidy, including social security fees, is estimated at approximately SEK 4.3 million after corporation tax. The subsidy corresponds to the option premium that the Company receives on the transfer of the call options. The personnel expense accrues over the vesting period.

2017/2021 scheme
The allotment for 2017 approved by the 2017 Annual General Meeting included 24 executives and a total of 300,000 call options, corresponding to 0.4 percent of the total number of shares and approximately 0.3 percent of the total number of votes in the Company. The allotment varied between 7,000 and 25,500 options per person. The Chief Executive Officer acquired 25,500 and other members of Group Management 115,000.

Each option entitles the holder to acquire one repurchased Class B share between 14 September 2020 and 4 June 2021. The purchase price for shares when exercising options will correspond to 120 percent of the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 1 September 2017 and 14 September 2017. In the event that, on invoking call options, the market price for Class B shares in the Company exceeds 200 percent of the average price during the period 1 September 2017 to 14 September 2017, the exercise price shall be raised by the amount exceeding 200 percent in SEK 1 increments. The premium for the call options will correspond to the market value of the call options in accordance with an external independent valuation applying the Black & Scholes model. The measurement period for calculating the option premium will be based on the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 8 September 2017 and 14 September 2017

The exercise price for the call options was set at SEK 178.50. The market value of the call options was set at SEK 10.80. The expenses for the scheme consist of the subsidy paid in September 2019, as detailed above, and the social security fees payable on that subsidy. The total cost of the subsidy, including social security fees, is estimated at approximately SEK 3.5 million after corporation tax. The subsidy corresponds to the option premium that the Company receives on the transfer of the call options. The personnel expense accrues over the vesting period.

2016/2020 scheme
The allotment for 2016 approved by the 2016 Annual General Meeting included 20 executives and a total of 300,000 call options, corresponding to 0.4 percent of the total number of shares and approximately 0.3 percent of the total number of votes in the Company. The allotment varied between 7,500 and 37,500 options per person. The Chief Executive Officer acquired 31,500 and other members of Group Management 135,000.

Each option entitles the holder to acquire one repurchased Class B share between 16 September 2019 and 5 June 2020. The purchase price for shares when exercising options will correspond to 120 percent of the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 1 September 2016 and 14 September 2016. The premium for the call options will correspond to the market value of the call options in accordance with an external independent valuation applying the Black & Scholes model. The measurement period for calculating the option premium will be based on the volume-weighted average price paid for the Company’s Class B shares on NASDAQ Stockholm between 8 September 2016 and 14 September 2016.

The exercise price for the call options was set at SEK 159.00. The market value of the call options was set at SEK 11.80. The expenses for the scheme consist of the subsidy paid in September 2018, as detailed above, and the social security fees payable on that subsidy. The total cost of the subsidy, including social security fees, is estimated at approximately SEK 3.6 million after corporation tax. The subsidy corresponds to the option premium that the Company receives on the transfer of the call options. The personnel expense accrues over the vesting period.

Between 16 September 2019 and 31 March 2020, 99,500 options were repurchased under current market conditions, based on an independent external valuation applying the Black & Scholes model. During the corresponding period, 93,500 options were also redeemed for the same number of shares.

BOARD OF DIRECTORS
In accordance with the resolution of the Annual General Meeting, the total Board fees of SEK 2,960 thousand (2,275) approved by the Annual General Meeting are distributed between the Board members not employed by the Parent Company.

MANAGING DIRECTOR OF THE PARENT COMPANY
During the period 1 September 2019 to 31 March 2020, the Managing Director of the Parent Company, Niklas Stenberg, received fixed salary of SEK 5,252 thousand and variable salary of SEK 1,893 thousand. Variable remuneration included SEK 345 thousand regarding the subsidy expense for the year for participation in the Group’s incentive programmes. He also received taxable benefits amounting to SEK 6 thousand. Pension premiums of SEK 1,548 thousand were paid.

From the age of 65, the Managing Director is covered by a defined contribution pension plan, the scale of which depends on the outcome of pension insurance agreements. The size of the pension premiums is determined annually by the Remuneration Committee. Variable salary paid based on the Group’s earnings may not exceed 30 percent of fixed salary and is not pensionable. An additional premium may be payable corresponding to 20 percent of paid variable remuneration used to acquire shares in Addtech AB. On termination by the Company, the period of notice is of 12 months and, on resignation by the Managing Director, the period of notice is six months. Beyond salary paid during the period of notice, on termination by the Company, the Managing Director is entitled to severance pay equivalent to one year’s salary. In the event that the Managing Director resigns, he does not receive any severance pay.

OTHER MEMBERS OF GROUP MANAGEMENT
For other members of Group Management, fixed salary of SEK 12,023 thousand (13,850) was paid and variable salary of SEK 4,777 thousand (4,048). Variable remuneration included SEK 1,439 thousand (988) regarding the subsidy expense for the year for participation in the Group’s incentive programmes. The variable remuneration was expensed in the 2019/2020 financial year and disbursed in 2020/2021. He also received taxable benefits amounting to SEK 318 thousand (307). From the age of 65, members of Group management are covered by pension entitlements in accordance with individual agreements. Certain pension solutions are defined premium plans, with the size of the pension depending on the outcome of pension insurance agreements, while others are defined benefit plans.

In terms of the expense, both the defined benefit pension plans and the defined premium plans are basically equivalent to the ITP plan. During 2019/2020, a total of SEK 2,984 thousand (2,854) in pension premiums was paid for the group “Other members of Group management”. Variable salary paid based on the Group’s earnings may not exceed 30 percent of fixed salary. An additional premium may be payable corresponding to 20 percent of paid variable remuneration used to acquire shares in Addtech AB.

On termination by the Company, the maximum period of notice is of 12 months and, on resignation by the employee, the period of notice is six months. Severance pay is payable equivalent to no more than one year’s salary. In the event that the employee resigns, he/she does not receive any severance pay.

Remuneration to Auditors

Depreciation/amortisation

Other operating income and expenses

Operating expenses

Leases
The effect on the group from the transition to IFRS 16 Leases is described in note 1 Accounting and valuation principles. The method chosen by the Group for the transition to IFRS 16 means that comparative figures are not recalculated. The transition effect from previous accounting standard to IFRS 16 is described in the tables below. Future minimum lease payments amounting to 564 MSEK at the end of March 2019 have been discounted with the incremental borrowing rate. At the transition to IFRS 16 a weighted average incremental borrowing rate of 1 percent was used. Leases for which the underlying asset is of low value and short term-leases have been exempted and extension periods have been added. The opening lease liability with IFRS 16 in the beginning of April 2019 amounted to 558 MSEK. At the end of 2019/2020, the lease liability amounted to 627 MSEK whereof 169 were short-term and 458 long-term. The average remaining lease term at the end of March 2020 was 34 months. The Group’s right-of-use assets relate primarily to leased premises, vehicles, and other leases (e.g. leases of production equipment, office equipment, and other assets not considered individually significant). Depreciation on right-of-use assets is specified in note 8 Depreciation/ amortisation. Interest expense on lease liabilities amounted to 8 MSEK in the financial year 2019/2020. In addition to the interest expense, the cash flow statement was affected by instalment on the lease liability, amounting to 162 MSEK. The effect from low-value and short-term leases is not included in these amounts.

Financial income and expenses

Taxes

Earnings per share before and after dilution

See Note 1 for the method of calculation.

EARNINGS PER SHARE BEFORE DILUTION
The calculation of earnings per share for 2019/2020 is based on profit for the year attributable to Parent Company shareholders, totalling SEK 862 million (660), and a weighted average number of shares outstanding during 2019/2020 of 67,123 thousand (67,047). The two components were calculated in the following manner:

EARNINGS PER SHARE AFTER DILUTION
The calculation of diluted earnings per share for 2019/2020 is based on profit attributable to Parent Company shareholders, totalling SEK 862 million (660), and a weighted average number of shares outstanding during 2019/2020 of 67,300 thousand (67,189). The two components were calculated in the following manner: